Difference Between Transactional and Relationship Marketing (With Table)

Transactional vs Relationship Marketing

Any product or services can only be considered successful when they sell well in their comparative market. For this reason, marketing is an inseparable part of every business. Currently, various companies around the world are spending billions to market their product and service.

However, the marketing strategy is not a straight forward thing. Every product has a niche category and its dedicated market. Any product that is designed for the mass-market may not satisfy everyone. Thus, various small markets emerge to fulfill the requirement of a small group of people.

At this moment, the marketing strategy can be segregated into two parts. These strategies are transactional and relationship marketing. These are two different marketing strategies and fulfill the requirement of two different types of markets.

The difference between Transactional and Relationship Marketing is that the transactional marketing strategy emphasizes on selling goods and makes a one-way communication with the customer, while relationship marketing utilizes good customer relationships for their product or service sales.


 

Comparison Table Between Transactional and Relationship Marketing (in Tabular Form)

Parameter of ComparisonTransactional MarketingRelationship Marketing
What is it?An aggressive marketing strategy where the primary goal of the business is to sell any product or services to the customer.A sales strategy that utilizes good customer relationships for their product or service sales.
Time frameLimitedLong term
Main objectiveMaximize salesDevelop a good relationship with the customer
Marketing mediumConventional advertisementWord of mouth and social marketing
CostExpensiveinexpensive
Used byMost fast-moving consumer goods (FMCG) companies.Multi-level marketing (MLM) companies.

 

What is Transactional Marketing?

Transactional marketing is an aggressive marketing strategy where the primary goal of the business is to sell any product or services to the customer. This marketing strategy emphasizes on volume sale of the product or service.

Finding new customers for the product or services is a big part of this strategy. For this reason, the marketing companies often use advertisements to push forward transactional marketing strategy. This marketing strategy also encourages one time sales through various discount and reward programs.

Transactional marketing does not accentuate post-sales service. Most advertisement agencies also do not take customer feedback when they use a transactional marketing strategy. For this reason, the relationship between customer and sellers are limited and remain for a short period.

Even though this marketing strategy is very costly, but it is very effective to sell large amounts of products or services to the mass market. There must be a large number of potential customers available to make this strategy viable. This marketing strategy cannot succeed in a small group of buyers.

Best use of this marketing strategy can be found with festive season sale, sale at malls, buy one get one offer, etc. Various fast-moving consumer goods (FMCG) companies utilize this method of marketing.

transactional marketing 1
 

What is Relationship Marketing?

Relationship marketing is a sales strategy that utilizes good customer relationships for their product or service sales. This marketing strategy emphasizes heavily on the one to one relationship with the consumer and seller.

This marketing strategy is not bound by any time frame. Instead of a quick sale, this marketing strategy takes time to deliver results. This marketing strategy depends on the brand value of the product. Where the consumer has used the product before or heard good things about it from a known person.

Consumer feedback is an important aspect of relationship marketing. The marketing company always needs to maintain two-way communications with the consumer. They also need to modify or improve their product and services according to customer requests.

Compared to other marketing methods, relationship marketing does not utilize conventional advertisements. Instead, relationship marketing methods utilize the mouth of word marketing or social media promotion. For this reason, this marketing strategy is also quite inexpensive.

This marketing strategy delivers better results where the number of consumers is limited. It helps both buyers and sellers come to a satisfactory agreement before the exchange. The seller also offers post-sales services after the exchange of goods.

Some of the best use of this marketing strategy can be found in multi-level marketing (MLM) companies.

Relationship Marketing

Main Differences Between Transactional and Relationship Marketing

  • The primary method of transactional marketing is aggressive marketing where the primary goal of the business is to sell any product or services to the customer. On the other hand, relationship marketing utilizes good customer relationships for their product or service sales.
  • Transactional marketing is always used within a limited time frame, while relationship marketing depends on a long term time frame.
  • The main objective of transactional marketing is to maximize sales. On the other hand, the objective of relationship marketing is to develop a good relationship with the customer.
  • For the promotion of the products, transactional marketing uses conventional advertisement, while relationship marketing utilizes the word of mouth and social marketing medium.
  • The expenses for transactional marketing are quite high and most small businesses cannot afford it. But the expenses for relationship marketing are quite low and even small businesses can afford it easily.
  • Most fast-moving consumer goods (FMCG) companies use a transactional marketing strategy. They often provide festive season sale, sale at malls, buy one get one offer, etc to sell their products and services. However, most multi-level marketing (MLM) companies utilize relationship marketing to sell their product and service.


 

Conclusion

Transactional and Relationship Marketing are both effective marketing strategies. But they are effective in different places. Transactional marketing is designed for the mass market, where the conventional advertisement is the only effective tool to sell products in large quantity to the people.

Contrary to transactional marketing, relationship marketing is designed for a limited market. This strategy does not utilize conventional advertisements. Therefore, it can be successful with a small group of people. For this reason, both of these marketing strategies are popular among various companies. Most corporate large FMCG companies use the transactional marketing method to sell their product. But most small and medium businesses generate loyalty from the customer to sell their product.


 

Word Cloud for Difference Between Transactional and Relationship Marketing

The following is a collection of the most used terms in this article on Transactional and Relationship Marketing. This should help in recalling related terms as used in this article at a later stage for you.

Difference Between Transactional and Relationship Marketing