Transaction vs Relationship Buyers

Arthur Middleton Hughes of the Database Marketing Institute has written a article that suggests that companies should make a clear distinction between two types of customers: Transaction Buyers, who buy only based on price, and Relationship Buyers, who buy based on the quality of product, service, and reputation.

Hughes points out that the concept of attracting new customers solely with low prices rarely works: those new customers will always hop to the next low price vendor, and never contribute much to profits.

He suggests that the ties that bind ongoing customers include ALL of these factors:

  • Recognition
  • Service
  • Information
  • Helpfulness
  • Friendly employees
  • Brand identity
  • Product quality and price

Here is a short summary of his conclusions, but there is much to read in the full article.

  • Know who your customers are. Be sure that they are treated as Gold.
  • Communicate with them. Find special ways to build a relationship with them.
  • Use your best customer service people with them.
  • Build equity in the process. Provide rewards for volume business and for length of service.
  • Don’t stress price. 
Tags: 
price
relationship