Friday, September 18, 2015

Transaction vs. Relationship: Which Sells More?

Imagine this scenario: In your business or organization, you are the person responsible for sales and marketing activities. It’s time to formulate next year’s plan and determine how much executing it will cost. Will investing in transactional marketing strategies or does building relationships with customers yield the best results?

On the one hand, transactional marketing – which focuses on single point-of-purchase sales transactions – can be maximized for transaction efficiency. This means less overhead costs associated with each sale and therefore a higher potential net profit. Transactional sales are appealing to buyers in today’s busy world because they take less time and can happen 24/7.

In contrast, relationship marketing focuses on generating sales based on first developing a relationship with the buyer. This means the business must gather and analyze information about each buyer’s needs and wants in order to offer products and services that are useful and relevant. Such an approach takes business resources (time and money), which compromises efficiency. The trade-off is that a relationship with the buyer can lead to customer loyalty and long term purchasing habits.

Transactional Marketing

The aim of transactional marketing is to generate a high number of individual sales. If your product or service can be used “off-the-shelf” by a broad range of potential customers, transactional marketing may be the right approach.

The role of the customer in transactional marketing is limited. The customer has little interaction besides making the purchase decision. In transactional marketing, a customer’s overall value is determined by the size and frequency of transactions – in other words, by how much they spend and how often they buy.

Successful transactional marketing is built on The Four Ps:

  • Product: having a product that meets the buyer’s needs and has the features and benefits he wants.
     
  • Pricing: having a price point that is competitive and attractive to the buyer while maintaining a good profit margin. To accomplish this, the business must be a low-cost producer – that is, be able to produce the product or deliver the service at a cost below that of competitors.
     
  • Placement: making the product or service readily available through an efficient supply chain or distribution channel.
     
  • Promotion: using marketing techniques and advertising that makesthe product or service readily visible to potential buyers and provides reasons for the buyer to purchase immediately.
     
It may seem like transactional marketing does nothing to encourage customer loyalty and repeat business. This isn’t necessarily true. If the product or service fulfills a need the customer has and is value-priced, the customer will make repeat purchases and may recommend the product or service to others. Just because a seller has not emphasized establishing a relationship with the buyer doesn’t mean that one doesn’t exist in some form.

Relationship Marketing

Relationship marketing has a longer-term goal than transactional marketing. It sees customers as having lifetime value – the sum of current and future purchases. Viewing customers this way changes the business’s focus from maximizing profit based on the immediate sale to establishing a long-term relationship that over the years will result in overall higher sales volume.

Customer retention is a cornerstone of relationship marketing. It is based on a much more in-depth understanding of customer needs and wants. Whereas successful transactional marketing only needs to know whether the current product or service meets the customer’s requirements, relationship marketing requires knowing what the customer may want or need in the future. This requires more frequent contact with the customer, as well as gathering a broader range of information upon which predictions can be made.

It also gives the customer more control of the situation. Customers must participate in more-frequent contacts as well as share information. This makes relationship marketing a longer and more resource-intensive effort.

The long term benefit of relationship marketing is increased customer satisfaction and better customer retention, leading to an overall net increase in the customer’s lifetime value. In addition, since new customer acquisition costs are frequently much higher than the cost of selling something new to an existing customer, greater overall profits result.

The Role of the Internet

Technology and the internet have dramatically changed the way customers interact with businesses. Email and social networking have significantly eroded the number of face-to-face interactions between businesses and their customers while simultaneously enabling businesses to communicate much more frequently. Businesses that once relied exclusively on relationship marketing are now offering transactional purchasing using online ordering at the company’s website. Search engines and overnight shipping have eliminated geography as a barrier to buying. Manufacturers, who previously relied on their dealers to maintain the customer relationship, now actively participate with instructional and educational features on their websites, with blog articles and posts on social media pages.

The internet can be a powerful force in supporting relationship marketing by helping businesses build a community of loyal customers, fans and followers. With search engines, a community becomes much easier for potential customers to find, join and be persuaded to buy.

Building an online community begins with understanding your audience – their wants, needs, and motivations to buy. Be specific in developing a profile of those your product or service will benefit most, and craft messages that will resonate with them.

