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Relational vs. Transactional Advertising

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So, I’m sure you have heard of relational advertising and transactional advertising, but have you really thought what is best for you, the retailer? Deciphering the difference is the first in many steps to figuring out to grow your business through advertising.

Let’s examine both types of advertising a little more closely.

Relational advertising deals with relationships. It is based on brand loyalty, not on price. This type of advertising allows customers to relate to the retailer and creates a connection between the two.

Transactional advertising is price driven and creates a short-term relationship with customers. They don’t shop with the retailer unless there is a sale.

Now, I bet you’re asking yourself, which is the best for me? Well, it really depends on what you want for your business. Transactional, while it may sound appealing and get customers through the front door, doesn’t develop a long-term relationship. It only brings in those coming for the sale. Of course all business is good business. However, as you know, retailers can’t afford to do a sale every week.

This is where relational advertising comes in to play. Not only does it promote your brand and make customers want to shop at your store; it also builds a long-term relationship with the customer, so that they won’t shop anywhere else. If done correctly, customers won’t even pay attention to price, but will focus simply on the company that they have come to know and trust. Relational advertising doesn’t happen overnight. Results will take longer than transactional advertising.

So what should you do? Most retailers are still focusing on transactional advertising. They want to get customers in the door and make a sale— and improve their bottom line. While making the sale is important, it is also important to establish relationships. I think that while offering discounts and sales are great, establishing a strong relationship will help you in the long term. Less price-driven sales for you equals more money in your pocket.

Now, should you go cold turkey and drop transactional advertising all together? No. You need to do a nice mix between relational and transactional advertising. Once you have established your customer base you can back off some from transactional advertising. But, I would never stop using transactional advertising completely. It helps to reward your long-term customers and also bring in new customers.

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