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I often talk about consultative selling and the fact that it is the sales approach that elite sellers systematically use. We help sales leaders implement consultative selling within their companies to increase profitability and accelerate growth.
On the other hand, I talk less often about transactional sales. Very often, in my mandates, I find that B2B sales forces approach sales in a transactional way when a consultative method is required in order to achieve their objectives. But in rare cases, the opposite situation occurs and representatives work too hard on simple sales.
What is the difference between a consultative sale and a transactional sale?
Definition of transactional selling
According to the website Business Dictionary, the term transactional selling is used to refer to a sales situation in which the seller’s consulting role is particularly limited or non-existent, or even for which the consumer does not have recourse to a seller. In the context of transactional selling, the goal is to make the sale as fast and efficient as possible.
In this first type of sale, the effort, level of expertise and time spent on the sale are minimal. This is the most common selling approach used to sell commodities.
Definition of consultative selling
Conversely, consultative selling is an approach that consists in deeply understanding the problems of potential customers, the consequences of these problems and identifying a solution to solve them by placing yourself in a position of trusted expert through the questioning process. Consultative selling makes it possible to sell the value of products, services and solutions by focusing not on the need expressed by customers, but on the causes and problems at the root of the need.
In this case, the level of skills, the time to invest in sales and the efforts are important. Consultative selling is the most effective approach to sell the full value of products, services or solutions with a technical and/or technological dimension.
However, consultative selling should not be confused with advisory sale. In the latter, representatives provide information to customers in order to close the sale, while with the consultative approach, representatives obtain information through their questions and create value through them.
What is the problem when you are consultative rather than transactional?
Too much effort
Representatives who rely on the wrong sales approach work too hard for small sales. The investment of time and effort is disproportionately high in relation to the value of the sale, which raises a question about the profitability of the transaction.
Missing the biggest opportunities
It is even possible that this consultative approach to sell “commodities”, products or services with low added value makes you overlook larger sales opportunities.
How to choose between a consultative or transactional sales approach?
This is specific to each company and it is necessary to categorize the two types of sales to draw the line. Many companies offer products and/or services within a very wide price range.
For example, if the maximum amount of a sale is $10,000 in your company, of course, it will have to be addressed with a consultative approach and all sales that are a few thousand dollars will be as well. If you also have products or services that cost a few hundred dollars, then their sale should be approached in a transactional manner.
Conversely, if you sell products or solutions for several hundred thousand dollars, then sales of $10,000 or $20,000 could be transactional.
The importance of the sales force architecture
To apply the right sales approach in the right places, you will need to structure your sales force accordingly.
Ask yourself the question: can some sales that are treated in a consultative manner be made transactional?
If so, this means that these new transactional sales can be managed by internal sales, technical support or customer service.
Now, we must see how to ensure that representatives seek larger and more profitable sales with a consultative approach.
For example, in some models, representatives should stop looking for “orders” and instead open new accounts and look for all the sales volume from them.
The sales approach your team uses must be well calibrated to what you are selling. Don’t rely on either consultative or transactional sales, as you may very well need both approaches to sell different products, services or solutions.