As I work with sales organizations across the world, I am frequently asked if the inbound sales philosophy works in an industry defined by a transactional sales process.
Many salespeople find it difficult to overcome price objections, especially when their sales process is short and their product isn’t highly differentiated. However, an increasing number of salespeople are using the inbound sales philosophy in transactional industries with good results.
Here, we'll get a more thorough understanding of transactional selling, how it compares with consultative selling, and how to reconcile the two in a transactional industry.
The term 'transactional selling' typically refers to the process of conducting one-off, generally impersonal sales where immediately generating revenue is the main — if not sole — priority. Ecommerce and retail are two of the more prominent examples of this brand of sales.
Explaining value when your prospect is focused on price is a choice every modern salesperson faces with each new customer. While guaranteeing the lowest cost over an extended period of time is definitely a competitive advantage, it is not always the best way for a customer to buy.
It's also not necessarily a good way to build a relationship, unless you can be sure of superior pricing and availability in perpetuity. I often hear reps say, "My customers don’t care about relationships — all they care about is the lowest price," during my sales coaching.
Unfortunately, many salespeople take this at face value without doing their requisite homework. If done properly, leaning into consultative selling can lead to good results — even in transactional industries.
Transactional Selling vs. Consultative Selling
Where transactional selling is impersonal and immediate, consultative selling is a more long term, needs-based play where salespeople establish trust and personal relationships with prospects to understand their pain points and tailor solutions to suit their circumstances.
Transactional selling, on its own, isn't always sustainably successful. It's a quick fix method that tends to pay off less than consultative sales in the long run. It doesn't empower prospects to the same extent as consultative selling, and in turn, makes them less inclined to consistently engage with you and your organization.
That said, your industry might naturally lend itself to transactional selling. It could be ingrained in how you operate, but that doesn't mean it has to define the full extent of the sales strategies you use. You can still incorporate elements of consultative sales into your broader sales efforts.
Here are four techniques you can employ to engage in consultative selling in a transactional industry.
Consultative Selling in a Transactional Industry: 4 Strategies
1. Build trust by understanding the end goal.
The inbound sales process is built on trust. One of the ways you can differentiate yourself is by running a comprehensive discovery call that helps you understand the company, the key contacts, the goals, plans, challenges, timeline, purchasing process of your prospect.
Good questions include:
- How often do you purchase?
- Do you leverage single or multiple suppliers?
- Do you have a standard for a great vendor relationship?
- Are there factors other than price that would be valuable to you?
- How are you measured on performance?
- What is the one thing that I can do today that would make your life easier?
- How often do you do source new vendors?
- How long does that take? Is the process easy or hard?
- Are there any services that go along with that?
- How much time does it take for you to source the lowest price?
Regardless of how the prospect is trained to buy, explain that your best customers value their vendor relationship. Sometimes, new clients like to speak to a current client to get industry insight.
Using testimonials or connecting your prospect with a reference to explain a specific experience can be highly effective. Creating a networking group where several of your clients can combine to meet periodically can also help.
2. Act like a consultant to point out areas of cost savings.
During the discovery call, identify ways the prospect can save time, effort, and money (outside of the purchase price) to make the conversation about total cost of ownership rather than just a spot transaction price. Availability, access to inventory, payment terms, purchasing method (invoice or credit card), contract length, and legal terms can all help determine the price.
A good discovery meeting includes questions not just about the current transaction but also the longer-term relationship, and can uncover areas your prospect hasn’t thought about that demonstrate your experience, expertise, and goal of working toward a valuable relationship for everyone.
When a prospect jumps to price right away, it behooves the inbound salesperson to dig in and figure out what that means. Is the purchase price the critical issue or does the cost include installation, training, ongoing support, account management, maintenance or other aspects of the ongoing use of the product? Even if the product is a commodity, there are value-added aspects from having just-in-time availability to delivery you can differentiate yourself on.
Some good questions to ask here include:
- Is a 15% reduction in cost meaningful?
- If I could help you save 10% off the purchase would that have an impact?
- Is there anything other than price that could influence your decision?
- How do you pay for your goods?
- Do you get a guarantee of lowest price?
3. Schedule a quarterly onsite review with your customers.
If you have a current relationship with a client who is mainly focused on price, it may make sense to schedule a time to review the overall relationship and make sure you are providing the most value based on a total cost of ownership. Quarterly reviews are a good way to cycle in and make sure that you are meeting current needs and looking for new one.
Priorities or directions often change in an organization, but salespeople don’t uncover this information because they don’t ask. As an inbound sales rep, you should identify a good-fit account, then connect multiple times to build that relationship.
Check in frequently to determine if there are changes to the business, new needs, extension of a product line, new territories, or new opportunities to help.
A good agenda includes the following elements:
- Welcome and Introduction
- Overview of major updates in prospect’s industry
- Prospect’s purchasing history for the quarter/year
- Delivery schedule
- Forecast for the rest of the year
- Q and A
4. Keep your interactions conversational and genuine.
Consultative selling is a personal game, so it serves you to add a personal edge to your communication when conducting it. As I've said, you need to be able to garner and sustain trust with your prospects — it's hard to do that when your interactions with them leave them on edge. It might be self-explanatory, but you have to put your prospects at ease by keeping your conversations with them … conversational.
Mind blowing stuff, right?
But seriously, you have to keep your communication fluid and, perhaps more importantly, genuine. Be sincerely enthusiastic, and mean what you say. Prospects respond to approachability, but they'll see through phony, ham-handed pandering — and there's often a fine line between the two.
Understand your offering's value, believe in it, and be able to articulate it in accessible, non-imposing language. If you can do that, you'll get considerable mileage out of your consultative selling efforts in a transactional industry
There's tremendous merit to and utility in leveraging consultative sales tactics. And as much as transactional selling is a fact of life in several industries, there's still room to use them in many cases.
No matter the nature of your space or how you sell, it's worth having a thorough understanding of both sides of this sales token — you stand to gain a lot from incorporating consultative sales strategies into your sales efforts in a transactional industry.
Editor's note: This post was originally published in September 14, 2016 and has been updated for comprehensiveness.