MKTG 3410 Exam 3
What is a value proposition and how is it used in a sales presentation?
A customer value proposition is the way in which your product will meet the prospect's needs and how that is different from the offerings of competitors, especially the next-best alternative. The value bundle contained in a solid customer value proposition includes the features and benefits tailored to the prospect, the proof that those benefits actually exist, and the value of the seller and the seller's firm as the solutions provider.
What is an objection? Are they positive or negative for a sales presentation?
An objection is a concern or a question raised by the buyer. Salespeople should do everything they can to encourage buyers to voice concerns or questions. Having a positive attitude about objections is paramount in this regard. Proper attitude is shown by answering sincerely, refraining from arguing or contradicting, and welcoming - even inviting - objections. Salespeople must assume the attitude of: helper, counselor, advisor. Objections lead to feedback about what is really on the prospects minds and also sales opportunities.
What are the characteristics of a strong sales presentation?
Communication tools such as visual aids, samples, testimonials, demonstrations, and the use of humor are important ingredients in most sales calls. Use of such tools focuses the buyer's attention, improves the buyer's understanding, helps the buyer remember what the salesperson said, offers concrete proof of the salesperson's statements, and creates a sense of value.
Discuss the conflict-handling modes used in negotiations. Which one is most effective?
Competing: assertive and uncooperative; tend to pursue their own goals and objectives at the expense of the other party Accommodating: unassertive and highly cooperative; focus on the needs and desires of the other party Avoiding: individuals who don't attempt to fulfill their own needs or the needs of others; don't strive for a win-win agreement or any agreement Compromising: applies to people in the middle, in terms of cooperativeness and assertiveness; attempts to arrive at a win-win solution Collaborating (most effective): individuals who are are assertive and cooperative; seeks to maximize the satisfaction of both parties and a truly win-win solution
Briefly describe what a salesperson can do if commitment is obtained.
Customers don't like surprises, so now is the time to go over any important information they will need to fully enjoy the benefits of the product or service. Successful salespeople reassure customers that their choice was the right one. The buyer's signature often formalizes a commitment. Salesperson should show appreciation for the customers business - write a letter to say thank you. Follow up with the customer to make sure they are satisfied and strengthen the relationship. Review the actions taken by making sure the buyer gets the service promised.
Define and give examples of the following methods of obtaining commitment: direct request, benefit summary, balance sheet method, probing method, and alternative choice.
Direct request method: the most straightforward, effective method of obtaining commitment is simply to ask for it. Example: "Can I put you down for 100 pairs of model 63?" Benefit summary method: obtaining commitment by simply reminding the prospect of the agreed-on benefits of the proposal. Example: "You stated early in my visit that you were looking for a product of the highest quality. As I've mentioned, our fasteners have been rated by an independent laboratory as providing 20% higher tensile strength than the closest competitor." Balance sheet method: aids prospects who cannot make a decision, even though no reason for their behavior is apparent. Example: "Take a piece of paper and write all the reasons for yes in one column and all the reasons for no in the other. When you make this graphic comparison, the correct decision becomes more apparent." Probing method: sales reps initially attempt to obtain commitment by another method, perhaps simply asking for it. If unsuccessful, the salesperson uses a series of probing questions designed to discover the reason for hesitation. Example: "There must be some reason why you are hesitating to go ahead now. Do you mind if I ask what it is?" Alternative choice method: in many situations a salesperson may have multiple options to present to a buyer. Suggestion is to limit the customers choices and then allow the customer to express a preference.
What are the terms and conditions of discounts?
Discounts are given for many reasons and may be based on the type of customer, quantity purchases, or some other factor. The most common type of discount is the quantity discount. Quantity discounts encourage large purchases by passing along savings resulting from reduced process costs. Businesses offer two types of quantity discounts: (1) the single-order discount and (2) a cumulative discount. A cumulative discount is a transaction for a long period and offering discounts.
How can you respond to an objection over price?
Don't waste your time if the prospect says they have no money. When faced with a price objection, salespeople should ensure that they are up to date on information, establish the value of the product, and use communication tools effectively. Successful salespeople make sure they have the most current pricing information available and also know their competitors pricing. Ensure the value of the product is established before talking about price. Communication tools is important to be able to show the prospect why it's worth the money.
Define and give examples of the following win-lose negotiation methods: good guy-bad guy routine, lowballing, emotional outbursts, budget limitation tactic, and browbeating.
