The Trap of Transactional Marketing

In this episode of Designing Tomorrow, we dive deep into why social impact organizations often default to transactional marketing approaches - and the hidden dangers of this common mistake.

We cover:

• The 6 reasons why we fall into the transactional marketing trap
• Why "easy" and "inexpensive" marketing tactics can backfire
• The false sense of safety in sticking to familiar strategies
• How to balance brand-building with calls-to-action
• Why your marketing culture matters more than individual tactics

We also explore:

• The concerning trend of relying too heavily on data-driven approaches
• Why some "old school" marketing methods are making a comeback
• How to avoid creating "icky experiences" for your audience
• The dangers of fake urgency and misleading messaging

If you're struggling to break free from transactional thinking or wondering why your marketing efforts aren't delivering results, this episode is a must-listen.

Don't let outdated marketing approaches hold back your organization's impact. Watch/listen now to learn how to shift towards more effective, relationship-focused strategies that will help you build trust, credibility, and long-term supporter engagement.

Episode Highlights:

• [01:00] The six reasons why social impact marketers fall into the trap of transactional marketing - starting with how easy it is
• [02:15] Marketing tools and best practices have increasingly leaned towards transactional approaches due to their data-driven nature
• [03:10] Over-reliance on data and how it can lead to neglecting broader brand-building strategies
• [05:00] Example from political campaigns, drawing parallels between canvassing strategies and modern marketing
• [07:00] Resurgence of more traditional, person-to-person engagement in marketing amidst the saturation of digital tactics
• [09:00] It's inexpensive
• [12:00] Perceived safety of transactional marketing and how it stifles creativity and long-term growth
• [16:00] Balancing between transactional marketing and brand building

Quotes:

• “There are six reasons we fall into this trap of transactional marketing. And when I say we, I mean social impact executives, marketing leaders, even practitioners.” - Jonathan Hicken [01:00]
• “We’ve gotten hyper-focused on microtransactions and data. We let the tools guide the strategy instead of having a broader, intentional approach.” - Eric Ressler [03:09]
• “Ease becomes a priority when marketing is not a priority… I’m guilty of asking my team to just get that email out or post up because there’s so much more to work on.” - Jonathan Hicken [05:04]
• “Are you building relationships, or are you just looking at people as numbers, transactions, signatures, and votes?” - Eric Ressler [07:33]
• “It feels safe. For an organization that is reticent to take risks, it may feel like the right thing to not rock the boat and deliver what the audience is used to.” - Jonathan Hicken [10:56]
• “Brand building is not just about putting content out there and trusting people will find their way. You do need to help them along the way, but in a respectful, frictionless manner.” - Eric Ressler [13:39]
• “If all you’re doing is optimizing for the next click or signature, you’re missing the bigger picture. We need to build relationships, not just hit targets.” - Jonathan Hicken [14:30]
• “The magic happens when you balance the art and science of marketing. You need both data and storytelling to create a holistic approach.” - Eric Ressler [15:45]

Resources:

• Designing Tomorrow: Season 1 - Episode 04 - We’ve GOT to Stop Marketing Like This. 
• Beyond Aesthetics: The ROI of Brand Building
• A Guide to Social Impact Marketing Through Brand-building
• Top 5 Features Your Nonprofit Needs in a Donor Management Platform
• Social Enterprises, Meet the New Digital Media Imperative

Transcript:

Jonathan Hicken [00:00]:

Eric, I have a confession to make in my current role and in other roles I've had, I have fallen into the trap of transactional marketing.

Eric Ressler [00:09]:

No.

Jonathan Hicken [00:11]:

I was raised in a Catholic household, so the feeling of guilt is surging through my body right now, but I have to confess this to you and I really want to unpack why I have fallen into and continue to fall into this trap of transactional marketing. So I was hoping we could dig into that together. How does that sound?

Eric Ressler [00:32]:

It sounds great and I just want to let you know we all have done it. 

Jonathan Hicken [01:00]:

There are six reasons we fall into this trap of transactional marketing, and when I say we, I mean social impact executives, marketing leaders, even marketing practitioners who are interested in building a better brand. I think we all fall into this trap, and I think there's a couple of reasons why this happens. First is that it's easy and honestly, I think that's the biggest reason it's really easy to do transactional marketing. It doesn't take very much time, it doesn't take very many resources. You throw a call to action on the website or on social or in your email and you call it a day and you move on to your next project. Is that a good enough excuse?

