Transactions versus relationships: why does this matter for my business?

Some businesses are designed to be transactional and absolutely thrive that way. Transactions aren’t inherently bad and only pose a problem if one of the stakeholders is expecting a relationship instead. Take Starbucks, for example. While you might have a relationship with your barista if you visit regularly, you don’t need to have a deep connection to that person to still have a great experience. No matter which Starbucks you go to, you’ll be greeted by pleasant people who will give you the product you want, made the way you want it. You might have loyalty to Starbucks over other coffee shops because of the experience or quality of the product delivered, but ultimately, it doesn’t matter which location you shop at or whether you care about the people serving you.

Sales are transactional; customer service is relational.

Starbucks baristas are salespeople designed to get you in and out as quickly as possible – doing so in the nicest way so you feel good about being there. They don’t need to understand anything about you to make your drink and keep you wanting to return.

But many companies recognize that focusing on the customer and getting to know them will be the key to repeat, loyal business. There’s an infamous story of how a Zappos customer service representative understood the situation and tapped into the most basic parts of humanity – earning both customer loyalty and incredible word of mouth credibility.

Back in 2007, Zaz Lamarr had a cooking blog where she also shared some details about her mother’s cancer diagnosis. Shortly after her mother passed away, she uploaded a post called “I Heart Zappos.” 

“I had an email from Zappos asking about the shoes, since they hadn’t received them. I was just back and not ready to deal with that, so I replied that my mom had died but that I’d send the shoes as soon as I could. They emailed back that they had arranged with UPS to pick up the shoes, so I wouldn’t have to take the time to do it myself. I was so touched. That’s going against corporate policy. Yesterday, when I came home from town, a florist delivery man was just leaving. It was a beautiful arrangement in a basket with white lilies and roses and carnations. Big and lush and fragrant. I opened the card, and it was from Zappos. I burst into tears. I’m a sucker for kindness, and if that isn’t one of the nicest things I’ve ever had happen to me, I don’t know what is. So… IF YOU BUY SHOES ONLINE, GET THEM FROM ZAPPOS. With hearts like theirs, you know they’re good to do business with.”

While the blog is no longer live, this story has been famously retold, reposted, and used in articles and case studies, including as an example in a 2009 Harvard Business Review article, Amazon and Zappos: A Savvy Deal by best-selling author and co-founder of Fast Company, Bill Taylor.

In that article, Mr. Taylor also shares some insights from Mr. Hsieh about what customer service truly meant for the company as they continued to operate with their same corporate culture after being acquired by Amazon.

“We want to talk to our customers,” the CEO argues. “We encourage them to call. As unsexy and low-tech as it sounds, the telephone is really powerful. Most companies look at the telephone as an expense. We look at it as one of the best branding devices out there. You have your customer’s undivided attention. If you get the interaction right, if you focus not on ‘closing the sale’ but on doing exactly what’s best for the customer, it’s something they’ll remember and tell their friends and family about…. We’re not trying to maximize every transaction. We’re trying to build a lifelong relationship with each of our customers, one call at a time.”

So, do I have to be a huge business with lots of money to be relational?

Oh goodness, no! Cultivating a customer relationship doesn’t have to be as profound as knowing someone’s deepest pain or as labor intensive as spending a ton of time with them. Businesses earn customer loyalty by tapping into basic values and demonstrating them in a clear and authentic way.

Let’s use my local mechanic as an example. During the peak of the COVID-19 pandemic, I needed a new place to fix my car because my mechanic refused to wear a mask and I had health issues that required me to be extra careful. I stumbled upon Regan’s Service which had overwhelmingly positive Google reviews about the quality of their work and how wonderful and safe the employees were.

I decided to try them out and found a mechanic that showed me honesty, clarity, and integrity which are values that I particularly care about. I’ve been a customer of Regan’s since 2021 and have occasionally gone in expecting the worst with large dollar signs attached. Each of those times, Jeremy, the lead mechanic, has called to explain what’s going on with my car before fixing it, and nearly every time it’s been a minor issue. Jeremy could have fleeced me many times over. Instead, each time he explained the problem in clear and easy language and how a simple and affordable fix (like resealing my tires instead of replacing them) was all I needed. (Fun fact: road salt used for de-icing and aluminum wheels don’t go well together!)

When I finally had a big-ticket fix, he walked me through the problem, possible solutions, and pricing. Because he has always demonstrated complete honesty and integrity, I had no doubts and told him to immediately fix everything rather than wait or try to shop around. And it’s not just the lead mechanic who is honest and kind. Paul in the front office always remembers me and we have lovely conversations each time I come in. I’ve watched him run out to help older people and others who need help pumping their gas or putting air in their tires as a courtesy, and he cultivates a feeling of community in that waiting area where everyone feels welcomed and supported.

There are hundreds of service stations within a walkable radius of where I live, but I’ll gladly drive 25 minutes out of my way to give Regan’s my business. I’ve also referred a bunch of people to them who are searching for an honest mechanic. Like Zaz Lamarr said in her post, “with hearts like theirs, you know they’re good to do business with.”

Bottom line

When you have a true connection with your customer, you not only earn their loyalty, but also their willingness to put up with some inconveniences to keep the relationship going. You will also, most likely, earn their word-of-mouth marketing on your behalf. If you’d like help shifting your business to move beyond transactions to a deeper connection, send us an email at hello@theconnectors.net and we’d be delighted to start a conversation.