Professional Selling Exam 2
Group Influences that affect Buying Decisions Model
- Roles (expected set of behaviors) - Reference Groups (fraternity, friend) - Social Class (income, education) - Culture and Subculture (values, beliefs)
Parts to becoming a product expert
- helps build TRUST - need to be able to have strong product knowledge (number one characteristic that helps generate trust) - possesses strong product knowledge that meets and exceed customers expectations, increases sales effectiveness and willing to pay - customers seek out the "product experts" who can assist them in making buying decisions
Social Contacting - Building Rapport
- make comments on here and now observations - offer compliments - search for mutual interests
position products with price strategy
- maximize profit and market share selling tactics that emphasize low price - seasonality discounts - quantity discounts - promotional allowances - trade discounts - Unbundling of product features - *be careful because excessive low price and discounts can lead to a negative effect on sales and commission*
team selling
- need a more detailed pre-call plan - clear understanding of role - clear presentation objectives
Strategic/Consultative Selling Model
- personal selling philosophy - relationship strategy - product strategy - customer strategy - presentation strategy
pricing professional fees- creating a value proposition
- professional service challenged with how to create value proposition and how much to charge? fees to quantify a professional service - value 1) value 2) exclusivity 3) experience 4) target market
Sources of Product Information
- web-based sources, catalogs, marketing related sales support information - Plant tours - internal sales and sales support team members - using the products - read and study publications
Presentation Plan (6 Steps)
1) Approach - review strategic/consultative selling - initiate customer contact 2) Need Discovery - ask strategic questions - determine customer needs - select product solution 3) Presentation - select presentation strategy - create presentation plan - initiate presentation 4) Negotiation - anticipate buyer concerns - plan negotiation methods - initiate win-win negotiations 5) Close - plan closing methods - recognize closing clues - initiate closing methods 6) Servicing the Sale - follow through - follow up calls - expansion selling
Organizational Buyers - 3 buying situations
1) New-task buy - first time purchase - *focuses heavily on consultative selling* 2) Straight re-buy - a routine purchase of items needed by a business to business customer 3) Modified re-buy - customer wishes to modify product specifications, change delivery schedule, renegotiate price
How do customers judge service quality?
1) Reliability 2) Assurance 3) Tangibles 4) Empathy 5) Responsiveness RATER
Three types of consumer buying decisions
1) habitual-buying decisions - require very little consumer involvement and brand differences are insignificant - care about low price 2) variety-seeking decisions - low customer involvement, but important perceived brand differences 3) complex buying decisions - HIGH degree involvement by consumers - expensive, infrequent purchases EXAMPLE - purchasing a boat
Qualifying Criteria
1) have the need for my product? 2) have the authority to buy my product? 3) have the financial resources to buy my product? 4) have the willingness to buy my product?
Three ways to improve the quality of the prospecting effort
1) increase the NUMBER of accounts or people who jump aboard the Ferris Wheel 2) improve the QUALITY of prospects 3) SHORTEN the sales cycle to find out which prospects are qualified - need - authority to buy - ability to pay - ability to purchase the product
Networking
1) meet as many people as you can 2) when you meet someone, tell the person what you do 3) do not do business while networking 4) offer your business card 5) edit your contacts and follow up Takes place in three areas - within your organization - within your industry - outside your industry
Steps in buying process (5 steps)
1) need awareness - partner with customers to identify unique needs in new and improved ways 2) evaluation of solutions - adapt superior solutions to fit unique needs 3) resolution of problems - provide assistance and advice to overcome problems and provide solutions 4) purchase - adapt and suggest effective methods to purchase and enjoy solutions 5) implementation - assist and train customers in maximum satisfaction from purchase
Sources of Prospects
1. Referrals 2. Centers of influence 3. Directories 4. Trade Publications 5. Trade shows and special events 6. Telemarketing and Email 7. Direct-response advertising and sales letters 8. Websites 9. Computerized databases 10. Cold Calling 11. Networking 12. Educational seminars 13. Prospecting by non-sales employees
approaches to gain prospect attention
Agenda approach Product demonstration approach Referral approach Customer benefit approach Question approach Survey approach Premium approach
Prospect
An individual or business who meets the qualification criteria established by you or your company Three Qualifications - person must have a need for the product or service - person must be able to afford the product - person must be authorized to make the purchase
Satisfactions
Arise from the PRODUCT itself, from the COMPANY that makes or distributes the product, and from the SALESPERSON who sells and services the product
Pre-appoach: two-part process
First Step: - establishing pre-sale objectives and creating a pre-sale presentation plan Second Step - favorable first impression - securing prospects attention - transitioning to need identification
Total Product Concept (4 areas, examples)
Generic Product (starting point) - the basic, substantive product you are selling - describes only the product category (life insurance, rental cars) Expected Product - is everything that represents the customers minimal expectation - very difficult to build customer loyalty if you are only selling expected product EXAMPLE: - expected product at Nordstrom's is currently fashion and well informed sales people Value Added Product - exists when salespeople offer customers more than they expect and may not even know exists - QUALITY OF EMPLOYEES with who interact with customer are super important to add value EXAMPLE: - modern technology allows siebert hotel to see transactions of consumer at a hotel in Boston... so I will have a bag of cookies waiting for the customer in his room when he comes to siebert hotel in Dallas Potential Product (more B-2-B) - refers to what may remain to be done... what is possible - customized solution - requires imagination and creativity to satisfy new consumer needs - more likely to occur when the salesperson is close to his customers - can often be mutually discovered EXAMPLE: - Steelcase created an environmentally friendly chair (the potential product) after learning about increased environmental concerns
Prospecting
Identifying and developing potential customers - called Prospecting in B2C - called Account or Business Development in B2B GOAL of developing a qualified prospect base
How does the buying process relate to the selling process?
