Relational vs. Transactional: Which Type of Customer Is Better?

‘Aha,’ I thought to myself. ‘That makes so much sense!’

The more I thought about it, the more I realized that this distinction impacts pretty much every aspect of business — how to price your work, how to relate to customers, and how to position yourself.

This distinction is so crucial that when I taught a workshop about pricing strategies, this is what I started with. Let’s explore this:

The difference between transactional and relational customers

Before describing this difference, I want to point out that many people are sometimes relational customers and sometimes transactional ones. In other words, this distinction should not be confused with personality traits such as introversion and extroversion.

Transactional customers:

For transactional customers, price is the main thing that influences whether they purchase from you or not.

They will spend time shopping around, enthusiastically use discount coupons, and might even try to haggle on the price.

With a transactional customer, you can expect a one-time sale. They are not interested in long-term relationships with the seller but they will return if they need to buy something and you happen to have the lowest price.

In general, transactional customers have a somewhat adversarial relationship with the seller in that they want to be the ones to “win.” Their primary desire during the purchasing process is to not pay more than they have to.

When it comes to buying gas, I’m a transactional customer. Since I’m not particularly fond of any gas company/station, I just want to get the lowest price (and look forward to getting an electric car so I don’t have to bother with the whole process anymore).

→ What about you? Where are you a transactional customer? By exploring your own experience, you can more deeply understand this mindset.

Relational customers:

For relational customers, price is only one of many considerations that influence their purchasing decision. Some other factors that matter include their relationship to the seller, their values, time investment, etc.

Unlike transactional customers, they don’t care as much about getting the best price. If they are satisfied, they will likely become a repeat customer.

In general, they aim to have a supportive relationship with the seller and want to find a win-win. Their primary desire during the purchasing process is to make a good choice.

One example of me as a relational customer is when it comes to buying groceries. We have an organic supermarket nearby that I absolutely love and so I don’t mind paying a bit more for produce.

I also tend to be a relational customer when it comes to personal services. Many times, I’m not looking for the cheapest option but for what’s the best fit. I also want to feel like the price is “fair” — both to me and to the other person. If I’m paying too little to make it worth the other person’s time, I feel uncomfortable because it feels like I’m taking advantage.

→ What about you? Where are you a transactional customer? By exploring your own experience, you can more deeply understand this mindset.

Takeaway

Make sure your offer, selling process, and pricing are all in alignment with the type of customer you want to attract. If you want loyal customers (or true fans), it’s probably best to choose a relational approach.

Of course, customers don’t have to like you to buy from you. People are buying from icky salespeople all the time. However, if someone doesn’t like you, they generally only buy from you if you have the best offer (which is typically the lowest price). Plus, the customer journey might be over after a single interaction.

In contrast, if you have great customer relationships, you often don’t need to participate in a “race to the bottom.” One of the main differences between transactional and relational sales is customer loyalty. Relational customers often come back for more.

As a creator, solopreneur, or small business owner, you can benefit from this! Small businesses are often already very relational, more than big businesses can ever hope to be. For instance, in a small business, it’s not unlikely that the CEO (you?) has personally interacted with all customers.

Why not embrace that advantage?

If you plan on taking a relational approach, focus on strong relationships and positive customer interactions. Remember that discounts or low pricing alone are not enough to win over someone’s heart.

For many creators, that is great news!