What is transactional selling, and how does this approach work?
Whether you're a sales expert or new to the industry, transactional selling is a classic negotiation strategy. Get tips on when and how to use it, and see examples of what it looks like in action.
Last updated August 24, 2022
Certain niches in the sales industry focus a great deal on building lasting and meaningful relationships with customers. But that level of personal investment doesn’t always make sense—plus, transactional selling continues to be the most common way to make a sale.
This isn’t hard to believe when you consider that 50 percent of your prospects aren’t going to be a good fit for what you’re selling. For many businesses, a strategy that moves sales along quickly is the more powerful revenue generator.
But what is transactional selling, and when is it appropriate? In this article, we’ll define transactional selling, explain how it compares to other forms of selling, and share our best tips for how to create value in transactional selling.
What is transactional selling?
Transactional selling is a negotiation strategy that focuses solely on making a sale. It emphasizes competitive pricing, social proof, and purchase urgency. The goal is to make the greatest number of individual sales possible.
Transactional selling typically has very short sales cycles and low customer lifetime value. Emotional connections aren’t important in this sales methodology—what matters most is closing the sale. Reps aren’t necessarily trying to develop strong, prolonged relationships with customers. So, individuals move through the sales pipeline rapidly.
In short, transactional selling’s motto might be: “One and done, and on to the next.”
How does transactional selling work?
In transactional selling, the representative typically contacts the customer and then uses negotiation tactics to quickly sell a product or service. This strategy is often used on sales calls, but it can also be helpful for in-person or virtual sales.
Transactional selling continues to be the most common way to make a sale.
As transactional sales are one-off encounters, sales reps tend to introduce a generally compelling offer without honing in on particular customer pain points. The goal is not to create a personal bond with the customer, but to help the customer see the value of the product or service—and then convince them to buy it now.
Sales reps usually try to move products fast in transactional selling and frequently utilize scarcity techniques. Limited-time offers, for example, create urgency for customers. If your prospects begin to feel that they might miss out on this deal if they don’t take it now, they’ll be more inclined to buy.
You may never see customers who make impulse or one-time purchases again, but these transactional exchanges do add up. Reps who excel at transactional selling can vastly increase their win rates.
- Transactional vs. consultative selling
While transactional selling emphasizes fast, singular exchanges with short sales cycles, consultative selling focuses on forming a lasting connection with customers by meeting their needs and solving their pain points. Consultative selling (also known as needs-based selling) has a lengthier sales cycle and offers personalized solutions, not quick fixes.
The consultative sales approach may entail a longer process, but it is more successful at recruiting recurring customers (with high customer lifetime value) and presents more upselling and cross-selling opportunities. It’s a great strategy for high-end goods and services, while transactional selling makes more sense for fast or small purchases.
Another difference between transactional and consultative selling is who initiates the sales conversation. With transactional selling, the sales rep always contacts the customer first. With consultative selling, either party may reach out. Whichever way it begins, consultative sales reps work to earn customer trust, understand their issues and needs, and help them find the right solution.
- Transactional vs. transitional selling
Transitional selling is less proactive than transactional selling. In transitional selling, a sales exchange always begins with a customer reaching out to a company. The prospect is already interested in your product or business, and it is the sales rep’s job to capitalize on this interest to close the deal or upgrade the sale.
It’s called transitional selling because the aim is to transition a conversation with a prospect into a selling, upselling, or cross-selling opportunity. Well-executed transitional selling can pivot and expand the conversation from a single sale toward package deals, upgrades, and additional products or services. This differs from transactional selling where the goal is to seal a singular deal ASAP.
In transactional sales, reps strive to sell to many customers swiftly. But in transitional sales, reps aim to increase the price point per purchase and attract repeat customers. There’s more relationship-building involved in transitional sales as well as a longer sales cycle.
