July 14, 2021

Transactional selling vs solution selling: How to mix & match strategies

Transactional selling vs solution selling—both methodologies have been around for decades, but do you know which method will work best for your business?

These two sales models are wildly different from each other, and 10 or 20 years ago you had to choose one or the other based on the type of product you were selling. But now, the lines between transactional and solution selling have started to blur.

Can transactional sellers use some solution selling methods in their process? What are the differences between these two models, and where can they overlap? Keep reading to find out:

What is transactional selling?
What is solution selling?
Transactional selling vs solution selling: how are they different at a glance?
How transactional selling and solution selling differ inside the sales process
Blurring the lines between transactional sales and solution selling

What is transactional selling?

Transactional selling is solely focused on today’s transaction, not on future sales. This method is traditionally used for one-time purchases with short sales cycles, like real estate, automotive, or retail. Transactional sellers lean heavily on discounts and special offers with the goal of closing the deal today.

Generally, a real estate agent will only deal with their customers once—this isn’t a long-term sales relationship that will keep coming back for more. That’s why, when most people think of transactional selling, they picture this once-and-done model of sales, focusing on getting the deal closed as soon as possible. If for example you're taking a high-volume cold calling approach where each rep is making 200 cold calls per day with a predictive dialer, that's more common in transactional sales.

Why does this model work for one-time sales transactions? Because it fits the needs of the transactional customer. After all, they’re not looking for a long-term relationship with their car salesman, they just want to buy the right car at the right price. This is an ideal model for customers who are more convinced by a hefty discount than a relationship with the salesperson.

What is solution selling?

The solution selling model focuses on building a clear understanding of customer needs and developing a solution that solves their problems. This model is commonly seen in subscription sales, SaaS sales, or other B2B transactions. It takes a long-term view of the relationship between rep and customer.

Solution sellers get to know their prospects first, before trying to sell to them. They work alongside prospects to diagnose problems, identify the root of those problems, and develop a clear solution. This extra time spent understanding their prospects allows them to position their product as the ideal solution to the problems the prospect is facing.

This model builds relationships for the long-term and is usually seen in longer sales cycles, B2B sales, and subscription models.

Want a practical playbook for authentic relationship-building with prospects? Download your free copy of my book Talk To Your Customers.

Transactional selling vs solution selling: how are they different at a glance?

Wondering what the differences are between these two models at a glance? Here’s the cliff notes version:


Transactional sales	Solution sales
Short-term play to close a deal quickly	Long-term method focused on building relationships for the future
Normally used for one-time purchases	Normally used in longer sales cycles and subscription-based sales
Generally a B2C sales model	Generally a B2B sales model
Commonly uses discounts and special offers to close deals faster	Focuses on proving the value of the product, and rarely uses discounts to close the deal

How transactional selling and solution selling differ inside the sales process

How do these two sales models act in the real world? Let’s see clear examples of what transactional sales and solution selling look like at different stages of the sales process:

Qualify

All salespeople, whether B2C or B2B, must first make sure their prospects are a good match for what they’re selling. Here’s how each model qualifies their prospects:

With transactional: Transactional sellers normally have fewer requirements to qualify their customers. They may have one or two questions for prospects before they begin their pitch, but generally, they’ll move through qualification after just a few minutes.

With solution: Solution sellers spend a great deal of time qualifying their prospects. At this stage, reps ask open-ended sales questions to understand what’s going on in their prospect’s business, where their main challenges are, what goals they’re trying to achieve, and what solutions they need to overcome roadblocks.

Pitch

When it comes to presenting the product to the customer, how do these two sales models act?

With transactional: The pitch is where transactional sellers work their magic. They’ll likely be working within a sales pitch script that changes very little from customer to customer. The transactional seller lists the main features of what they’re selling, adding the benefits of each feature as they go. They’ll also use the pitch to build urgency, perhaps offering a limited-time discount.

With solution: Solution sellers adapt their pitch to what they’ve learned about the customer during qualification. Rather than list features, they show how their product is a solution to the problems the prospect is facing, highlighting key benefits with specific examples of how this will improve the prospect’s business.

Negotiate and close

The final stages of the sales process are arguably the most important—so how do transactional sellers and solution sellers close deals?

With transactional: This sales model is focused on closing the deal, so they’re willing to negotiate their heart out if it means making a sale today. They close early and often, with the main goal of getting the deal done as soon as possible.

With solution: Solution sellers are also willing to negotiate, but don’t rely so heavily on discounts to get the deal done. They may try to adjust pricing plans or limits on their SaaS product to better fit the customer’s needs, but their focus is on providing a solution that works rather than simply closing the deal.

Blurring the lines between transactional sales and solution selling

If you’re selling a one-time transaction in a B2C setting, such as retail, real estate, or automotive, does that mean you MUST use the transactional selling model?

Simply put, no.

After all, a one-time transaction can also be a solution to a problem for your customers.

Going back to the example of real estate—a real estate agent who spends some extra time getting to know potential home buyers and understanding their needs is more likely to provide them with the right home early on in the process. In addition to this, they're more likely to build a long-term relationship with prospects that can result in future referrals or even repeat business.

Solution selling absolutely has a place in one-time purchases. The key is this: spend a balanced amount of time qualifying so that you can provide the right product off the bat, and you’ll still maintain a short sales cycle.

What’s the benefit of this?

First, providing the right product from the start will help you close the deal faster. If a real estate agent knows exactly what the home buyers need in a new home, they’ll be in a better position to show them the right house that fits their needs.

This fits with what these kinds of customers want now—for example, a study by the National Association of Realtors found that the top aspect home buyers look for when choosing an agent is someone who can help them find the right home (not someone who can get them the biggest discount).

Second, providing a more personalized touch inside the sales process will make your customers happy. And even if they’re not coming back every week for a new purchase, they’ll be likely to tell others about the good experience they had with you.

Transactional sales or solution selling—is there a perfect method for your business?

While these two sales models are vastly different from each other, each has its own place.

That said, when transactional sellers start to add some solution selling techniques into their process, they’ll improve relationships with their customers, close the right deal faster, and likely get more referrals.

For those who want to build a sustainable sales career, I'd advice against a transactional sales approach. Those who succeed long-term in sales typically do so by building a high-value network of relationships, and you can't do that well with a transactional sales approach.

The main reason, from the point of view of a sales rep, to prefer a transactional sales approach is that it can be a great sales bootcamp. If you're an inexperienced sales person, the high-volume of sales interactions that comes with transactional sales is a great opportunity to practice your sales skills and learn to master the emotional self-management element of sales. If you're nervous making cold calls, you can use my emotional alchemy hack to get yourself into the right state. You can practice opening a sales conversation on a cold call effectively, really hone in on mastering objection management, and many other skills.

Of course, every sales process is different—that’s why a good salesperson keeps learning and adapting different sales strategies to their own process in order to fit their customers and close more deals.

Whichever sales methodology you chose to adapt for your company—our free collection of templates, scripts and worksheets will help you set up a winning process faster.

DOWNLOAD OUR FREE SALES SUCCESS KIT →

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Article written by

Steli Efti

Steli is a co-founder and CEO of Close. He is known as Silicon Valley’s most prominent sales hustler, a YC alum, and advisor to countless startups and entrepreneurs.