It is important salespeople understand the customer's unique buying process, where the customer is in that buying process, and then align the sales process to satisfy their customer's needs. - you need to know the buying process to create the selling processterm-69
Positioning new and emerging products versus well established products
New: - new expectations - change habits - establish new standards - BUILD DESIRE FOR THE PRODUCT - focus on creating new markets - HIGH COMPETITION with new brands entering the market OLD - emphasize RELATIONSHIP strategy - emphasize brand and company superiority - point out unique features - excellent customer service - focus on sustaining existing market share
Patronage versus Product
Patronage: - causes the prospect to buy products from one particular business - customer has had direct or indirect contact with the business and sees them as beneficial - very important for look a like products - can include availability of purchase online, superior service, or any reason to love the company Product: - leads a customer to buy one product in preference to another - buyer simply believes that one product is superior to another - can include brand preference, quality, design, price
salespeople need an important understanding of what consumer needs? (HW Q)
Phycological Social
Product Information Categories
Product development and quality improvement processes - testing and modifying an idea for a product many tterm-60imes before offering it to a customer - *Quality Improvement is important for long-term business success* Performance data and specifications - *customer uses to compare the merits of one product with another (what is the anticipated rate of return)* Maintenance and service contracts - customized maintenance and serviced agreement are important when adding value and separate self from competition Price and Delivery - salespeople need to be ready to set prices and plan delivery - salespeople who have price authority are in a stronger position
Rational versus Emotional
Rational - act to an appeal such as profit, quality, technical assistance Emotional: - act because an appeal to some passion EXAMPLE: - Harley Davidson buyers are purchasing to be a part of the passionate harley community
Two buying Motives
Rational versus Emotional Patronage versus Product
Dimensions of Service Quality
Reliability Assurance Tangibles Empathy Responsiveness
Reality Selling Video: Amy Vandaveer
Selling Texas Monthly - been in business for 34 years - won 9 awards - 2.2 million readers client advertised Woodlands saying - great place to live - great place to have meetings at
Three types of buyers and how to create value?
Transactional Process Buyer - focus on the purchase stage - emphasize low price that focuses on MEETING COMPETITION Consultative Process Buyer - focus on needs awareness and helping evaluate solutions Strategic Alliance Process Buyer - focus on careful study of proposed partner
Customer Strategy
a carefully conceived plan that results in understanding the customer's perceptions and maximizing customer satisfactions and responsiveness - used to achieve a better understanding of the customer's buying needs and motives - goal to increase customer responsiveness Three Parts - Understand the Buying Process (if we haven't figured out how our buyers buy, then we will make assumptions that throw us out of alignment) - Understand the Buyer Behavior (why do customers buy) - Develop Prospect Base
Today's Consumer
a new generation of aggressive, internet empowered customers Three Power Tools 1) comprehensive information from the Internet about all products and services sold online and offline. 2) Immense choice in every segment of commerce—a wide variety of options and prices everywhere 3) Real-time price comparison at the moment and location of purchase on increasingly advanced technology *greatest challenge is realized and unrealized customer needs and improving responsiveness to customers*
Buyer Resolution Theory (5 W's)
a purchase is made only after the prospect has made five buying decisions involving specific affirmative responses to the following questions: - focuses on questions the customers may need answers to before making a decision 1) Why should I buy - buyer benefits, what are the needs 2) What should I buy - you need to convince the customer that the product will satisfy a need 3) Where should I buy 4) When should I buy 5) What is a fair price? - balance between price and value
Product Strategy
a well-conceived plan that emphasizes becoming a - PRODUCT EXPERT - Selling specific benefits - Configuring value-added solutions - a product encompasses information, services, ideas or some combination that satisfy the customers needs with the right solution
Portfolio Model for Classifying Prospects vs BCG Matrix
account opportunity (forecasted sales) and competitive position (the ability to capitalize on the opportunity) to classify how much sales effort should be made on individual accounts in the prospect database - used for to find individual customer needs and where relationship strength is important to sales success Strategic Accounts - HIGH account opportunity HIGH competitive position - most resources intensive account Problem Accounts - HIGH account opportunity WEAK competitive position - requires careful planning and execution and deserves effort because of high potential Hold Accounts - LOW account opportunity HIGH competitive position - can be attractive if current sales can be maintained with limited commitment of resources - should be monitored when opportunities arise but not too much commitment Drag Accounts - LOW account opportunity LOW competitive position - limited if any resource commitment is necessary - could be managed better by methods other than personal selling
how can the salesperson figure out the expected product?