- Transactional vs. relationship selling
Relationship selling sits at the opposite end of the sales spectrum from transactional selling. As the name implies, relationship selling is all about building meaningful, long-term relationships with your customers. It has a long sales cycle and emphasizes repeat sales, positive reviews, and word of mouth. Relationship selling is a newer concept and well worth considering for B2B sales teams.
In transactional sales, companies usually use mass marketing and promotional tactics to reach a wide audience. This is different from relationship selling, which requires personalized marketing strategies so customers feel heard and valued—you need to show that you understand them.
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How to create value in transactional selling
Just because transactional selling is all about quick, snappy sales, it doesn’t mean you can’t leverage elements of other sales methods that are more focused on relationship-building. Finding ways to establish a connection with a prospect helps transactional sales reps close more deals.
Try the following tactics to create value and up your conversion rates when transactional selling.
Tip 1: Build rapport
Even if a sales call is short, you can still find a way to connect with a prospect in the time you have. One way to quickly establish rapport is to identify a common interest. Do you and your prospect enjoy the same hobby? Are you of a similar age? Do you hear a dog in the background and, as luck would have it, you’re a dog-lover yourself? Finding a shared interest can go a long way in helping someone warm up to you.
Don’t let sales scripts and speed distract from your basic listening skills, either. If a prospect shares a preferred name or pronoun, be sure to use it. If they tell you about a pain point, jump in and commiserate, then explain how your product can help. Use the essence of solution selling to make a prospect feel like you’re there to solve their problems. Great customer service never goes out of style.
Tip 2: Incentivize a customer to buy
In a brief transactional interaction, it’s important to give the customer a reason to buy now. If you can incentivize the purchase, you’re likely going to have a successful transactional sale and a high rate of customer satisfaction.
Offering limited-time discounts, deals, or free demos is a great way to create a sense of urgency. If your product is 50 percent off for only one day, people will feel like they’re missing out if they don’t take advantage of the deal immediately. Making them want to buy the product or service right now, through you, is key to transactional selling.
Tip 3: Believe in your product
A salesperson must know the product or service inside and out—this remains a staunch truth in transactional sales. Share with a prospect what you genuinely love about your product. People can tell when you’re passionate about something, and if you’re excited about what you’re selling, they will be, too.
Tip 4: Be patient
In a transactional sale, it can be tempting to rush through each call or interaction to get to the next one. Don’t give in to that impulse. A few extra minutes spent with a prospect might give you the piece of information you need to push them over the edge to buy.
You also shouldn’t write off everyone who doesn’t immediately seem like an ideal prospect. Listen and adjust your sales pitch for each person. You’d be surprised how a small adjustment or a found connection can open up a prospect to the possibility of a purchase. Although you have many transactional sales to move through, don’t use that as an excuse to not give each one your all.
Examples of transactional selling
Here are some examples of transactional selling and transactional selling strategies:
- A sales rep working on commission is often focused on transactional selling. For instance, a rep selling refrigerators likely wants to make as many individual sales as possible. It wouldn’t make sense to build a relationship with someone who probably isn’t going to need another refrigerator for a long time.
- A Black Friday sale is an example of a transactional selling strategy. It is a notable limited-time sale that encourages consumers to buy a product now while prices are slashed.
- A company might send a mailer with a limited-time “buy one get one free” offer. This is a great tool to energize and incentivize prospects to buy before the sale ends.
Try Zendesk Sell
To increase your chances of sales success, use a sales CRM that compiles prospect and customer information, generates leads, helps develop your sales territory, and automates administrative tasks so you can spend more time selling. Every feature should help improve and expedite the buyer’s journey.
Zendesk Sell is designed to do all these things and more. With Zendesk, your sales reps will be set up for success whether they’re focused on short-cycle transactional sales or long-term relationship-building.
Start a free trial today and see how a quality CRM can transform your sales process for the better.
Improve your sales process
A good sales process is the foundation of any successful sales organization. Learn how to improve yours with this free guide and close more deals.
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