Eric Ressler [01:46]:

I hear what you're saying and I agree, and I would add to that and say that a lot of the tools that we use are built to support transactional marketing. A lot of the best practices that you see posted are focused around transactional marketing and in general, the way that marketers have been taught to do marketing has been largely, especially in the last five, 10 years, based on transactional approaches to marketing. I don't think that that is the only reason it happens, but I do think that the ease and the tools being built for it and the overall kind of playbooks and best practices around marketing being focused, especially as of late around more transactional approaches to marketing and more analytical and data-driven approaches to marketing is largely why we've ended up here.

Jonathan Hicken [02:35]:

Where does that come from when we look at the best practices that we're learning and we're reading from people in the space and maybe in other industries that we respect, why is that what they're teaching?

Eric Ressler [02:47]:

I really think that the main reason is data and how data has been used effectively but also taken too far where we want to make sure that when we're doing brand building and marketing, that it is evidence-based, right? That it's not just this blind leap of faith that we're hoping that by doing all these brand building and marketing efforts that we just hope that they pay them off. I think there's a valid seed to this idea that we want to make sure that when we're doing marketing that we're doing it effectively and that it's actually driving business outcomes. And it's not just this thing that's being done kind of on the side. I think it's just been taken too far. And I think that that is because we've had this new set of tools that is very shiny for marketers, which is like, wow, we have so much more data than we ever used to have, largely because so much marketing is happening through digital channels now. And then we got hyper-focused on micro transactions and data and conversions and AB tests and all of these tools that we now have at our disposal that we kind of let the tools guide the strategy instead of having a broader strategy and being intentional about how we use those tools.

Jonathan Hicken [03:55]:

I think that's an excellent example of how transactional marketing has become easy when we're being served up all of the tools and the data and the metrics, especially for say, somebody who is new to the workforce and is pursuing a career in marketing, this is the canvas that they've been given to be creative, and of course they're going to operate within that space because that's the tool that they've been given and that's why it can be easy. That's why I think it's almost reflexive, ease becomes a priority when marketing is not a priority. And that has been something I am guilty of in my own leadership where maybe the person I'm asking to do the marketing, I'm asking to do quite a few other things, and I am not putting enough emphasis on spending the time and taking the space and making room for creativity where maybe the people on my team are feeling pressure to just get that email out or just get that post up because there's so many other things to work on. So transactional language or messaging is just an easy way to get the job done

Eric Ressler [05:05]:

Or to just kind of check the box, right? Because if you don't have the time and energy to build a broader strategy and a longer game strategy, then what else can you do? But either nothing or just kind of checking the boxes. Well, we will make sure we send the emails, we'll make sure we do the social posts, we'll make sure we write letters to donors and just kind of checking those boxes of just like, well, we can't do nothing, so we have to do something. So these are the easy things. And also frankly, this is largely what people do. There are not that many organizations who are truly doing longer term brand building work effectively, especially in the social impact space because it is harder. But I will argue very strongly that it is a better way to do it long term.

Jonathan Hicken [05:49]:

I was participating in a local rally around a local measure that's coming to our county that voters are going to vote on in November, and there was a campaign consultant in the room and the campaign consultant was talking about how for a long time phone banking and email campaigns and text messaging campaigns, there was a period there where those were really effective ways to get out the vote. And that has changed, and it goes back to the very simplest oldest school way of doing it, which is door-to-door canvassing, and that's back where political campaigns are back to this technique that takes more time, that takes more effort, that sometimes takes more creativity and improvisation, but ultimately has a deeper impact. And I think that there's an interesting corollary with the time we're in marketing where maybe some of these tools that have been popular for the last 10 years are no longer serving our purpose in the same way.

Eric Ressler [06:41]:

And because of transactional marketing, because so much of our channels and our inboxes are filled with low effort BS content and just so much of it because you can pump out a lot of content in that fashion that we're overwhelmed. And so there's just a saturation point that's been reached. So it is interesting to see some of these more like old school brand building approaches and full circle approaches coming back. Now, don't get me wrong, I'm a huge proponent of digital marketing and digital engagement. I think it could be extremely powerful, but I don't think you should discount tried and true things like direct mail outreach and person to person outreach. And I think really what it comes down to is regardless of the format or the channel, are you building relationships? Are you building community or are you just looking at people as numbers and transactions as signatures and votes as dollars, or are you looking at them as a whole person?

