I read a great article on transactional businesses recently. The gist is that most businesses have focused only on how to get that “next transaction” right now.
The days of building a relationship are gone for most businesses. Most companies are strictly transactional. Their main focus is to get consumers to…
– Buy now from email
– Buy now from ads
– Use steep discounts to get a sale now
You get the idea. The list goes on. And while this isn’t a bad thing, there is little focus on customer loyalty. Each transaction is treated as a first time purchase.
And little do these companies know that by simply adding the relationship aspect back into their transactional business, they can drastically improve their sales.
Here’s the way I see it…
Let’s say you spend $10 to make a sale to Joe. The common approach would be to make the sale and then spend another $10 to make a sale to Bob. Can you still profit this way?
Sure, but not for long.
See, unless you’re a company like Walmart or Amazon, you’re going to have a difficult time getting repeat buyers based solely on price. But if you were to set up, say, a series of automated email sequences to follow up purchases, now you’re playing a different game.
Now you’re playing the long game. You’re building a relationship so you can make another sale to Joe without spending another $10. Without having to offer deep discounts just to get him to buy. Without paying that ghastly difference between new customer acquisition and customer retention.
But heed my warning…
If you expect to create long-term customers without differentiating yourself from the competition, you’re better off sticking with a purely transactional business. But if you’ve developed something that truly separates you from your competition, make sure customers know about it every chance you get.
If you do that AND provide a great experience, they’ll keep coming back.