A version of this article appeared in Building Products Digest in May, 2014.
After all the advice you’ve been getting from sales professionals, managers, trainers, and sales columnists over all these years, why is the transactional sale still so common? Why haven’t we swam against the tide and found a better way? Perhaps it’s because it’s easy. Someone calls, you quote a price, you get the order…or not. Move on to the next call. What’s wrong with that? In some cases, there’s nothing wrong with it; in other cases, there’s a lot. Let’s break it down.
Transactional sales are easy and uncomplicated. That’s the irony. We love them. And that’s why your sales people gravitate to selling transactionally even when they know there’s a better way and even when they know that applying a sales process and applying better selling methodologies might give them better results.
In an ideal world, we have the best product in a category with the best value that no one else has and everyone in the market knows we have it. Just sit back and let the phones ring, right? Imagine being an iPhone salesperson. I mean no disrespect to the helpful folks at the Apple store, but if there were ever a quintessential example of an order-taker, that would be it. And if your products were like that, you wouldn’t need sales people at your company either. Imagine if your people drove around with a hand-held order machine like those guys have. “And would you like your receipt emailed to you, Mr. Campbell?”
But your products might not be like that. There is always an alternative, to your product, to your company, to your category, or even to your people – more on that in a minute. And thankfully, this is so. It's why we need good sales people. It gives your people a chance to shine, to build value, to solve business problems, and to differentiate not only your products but themselves.
Maybe you sell a broad mix of products. Some are special. They might have a longer sales cycle as you try to get the product sold as a stock item, or at least regularly purchased as a tried and true product. Perhaps you’re hoping an end user will get hooked on a particular type of widget or that a dealer stocks a certain set of products. We’ve talked a lot about how to sell those items in other articles.
But what about the products that sell more like a commodity? What about the products for which customers call and say, “I need another 300 pieces.” What about the products that seem like price is the only thing that matters? That’s our domain today.
Let’s first divide the transactional sale into three categories so we can understand what to do in each case.
- First we have the customer calling who always buys this product from you.
- Then we have the customer who sometimes buys it from you.
- And finally, we have the customer who calls and never buys from you.
Case 1: In this first case, where they always buy from you, that’s as close as you’re going to get to selling iPhones. Be happy, but don’t be complacent. The key to it working long term is maintaining a great relationship with that customer. They’re not shopping you, therefore they like you. All of the other qualifications are there, by definition. So the only thing you can mess up is the relationship. Put your best account managers on it and cherish them.
Case 2: In the second case, where they sometimes buy from you, you’re locked in purchasing department purgatory. When I talk to companies about this group, I’m almost always told the same thing, “They only care about price.” I remember one such dealer many years ago who was purchasing primed wooden trim boards and everyone in distribution “knew” that price was all that mattered to him. Then one day, someone sold him PVC trim boards at three times the price. What happened? Different value proposition? Really? Are all primed wooden trim boards the same? This was a missed opportunity.
The key, in this case, is not accepting that the sale is transactional at all. They sometimes buy from you and sometimes someone else. Why? Is price all that matters? What is the product being used for? Are there alternatives? Have they ever had a problem? And what other problems did that problem cause? Does timing matter? Does having it in stock matter? What if it costs more to keep enough in stock to never run out? Who else is affected by this purchase? How often do they need it? How many more times this month? How else could we structure this to get more of their business? Why is this important? Who else cares? Should they be in the conversation?
Find out who’s wearing the decision and get to that person. The best salespeople can do this. Then, have a business conversation. If all you do is quote the price, then you’re the same as the other guy but with a different phone voice. When the product seems the same, and the service seems the same, and the only thing that changes is the day of the week, then you need to be the difference. Slow down the call, find out what other factors are on the table, and talk about their business. Be the only one who really gets it. When your people can do that, they are the difference.
Case 3: In the third case, where the prospect frequently asks for a quote, but never, or rarely, gives you the business, we must take a different approach and it might sound something like this.
Salesperson: “You call a lot asking for a quote, and you’re real nice; you say we’re competitive, and you say good things about us, but we never get the business, why is that?”
Prospect: “It’s just business.”
Salesperson: “Is it fair to say you’re in business to make money?”
Prospect: “Aren’t we all?”
Salesperson: “And if you never get the business, how can you make money, and how can you be in business?”
Prospect: “Look, I get a lot of quotes from people who don’t get the business, and I give a lot of quotes for my company and don’t get the business. That’s what it means to be in business.”
Salesperson: “That doesn’t work for me. With all this price quoting, I’m spending a lot of time and not getting paid. Tell me what it’s going to take to do business with you and if it makes sense, I’ll give you another quote.”
Often, what’s happening in this third case is that you are being used to keep someone else’s prices low. The prospect is behaving as if business is devoid of relationship, both with respect to you and to the incumbent. And they will keep behaving that way until someone shows them a reason to change their thinking. Why not be the first one to do that? You have nothing to lose. They’re not your customer, but they called you. Seize the moment.
In summary, we tend to like transactional sales because they are easy. But we are leaving much on the table. We’re either vulnerable to the competition, we're stuck in a price war and a race to the bottom that no one can win, or we’re getting walked on while letting good potential business slip away.
Can your sales people cope with these issues and reverse the transactional tendency? Can they change the nature of the conversation and reverse the downward pressure on margins? Can they sell more consultatively and become the primary differentiator? Getting the answers to these questions could be the beginning of transcending the transactional sale and having your best year ever.
Image credit: ajcotton / 123RF Stock Photo