The transaction game: How to increase your sales and retain customers

The companies that operate mainly offline focus on increasing the number of transactions, where the exchange of value occurs between the business and the customer. For a product manager, this type of service can be called a "transaction game."

Typical representatives of these companies are Mercadona, Amazon, Shein, and Temu. Here we are dealing with a typical "transaction game." A visitor enters an online store, chooses a product (e.g., an iPhone), clicks on "buy," and a transaction occurs. The buyer transfers money, and in return, you provide an iPhone. The main metrics here are the number of purchases per user and the average ticket, which is typical of e-commerce.

The business model here is generally quite simple: the buyer pays for the product once. We strive to attract them to make repeat purchases using recommendation systems or sending beneficial offers for products available offline. This can include any product, from consumer goods to branded items.

For a more detailed analysis of the transaction game, I propose the classic marketing funnel with an example from FMCG marketing, but the same path applies to the user in the digital world.

Classic Marketing Funnel

Let’s recall the classic marketing funnel, which represents the path our user or buyer takes. It consists of the following steps:

• Awareness
• Acceptance
• Trial
• Retention
• Loyalty

In the late 90s, a legendary advertisement for Tide detergent was broadcast in Russia. At that time, there were few high-quality cleaning products. There might not even have been detergents similar to what we know now. Therefore, to wash clothes, people used to boil them in a pot. The slogan of the advertising campaign was: "Are you still boiling? Then we’re coming to you!" Here is the link to that advertisement. It might not seem funny or special to you, but for Russia, it became a legend. The slogan gained popularity and became part of the country's cultural heritage.

Awareness

There is a myth that a good product sells itself. However, this is not true. The first stage of the sales funnel is crucial. Here, it is important to attract the audience and generate interest in the product. This phase can be considered the courtship, where it is necessary to properly describe the product, its features, the problems it solves, and how it can benefit the consumer. Only after this can the next steps in the sales process be taken.

Therefore, we aired a detergent commercial on television with our communication message, given that it is a mass-consumption product. The likelihood that our target audience will see the message each time it airs is high, providing us with a profitable return on investment.

Acceptance

The second step is activated when a person is already interested and ready to use our product. We must provide an incentive for them to try our product. This can be an additional discount, free shipping, or a free service. It is vital to give the consumer a reason to prefer our product and help them make the right decision.

Thus, our advertisement had a simple and memorable message that remained in memory and became a meme before memes were known as such: "Are you still boiling? Then we’re coming to you!" From the perspective of classic marketing and business, this advertisement is simply brilliant.

First, it clearly targets people who are boiling. This is directly expressed in the creativity, freeing other people from the need to pay attention to this ad.

Second, it promotes a product that will allow them to stop boiling, wash their clothes more efficiently, wear them out less, and save energy.

Finally, as an additional incentive, a discount can be offered.

Trial

The third step involves the trial. This phase occurs when the user decides to try the product. It is crucial to provide full and timely support during the product's use. This can include a refund, an exchange option, or assistance with problems. It is also necessary to provide the information and training needed to help the user make the most of the product.

On the packaging of the detergent, instructions are included. Additionally, there could be a pop-up stand in the store with the sign "Just one scoop!" Advertising is gradually changing people's perception from boiling to favoring the use of washing powder, which offers savings and clean clothes. When consumers visit the store, previously influenced by advertising, seeing discounts on Tide detergent, they are ready to make their first purchase, try the product, and move forward in the sales funnel.

Retention

The fourth step involves the period between the first purchase and subsequent purchases. We must retain the consumer, attracting them repeatedly to our product. To achieve this, we need to implement a consumer-centered loyalty program. The goal is to incentivize the consumer to buy our product recurrently. Recurrent customers are the most profitable and efficient, as we do not require advertising expenses and they already know the benefits of our product.

If the promise that Tide made in its advertisement proves to be true, then the consumer stops looking for other options and starts using the Tide product regularly. This takes them further along the sales funnel.

Loyalty

The fifth step is fostering loyalty. If the user was satisfied with the product and acquires it again, then you have obtained a recurrent customer. It is important to provide a reliable product and constant updates to maintain its long-term use. Additionally, you should offer privileges and rewards to consumers for their support and loyalty.

For example, if our product is a powder, our buyer could tell all their friends and acquaintances how convenient it is to use powder instead of boiling. In the digital world, the process is similar. Here you can also offer privileges and rewards. In our example, we could give gifts to those who, for example, send us letters.

Cost

Additionally, an important stage is pricing. The customer needs to know the correct price of the product. It is crucial to understand what prices are available for your target audience. You must determine what incentives encourage the purchase and how to make the product accessible to more consumers. Consider different rates, offers, bonuses, and other promotions. Develop pricing policies and concepts that help increase sales.

Key Conclusions

To succeed in the transaction game, it is essential to understand and follow the classic marketing funnel. Each stage, from awareness to loyalty, is crucial and requires a specific approach. Effective advertising, clear value proposition, customer support, loyalty programs, and correct pricing are key elements to move customers through the funnel and achieve successful transactions. It is not enough to have a good product; a strategic and customer-centered approach is necessary.

As always, I invite you to share your opinion in the comments
With love 😽 🤗 😘
K