Guest Post: Transactional vs Relational Customer Service

This week, we feature an article by Deniz Kuran, Head of Marketing at Idiomatic, an organization that helps companies understand their customers by translating customer feedback into actionable data. She discusses the difference between transactional and relational customer service.

Effective customer service should contribute to a positive relationship between the organization and the customer. While customer service used to focus on promptly addressing individual complaints and requests, we know customers’ needs are more complex than this.  

Beyond convenience, customer service should develop customers’ sense of belonging and recognition. A successful customer service experience should leave the customer feeling valued and appreciated by the organization.  

What Is the Difference Between Relational and Transactional?

Essentially, transactional vs. relational customer service is the difference between a one-time purchase and lifelong customer loyalty. 

• Transactional customer service is low-effort and short-term: it focuses on getting the issue resolved efficiently, sometimes at the expense of experience.  
• Relational customer service aims to contribute positively to a customer’s relationship with the brand by providing a personalized experience. It satisfies the customer’s need for approaching customer service and their need for connection and appreciation.  

Relational customer service is more effective than transactional customer service because it centers around bringing human experience to a functional interaction. Relational customer service builds trust between a business and its customers. Customers who feel they can rely on a company are more likely to purchase again. 

An advantage of relational customer service allows businesses to collect customer intelligence. This information allows for a more personalized experience for each customer. 

Finally, relational customer service creates an emotional connection between a business and its patrons. Customers who feel connected to a company are more likely to remain loyal. 

What Is a Transactional Customer Relationship?

In a transactional customer relationship, the customer and company interact on a one-time or short-term basis. There is no ongoing relationship between the customer and the company after the transaction is complete. For example, if a customer buys a product from a company and then never interacts with the company again, that is a transactional relationship. 

What Is Transactional Customer Service?

Transactional customer service is the most basic form of customer service. The goal is to sell something without much customer contact and with little commitment. The focus is on turning over inventory and bringing in new customers.  

What Is Relational Customer Service?

Relational customer service involves an ongoing, meaningful relationship between a business and its clientele. This type of customer service focuses on building long-term relationships rather than simply completing a transaction. 

Relational customer service is a more effective way to build loyalty and customer lifetime value (CLV). Studies have shown that customers who receive relational customer service are more likely to make repeat purchases. They’re also more likely to recommend the company to others. 

Creating a Relational Customer Service Strategy

Every company should focus on providing superior customer service. 

This means going above and beyond to meet customer needs and can include sending thank-you notes for purchases and providing immediate support when customers have questions or concerns. 

All businesses should focus on developing long-term relationships with their customers. This is achieved by regularly interacting with customers and developing a personalization strategy. Personalization goes beyond including the customer’s name in messaging. Identifying their preferred communication channels is an effective way to fulfill customer needs without them having to ask. Using satisfaction ratings, session duration, and most frequently used channels, you can organize customers into preferred communication methods; phone calls, emails, chat, or video calls. 

The strategy may also include sending personalized messages on holidays and birthdays. 

A customer relationship management (CRM) system keeps buyer information organized and accessible. Details relating to purchase history, communication preferences, and personal information are easy to find using this software. These tools can improve the overall customer experience. 

Rewarding customer loyalty shows customers that you value their patronage. You can offer loyalty points, discounts, and exclusive deals as part of your customer rewards program. 

Leveraging AI in communication flows can improve efficiency, resulting in a more positive customer service experience. Chatbots can take care of simple questions and concerns, freeing up your team to handle more complex concerns. 

Following these steps, businesses can create a relational customer service strategy to improve customer loyalty and increase revenue. 

Creating a relational customer service strategy is essential for businesses that want to build loyalty and customer lifetime value.

Customer Lifetime Value (CLV)

CLV is the total dollar amount a customer is expected to spend on a product or service over their lifetime. Businesses that focus on relational customer service are more likely to have high CLV because customers are more likely to repurchase and become brand loyal.  

The Importance of Collecting Customer Intelligence

Collecting customer intelligence is essential for businesses seeking to offer a more personalized experience. This information can segment customers, create targeted marketing campaigns, and provide a better overall customer experience. 

Businesses can collect this information through surveys, interviews, focus groups, and customer data.  

The Importance of Creating an Emotional Connection

Creating an emotional connection with customers is essential for businesses that want to increase customer lifetime value. Emotional connections are made when customers feel a positive association with a company. It goes beyond knowing that their business is appreciated — they have to feel it. This emotional connection comes from the language you use to communicate with them, the approach customer service agents utilize, and the recognition of their needs or struggles.  

To foster meaningful relationships with your customers, you should create marketing campaigns that resonate with their values and emotions, emphasize outstanding customer service, and identify opportunities for increased shopping convenience.   

Make Relational Customer Service the Cornerstone of Your Business Strategy

Customer service is an essential element of a company’s brand reputation— a notable customer experience spreads through word of mouth, for better or worse.  When done well, customer service equips your organization to retain customers in the long term, increasing CLV. 

Deniz Kuran is the Head of Marketing at Idiomatic. She has 10+ years of B2B & B2C marketing experience in various sectors such as SaaS, e-commerce, education, and consumer goods.