Understand that being part of an online community means having a dialogue. For businesses, that means listening to customer feedback – good or bad – and responding to it appropriately. Today’s customers expect to be part of the conversation and to be taken seriously. Don’t disappoint them.

An online community provides the opportunity for you to share your expertise, providing advice and answering questions. A side benefit of this process is that you are generating content for blogs and social media posts.

Use a Combination

For most businesses and organizations, the best marketing approach is a combination of transactional and relationship. With its focus on the lifetime value of a customer, relationship marketing reminds businesses of the importance of offering a quality product or service accompanied by excellent customer service and responsiveness. It also gives customers a much more active role in the relationship, making it easy and convenient to conduct a conversation with the business.

On the other hand, transactional marketing based on internet purchases provides businesses with a much wider geographic reach and levels the playing field between competing businesses. The requirements of transactional marketing – offering a quality product at an attractive price point that maintains profit margin – and the faster pace of purchases allows businesses to grow sales while waiting for the customer relationship to develop.

AIDA on the Web

Tim Matthews, author of The Professional Marketer and blogger at www.matthewsonmarketing.com, recently explained the history of the sales funnel to describe the process of prospects becoming customers. Tim states the original image was a kitchen pot, formulated in 1904 by Frank Dukesmith, editor of Salesmanship magazine. Dukesmith wrote:
A sale of any kind has four essential parts: Attention, Interest, Desire and Conviction. Take these in their proper order. Do not mistake polite attention for interest and do not assume when a desire for possession is aroused that conviction has been reached.
To help salesmen remember the four essential parts, Dukesmith created the mnemonic AIDC. Later he changed conviction to action resulting in the lasting mnemonic AIDA.

AIDA and the sales funnel concept is still valid today and can be used with digital marketing practices: social media to establish brand identity and Awareness; engaging customers to request e-newsletters or other marketing material to establish Interest; open and click rates to measure Desire; and the buttons on a website to enable taking Action.

Print for Web Based Businesses

Whether your company selects a marketing approach based on transactions, relationship or both, there is still a need for printed sales material to enhance the buyer’s experience.

  • If using transactional marketing, during product fulfillment, enclose new product flyers, catalogs, customer-focused newsletters, coupons or other material that will inform the buyer and spark interest in another purchase.
     
  • For relationship marketing, you’ll need printed brochures, product sheets, professionally printed business cards and other sales collateral material.

To build credibility with prospects, it is important that your printed sales material match your website. The color palette, choice of fonts, writing style and use of graphics should be appropriate to the medium and visually coordinated.

If you would like a graphics-related analysis of your website and printed materials, contact Brigid at 215-923-2679 or brigid@creativecharacters.com. She will be happy to assist.

Buying Online or In Person?

According to Nelson Global Consumer Report, 83% of Americans have made a purchase online. Buyers today are faced with one key question before purchasing: Should I buy online or in person?

The answer is somewhat complicated, subjective and even scientific, according to shopping experts and studies. “The more familiar and predictable a product, the safer you are buying it online from a reputable online retailer,” according to Philip Graves, consumer psychologist and author of Consumerology: The Truth about Consumers and the Psychology of Shopping.

For example, if you knew which model of Tag Heuer watch you wanted to buy, you would purchase it online due to brand consistency. Sometimes, it’s not that simple though. “I once bought a bed online, based on the description,” Graves said. “That was a huge mistake. I don’t think anyone can adequately describe to someone else how they will feel lying on a particular bed.”

If you need help putting your product or service online contact us today!

Thursday, September 3, 2015

Now is the Time to Grow or Start Your Blog

Articles and statistics touting the benefits of blogging are ubiquitous. You know you probably should be blogging, but how and what you should write about plague even the most seasoned marketers. If you aren’t sure blogging is right for you, let’s start with a few statistics.

  • Nearly 40% of US companies use blogs for marketing.
     
  • 82% of marketers who blog daily have acquired customers through their blog, as opposed to 57% of marketers who blog monthly -- which, by itself, is still an impressive result.