Good guy-bad guy routine: bad guy negotiator makes all sorts of outlandish statements and requests; good guy offers a win-win solution Lowballing: occurs when one party intentionally underestimates or understates a cost Emotional outbursts tactic: buyer teams will appeal to your human nature (trying to make seller feel uncomfortable) Budget limitation tactic: negotiation strategy in which one side claims that the budget doesn't allow for the solution proposed (a ploy to get a lower price) Browbeating: attempts to alter the selling team's enthusiasm and self-respect. Salesperson should perform negotiation jujitsu.
How is humor used in a sales presentation?
Humor helps keep the buyers attention. The wonderful effects of laughter will put everyone at ease.
Briefly describe what a salesperson can do if commitment is not obtained.
Identify reasons for lost opportunities; wrong attitudes, poor presentation, poor habits and skills. Discover the cause; real reasons for not obtaining commitment must be uncovered.
What's the difference between win-lose and win-win negotiating?
In win-lose negotiating the negotiator attempts to win all the important concessions and this triumph over the opponent. In win-win negotiating, the negotiator attempts to secure an agreement that satisfies both parties.
Give some suggestions for dealing with rejection.
Maintain proper perspective, recommend other sources, good manners are important.
What are the terms and conditions of credit terms?
Most U.S sales are made on a credit basis, with cash discounts allowed for early payment. These cash discounts are the last discount taken, meaning that if a quantity discount is also offered, the cash discount is calculated after the quantity discount is taken off. 2/10, n/30 discount = deducting 2% from the bill if paid within 10 days of invoice, otherwise paying full amount in 30 days. 2/10, EOM discount = 10 day period begins at the end of the month. Credit terms are very important in capital equipment sales. Easy credit terms help salespeople close sales.
What are the five most common objections raised during a sales presentation?
Needs: I don't need the product or service // I've never done it that way before. Product: I don't understand // I don't like the product or service features // I need more information. Source: I don't like your company // I don't like you. Price: I have no money // The value doesn't exceed the cost. Time: I'm just not interested today // I need time to think about it.
What's the difference between negotiation and professional selling?
Negotiation is the bargaining process through which buyers and sellers resolve areas of conflict and arrive at agreements. Formal negotiation usually involves multiple buyers and sellers and generally only take place for very large or important prospective buyers.
Discuss the importance of using a demonstration in a sales presentation.
One of the most effective methods of appealing to a buyer's senses is through product demonstrations or performance tests. Customers and prospects have a natural desire to prove a product's claims for themselves.
What is a concession, and why is making concessions important during negotiations?
One of the most important activities in any negotiation is the granting and receiving of concessions from the other party. One party makes a concession when it agrees to change a position in some sort.
What are some of the positive and negative traits of a negotiator?
Positive traits: patience and endurance, willingness to take risks and the ability to tolerate ambiguity. Negative traits: fear conflict and are closed-minded, unorganized, and dishonest. Downright belligerent.
What are the factors to consider when planning for the negotiation session?
Preparation and planning are the most important parts of negotiation. Prepare emotionally for the stress that will occur. Location: free from distraction, neutral site, middle of the workweek best for negotiations. Time allotment: how much time should be set aside for the negotiation session depends on the objectives and the extent to which both sides desire a win-win session.
Give examples of: the referral method, revisit method, acknowledge method, and postpone method of handling objections.
Referral method: "I can certainly see how you feel. Bob Scott, down the road in Houston, felt the same way when I first proposed that he sell these. However, after he agreed to display them next to his current DVD line, he found that his customers were very interested. In fact, he called me four days later to order more." Revisit method: "It's interesting that you mention that. In fact, their drab color is probably their best selling point and the reason you should carry them. No hunter wants to attract attention when they're in the field." Acknowledge method: "I certainly understand your concern. I remember my dad talking about some of his role models and the respect he had for them. What were we talking about? Oh, yes, I was telling you about the coupon drop we are planning." Postpone method: "If you don't mind, I would prefer to answer that question in a few minutes. I really can't tell you how much it will cost until I learn more about your engraving needs and know what kinds of features you are looking for."
When do buyers raise objections?
Salespeople can expect to hear objections at any time during the buyer-seller relationship. Objections are raised when the salesperson attempts to secure an appointment, during the approach, during the presentation, when the salesperson attempts to obtain commitment, and during the after-sale follow-up.
Discuss the importance of negotiation objectives. What's the difference between the target position, a minimum position, and an opening position?
