Question

Distinguish between transaction-focused traditional selling and trust-based relationship selling

Answer 1

Transactional selling and relationship selling a two different methods employed by the marketers for the selling and promotion of the organizations products and services, but the key difference between these two tactics is; transactional is wholly concerned about the promotion and selling of the product with little or no focus over customer value and satisfaction, and try to make new customer every time, on the other hand relationship selling is all about developing and sustaining the long-term customer relationships, creating a sense of loyalty by offering the valued product and services for mutual benefits.

Transactional selling is also called traditional marketing. Transactional selling is a selling method,
which largely concentrate on the single sales formula, driving the sales through mass marketing and promotions of the product. Orientation on product features, instead planning for the longer run of the product in the market; it is due to the short time scale, with little or no attention on customer services. This uses pull technique, producing the product with quality as the main concern, and satisfying customers’ needs and wants without creating any relationship with them. “Transactional selling focuses on maximizing the profit of the company by recruiting more and more customers to purchase the firm’s product .” For instance, consumers have their preferred brand of laundry detergent and they have their preferred locations to buy it, both developed from years of trying other products and shopping at different places. The actual process of buying it does not involve any material sales interaction. If their preferred seller stopped carrying it or was significantly more expensive they would likely shop elsewhere regardless of their overall loyalty to the seller.

Relationship selling is more emphasized on offering the valued products and services to the customers. This customer relationship management (CRM) approach focuses more on to retention of the customer for the longer benefits of the company, not on making new customer everyday. Relationship selling reverses the historical emphasis of making customers and paying no attention retaining them. It was claimed by “It is between five and ten times more expensive to win a new customer than it is to retain an existing one”. This approach is planned to develop strong ties with customers by giving them with valued products and going all-out for the their satisfaction, that often results in increased word-of-mouth activity, repeat business and even gives the company a competitive advantage over its competitors. For instance in the case of the wine store, relationship customers are those who come in with engaging in conversation and asking about wine and what the salesperson might suggest, say, to accompany their meal.