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What Is Transactional Marketing?

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  • Written By: M. Walker
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 11 September 2016
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Transactional marketing is one of many marketing strategies that focus on maximizing the volume and revenue of sales. This strategy places a large emphasis on boosting sales by concentrating on single transactions. In contrast to relationship marketing, transactional marketing does not attempt to build long-term relationships with customers, but rather it promotes high short-term sales.

Like other forms of marketing, transactional marketing optimizes sales in product, price, placement, and promotion. Product creation and pricing involve developing a useful product that will be priced according to consumer preferences while still generating significant revenue. Placement focuses on effectively distributing the product in various locations that are estimated to be successful, and promotion involves advertising and making the product attractive to consumers.

Much of the focus in this form of marketing revolves around the products themselves because the products, not the companies, are the main draw for consumers. In contrast, relationship marketing focuses more on brand image and developing long-term relationships with customers. While many companies build comprehensive marketing strategies that include both of these forms, certain companies will find one to be more effective than the other.

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Some of the main advantages of transactional marketing include relatively fast jumps in income for little upfront investment. Since this style of marketing is not focused on brand image or gaining long-term customers, it can allow companies to save a great deal on widely publicized, long-term marketing campaigns. It also focuses only on promoting the product itself, rather than the company in conjunction with the product, allowing them to save during times when advertising is not needed to sell a certain product. Extra time is also an advantage for those using this marketing tactic because they do not have to spend time maintaining relationships with consumers. Instead, they can focus more energy in finding and acquiring customers in the short term, boosting sales.

The main disadvantages of transactional marketing include the lack of brand recognition and the lack of a reliable customer base. Since companies using this strategy will forgo one to one marketing, they will not be able to personalize the shopping experience for their customers, and in turn they will sacrifice the potential for returning visitors. The lack of long-term marketing campaigns also means that brand recognition will be decreased, as will the ability to build a solid reputation. Companies will need to continually strive for more transactions and new customers rather than relying on a relatively stable base of returning customers.

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JaneAir
Post 2

@indemnifyme - Transaction marketing definitely won't work for every business model. However, I think it makes sense when you're selling something that isn't going to be popular for long.

For example, if you were selling themed merchandise for a new movie, you probably wouldn't need to develop relationships with your customers. It's not likely they will want to buy any more merchandise when the movie isn't new anymore, so why bother?

indemnifyme
Post 1

I don't think this is a very sensible marketing strategy. How is your business ever supposed to succeed if no one knows who you are and you don't get repeat sales? This sounds so short sighted to me!

But then again, maybe I'm biased because of the industry I'm in. I work in insurance and our business is all about relationship! Our business depends on getting people to renew with us after their policy period is over. If we aren't successful at building a relationship with them, they'll just go somewhere else!

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