Jonathan Hicken [07:45]:

You referenced one of the reasons why I think we fall into this trap, which was that the tools that we use are built to reinforce these behaviors. So I'll move on to point number three, which is that it's inexpensive. Transactional marketing is inexpensive and it's related to the two topics we've already brought up around ease and the tools themselves. I mean, a lot of these tools that are fingertips are free or extremely inexpensive, and it can be a false facade for a leader to say, oh, we can invest 200 bucks a month in this email platform and boom, we're done on our marketing stack tech stack or our marketing strategy, boom, we're going to sign up for this email service. It's inexpensive. It looks good on a balance sheet, especially when leaders are bundling their marketing expenses in with this false overhead, I think of false overhead justification for the efficacy of your organization. So you try to reduce costs and keep it inexpensive. I think that's another reason we fall into the

Eric Ressler [08:45]:

Trap. Yeah, it's interesting because in certain ways it is inexpensive, but in other ways, brand building can also be inexpensive. I think there is a perception that building a brand is this massive, huge, expensive thing, and it can be, don't get me wrong, especially bigger plays in brand building if you're doing a whole rebrand or reinventing your digital experiences or launching a huge campaign. But I think that there's a lot that you can do in a brand building philosophy that is exactly the same cost as a transactional marketing philosophy. For example, you will probably use the same exact tools that you're using for a transactional approach as you would for a brand building approach. You're just applying those tools differently and using them in different ways. So brand building becomes expensive in that it's a longer term approach, so you have to constantly invest overtime over years, whereas you can run a given transactional marketing campaign in days, weeks, months, but you don't just do that. You don't just run a month-long campaign and then call a day. I mean some organizations do. I don't think that's a good strategy, but in certain ways you're still going to continuously invest in transactional marketing as well. So I don't actually think it's that much more inexpensive than a brand building approach or it doesn't have to be if you approach it intentionally and strategically.

Jonathan Hicken [10:19]:

The fourth reason I think that we fall into the trap of transactional marketing is that it feels safe. This is a familiar language. Other people are doing it and combined with the fact that it's perceived as fast and easy and inexpensive, it feels safe. And I think for an organization that is reticent to take risks, that it may feel like the right thing to do is to not rock the boat and just keep delivering my audience the thing that they're used to seeing. Is that a dangerous mindset to get in or is this something that you encounter with clients in the space?

Eric Ressler [10:57]:

Yes, to both. I think it is probably the most dangerous mindset that you could develop as a social impact marketer or a marketer in general. You want to constantly be laying the path for the organization in your marketing. And so anytime your marketing feels safe is a little bit of a red flag to me. Now, I don't want to conflate it feeling safe with it, feeling familiar, because over time you do want to build a marketing muscle. This shouldn't always feel like you're constantly reinventing things and that you're learning on the job. There should always be some amount of that. But over time, as an individual marketer or as a marketing team, you should start to get enough reps in that you're like, this becomes familiar, but if it gets to the point that it feels safe and your entire marketing program feels safe, then I would argue that you are not forward looking enough in your marketing strategy.

Jonathan Hicken [11:46]:

The fifth reason that I think we fall into the trap of transactional marketing comes from the best practices that we've seen online from any company that's online from commerce, companies that are online where I was in a usability testing company for years, and one of the things that we coached our clients at that company was to make sure that there were clear calls to action on everything, on every page, on every piece of email you send out on every social post, constantly needing to make sure that there was a clear and easy to pursue call to action. I think that that relentless drumbeat on calls to action can be a reason we fall into this trap because we have been taught and trained that just everything needs to be a meaningful call to action. Do you think that every piece of content that any social impact brand puts out needs to include a call to action? And do you think that that can create a problem?

Eric Ressler [12:43]:

I don't think that every piece of content needs a call to action, but I also don't think that being good with calling people to action is anti brand and building either. And I'll extend that to say that I don't think that usability testing or conversion rate optimization or AB testing or any of these more analytical scientific approaches to marketing are outside of the purview of brand building. To me, brand building is really the overarching strategy and result that you are trying to create through your marketing efforts. And it's a philosophy and it's an approach that is very squarely and relentlessly focused on customer experience. At the end of the day, how are you making them feel? And you can be very strategic and you can be very scientific even in your marketing efforts and even do some amount of transactional marketing within a larger brand building philosophy.

[13:39]:

Brand building is not just about putting content out there and trusting the people will find their way. You do need to help people along the way, and you want to make it frictionless. And I think that's something that's easily conflated and maybe even the way that I've brought this up is this kind of either or transactional marketing or brand building or this dichotomy, maybe it's a little bit of a false dichotomy. So a lot of the best practices from that we've learned from doing transactional marketing can be and should be applied to brand building because at the end of the day, we want to create delightful, frictionless, easy to use experiences for our supporters. Where it becomes a problem is if that's all you focus on and you lose sight of how are we making our supporters feel? Are we building trust with our supporters or are we moving away from that credibility and that trust through our transactional marketing that's making people feel like they're being extracted instead of nurtured over time?

