Topic of the Week (TOTW): Relationship Selling vs Product (Transactional) Selling – “The Selling Clock is Ticking”


As we mentioned in social media, we have long had a Topic of the Week that we discuss for 30 minutes at the beginning of our weekly status meeting.  This week’s topic is Relationship Selling versus Product Selling.

Many how-to books are written on marriage, golf and selling because they are all complicated, complex subjects which take time to learn.  For purposes of our discussion, we are defining relationship selling as selling oriented on learning the customer’s company inside and out.  Relationship selling is focused on understanding the buyer’s motivations and drivers around the strategy and the context of the sale.  Product selling (sometimes referred to as transactional selling) is defined, for our purposes, as selling based on the product’s attributes, the seller’s product knowledge and reputation.  Both forms of selling involve relationships and we think both approaches work when used in the correct environment.

In all selling situations, the selling cycle time is an important factor.  The selling cycle time is the time it takes to complete a sale.  The cycle begins when first contact is made with a potential customer and ends with the closing of the sale. The common view is that relationship selling cycle has a longer cycle time than product selling.  For example, in a retail environment, the cycle is typically short because people come to the store to buy. In industries where sellers call on prospects, the cycle time can be weeks, months or even years.

In any selling process the key is caring about the customer’s side of the equation and not just about what the seller wants.  There is a price and/or risk factor from the customer’s point of view in both relationship selling and product selling.  In a commodity situation, product selling, e.g. price driven, may be more relevant. In a higher risk, higher complexity, longer time frame or higher base price selling, where trust is imperative, relationship selling is often preferred.

The relationship can be with an individual, a team, a brand or a company. The best relationships are created when the seller’s and buyer’s company goals are aligned. From the buyer’s perspective risk exposure changes how the relationship is viewed. In some cases, the buyer is betting their company’s success on the vendor’s performance.  Relationship selling is often used when repeat business is involved and the impact and price are high.  Product selling works well when the product price is low and the product’s impact for the buyer is low.

So what about virtual relationships?  On-line sellers are one example.  Customers rely on reviews from other customers, brand loyalty, company loyalty and a trusted name.  Even though there is not a sales person directly involved, the relationship depends on reliability, previous experiences of the buyer, as well as, other buyer’s reviews.  In other words, trust.  Exactly the same requirements for other types of relationship selling.

Product selling is sometimes referred to as transactional selling because it is either a one-time sale or a one-time sale repeated every time the customer has a need.  Commodity products come to mind if there are many sources for the product and the buyer’s margin is directly related to the cost of the product.  Product selling requires deep product knowledge and the sales person must a specialist in the products attributes.  Often the sale is made at one entry point in the buyer’s organization so the seller has to understand the buyer’s motivation and purpose for the product.

It seems obvious that relationship selling would be best, however, the reality is not all customers want a relationship interaction.  Product selling is focused on generating interest, overcoming objections, and closing the sale.  In an environment where cycle time is important, supplier support or training are not needed and the product is available from many sources, product selling may be best.

In any event, the sales clock is ticking and nothing happens until the sale is made.

Posted in News & Views.