What Are the Advantages & Disadvantages of Transactional Marketing?

Transactional marketing is a marketing strategy that entices people to make a transaction. The concept focuses only on the one transaction; it doesn't focus on fostering a relationship with the customer for repeat business, as in relationship marketing. Transactional marketing has a number of advantages and disadvantages.

One major disadvantage to transactional marketing is the "one and done" concept in terms of customers. Transactional marketing efforts aren't concerned with acquiring a new long-term customer per se; marketers are given the task to find people to make a purchase one time, not foster a relationship with that customer for more purchases down the road. Customer loyalty isn't important in transactional marketing. This lack of focus on repeat business is a loss of potential future revenue for a company.

Another disadvantage to transactional marketing is that you can't build a good reputation for your company around customer loyalty and reviews. When you foster good relationships with customers, they often become marketing advocates for your company, telling their friends and family about your great products and services. But when you just want them to make a quick purchase, you lose that ability to build your reputation with your customers and consumers in general. People are less likely to recognise your brand if you don't establish relationships with them.

Cost is one of the advantages of transactional marketing. Because transactional marketers are really concerned with just making one quick sale, the cost for transactional marketing campaigns is often much less than the cost for other campaigns that spend a lot of money on fostering relationships with customers over time. For example, certain transactional marketing campaigns cost nothing more than a phone call or sending a flyer out in the mail. Since it's a relatively inexpensive effort, marketers can make their marketing dollars stretch farther with transactional marketing campaigns.

Time is another advantage to transactional marketing. Similar to cost, marketers spend less time on transactional marketing than with other types of marketing campaigns because they're only focused on the one sale. Relationship marketers spend a lot of time communicating and building relationships with customers, but because transactional marketers aren't concerned with that, they often spend less time acquiring a customer, giving them more time to reach out to more people. The more customers you can connect with, the more sales you drive.