  • 79% of companies that have a blog reported a positive ROI for inbound marketing last year

Like many things, getting started blogging can be the hardest part. Use the following suggestions to keep your blog going on a regular basis.
 

What Should I Write About?

Blogging is an informal platform. It can, and should, be written in a very similar tone to how you would speak to someone in a casual conversation. Here are topics that can help you jumpstart your blog.
  1. Showcase a customer experience, anecdote or problem you have solved. Is there a time that you came to the rescue for a client? Something you did that went above and beyond the call of duty? Share it on your blog. Write out the situation, the solution and what successes came from it and share it with readers on your blog.
     
  2. Answer, in great detail, some of the most frequently asked questions about your company, products and services. Do you feel like you are always answering the same questions over and over again? Create a post for each one of your most frequently asked questions. In the post, explain industry jargon, why you do what you do, how you differ from the competition in this regard, what caused the policy to be this way, etc. If you don’t know what your most frequently asked questions are, you can try answering the question “What do people need to know in order to do business with you?”

  3. Publish news and press releases on your blog. Did someone in your company get a promotion? Earn an award? Accomplish something great (even non-business related)? Blog about it. A blog post showing appreciation for a stellar employee can do a lot for company morale, internal production and external promotion.

  4. Write about your experience with other industries. Did you just eat lunch at an amazing restaurant with superb service? Talking about the importance of service, delivery, brand messaging, etc. no matter what industry can be a great blog post. On the flip side, if you just had a terrible experience, that can also be a great blog post. Talk about what you would have done differently, how the situation could have been rectified and what you do to make sure a similar situation doesn’t happen in your place of business.
     
  5. Create a list. The internet loves a good list. Again, this can be about things in your industry or things adjacent to it. Do you have a list of the top 10 books that helped you succeed in business? Write about it. Top things you have learned from networking, from running, from _____ (insert your hobby here) can be a great, easy to read blog post.
     
  6. Talk about travel experiences. Have you had a once in a lifetime experience in a far off (or not so far off) place? Write about that too. How did it change you, what did you learn, what would you do differently? How did you manage the time away from work? In this 24/7, instant gratification world it can be very refreshing to see a business owner actually taking a step back and enjoying the life they are working so hard to maintain.
     
  7. Host a contest/giveaway/poll. People like to get free stuff! We worked with a travel agent client recently who ran an interactive contest with the grand prize being a week aboard a fishing vessel in Alaska. The contest was all about “why I deserve a week vacation”. People had to write a blog post on the topic and then share it on various social media sites to be entered in the contest. What it did was create a community of people who all wrote about how fun it would be to get away for a week aboard a fishing vessel. The client was able to use these contest entries as “guest” blog posts and gathered a lot of insight into why people want to take a fishing vacation. The content he gathered from this contest has been invaluable to his marketing efforts.
     
  8. Respond to news around you or your industry. Think about major events that are coming up in your area and how you could tie in your business to that event. Check with the local chamber of commerce and tourism board to see what events are happening that you could write about on your blog. On a broader scale, look at the world news and see what might be happening that you have experience and an opinion on that you would like to share with your audience. Maybe you have a unique spin on a recent sports team win. Or maybe you just want to share your excitement about it! Either way, current events are a great place to look for blog topics.
     
  9. Industry myths that need to be debunked. I’m sure every plumber has heard a bad joke about one of the many plumber stereotypes. If your company breaks the mold and is far from the stereotype, share that with people? Debunk myths that have lived for far too long about your industry.
     
  10. Talk about your future plans; both personal and professional. People tend to do business with people they like and trust. Posting your personal and/or professional goals and plans can seem like a vulnerable and private exercise, however, it will do two things for you. First, it may show a common bond that you are your customer never knew you had. Perhaps you both intend to run a marathon or bike across the state. Having something in common will increase your likeability. Second, it can help hold you accountable to your goals. Statistics show that people who write down their goals have over an 80% higher success rate of achieving them than those who don’t. Putting your goals in a blog post will help create a roadway to success.
     
