Relationship Marketing vs. Transaction Marketing
This month’s newsletter article was written by Robert Friend, Vice President, Business Development & Strategy here at Patron Technology. —Gene Carr
Over the past several years, theatre marketers and fundraisers have started to make a fundamental shift toward a relationship-oriented approach with their customers. The challenge, however, is that many arts organizations do not yet have the capacity or expertise to truly engage in this way.
Today, many marketing and fundraising departments are immersed in transactional marketing programs and activities — an approach that worked very well a decade ago. This marketing and sales approach is focused primarily on acquiring new customers and keeping current customers in touch with institutional movement.
It is a short-term transaction marketing strategy that revolves around action-related marketing programs for large groups of customers. Although this strategy is essential for building audiences for any arts organization, it is no longer the way to build long-lasting relationships inside your audience base.
Relationship marketing, on the other hand, is geared toward building lifelong customer connections. It requires deep and highly targeted interactions and a long-term action plan to create a customized and personal connection with your audience.
Seth Godin, American entrepreneur, author, public speaker, and blogger, crystallizes the essence of relationship marketing in his discussion of “tribe management.” Seth writes, “Tribe management starts with permission, the understanding that the real asset most organizations can build isn’t an amorphous brand but is in fact the privilege of delivering anticipated, personal and relevant messages to people who want to get them.”
Relationship marketing is a top-down commitment that could very well create a major cultural shift for your operation. It is a commitment to truly get to know your audience and understand who they are and why they are engaged with your arts organization.
The difference between transactional marketing and relationship marketing is profound. The two can and must exist together to support the overall growth and nurturing of your audience base. But in the end, a relationship-based marketing effort will yield much stronger results. It will build a core group of evangelists who will play a key role in the ongoing success of your operation and, through this effort, support a significant increase in earned and contributed revenue for your institution over the long term.
So, here’s the question: Are you managing your customer relationships by empowering your entire management team to deeply engage in a customer relationship initiative? Is this part of the intuitive culture and context of your day-to-day operation?
As the board and senior staff develop business strategies to ensure fiscal success, are we also reviewing our culture of engagement? A culture of engagement that, if adopted, could change the paradigm of how we interact holistically with every one of our customers?
Next time you sit down with your management team, why not raise these issues? Engage in an open dialogue about the strategies and tactics you deploy around your audience relationships. Then ask the group whether you are merely giving lip service to relationship marketing — and if so, whether it is time to rethink, redeploy, and make the shift to a relationship-marketing-driven operation.
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