The Key to Sales Success: Transactional Vs. Relational Sales

Top-notch sales programs focus on the difference between transactional and relational sales

I was lucky enough to attend Michigan State University, which has one of the top-ranked sales programs in the world. One of the foundational pillars of Michigan State University’s sales program is transactional versus relational sales. As a student, this concept was drilled into my core from the start of the program. There is a dramatic difference between transactional and relational sales, and the unfortunate reality is that most sales reps don’t know the difference.

Ultimately, customers experience the implications of uneducated sales representatives. Inappropriate applications of transactional and relational sales tactics is one of the leading reasons why the sales industry gets a bad rap. However, when done correctly, sales reps are a customer’s biggest asset in the marketplace. After all, they champion the brand.

The sad reality of being a consumer in a selfish marketplace

We’ve all had that sales experience that makes you cringe. You know, the salesman who is pushy and controlling. Even worse, you’re left feeling taken advantage of. Before you know it, you’re over budget and you realize it’s because you were baited and switched. Sometimes, you’re even blatantly lied to.

Unfortunately, you lose your sense of optimism in the marketplace. From that point forward, you take extra measures to determine whether you can trust a salesperson/company. In a sense, it’s a learning experience that matures you within the marketplace. It’s a sad reality, but you realize that the salesperson may have an agenda that doesn’t align with your best interests.

So what does transactional vs. relational sales look like?

Transactional:

-Transaction based

-Short-term

-Low price point

-Low emphasis on customer’s needs

In my opinion:

Not heart-led

Example:

Over the counter sale - bubble gum or candy bar

Relational:

-Relationship-based

-Long-term

-High price point

-High emphasis on customer’s needs

In my opinion:

Heart-led

Example:

Buying a piece of land and building a home on it

The diagram above provides some examples of each sales philosophy.

Salespeople are largely driven by whether or not their name is connected to the service or product

Ten years ago, as an eighteen year old, I incorporated my first LLC while attending MSU’s business school and sales program. It was a high-end paint company. Prior to that, I had several sales jobs consisting of selling knives, selling vacuums door-to-door, and nonprofit fundraising door-to-door. I even worked for a network marketing company that went viral within my high school.

It wasn’t until I started my own company in conjunction with my sales program that I learned about the value of relational sales. It was when my name was associated with the brand I was representing that I thought about the implications of my sales tactics. It wasn’t that I was unethical until then, but I had no personal tie to the quality of what was being delivered to the customer, and therefore focused on a quick sales transaction. In these contexts, I was removed from the customer after the sale.

By understanding that a customer doesn’t want to be passed down the line, it was important for me to build a business model that ensured that the initial salesperson would be with the customer from start to finish--an account manager. At LIME, being intentional about the relationship with the customer is paramount. In fact, most of the sales reps who I train are brought to a new understanding of sales once they’ve graduated from LIME Elite Academy’s sales program. One of my most successful salesmen was in his early forties, had a lifetime of sales-related positions, and felt like the secret to life was revealed to him once he learned what relational sales represented. It was a beautiful process to be a part of.

LIME’s sales philosophy

Early in LIME’s development as I was refining the model, I recognized that the year before we had done a great job of “upselling” on each account. After all, sales drives the success of a business--especially one in its infancy. Toward the end of that season, I had a conversation with a client about one of my sales guys being a really good salesman. She shared with me that it was hard for her to say “no” as he had done such a good job.

Even after I removed myself from that conversation, I kept returning to what she said. Eventually, I realized that I had built a great sales process that was reaping a lot of success for our sales team, but I wanted to go above and beyond to ensure that the clients' sales experience was not one-sided. I wanted to put the power in the hands of the consumer and allow him to freely choose what he wanted us to service. This effort would be driven by education. Not education of our sales team (although they are), but of our clients.

Relational sales in action through LIME’s Advisor Model

At the beginning of the following season, I rolled out the annual theme. Each year we have a new one (i.e., purpose, goal setting, etc.), but this particular year the theme was to serve vs. sell. Because we are service and quality driven, I wanted to further align our sales and service philosophies. The objective was to further refine what it meant to be an Advisor at LIME, which is broken down into the three As: assess, advise, and audit. This philosophy is tailored toward being a consultative Advisor. LIME’s sales philosophy is to provide a client with an exhaustive assessment based on our advising process. This process is very relational and not pushy.

By implementing the Advisor model at LIME, the power is placed in the consumer’s hands as he becomes educated on how his coatings system works. The Advisor model is also based on providing quality solutions that are best in class. Finally, the client is given options and not “closed.” In this scenario, the client is allowed to independently do his due diligence and make an educated buying decision at his pace and at his terms--all for no cost, as LIME’s consults are free of charge.

When selling, do you focus on fully educating the prospect along with complete transparency while allowing the client to close himself?