Transactional vs. Consultative Selling: Knowing the Difference Makes All the Difference

John Tabita

Unlike many “natural-born salespeople”, I never had the childhood epiphany of, after selling newspaper subscriptions door-to-door, gloriously realizing that I loved to sell things. I never imagined myself in a position that would require selling, much less that I’d be blogging about it and teaching others how to do it.

I learned to sell out of necessity; because if I didn’t, I wouldn’t be able to do what I truly loved—developing websites and helping clients market. Oh, and I wouldn’t make any money … did I mention that?

In the beginning, I felt a certain disdain for the word, because it didn’t seem to fit what I did when I met with clients. Yet, when things didn’t go as planned, I sensed that the missing ingredient had something to do with “selling”—or my lack of skill at it. Perhaps “selling your services” feels more comfortable, but make no mistake, it’s still “selling.”

Sales people are not needed to quote prices. They are the bridge between the selling price and the perception of value provided to earn the sale. – Jeffrey Gitomer

Perhaps it will help to define exactly what type of selling our industry requires, because there are two different types: transactional and consultative.

A Transactional sale is a simple, short-term sale in which the customer already knows what he needs, so little to no product knowledge is required on the sales side. Typically, these are product rather than service-based. Buying criteria usually hinges on price or ease of acquisition. Consultative selling is a more complex, long-term process involving collaboration of both buyer and seller, in which the latter must first develop an understanding of the customer’s business, industry, and needs, and then craft a solution to help the customer achieve their objectives. This is usually service or solution-based. The difference between the two can be easily understood from best-selling author Roy H. Williams’ comparison of the transactional vs. relational shopper:

The Transactional Shopper

  1. Transactional shoppers are focused only on today’s transaction and give little thought to the possibility of future purchases.
  2. Their only fear is of paying more than they had to pay. Transactional shoppers are looking for price and value.
  3. They enjoy the process of comparing and negotiating and will likely shop at several stores before making their decision to purchase.
  4. Transactional shoppers do their own research so they won’t need the help of an expert. Consumer Reports are published primarily for the transactional shopper.
  5. Because they enjoy the process, transactional shoppers don’t consider their time spent shopping to be part of the purchase price.
  6. Anxious to share the “good deal” they’ve found, transactional shoppers are excellent sources of word-of-mouth advertising.

The Relational Shopper

  1. Relational shoppers consider today’s transaction to be one in a long series of many future purchases. They are looking less for a product than for a store in which to buy it.
  2. Their only fear is of making a poor choice. Relational shoppers will purchase as soon as they have confidence. Will your store and your staff give them this confidence they seek?
  3. They don’t enjoy the process of shopping and negotiating.
  4. Relational shoppers are looking principally for an expert they can trust.
  5. They consider their time to be part of the purchase price.
  6. Confident that they have found “the right place to buy,” relational shoppers are very likely to become repeat customers.

The article goes on to say that, because some shoppers will be in transactional mode and others in relational mode, your success or failure hinges on knowing which and adjusting your selling style accordingly. In context, the article is talking to merchants and store owners, so his advice makes perfect sense. Some sales (like buying a cell phone) are not so black-and-white and end up being a mix of both transactional and consultative, depending on the buyer. Yet, in a purely consultative industry like ours, problems occurs when buyers attempt to engage our services using the transactional approach. These are people who won’t answer your questions, demand yousubmit a bid or want to know “how much?” without providing any information in return. Your success, however, lies in how you deal with them, and not—I repeat, not—in adjusting your selling style to match their buying mode.

Unless you enjoy being dictated to by demanding clients for whom “getting the lowest price” is the primary reason they buy.

The trick is to get your prospects to change their buying mode, rather than adjusting your selling style. Can a transactional buyer be converted into a relational one mid-sales stream? In my opinion, yes, but not all of the time. Knowing how to “flip the switch” is one sales skill I learned to master. But knowing how to deal with those who can’t (or won’t) be converted is another one entirely.

Continuing to deal with a prospect struck in transactional mode generally doesn’t turn out well, at least in my experience. What about you? Have you learned how to get transactional clients into a relational/consultative mode? Or do you default to switching your style to match theirs, then wonder why you lose the sale or end up cutting your price? Post your comments below.

Image credit

Free book: Jump Start HTML5 Basics

Grab a free copy of one our latest ebooks! Packed with hints and tips on HTML5's most powerful new features.

  • http://www.wemosis.net Keith Ricker

    I have to admit, it’s been a long, long time since I can say that I’ve successfully “flipped that switch” and converted a transactional buyer. This is usually because, as soon as I ascertain that I am dealing with a transactional buyer, my next thought generally shifts to where the nearest exit is. But usually I won’t have to get to that point, because I’ve already weeded them out by our initial email or phone conversation.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Regarding “flipping the switch,” all you can do is try. It’s worth the effort before heading for the door. Once I know they’re a die-hard transactional prospect, I’m no longer trying to set an appointment with them; I’m referring them to my website or offering to add them to my mailing list.

      • http://www.wemosis.net Keith Ricker

        Ah yes! Mailing lists. You’re a much better marketer than I am, by a long shot. I work on everyone else’s marketing efforts, while neglecting my own. I’m like the plumber who’s sink and toilet are always backed up. Say, that should be another blog topic for you — how much better are your clients’ projects than your own?

  • http://www.medialabpro.com Matt Hammond

    I think this emphasizes the importance of working towards a proposal before starting work, and having a proposal that clearly defines the scope of work in terms of what IS and what IS NOT included in the project.
    I also have found that breaking projects into many small stages with deliverables – and payments – defined for each stage, and specific stages allocated for debugging and fine tuning.
    Make sure you clearly define that any additional work will be billed at an hourly rate and define what that hourly rate is – that way, when clients start introducing “scope creep” or flat out asking for new features in the middle of the project, you can accommodate their requests provided they sign off on the extra work – thus “flipping the switch”.
    We try to accommodate a certain degree of agile development but at some point clients have to start paying for the extra work they come up with as they see their project come together.

    • http://smallbusinessmarketingsucks.com/ John Tabita

      Matt,

      If by “proposal before starting work” you mean a detailed project plan, I would agree that all of this is very important, but I would never develop such a document unless the prospect has already agreed to hire me.

      Many of us have defaulted to offering up a proposal without such a commitment from the prospect, only to have it handed off to a competitor, used as leverage against their current provider, or be sucked into the black hole of “we’ll get back to you.”