6: Negotiation and closing

Common closing mistakes

- Bad attitude - Talking not listening - Ineffective pre-approach - One-size-fits-all approach - Failure to try/fear - Uncertainty over what to do next- don't talk them out of it - It might be cirumstances

Customer concerns

- Do I need your product? (product need) (your product need) - Do I trust your company? (Unease about the company) (Loyalty to existing supplier) - I don't really know you - I need more time to consider the purchase - Is this your best practice?

Other follow-up opportunities

- Measure and track customer satisfaction - Measure customer retention and loyalty - Reexamine customer value from customer feedback - Reset customer expectations as needed, often back to more realistic levels.

Handling complaints

1. Listen carefully 2. Never argue 3. Show empathy 4. Don't make excuses 5. Be systematic 6. Make notes about everything (keep a paper trail) 7. Express apreciation

Guidelines for negotiating a win-win solution

1. Plan and prepare 2. Anticipation enhances negotiation 3. Say what you mean and mean what you say (plain speaking, honest answers, if you don't know the answer don't make it up) 4. Negativity destroys negotiations (don't get emotionally involved, and control anger, once the customer is angry its hard to get back to negotiations, step back and re-focus) 5. Listen and validate customer concerns (even if questions are trivial, listen and validate the concerns!) 6. Always value the value proposition (carefully explaining the benefits alleviates customer objections, value is more than price)

Loyalty to the customer

A customer who has objections about your firm may be showing loyalty to/ or satisfaction with their current supplier. It may be that your firm has done nothing wrong but the competition has done things right. Your firm should be careful to avoid criticism and damage a potential future relationship as customers don't like change.

Third party endorsement

Based on the use if outside parties to bolster your arguments in the presentation. Can be use in conjunction with other strategies. It helps to add credibility to the company. Can be useful if the firm has had a poor reputation in the past.

Summary of benefits close

A relatively formal way to close by going back over some or all of the benefits accepted, reminding the buyer why those benefits are important, and the asking a direct close question. "We agreed that the product can do X,Y,Z, lets go ahead and order"

Follow-up enhancing customer relationships

After sales service - part of relationship building - not always the salespersons responsibility - try and be involved in after-care and follow up activities Expectations and complaints - complaints come from gaps between expectations and delivery i.e. performance, installation, training. (Performance gap) - the salesperson must help handle these, don't ignore them once you've closed, its a good source of relationship building and trust. - be proactive at following up customers, don't just wait for complaints.

Trial offer

Allows the customer to use the product without a commitment to purchase. Effective with new products because the customer can try it, become familiar and see the products benefits. Must make sure the customer is fully aware of the terms and conditions to avoid confusion and misunderstanding.

Assumptive close

Allows the salesperson to verbalise the assumption of a close to see if it is correct. You want the buyer to naturally go along with this assumption. If this isn't the case, the customer may have some more objections. "I can ship it on Monday'

Balance sheet close

Also called the t-account close, gets the salesperson directly involved in helping the prospect see the pros and cons of placing the order. Write them down on paper and balance these to summarise the decision. " lets take a few minutes to discuss the pros and cons and answer any remaining questions you have"

The trial close

Any time the buyer exhibits signals, you can try and 'trial close'. Often results in a customer objections which can lead to the negotiation stage- but sometimes it works.

Closing methods

Basic methods: 1. Assumptive close 2. Minor point close 3. Alternative choice close 4. Direct close Advanced methods 5. Summary of benefits 6. Balance sheet 7. Buy-now

Dangers of focusing on the close

Close shouldn't be viewed as the end point, this can lead to stress, anxiety and pressure tactics. In a relationship selling model, the close is achieved by 'call goals' and this isn't always the sale.

THE SALES PROCESS IS RARELY LINEAR

Closing can occur at any point! Not just at the end. If we are ethically negotiating and selling value, the close should be a natural progression of dialogue. The art of selling is finding the common ground where both parties can win by developing a mutually beneficial business relationship. To do this the salesperson should have a certain level of empathy in dealing with their prospects and the customers- understanding their situation, motives and feelings.

I need more time to think

Common situation. Customers have a legitimate concern about making a purchase decision to quickly. In some cases, the decision to purchase can take a long time. i.e. purchasing large commercial aircraft, takes more than a year to build. The customer may want to stall the final decision because: - Uncertainty of a new product - Failed to prove the value proposition of the product (important to realise they aren't saying no but may want you to make a stronger case, part of the relationship building).

Is this your best price?

Concerns about the price of the product. A likely reason for this is because the customer hasn't fully accepted the value proposition yet. If customers don't think that the benefits exceed the price, they wont buy the product. (price/benefits ratio) Add value to the total package- get customers to see the entire bundle of benefits i.e. after sales service etc. Price should never be the main issue- the benefits should be explained first. Price is a friend, not enemy- when a salesperson offers concession is shows they think the price is too high, it could harm the customer perception of the brand.

