Disengaged and Disgusted: The Trou ble with Transactional

Most companies are very fixated on growing sales and increasing revenue. So they look at customers through the lens of the transaction, tasking their teams with one overall objective: how can we get people to buy more of what we sell? Even so-called Customer Relationship Management and loyalty programs often focus most closely on the desired transactions themselves, funneling customers toward making purchases and rewarding them when they do.

This transactional focus pervades the relationships these companies have with their customers. Strictly transactional relationships with your customers are a quid pro quo. You provide a thing, and they buy the thing. Th at’s that.

The thing is, this type of tit-for-tat, transactional relationship is what my dear grandmother would call a hard row to hoe. Because it’s a row that has to be constantly seeded. Incessantly seeded. Expensively seeded.

And that’s exactly what most companies do. They hire growth hackers. They pay for “user acquisition.” They spend millions on brand marketing. They spend all their money trying to plant new seeds in new fi elds, getting new customers into the top of their funnel, because they can’t count on their existing customers to visit again, buy more, or get their friends to come into the fold. This is a losing game, unless you can count on it being cheaper to acquire new users over the long run than to engage the customers you already have.

Spending millions to acquire disengaged “customers” who buy your product or download your app and never buy it again, never tell anyone about it, never read or watch your marketing messages again is an unsustainable business model.

On the other hand, any company, of any size, in any sector will be successful if it engages two audiences, over and over again: customers and employees.

Unfortunately, most companies are not doing so well with either:

One in four mobile app users abandon apps after a single use.

Viewers avoid well over 60% of commercial messages simply by turning their heads.

Nearly 70% of employees, the people we pay to be engaged, rank somewhere between mildly disinterested and actively, toxically hateful when it comes to their employer and their work.

Let that sink in for a minute. We can’t even pay people to be engaged.

The other problem with taking the transactional approach is that it tempts companies into short-term thinking and bad behavior. Imagine, if you will, that a New York Times article about your company triggered readers to describe your company as “cravenly amoral,” your products as a “dystopian disaster,” and your strategy as “crony capitalism.” That’d be a nightmare, right?

Well, that nightmare came true for a number of Big Food companies in February 2013, when an excerpt from Michael Moss’s Big Food exposé Salt, Sugar, Fat: How the Food Giants Hooked Us ran in the New York Times, eliciting those real-life reader quotes. Under the headline “Th e Extraordinary Science of Addictive Junk Food,” the piece told how Moss discovered overwhelming evidence that food companies make “a conscious effort to get people hooked on foods that are convenient and inexpensive.”

Unfortunately, these same foods played a disproportionate role in kick-starting America’s obesity and diabetes epidemics.

Moss wrote of meeting a pioneering “food optimizer” who had “no qualms about his own pioneering work on discovering what industry insiders now regularly refer to as ‘the bliss point’ or any of the other systems that helped food companies create the greatest amount of crave.” He wrote about a meeting he had with the food scientist Steven Witherly, bringing the well-known food optimizer a bag of junk food from which Witherly immediately extracted Cheetos:

“This,” Witherly said, “is one of the most marvelously constructed foods on the planet, in terms of pure pleasure.” He ticked off a dozen attributes of the Cheetos that make the brain say more. But the one he focused on most was the puff’s uncanny ability to melt in the mouth. “It’s called vanishing caloric density,” Witherly said. “If something melts down quickly, your brain thinks that there’s no calories in it . . . you can just keep eating it forever.”

The result? More Cheetos sold. More transactions. In the short term.

This decades-long campaign to get people addicted to unhealthful foods is exactly what people think of when they think of companies trying to create habit-forming products. They think of big, evil conglomerates on a sinister mission to get people addicted to retail, screens, friend feeds, and bad foods, while they laugh all the way to the bank.

This sort of bad behavior happens when a sector of companies has exclusively transactional relationships with customers.

Cravenly amoral. Disgust, distrust, and, ultimately, disengagement. (Fortune reports that soda sales are down in 2016 for the 11th year running.) That taking a transactional approach to your customers is bad for business seems like a serious understatement.