Target position: what a company hopes to achieve at the negotiation session Minimum position: absolute minimum level of acceptance that should be established by the team Opening position: initial proposal which should reflect higher expectations than the target position to allow concessions and be supported with solid information
What is a testimonial?
Testimonials are statements written by satisfied users of a product or service. Before using a testimonial, the salesperson needs to check with the person who wrote it and frequently reaffirm that he/she is still a happy, satisfied customer. Salespeople should not hand out a testimonial to every prospect.
What is the compensation method of responding to an objection?
The compensation method is when a salesperson admits that such objections made be the prospects are valid and then proceed to show any compensating advantages. The compensation method is often referred to as the superior benefit method because the benefit of one attribute overcomes a concern about a less important attribute.
What can a salesperson do to successfully obtain commitment?
The obtain commitment in a non-manipulative manner, salespeople needs to follow several principles, including maintaining a positive attitude, letting the customer set the pace, being assertive rather than aggressive, and selling the right item in the right amounts.
What is return on investment and payback period?
The return on investment (ROI) is simply the net profits (or savings) expected from a given investment, expressed as a percentage of the investment. ROI = Net Profits (Or Savings) / Investment. The payback period is the length of time it takes for the investment cash outflow to be returned in the form of cash inflows or savings. The payback period indicates how quickly the investment money will come back to him or her. Payback Period = Investment / Savings (Or Profits) Per Year.
When can a salesperson attempt to obtain commitment during the sales process?
The right time to attempt to gain commitment is when the buyer appears ready, as evidenced by buying signals. Most buyers will commit themselves only when they clearly understand the benefits and costs of such a decision. A customer's comments often are the best indications that he/she is considering commitment. Look at the buyer's nonverbal cues to see if they are ready to commit or not.
What is a cost-benefit analysis?
The simplest method of quantifying a solution is to list the costs to the buyer and the savings the buyer can expect from the investment. For this analysis to be realistic and meaningful, information needed to calculate savings must be supplied by the buyer. In many situations, the salesperson does a comparative cost-benefit analysis by comparing the present situation's costs with the value of the proposed solution or the seller's product with a competitor's product.
What are the terms and conditions of shipping costs?
The terms and conditions of sale include shipping costs. Free on board (FOB) - the buyer assumes responsibility for both the goods and the costs of shipping them. FOB destination - buyer takes responsibility for the goods once they reach the buyer's location, the seller pays the freight. FOB installed - title and responsibility don't transfer until the equipment is installed and operating properly.
What does it mean to forestall known concerns and objections?
To forestall is to prevent by doing something ahead of time. In selling, this means salespeople raise objections before buyers have a chance to raise them.
Why is obtaining commitment is so important today?
Today's sales professionals recognize that securing a sale is the reason for their existence, but getting that sale should be due to the value created, not the technique used. Overall, gaining commitment tells the salesperson what to do next and defines the status of the client. It also results in financial rewards for the salesperson.
How would you sell value to re-sellers?
When resellers purchase a product for resale, they are primarily concerned with whether their customers will buy the product and how much they will make on each sale. Profit margin is the net profit the reseller makes, expressed as a percentage of sales. Inventory turnover is typically calculated by diving the annual sales by the average retail price of the inventory on hand. A key investment that resellers make is in space - retail store space and warehouse space.
What is the different between a direct denial and indirect denial response method?
When using direct denial, the salesperson makes a relatively strong statement to indicate the error the prospect has made. The salesperson must possess facts to back up such a denial. Direct denial should never be used if the prospect is stating an opinion or if the objection is true. In the indirect denial method, the salesperson denies the objections but attempts to soften the response. The salesperson takes the edge off the response by agreeing with the prospect that the objection is an important one. Indirect denial should never be used if the prospect is stating an opinion or if the objection is true.
What are the behaviors that successful salespeople use during objections by the customer?
With regard to objections, successful salespeople anticipate objections and prepare helpful responses. They address known problems before the prospect does; that is, they forestall known concerns. They relax and listen and never interrupt the buyer. They make sure that the objection is not just an excuse. They always tell the truth. Some trainers suggest that salespeople use the LAARC Method to respond to objections: Listen, Acknowledge, Assess, Respond, and Confirm.
Describe the verbal tools used to strengthen the sales presentation.
Word pictures and stories of all types can be effective. Stories have the ability to access all three paths of the subconscious mind. Humor helps keep the buyers attention.