Jonathan Hicken [14:44]:

I am glad you brought this up, that brand building style marketing and transactional style marketing can work in concert and can really help the other and help your organization as a whole. I think that I am certainly guilty of discussing transactional marketing as some evil, and I don't think that's the intent of our conversation here. It's probably just how to balance these two things. And it sounds like at Cosmic you've really learned what that proportion is. Do you have any sort of rule of thumb? I know it's not perfect to every organization out there, but how much time or energy or proportion of your content should be strictly brand building versus more transactional?

Eric Ressler [15:27]:

Well, I think again, that might be even a false way of framing it. In my opinion, none of your content should be strictly transactional, and that doesn't mean, again, that your content can't be conversion focused or your content can't be driving action or can't be tied back to metrics that are based on literal transactions. So I think when I use the word transactional marketing, I think the way that I think about it and that I'm describing it and when it becomes an evil, so to speak or not a best practice, is when you are taking some of these tactics too far to the point that you are undermining your ability to build credibility and reputability with your audience and you're creating icky experiences for them. We did an episode in season one about brand building versus transactional marketing. It was called We've got to stop Marketing like this.

[16:18]:

It was season one, episode four, I believe. We'll link to it in the show notes. And that really went deep on some of the traps of transactional marketing, like fake urgency and straight up bad faith messaging that is misleading or sometimes even misinformation. That is when it's becoming transactional, where you might be driving donations or action, but you're doing it in a bad faith way. Or even like in ui, there's a concept, user interface design, a concept of dark patterns where you're essentially tricking users into landing at the place that you want them to or clicking the button that you want them to by making them think they're doing the opposite action, right? So that would be a very clear case of transactional marketing and when people experience that they are rightfully repulsed and it will negatively impact your brand forever. But I think best rule of thumb when it comes to a brand building approach and how that affects your content is that you don't need every piece of content to be driving action.

[17:19]:

Some content can be there to inspire, to inform, to educate, to update people. That's okay. And I think if you think about your content in a larger brand building approach that not every piece of content is serving the purpose of driving action. And the way that I like to think about this is how can we earn attention? How can we earn action from our community in a respectful way? The same way that you would a friend, if all you ever did every single day to a friend was ask them to do favors for you and you never those favors and you never just kind of hung out with a friend and just spent time with them, that would be a very unhealthy relationship. So if you think about your relationship with your community the same way you think about your personal relationships, that's a generally good rule of thumb that could inspire and inform your content and marketing strategy.

Jonathan Hicken [18:06]:

I wish that you could deliver that exact monologue to the people I hire from my marketing teams because I think another mistake we make as leaders in the space is that we default sometimes to hiring entry level folks into channel management positions. So whether that's social or email or whatever, and we don't give them enough of the training necessary to understand the nuances and complexities of good storytelling and good brand building, or sometimes we unintentionally restrict their behaviors and don't give these creative people the latitude to experiment and get creative with the way that they're communicating with the audience through the channels that we've assigned them to. So I think that's the sixth and final point I want to make is that a reason we fall into this trap is we're not supporting the people that we hire well enough with the training to do this work well

Eric Ressler [18:58]:

That I see all the time. And there's a lot of reasons why that can happen. I think at the end of the day, what you really need if you want to elevate your marketing at a social impact organization is you need to build a marketing philosophy and a brand building philosophy and a marketing culture and a brand building culture, which is how do we show up in our communications as an organization, as a brand, and what are the actions that we're asking people to take and how are we going to do that creatively and strategically? And that then trickles down into your more tactical elements of your marketing strategy, such as what are the channels you'll use, what are the communication formats that you'll use? Because if you start bottom up like that and look at channels first and you look at content and formats first, but that's not anchored by and supported by a broader marketing strategy and philosophy, then you fall into that trap of transactional marketing much more easily. I want to make one distinguishing point there. You still need to approach things in a channel first way in that you need to learn the culture of every channel that you will be playing in because if all you do is think about the idea first and then just try and distribute it throughout all these different channels without personalizing it, that is also not going to work. So you have to really look at it from both ways.

Jonathan Hicken [20:14]:

Well, thank you so much. I mean, it's clear to me that you think about this with your clients day in and day out, and you got so much to share on it. I think for now, we'll call it a day. Thank you so much, Eric. 

Eric Ressler [20:24]:

Thanks, Jonathan.