Negotiations at the heart of the win-win solution

Customers should always raise questions and objections, and this should be seen positively and as a way to strengthen the relationship. - This is why salespeople are used, as otherwise a brochure or robot could be used. - In the past negotiation was called handling objections, seen as a problem the salesperson had to solve- this is the adversary approach where 1 person wins and 1 looses.

Bounce back

Effective in many situations but is more aggressive than some other strategies care needs to be taken to not appear pushy. Turn a concern into a reason for action e.g. delaying your decision costs your firm money.

Alternative choice close

Focuses the buyer on deciding relatively minor points. It also adds the twist of giving the prospect options. Focusing on making a choice between viable options. "which would be best for you, the golf or the polo?"

Unease about your company

If customers don't know about your company they may be concerned about your ability to deliver what, when and where they need it. They need to know what you will do and what you promise in the presentation.

If 1 looses, you both loose

If the buyer looses then they are unhappy and wont be loyal. If the seller looses, then the buyer will end up paying the price by way of poor service, lower status, lower quality products etc.

Defer

If the customer raises a concern you need to address later in the presentation, you may defer it until you have had the chance to explain other material. Especially useful when the customer raises prices before you have show the value prop.

Closing the sale

Means obtaining a commitment from the prospect or customer to make a purchase. Old views of closing where were sales people only wants a sign on the dotted line.

Compensating for deficiencies

Move the conversation from a benefit you do poorly on, to one which you do better on, as long as its important tot the customer.

Direct close

Not the most straightforward approach- the salesperson simply asks for the order. It can be highly effective when buying signals are strong and the buyer seems straightforward. "It sounds to me like your ready to make the order, lets get it in the system"

Specific negotiation strategies

SIMPLE STRATEGIES 1. Question 2. Trial offer 3. Third party endorsement MORE ADVANCED STRATEGIES 4. Defer 5. Compensate for deficiencies 6. Indirect denial RISKY/EXPERT LEVEL STRATEGIES 7. Direct denial 8. Feel-felt-found 9. Bounce back

Dealing with rejection

Salespeople must remember that not closing isn't personal rejection. 5 tactics for dealing with rejection are: 1. Remind yourself of the difference between self-worth and performance 2. Engage in positive self talk 3. Don't automatically assume you're the problem 4. Positively anticipate the option of rejection and it wont overwhelm 5. Consider the possibility that not buying is a rational decision because of underlying reasons. *Attitude is important, and showing tenacity.

Buy-now close

Sometimes called the impending-event or standing room only close, and creates a sense of urgency with the buyer, that if they don't act, they may loose out. Manipulative selling tactics are taboo so the salesperson must be honest. "my firm is running a special offer this week only"

Indirect denial

Takes a less threatening approach, where the salesperson initially agrees with the customer, validates the objection and then explains why it isn't true.

Product need

The customer may not be convinced that there is a need for the product. May not see the value in the product. Customers must see a clear and convincing reason to buy the product. Keep in mind that customers aren't usually risk takers. With new technology advances they are likely to wonder if its too new/unproven.

Direct denial

The most confrontational strategy, involves the immediate and indisputable rejection of a customers statement. Customers can find this threatening and negative. If they say something false and damaging to the firm it important to respond immediately, and stating the facts will clear it up. Don't be offensive and condescending and focus on the win-win solution.

Minor point close

The salesperson focus the buyer on a small element of the decision. The idea is that by agreeing on something small reflects the commitment to purchase, and the salesperson can move on with the sale. "What colour do you prefer"

I don't really know you

The salesperson has to build up trust and earn the customers respect. Customers may want to see higher authority such as the manager to handle their business and in such cases the salesperson should be prepared to explain the knowledge of the customers value prop. to build customer confidence. Be careful of personality clashes and remember that your aren't friends- management can support here. Focus on the firm-customer relationship.

Buying signals

The salesperson should watch for buying signals, verbal and non-verbal cues that the customer is ready to make a commitment to purchase. - Body movements - Hand gestures - Being relaxed, open and friendly - Positive feedback - Asking questions - Seeing opinions

CRM and follow up

These follow-up activities should be documented in the CRM system: - tracking common customer post sale problems, sharing these and creating solutions - sharing post sale strategies among all members of the sales team - documenting and comparing levels of satisfaction, retention and loyalty - track individual salespeople performance against goals

Question

Turning their concern into a question and refocus on one or more strengths of the value prop. Requires good pre-planning.

Feel-felt-found

When the customers object based on opinions and attitudes (feels( not facts. Acknowledge (i know how you feel) extend to a wider audience (others have felt the same) and counter (however, i know i have found).

Your product need

Whether the customer needs your product. Customers can have product concern when compared to other competitors and your products superiority. The seller must clearly define their products features, advantages, and benefits (FAB's). Your value proposition must account for the cost of changing from a different product.