Is your sales team focused on quick wins or building long-term partnerships? The answer lies in the fundamental difference between transactional and consultative selling. Let's explore these two approaches and the sales methodologies that support each one.
This may help you determine which approach is right for your business or when to use each depending on your product, service, or target market.
Transactional selling vs consultative selling
The primary difference between consultative and transactional selling lies in the salesperson's focus: the former prioritizes building relationships and understanding customer needs, while the latter emphasizes closing the deal quickly.
What is transactional selling?
Transactional selling is a sales approach focused on quickly closing individual sales rather than building long-term customer relationships.
The emphasis is on maximizing sales volume and immediate revenue. This approach works well with items of a lower price point and items that are not continually repurchased. For example, you may not need to build a deep relationship with a customer if you're selling them a discount coffee maker.
Transactional selling pros
- Make quick sales and sell a lot of volume
- Shorter sales cycles
- More customers served
- Don't need a deep understanding of your customer's business or issues
Transactional selling cons
- Need a higher volume of qualified prospects
- Need to constantly find new customers, as existing customers may not have product or brand loyalty
- Less time to get to know customers and their needs in the sales process
What is consultative selling?
Unlike transactional selling, consultative selling is a sales approach focused on building strong relationships with customers. This happens by taking the time to understand your customer's specific needs and then providing tailored solutions. Sales professionals who take a consultative approach don't waste time pushing a specific product if it's not a good fit. They build trust and act as a strategic partner or advisor instead of simply an order taker.
Consultative selling pros
- Provides the ability to build lasting relationships with customers
- Increased customer satisfaction and brand loyalty
- Building trust in the sales process
- Increased customer lifetime value
Consultative selling cons
- Lengthier sales cycles
- More time is needed to build trust
- Sellers need to do more research into the prospects, businesses, and industries they serve, which can be time-consuming
- May find that the solution you offer is not a fit for your prospect
When is one sales method better than the other?
Consultative selling may be considered the better route than transactional sales in a few different environments. One more general example is when you have a more complex product or solution that needs to be configured specifically for your customer. Another time you might choose consultative selling if you sell to enterprise customers.
Transactional selling
Here are some businesses that may thrive when using a transactional approach to selling.
Direct-to-consumer, products
When selling direct to consumer a lot of the strategy is around creating a sense of urgency and excitement. Things like social media promotions, email marketing, and advertising are designed to close as many deals as possible as quickly as possible. This makes transactional selling a pretty compelling sales strategy.
Heating and air conditioning
When someone's HVAC is on the fritz, you want to help them get it repaired or replaced as quickly as possible. Solving an urgent need may require some transactional skills to get the deal done efficiently. The customer should be thrilled to have a comfortable environment, and the seller should feel accomplished about closing a deal quickly and saving the day!
Here, the faster the sales process goes, the happier everyone will be.
Office supplies
Transactional selling techniques work very well when it comes to things like office supplies. When selling bulk BIC pens, the sales rep doesn't need to hear about what the business does or how they use the pens. They want to get the pens (paper and other supplies) ordered and shipped.
Consultative selling
Since consultative selling lends itself to an increase in customer loyalty, in these industries it may be worth investing more time and effort into building the relationship if you work in one of these industries.
SaaS
In highly competitive environments like SaaS where a lot of customization may be needed, and sellers are already working on standing out from the competition, a lot can be gained by taking a more consultative approach with potential customers.
Understanding your prospect's needs can help ensure you sell the right thing at the right time to avoid watching customers churn away from your product and move on to a competitor.
Real estate
While residential real estate commissions may hover around two and a half percent, that can add up to big bucks when selling higher-end real estate. The consultative approach here means sellers can help buyers find their dream home and reap the benefits of that commission check. Additionally, by investing in the relationship, sellers may have the opportunity to work with their buyers over multiple transactions as their needs change.
This consultative approach can also work well in the commercial real estate sector, as businesses may need to expand or relocate multiple times over a period of time.
Service-based businesses
When it comes to selling services, consultative selling is the superior strategy. Unlike one off sales, most service providers will work with their clients or customers for a period of months or years.
So whether you're selling accounting services, personal training, social media management, or IT Support, it's critical to get to know your customers and their needs. This will also help you pitch additional services as the relationship grows or referral partnerships for complementary services.
Can you combine consultative sales with transactional sales?
Yes, combining consultative and transactional sales approaches is possible and often beneficial. While these two methods of selling represent different ends of the sales spectrum, using elements of each in the same sales process or cycle can make sellers more effective and efficient.
How to make the switch from transactional selling to consultative?
Shifting from transactional to consultative selling requires a significant mindset change. It's about moving from a product-centric approach to a customer-centric one. Here's a breakdown of key steps to make this transition:
Develop your customer-centric mindset
As a transactional seller, you were focused on the product, its features, and its benefits. As a consultative seller, you need to shift your focus to your customer. What do they need? How do they work? What are their challenges and goals?
This shift in mindset can help you be a better partner and trusted advisor to your customers as you grow your business or client list.
Learn to ask better questions (and actively listen to the answers)
As you might have seen at the end of the last section, you will need to gather a lot of information about your client (and directly from them). This requires you to learn to ask really good questions as well as some follow-up questions to get to the heart of your prospect's needs, challenges, and goals.
Showing up and asking about someone's goals isn't enough. You want to be broad enough to expose anything you weren't thinking about but specific enough that your prospect shares the most relevant information with you.
Actively listening to the responses is another muscle you may need to develop. In transactional sales (and most of life), a lot of people listen to ask the next question or respond. As a consultative seller, actively listening and waiting to respond are skills you may need to develop or refine.
Evolve your sales process and materials
A different sales methodology requires a different sales process and materials to support it. So, if you were doing a lot of cold calling or email outreach as a transactional seller, it might be time to change the game. While calling and emailing may be part of the strategy, you may need to use them more strategically.
As you begin to learn about and build relationships with your prospects, you might start to use email to share resources or call quarterly to do a check in and see how things are going and if it's the right time to start talking about your product or solution. The sales cycle in some industries that use consultative selling may be months or even years to close business.
You may also want to start to craft a sales proposal template or template library so that you are ready when the time comes to do a formal presentation or proposal. At Qwilr, we make this especially easy with our sales proposal templates and template library.
Adjust as you learn
As you start to make the shift, continue to make notes about what is working and where you might still need to evolve. The transition from a transactional sales process and mindset to a more consultative one will take time and effort. Remember, you get out what you put in. So, investing in this process should continue to pay off as you grow in both your role and career.
Final Thoughts
Mastering the art of both consultative and transactional selling is essential for modern sales success. By understanding your customers and tailoring your approach accordingly, you can build lasting relationships, increase sales, and drive business growth.
Remember, the ultimate goal is to create value for the customer, whether through a quick transaction or a long-term partnership.
About the author
Marissa Taffer|Founder & President of M. Taffer Consulting
Marissa Taffer is the Founder & President of M. Taffer Consulting. She brings over 15 years of sales and marketing experience across various industries to a broad range of clients.
