Hey there Rainmaker, it’s time for another Mental Game lesson on growing a thriving business…
From my book that I’m writing while you watch, Breakthrough Marketing Secrets.
I’ve talked off and on about playing “the long game,” in business and in life. I’ve quoted Marty Edelston, founder of Boardroom, in saying “Life is Long” — a quote I first heard from my friend and client Brian Kurtz who helped Marty grow his business from 7-figures to 9-figures (and who put on The Titans of Direct Response last year).
This is exactly what I’m talking about with playing “the long game” in business.
The working title for this chapter is “The Transaction Business vs. The Relationship Business.”
Marketing expert Joe Polish went from dead-broke carpet cleaner, living off credit cards, to one of the most respected names in marketing worldwide. All on the back of direct marketing concepts like the ones you’re getting in Breakthrough Marketing Secrets.
He’s recently become famous for the I Love Marketing Podcast, which he hosts with Dean Jackson. (I recommend you start at the beginning and listen to every single one of the more than 200 episodes — it’s that good.)
I’m sure Joe didn’t invent this concept. (He may have picked it up from… Who picked it up from… Who picked it up from…) However, I’ve heard it from Joe so many times, he gets credit for its inclusion here — especially in the details of the description.
You can take one of two approaches to business. You can either be in the transaction business, or the relationship business. Let’s break each one down.
If you’re in the transaction business, your focus is on today.
You ask questions like, “What can I do today to get maximum revenue from each customer that comes to my business?”
It’s all about instant gratification. It’s all about maximizing the now. You’re looking to get all the profit you can get today. All your marketing is measured by immediate ROI.
Your purpose of getting a customer is to make a sale.
And this can be valuable — especially if you’re in a situation with your business where you need immediate cash flow. (This is very common in early-stage businesses. Especially those with only one product on the market.)
However, it also puts a ceiling on your success…
If you’re in the relationship business, your focus is on forever.
The long-view strategy of building your business requires you to look at your lifetime relationship with customers.
And this changes everything. First, instead of getting a customer to make a sale, you decide to make that first sale to get a customer.
Today’s marketing to get new customers might be at a loss, because you know you’re just starting the relationship. It will continue through time, and the profits will multiply throughout your relationship.
You also tend to be more generous to your customers. To care more about their well-being and success. Instead of extracting as much profit from each customer in as little time as possible, you focus on them. You seek to provide as much value in as little time as possible. Because you’re focused on providing real value, and fulfilling their needs, they will come back. They will be naturally attracted to you because you have their best interests at heart.
They’ll do more business with you, and the profit from a positive relationship will far eclipse anything you could have gotten out of them in the short term.
Over-delivering on value on their first $10 or $100 transaction will turn them into a $10,000 or $100,000 customer, if you focus on nurturing the relationship. Perhaps you could turn the $10 into $20 or even $50 if you focused on maximizing the transaction. But it takes building a relationship to turn a $10 buyer into a $10,000 or even $10,000,000 customer or client for life.
It’s always better to be in the relationship business.
Transactional businesses tend to be very tactical. They also tend to be “flash in the pan” or “one hit wonder” businesses. Because they focus on using the tools of today to get maximum money out of their customers’ wallets.
Relationship businesses can last decades, even centuries. They grow and grow and grow. They are far more profitable, because of how easy it is to sell to a customer with whom you’ve established a solid relationship. They’re also more ethical, and more enjoyable to run. Your focus is completely and totally on doing right by your customer. And you have friends, fans, and followers for life as a result.
It also informs every marketing decision you make. Is this communication improving my relationship with my customer? Or eroding it? Should I focus on the quick buck today? Or focus on creating maximum value and doing the right thing for my customers, trusting that I will be rewarded?
The answers to these questions are always clear once you make the decision on whether you’re choosing to be in the transactional business or in the relationship business.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets
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