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.
Published August 24, 2022
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.