Finding the Right Fit: Transactional or Relationship Selling

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As many are predicting a U.S. travel surge for summer 2021 following the COVID-19 pandemic, the hospitality industry is moving into the next phase of recovery. Some hoteliers are looking to reevaluate roles while others are reestablishing relationships from both employee and customer perspectives. After furloughing some, most, or all sales team members during the pandemic, hoteliers could be faced with rebuilding entire sales teams from the ground up. While all situations vary, one notion is certain: It’s time to get back to the basics of selling.

Over the past 10 years, the revenue management focus has shifted to the transactional model of closing the deal rather than the relationship model of looking at accounts holistically. Total revenue management is the concept of looking at all the revenues of a hotel to capture the highest profits given the perishable nature of the various types of inventory. From a sales perspective, the closest corollary is total account value (TAV), which is the change from looking at the transactional model to the relationship model.

Shifting to TAV requires hotel sales teams to be adept at buiding and maintaining relationships with customers. The transactional model that has prevailed over the past decade doesn’t create an environment that supports TAV. Looking at TAV from a sales and customer perspective can help a hotelier choose the sales model that fits a specific hotel when coming out of an economic downturn.

TAV from a Sales Perspective

Comparing the transactional approach and the relationship approach provides insights on TAV from a sales perspective.

  • One-time or ongoing opportunities—Current sales teams might focus on the most immediate deal rather than the future business of an account. With TAV, the seller develops a relationship to understand a client’s needs and capture as much wallet share as possible rather than a single booking.
  • Short-term or long-term—Connections are transitory and limited with the singular nature of the short-term category, which makes it difficult to capture more wallet share. From a long-term perspective, ongoing relationships can deepen connectivity and grow business.
  • Low customer contact or frequent customer contact—Transactional sales teams limit to a single event. Sales teams that use a relationship approach develop a bond that extends beyond business to include a level of trust.
  • Focus on gaining new customers or retaining customers—With a single transaction focus, new customers feed the pipeline. Leveraging deeper relationships also builds a steady pipeline and can eliminate the peaks and valleys of the transactional model.
  • Limited loyalty or loyal relationships—Sales teams might view each new transaction independently, which creates a scenario where products are commoditized. Strong relationships with sales teams can allow customers to think less about the price and more about the partnership.
TAV from a Customer Perspective

Comparing the transactional approach and the relationship approach from a customer perspective can also provide insights on growing sales pipelines and increasing revenues.

  • Single transactions or multiple purchases—Customers that focus on products for their convenience are transactional. Customers that are willing to have conversations about the scope of their business are looking to build relationships.
  • Overpaying fears or bad decisions—Transactional customers are price sensitive and negotiate. Relational customers view price as a secondary consideration.
  • Excitement or comfort—While some customers enjoy negotiating a single transaction, others are looking for partners to help them find what they are looking for.
  • Individual searches or partnerships—There are customers that want to complete a transaction on their own, but there are also customers searching for sales representatives to act as experts to help with their booking process.
  • One-time or repeat customer—Transactional customers might not share about good sales teams and might rather discuss negotiations. Repeat customers will discuss the property and partnership with the sales team to grow word-of-mouth business.
Build Relationships and Transactions Will Follow

In relationship and transactional selling, sincerity in relationship building will encourage customers to rebook. As recovery continues throughout 2021, hoteliers might consider shifting their focus to relationships and long-term business. Building those relationships now can give hoteliers an advantage throughout recovery.

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Kristi White is chief product officer for Knowland. As a hospitality veteran by trade, with two decades of experience in the hotel and revenue management side of the industry, White has a pulse on the needs of hospitality group business. She has advised hundreds of hotels worldwide on improving their business strategy, hotel performance, and overall profitability. She is a recognized expert in hotel group sales and meeting intelligence and a frequent speaker at industry conferences and universities, as well as a former member of the Board of Directors for the HSMAI Revenue Management Special Interest Group. White also began a podcast entitled “Bring It On” during the pandemic to provide useful information from industry experts to help the industry with recovery: