Employers say they want employees to “build relationships” with customers and clients but often neither explain the differences nor teach employees how to do it.
Sometimes a transaction is sufficient, but simply building transactional relationships is never a good long term strategy for customer retention. We like and do business with companies that are relational.
You’ll notice transactional and relational differences in all areas of business, from marketing and sales, to customer service, and even in leadership styles within organizations. You’ll probably notice the differences in yourself in certain situations too.
Transactional vs Relational selling
Both approaches to selling can be effective, but if you’re looking to go beyond just making a sale, and you want to retain customers, and build strong relationships, then the focus must be on relational selling.
- Transactional Selling is all about the short-term. Get the sale, at all costs. The focus is on winning this one sale without much thought to the customer needs or the longer-term.
- Relationship Selling is about building long-term relationships. The sales rep gets to know his/her customer, their needs and their wants, within reason.
Take the situation of a single mother needing a new washing machine. A transactional sale will involve getting her to buy a more expensive machine with bells and whistles that she doesn’t need, and probably can’t afford. The hard sale gets her to buy it anyway, and she leaves feeling stressed about how much money she just spent. With relational selling, the salesperson would understand through talking to the customer that money is tight and instead sells her a brand new machine that was dented in delivery, and therefore is on sale. The customer is so grateful that she tells all of her friends about the store, makes a recommendation on social media, and goes back to the same store to get her dryer when it too needs replacing.
In today’s technology driven world, an experience with a business, whether positive or negative is no longer restricted to only word-of-mouth – it can be online for the world to see within minutes. The rise of social media platforms means companies that operate only in “transactions”, rather than “relationships” will be called out, and ultimately, companies and individuals who practice relational selling will experience higher levels of success that those that don’t.
The key differences between transactional relationships and relational.
Here are nine key differences between transactional and relational. How are you doing?
Transactionall vs. Relational
professional vs. friendly
self-interest vs. mutual interest
what you get vs. what you give
stay in touch vs. keep informed
understand the process vs. understand the person in the process
judge the results vs. evaluate the relationship
win conflict vs. resolve conflict
agreement vs. acceptance
evaluate the results vs. evaluate how the other feels about the results
Consider the interactions you have with people in your life, as a leader, and as a person. Are you building rewarding relationships or merely transacting your way through life?