Thread by @minethatdata

1 - Let's introduce a new concept for you.

There are two types of brands.

The first brand is what I call a TRANSACTIONAL BRAND.

The second brand is what I call a RELATIONSHIP BRAND.

2 - What is a TRANSACTIONAL BRAND?

It's a brand that seeks to identify a customer who wants to buy something RIGHT NOW and then, once identified, offers anything/everything to get the customer to buy RIGHT NOW.

3 - What is a RELATIONSHIP BRAND?

It's a brand that offers merchandise that causes the customer to buy something TOMORROW.

4 - Let's use a practical example ... Broasted Chicken!!

5 - Anybody can make fried chicken. Coat the bird with flour and seasoning and dump it in an oil-filled fryer. Done.

6 - Broasted Chicken is different. You need a Broaster ... there aren't many Broasters and they're costly and you need special Broaster coating.

7 - Worse, Broasted Chicken is made on-demand ... it's completely fresh and made on the spot. If a lot of customers want it, they'll have to wait. You literally anger customers in order to serve it.

8 - If a customer likes Broasted Chicken, the customer knows that it can only be found at a limited number of restaurants. The customer literally has to plan ahead in order to eat Broasted Chicken.

9 - If a customer is going to eat fried chicken, the customer has a hundred choices serving it right now.

10 - Fried chicken, then, becomes a transaction. Who has a coupon today? What promo is KFC running? Or Popeyes? Or Church's? Or Safeway? Or your local dive bar?

11 - Broasted Chicken is part of a relationship ... a limited number of establishments are willing to invest the money up-front and then disappoint long lines of customers with wait times in order to have fresh Broasted Chicken.

12 - Why bring this obscure topic up?

Simple.

In project after project, I keep seeing annual repurchase rates in free fall. Customer loyalty is gone. Everything is about a transaction happening right now.

13 - Ten years ago I'd analyze B2C brands with 35% - 40% annual repurchase rates.

Today I keep analyzing B2C brands with 17% - 22% annual repurchase rates?

The difference?

Transactional vs. Relationship.

14 - The transactional brand tries to convert the customer right now. It seeks to find a customer on Google who has a need right now, and pays to get in the front of the line to capture that demand right now. Often, this is accomplished with generic merchandise at low cost.

15 - The relationship brand couldn't care less about who wants to buy right now. If the customer wants to buy, fine. But the relationship brand offers merchandise that causes the customer to want to come back in the future.

15 - This mindset requires a company to view customer behavior differently.

Transactional = Facebook, Google, Amazon, Regargeting, Pinterest, Cart Abandonment Programs, SEO/SEM, 40% Off + Free Shipping.

Relationship = Patagonia, Broasted Chicken.

16 - Merchandise Strategy is fundamentally different if you work for a Relationship Brand.

Marketing Strategy is fundamentally different if you work for a Relationship Brand.

17 - When you read marketing advice out here on Twitter, it's generally "Transactional" advice ... teaching you how to get a generic customer to buy RIGHT NOW.

18 - When you read loyalty advice out here on Twitter, it's ways to improve Transactional effectiveness. Offering Points or Digital Coupons.

19 - Think carefully about the kind of company you work for (Transactional vs. Relationship).

Which kind of company do you want to work for?

Our world is shifting more and more toward Transactional Brands. That leaves a big opportunity for everybody else.