acquire information regarding the expected product that exists in the consumers mind
selling to the gatekeeper means
aligning yourself with the person who schedules the decision maker's appointments
position products with value added strategy
can add value for there product from better customer insights, product benefits, competitive offerings, partnering relationships, better product deliveries, bette, service after the sale, better relationships - model includes expected product, value added product, generic product, potential product
Organizational vs Consumer Buyers
consumer - purchases for individual consumption - decisions made by individual - purchase made on brand reputation or personal recommendation with little to no product expertise - purchase based on emotional response to product or promotion - quick decisions - consumer goods and services for indivdual use Organizational - purchases made for some purpose other than personal use - decisions made by numerous people - purchases made on technical specification based on product expertise - purchases based on primarily rational criteria - lengthy decision process - products often complex
Gartner Case
delivers world class objective research and advice - on both the supply and demand sides of the technology market - to help high-tech and telecom professionals grow their business "We provide insight you can't get anywhere else on your customers, markets, technologies, and competitors"
Benefits
describe how a feature or advantage meets an explicit need expressed by the buyer EXAMPLE: - "sound to go can satisfy the response time YOU SAID YOU NEEDED"
Advantages
describes how a feature can be used or can help the buyer - more GENERAL EXAMPLE - "the uv protection in the glass will extend the life of your instruments and fabrics more than three years"
Cost-Benefit Analysis (quantifying the solution)
determines the actual cost of the purchase and savings the buyer can anticipate from the investment - compares two companies
Prior to developing the presentation plan, the salesperson must answer one very important question: (HW Q)
do these activities relate to the customers buying process?
Establishing Presentation Objectives (2 stages)
during the first sales call with new prospect - establish rapport - obtain permission to ask need identification Q's - obtain information to establish the customer's file Stage 2 of buying process - involve customer product demonstration - provide value justification - compare and contrast different solutions
Balanced Funnel
enables salespeople to know how many prospects and how much revenue are needed at each stage in the sales process to meet sales projections and quotas - needs to ensure sufficient prospects are always being added so it does not become empty
Return on Investment (quantifying the solution)
formula used to determine the net profits or savings from a given investment - gives a financial reason for buying the product - especially true in business to business selling - key decisions makers like CFO are more inclined to approve an expensive purchase - shortens the sales cycle
important source of information about potential customers for new salespeople?
friends and family
competitive analysis worksheet
helps a salesperson discover ways to differentiate and position a product over the competition
Approach: objective
high quality approach can differentiate yourself from competitors and add value 3 Objectives* - build rapport with prospect - capture persons full attention - generate interest in the product your selling Telephone: - when appropriate, quick, inexpensive Social Contact: - building rapport for the first 2 minutes - helps build rapport which helps build TRUST and CREDIBILITY - helps make good first impression Business Contact: - converting buyer's attention from social contact to sales presentation - agenda, product, referral, customer benefit (elevator pitch), survey, combination Never begin your sales story if the prospect seems preoccupied and is not paying attention... first two steps, social and business contact are IMPORTANT when deciding how much influence you have rest of sales meeting
3D product selling solutions model (3 parts, how they relate)
illustrates the PRODUCT, COMPANY, and SALESPERSON features available to satisfy the customer's potential 3-D cluster of satisfactions - salespeople need to find the unique satisfactions that meets the needs of the customers Product should meet and exceed expectations, the Salesperson should act as a partner, the Company should act as a team - ultimately helps position, differentiate, prepare value proposition, and understand your competitors much easier
Girard's Ferris Wheel
illustrates the relationship between prospecting and loss of customers due to attrition - aimed at supplying an ongoing list of prospects (part of Joe Girard's customer strategy) - passing of time, customers may be replaced which can be out of control of the sales person - his model includes ways to prospect (referral, cold calling) on the left and reasons for customer attrition (business failure, customer moves) on the right
Features
include data, facts, and characteristics of product or service EXAMPLE: - we offer 4 different banquet dinner options prepared by Ricardo Guido
Sales Intelligence
include insights about a prospects' - marketplace - firm - competitors - the prospect itself - necessary when the sale is complex and requires a long closing cycle
Quality Control
involves measuring products and services against established standards.
