Are You Transactional or Relationship-Based?

Opinions expressed by Entrepreneur contributors are their own.

As more large businesses add self-checkout options, do you see this as a less personal way of doing business or more accommodating? I suppose an argument can be made either way. Those that see it as more accommodating, it’s likely because they tend to want to be in and out with minimal friction and conversation. Whether the self-checkout line is shorter or not, it feels like it’s apt to be a quicker transaction without the trite small talk that tends to come with the cashier experience. “Did you find everything you were looking for today?” If I say no, what’s going to happen, you might wonder? Are you going to hold up the entire line behind me and search for the unfound items? File my grievance that I couldn’t find the organic almond butter I was looking for? The whole scripted conversation just seems like a waste of good energy that could be better used elsewhere.

Do you enjoy a bit of chit-chat with a bank teller or do you prefer to get your cash from an ATM and be on your way? Unless a face-to-face interaction is necessary, most people are more than happy to work with a machine. Whether it’s perceived as impersonal or efficient, the truth is such businesses are showing us who they really are–transactional businesses. It’s an exchange of currency for products and off you go. Transactional businesses may as well lean into what they are best at. Move the transaction along as quickly as possible and make the shopping experience efficient. It may not be about building a relationship but it can still be excellent customer service. How so? How can a less personal experience be better customer service?

Ultimately the best customer service any business can offer is to be accommodating. To meet the customer where they are. To fit into their life rather than making customers feel like they have to fit into the business’s standard procedures. The best customer service is often the result of observing how society is changing and adapting to meet the current lifestyle needs. What does almost everyone want more of right now? Time. If an impersonal experience at a retailer can give us back time, one can say that’s very accommodating. In fact, what if the time gained is better spent with people whose relationship you care far more about than a cashier? Like a loved one, friend, or business associate. Do you really want a deeper relationship with a bank teller or more time to grab a coffee with a loved one? If transactional businesses can give us all back time and control over how to best use our time, then that is excellent customer service.

Let’s consider the distinction between transactional and relationship-based visually for a moment. At transactional businesses, the cash registers are lined up at the front of the store. The emphasis is on the transaction and checking out. In a high-end retail store, either no cash registers will be in view or there is a register for each department. Could you imagine seeing a lineup of registers like a cattle corral at a store like Neiman-Marcus?

Similarly, you walk into your favorite local diner and there’s likely to be a register with a bowl of mints. When you walk into a fine dining establishment, at most there’s going to be a hostess stand but certainly not a register. 

The important thing is to fully own whether you are a transactional or relationship-based business. Somewhere in between is the real problem. Making customers feel transactional when your business needs to be based on building relationships doesn’t bode well for a sustainable business.

This difference between transactional and relationship business is particularly important for small businesses to understand because most small businesses are built on relationships. It’s the promise of a personal experience that draws a customer in. It’s the relationship that keeps them coming back, and it’s the experience that motivates them to refer. The problem is without understanding the difference between a transactional business and a relationship-based business, it can be easy for a small business to fall into a transactional mode because that’s what we tend to see modeled around us by much larger businesses than our own. 

The most blatant example is when a transactional business, let’s say a utility company or cell phone carrier, offers a special deal for new customers only. I’m sure you can imagine how customers of a relationship-based business feel when their loyalty is disrespected when a deal is offered for new customers only. They, the loyal customer, don’t get the same benefit. In fact, if you are a relationship-based business, there should be a customer loyalty program in place that honors their previous business that a new customer would never receive. So much so that I suggest there should be some benefit, monetary or otherwise for existing customers that is greater than any offer ever made to attract new customers. That’s how you build great customer relationships.

So often though, modeling the big guys, small businesses get this backward. They end up catering to attract new customers at the detriment of their relationship with existing customers.

The good news is small businesses that are relationship-based are now given a huge opportunity to really shine on their core strengths of personalization and relationship building. As transactional businesses become less personal, albeit perhaps more accommodating, the more businesses that are relationship-based are going to stand out. Where consumers are lacking that personal touch in some business interactions they are going to crave it in others. The division between transaction-based business and relationship-based business seems to be widening and this can be to the advantage of higher-touch businesses. Both types of businesses can win. The important thing is to know where you stand. As a small business, it’s likely to be relationship-based. So, let those transaction businesses have at it. It’s only going to make your business shine brighter and play into your core strength of relationship building. 


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