Making The Shift From Transactional To Relational Experiences (Part 3)

Jacob Vaidyan, Imran Khan and Akhilesh Mahto

Parts 1 and 2 of this series focused on the difference between transactional and relational experiences and their applications. It follows, then, that making the shift in customer experiences (a shift that applies equally to employees, products, brands, suppliers, and even personal life) from transactional to relational is in the best interest of any organization that seeks to be a sustainable business. We can also extrapolate that relational experiences drive a greater level of loyalty from customers and help derive a greater proportion of the customer’s lifetime value for the category.

Within this context, the relevant question for any organization struggling to move beyond a transactional experience with their customers is: How do we make the shift to relational experiences?

We believe that there are steps you can take as an organization to make the shift. The principles discussed below also apply to other aspects of a business or personal experience – e.g., employee-employer, supplier-customer, etc.

How to make the shift

The move from transactional to relational is a massive cultural transformation and hence can be challenging. But with the right mix of platform and/or burning ambition driven with board sponsorship and underpinned by a transformation plan aimed at all levels, it can be accomplished.

Although the specific plans for making this shift will differ based on organizational maturity, desire, and context, (both internal and market), below are a few ideas that can help. We have looked at this from the perspective of shifting the experience for the customer, but these ideas can apply to other stakeholder groups as well.

1. Know your audience/customer

“Know and understand the customer so well the product or service fits him and sells itself.” – Peter Drucker

A full picture of the customer (the target of the experience) is essential to provide the optimal experience. The ideal way to build this picture is through a combination of operational data (from your CRM or other operational systems) and experience data (from customer feedback, reviews, social media comments, etc.). This does require systems to work together to give a comprehensive picture of customers’ needs and wants.

A good customer profile can drive segmentation and a perfect experience – the key is for departments/functions within your business to use customer data well, to have one view of the customer, and to provide a consistent experience.

2. Empower and motivate employees to be your experience ambassadors

“Everyone talks about building a relationship with your customer. I think you build one with your employees first.” – Angela Ahrendts

Management literature abounds with mentions of employees as your best asset – the shift to relational experience absolutely needs the employee to embrace and deliver it for customers. Frontline customer-facing employees alone aren’t responsible for the shift; the entire organization must rally behind it. Systems and processes need to change to support the shift – including measurements, recognition, and organizational structures – which again requires wide-scale cultural change.

Employees need support from tools and systems, but they also need the autonomy to do the right thing by the customer. This podcast from Jennifer Morgan with guest Simon Sinek offers a great discussion of the importance of doing right by your employees.

3. Embrace an honest, open, and transparent culture

“To give real service, you must add something which cannot be bought or measured with money, and that is sincerity and integrity.” – Douglas Adams

As described in Part 1, relational experiences take time, personal attention, and emotional connections. Hence it is important that your strategy is based on honesty, openness, and transparency with the customer. By extension, trust is the currency for a relational experience. If your organization is not honest, open, and transparent with your customers, it is difficult to make the shift to relational because your customers will not trust your motives.

4. Adopt/revitalise a relatable purpose beyond profits

“I think if the people who work for a business are proud of the business they work for, they’ll work that much harder, and therefore, I think turning your business into a real force for good is good business sense as well.” – Richard Branson, Virgin

More and more businesses are rethinking their purpose and responsibility to stakeholders beyond just shareholders. Global initiatives like B1G1 are setting the tone for this. Having a purpose beyond profits helps organizations build a deeper connection with their customers (and other stakeholders), making the shift to relational easier. Crafting a bigger purpose can be the rallying cry that brings together the organization and enables the cultural change needed.

5. Use bad experiences as an opportunity

“We learn from failure, not from success!” – Bram Stoker, Dracula

Every bad experience highlighted by customers should be treated as an opportunity to change systems and processes in the journey toward becoming a relational enterprise. A bad experience, if responded to appropriately, can be the foundation for a more emotional and deeper relationship between the customer and the organization. This does require technology to help identify customer feedback from the various channels that need an immediate response (automation can play a huge part in this).

6. Using operational and experiential data holistically

“We share the belief that every human voice holds value, every experience matters, and that the best-run businesses can make the world run better.” Bill McDermott, SAP CEO

Data has variously been described as the new oil, gold, strategic asset, etc., but the proliferation of structured (mostly transactional) and unstructured data is a reality for every business. The critical capability of shifting your customer experiences to relational is in the ability to strategically use both operational and experiential customer data.

SAP’s acquisition of Qualtrics to create the Experience Management category is driven by the desire to help organizations make their customers’ and employees’ experiences relational. The deluge of data and the need to use it strategically necessitates a technology platform and strategy to deliver an optimal experience for your customers.

To succeed in the experience economy, the shift from transactional to relational is critical. We hope this three-part series has been useful in enhancing your understanding and application of transactional and relational experiences, and has given you some food for thought to make the shift. We are keen to hear your thoughts on this series.

Read Part 1 and Part 2 of this series.


Jacob Vaidyan

About Jacob Vaidyan

Jacob leads a team of digital transformation and industry experts in SAP who work with customers across Financial Services, Retail, Telecom and Public sector on innovation, digital Strategy, technology/business roadmap and transformations. Jacob and his team work with leadership teams in large organisation to explore how technology and digital disruption can be used to leapfrog competition and build a sustainable future.

Imran Khan

About Imran Khan

Imran Khan has been driving adoption of innovative technologies by SAP ecosystem of customers, partners, developers and ISVs for 19 years. He is a firm believer of using technology to transform people, organizations and governments. He writes about Digital Transformation, Leadership & Technologies and their impact on our lives.

Akhilesh Mahto

About Akhilesh Mahto

Akhilesh Mahto is a technology enthusiast and is optimistic about emerging technologies. As a Solution Advisor for SAP, he loves to put technology in use to help solve business challenges. He is a firm believer that technology is a key enabler in providing better service and consumer experience.