Positioning
involves those decisions and activities intended to create and maintain a certain concept of the product in the customer's mind - requires developing a marketing and sales strategy aimed to influence how a market segment views a product in comparison to competitors - needs to be configured and custom fitted in order to meet the customers wants and needs EXAMPLE - Land Rover has positioned itself against a competitive market of SUV's as a dependable vehicle that can climb a steep hill (aiming for safety, dependability, security) - Land Rover uses Plant Testing so salespeople can show clients actual testing and observations of the car in extremely demanding conditions
Qualifying
is the process of identifying prospects who appear to have a need for your product and should be contacted - most important keys to success in personal selling is ability to QUALIFY LEADS
according to purchasing decision makers, the second most destructive habit that undermines sales experience is??? (pearson HW Q)
lack of knowledge about the product or competitor
Customer Attrition
loss of clients or customers (15-20% each year) - one time need or an extended time between purchases - movement outside of the territory - customer business failure or merger - loyal buyer or purchasing agent changed positions - sales are lost to the competition
customer needs are formed through? (HW Q)
perception
Two popular models salespeople use for performing account analysis
portfolio strategy and sales analytics model
selling solution
process by which the salesperson uncovers and clarifies a ... - customer's problem - works with the customer to create a vision of how things could be better - develops a plan for implementing that vision
Product Configuration
product selection process - used when the customer has complex buying needs and brings together part of the companies product mix in order to develop a custom fitted solution - Quotation Management is a major element
Presentation Strategy
provides the foundation for a value-added consultative presentation strategy (well conceived plan) Three Prescriptions for Presentation strategy - Prepare Objectives for sales presentation (understand needs and build or establish relationship) - Develop Pre-sale Presentation Plan - Provide Outstanding Service
system selling
purchasing a packaged solution from a single seller
Quantifying the Value Proposition
raises customers comprehension levels as they discover the merits of buying your service - communicates how your solution will impact business results - very critical in B2B EXAMPLE: - Kensworth trucks is selling to a customer who's purchasing 700 of your trucks. Kensworth trucks cost 10% more than competitors, so its critical for Kensworth to quantify the benefits such as greater durability, reliability, higher trade in value
Differentiation
refers to your ability to separate yourself, your product, and your company from that of your competitors - GIVES YOU COMPETITIVE ADVANTAGE - include quality, price, convenience, economy, service (salespeople interaction) - creates barriers that make it hard for customers to choose a competitor based solely on price
Product positioning options
salesperson has the option to use different product positioning strategies 1) Position new and emerging products versus well-established products 2) Position products with price strategies 3) Position products with value-added strategies
Reality Sales Call Video: David Levitt
the key to successful selling is EMPATHY - the ability to understand the customer's business so that the sales representative can identify areas where he can add value - "the salesperson has to be able to look at accounts holistically, understand what the real business drivers are at a company, and then apply Salesforce.com's service solutions in different areas" 1) how many sales reps does Adam Roth (client) say he has? - 2,000 clients 2) Dave mentions keys to adaption are... - EASE OF USE - FIT FOR PURPOSE 3) salesforce retention rate is 94% 4) Adam mentions issues are collaboration issues
Quantifying the Solution
the process of determining whether or not the proposal adds value - can compare costs between two competitors - important in situations when the purchase represents a major buying decision
pipeline management
the process of managing all the prospects in the salesperson's sales funnel to ensure that sales objectives are being met
value proposition
the set of benefits and values the salesperson configures to meet and exceed customers' specific needs - salespeople need to custom fit the proposition and communicate the vales well to the customer EXAMPLE: - Kinkos, a part of fed ex, promises that all 1,200 locations deliver a breadth of services unparalleled in the industry
Sales Funnel Model
the total set of accounts being pursued at any given time - classify prospects based on where they are in the sales process 6 Steps 1) Prospect 2) Qualified 3) Needs Analysis 4) Presentation 5) Negotiation 6) Closed/Service can include... - total potential sales analysis - forecast analysis (total sale X likelihood of purchase) - needs to be accurate because its the amount most firms use to project future operating results
Product Knowledge
top ranked characteristic of salespeople who are able to build trust with customers!!! - important step is acquiring knowledge about your competitors - makes it easier to emphasize the benefits that add value - *increases SALES EFFECTIVENESS and WILLINGNESS TO PAY*