  11. Show off a talent. In your daily 9 to 5, you may be the consummate professional but after 5pm, you rock the stage in a jazz band! Let people know about your talents. Now, I don’t mean start doing shameless promotion that distracts from your everyday business, however, a blog post that shares your passion for music (or whatever your passion is) can again build trust and show the human side to your corporate personality.
     
Hopefully some, or all, of the topics above have started the wheels spinning on what you could put on your own blog.  If you do decide to start blogging, consider some of these best practices as well.
  1. Post in great detail. Aim for 1500-2000 words per post.
     
  2. Source from your staff. Your blog can have multiple voices and tones to it. If you have a staff member that has something to talk about, give them the platform to do so.
     
  3. Try to use the words “you” and “I” in your posts as you would in everyday conversation.
     
  4. Make it easy to read. Bold items of importance, use bulleted/numbered lists and line breaks where necessary.
     
  5. Remember, what goes online stays online. Of course you can always delete a post, but that doesn’t mean that there isn’t a copy of it lurking around somewhere.  
     
  6. Be consistent.  Blogs that are posted to daily receive more traffic and conversions than blogs that are posted to monthly. Set a schedule and be consistent in your posts. But you have to start somewhere, so if monthly is all you can do for now – do that – and build up to daily frequency over time.
     
  7. Share, share, share! Now that you have a consistent blog, it’s time to get people to your site! Social media is a great way to start getting people to your site. Share your posts on twitter, Facebook, Instagram, Pinterest and LinkedIn just to name a few. Ask friends to share your new blog as well. Then participate and comment on other forums and blogs that are relevant to yours. Be sure to include your blog URL in your signature on any posts you make to other sites and forums.
     
We’d love to hear about your blogging success. What has worked well for you and what hasn’t? Contact us today to let us know!

Perform a Website Audit

Many website owners take the Ron Popeil approach with “set it and forget it” and while that may work for roasting chickens, it is a terrible web strategy. If it has been awhile since you reviewed your own website, now is an ideal time to do it. Here are some things to look for when doing a website audit.

  1. Check out your title tags. The title of your website is a critical factor when it comes to the major search engines understanding what your website is all about. A good title should be less than 55 characters and should contain a keyword (or two) that you want your website to be found for in a search.  The title tag appears in the tab of your browser and in the search engine results page. Check out the titles on your website pages.  If they are all the same and non-descriptive, it is time to update them with more relevant and search friendly titles.
     
  2. Update content. Things can change rapidly in business. What was true about your company and its offerings when you launched your website may not be relevant today. Be on the lookout for:
    a. Making sure all of your products and services are represented on your site
    b. 
    Employee profiles are current
    c. 
    News stories and press releases are up-to-date
     
  3. Add video content. Processing over 3 billion searches per month, YouTube is now the second largest search engine. Video content is becoming more and more important for business. Share your process, products, promotions and people with short video clips that can be uploaded to YouTube and embedded on your website.  
     
  4. Contact Information. Your contact information (address, phone and email) should be located and easy to find on every page of your site.
     
  5. Refresh graphics. Do a quick once over on your site. Do your graphics look crisp and clear? Do they load quickly and are sized properly for use on the web? If not, it is time to edit the graphics or do a site makeover.
     
  6. Social media accounts. Can people easily find links to your Facebook, Twitter, LinkedIn and other social media accounts? Adding a clickable logo to your page makes this easy for users to find and access.
     
  7. Cross links. Linking from one page of your website to another is an easy way for users to find and access information on your site. If the opening paragraph on your homepage talks about one of your products, be sure to link the product name on the homepage to the product page. Creating these links can also be good for Search Engine Optimization. Add these links from one page to another where it makes sense and seems logical for the user.
     
  8. Optimized for mobile. This is no longer an option or a nice to have feature. Having a mobile optimized site is an absolute must for businesses. With over 50% of searches being done on mobile devices, if your site isn’t optimized for those uses you are very likely losing out on a lot of potential business. Check out what your website looks like on a mobile device. If it is not optimized for a smaller viewport, it is time to call your webmaster and get a mobile site pronto.
     
These are just a few critical items that you can review your website for to make sure your site is an asset and not a liability. If you need help with any of the items above, let us know. We are happy to help.