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« Back To the Index November 28th 2012

Consultative Selling vs Transactional Selling

What do these terms mean and what’s the difference?

Transactional selling is where the customer knows what they want and the only variables are price, lead-time and perhaps an element of customer service.  Most commodities are bought and sold in this way and the sales person has a minimal role to play in the process.  The buyer often doesn’t really value the role that the sales person performs, “no I haven’t got time to see any more sales people”. The sales person can even be excluded from the process by the internet, telesales and e-auctions.  At the lowest level, the security industry is also serviced in a transactional way where the customer specifies a minimum standard of product and companies vie, usually on price, to win the order.

Consultative sales is where the sales person becomes a problem solver.  The customer often doesn’t know what they need or possibly wants something which won’t meet their requirements.  Providing the relationship is developed, they welcome the knowledge and solution approach of the consultative sales person.  The buyer will always focus on price until the seller can demonstrate value in a total solution.  The sales cycle is usually longer and the solution arrived at can present good value to the customer whilst returning strong margin for the supplier.

The best sales people position themselves as problem solvers and solution providers not just product peddlers.  To differentiate yourself against other transactional sales people, a contemporary, consultative salesperson would;

  • Ask questions about what problems need solving
  • Discuss a variety of innovative solutions to the problem
  • Provide choice to a customer including value proposals, but also added value proposals which address the customers’ perceived issues – perhaps providing additional benefit through incremental functionality
  • Demonstrate clear return on investment to help the customer “sell” back to his/ her organisation

 

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