Relational or Transactional Business Model – Belk on Business – Episode 136
- Evaluation of business model and core values – all decisions in business from what we do to why we do it to with whom we work should filter through core values
- A transactional business model is built on the short term. It is a model that the business does whatever it takes to make a sale many times neglecting what the customer really wants or needs. A transactional business model is focused purely on profit resulting in poor relationships with customers, employees and vendors. They advertise and market consistently.
- A transactional business model works best if price is the main decision point of the prospective buyer. When a customer is purchasing mostly on price, they will generally return. A relational business model is broader as to its approach and focuses more on overall customer satisfaction and experience.
- A relational business model starts with a goal of building a long-term relationship with the client by determining what the client truly needs and wants and putting the wants and needs of the business secondary.
- You allow the customer to buy on their own terms (no high pressure or manipulating or scare sales tactics)
- Valuing and cultivating the relationship comes first in a relational business model. The transactional business generally just meets the minimum expectations of the customer. In a relational business model, you will deliver value first, under-promise as opposed to over-promise and even easily tell a client that you may not be the best option. You will have resources and referrals that align with your core values that can help the client achieve their results or goals.
- A relational business model may not hit profitability as quickly as a transactional one, however, a relational business has a much higher probability of achieving profitability and impact in the long term.
- A relational business model generally has a much better internal culture which can make a greater external impact in the community it serves.
- A relational business model will generate loyal customers that send you referrals that come to you already understanding a little how you make people feel.
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