PERSONAL SELLINGPreparation & Process

Today we go through:Introduction:

The Psychology in

Selling Buying Decision Process Buying Situations or Types of Purchases Effective Communication Sales Knowledge and Sales Related Marketing Policies The Sales Process Transactional and Relationship

THE PSYCHOLOGY OF SELLING

Buyer Behavior ModelModel

assumes that if a salesperson applies a stimulus (or sales presentation), the prospective buyer will respond in a predictable manner Model does not tell us why the prospect buys or does not buy the product that the salesperson is trying to sell Understanding the psychological aspects in buyer behavior

BUYING DECISION PROCESSFive Stage Model of the Consumer Buying Process

Problem (or Need) Recognition Prospective

customer recognizes a problem or need Need caused by internal or external stimuli Internal stimulus physiological like hunger or thirst or psychological like desire for the prestige of owning a Skoda car External stimulus Person sees a fresh pizza at Pizza Hut that stimulates his hunger Whatever the cause, identification of buyers needs is important

Information Search (or Collection) An

interested customer will search for more information For low involvement products (like bread, butter, biscuits), which are routinely purchased, info search may be milder For high involvement products (like a home, an automobile, or insurance) which requires more of an investment in time and money, the person may want an active information search.involves visiting retail stores, asking family members and friends

Evaluation of Alternatives No

single evaluation process used by all consumers or by one consumer. Understand the following factors: Consumer trying to satisfy a need or solve a problem Consumer looking for certain advantage or benefits from the product or service that satisfies the need or solves his/her problem Consumer knows that each alternative product or brand has a set of characteristics (or attributes) Importance and relevance of attributes vary from product to product Eg. Characteristics consumers prefer for ceiling fans are adequate air, less noise, color to match the dcor, and price Eg. For tires, the preferred attributes are price,

Example of an evaluation system followed by a consumer for buying a set of tires

A Brand/ Supplier Evaluation System

Attribute (Characteristics) Price Quality Safety Life Total

Weight (Importance) 30 25 25 20 100

Brand/ Supplier beliefs 0.8 0.6 0.6 0.5

Brand Supplier Score 30*0.8=24 25*0.6=15 25*0.6=15 20*0.5=10 64

The brand/suppliers score of 64 is worked for one specific brand/supplier This process is repeated for other brands or supplier also The brand/supplier who gets the highest score receives the order from the consumer, in a rational system of evaluation Some consumer buy products/services based on emotional reasons (+ve or ve)

Purchase Decision Consumer

forms preferences among brands and also an intention to buy the most preferred brand in the evaluation stage Purchase intentions can be changed by two factors 1.Attitude of others friend, relative, boss, published reviews in magazines, newspaper, chatrooms, etc. 2.Unanticipated situational factors other product purchase becoming more important, financial problem, health related problems Decisions are also influenced by perceived risk For high involvement product, purchase decision include: a) brand decision, b) timing of purchase, c) quantity, d) from which

Post Purchase Behavior

After buying the product /service, consumer experiences some level of satisfaction/ dissatisfaction Products perceived performance viz-i-vis Buyers expectations Salesperson should monitor post purchase satisfaction, actions, and product uses Satisfied customers will buy the product again (repeat purchase) and will also act as good brand ambassadors (Word of mouth publicity the most powerful form of advtg.) Dissatisfied customers may return the product, stop buying, tell friends and relatives, take legal action, or complain to the company Salespeople can take corrective action if they are in touch

Buying Decision Process for Business Buyers3

additional stages as compared to 5 stages of consumer buying process 1.Determination of characteristics and quantity of needed product/service 2.Development of specifications of product/service needed 3.Obtaining and analyzing supplier proposals

Buying Situations or Types of PurchasesFor

Household and Individual Consumers 1.Routine decision making Groceries, milk 2.Limited decision making - TV 3.Extensive decision making Home, Car Buying Situations for Business Buyers 1.New purchase (or new task) CRM, office bldg. 2.Change in supplier (or modified rebuy)- for cost reduction or quality

Effective communicationCommunication is a two way transmission of verbal and non-verbal information between a salesperson and a buyer Use of words, visual aids, gestures and non verbal communication Obstacles to communication ( cultural diff. or outside interruptions) to be removed Non verbal communication such as physical space between buyer and seller, handshake, appearance, body movements Non verbal body language includes facial expressions, arm movement or position, hand movements or position, body angle, leg position Communication modes send three types of messages: acceptance, caution, disagreement 1. Smiling pleasant expression with direct eye contact 2. Puzzled expression with little eye contact

Salespeople who are effective communicators.. Get

feedback to uncover buyer needs by asking relevant questions Empathize with the buyers feelings, ideas, and situation Build a relationship based on mutual trust Use the philosophy of Keep It Sweet and Simple (KISS) LISTEN carefully to the prospects words, feelings and thoughts and talk less ENTHUSIASM towards the sales job and customers business Use proof statements from objective sources to add credibility to sales

Sales Knowledge and Sales Related Marketing PoliciesCompany

knowledge Product knowledge Customers and Competitors knowledge Sales Related Marketing Policies Pricing policies Distribution policies Promotional policies Product policies Product mix New product ideas Product information, quality and service

The Sales Process Activities

grouped into selling and non selling activities Selling activities various steps of the selling process Non selling activities preparation of sales report, collecting payments, obtaining market information, traveling and waiting to meet customers NO MAGIC FORMULA TO MAKE A SALE!! So, How do you improve your chances of success?? Use various methods and techniques as a guide only.

The Personal Selling Process

1.Prospecting and Qualifying 2.Preapproach (Precall Planning) 3.Approach 4.Presentation and Demonstration 5.Overcoming objections 6.Trial Close/Closing the Sale 7.Follow up and Service

Prospectingis the process of identifying prospective buyers of the product What is a sales lead? What is the difference between a sales lead and a prospect? A sales lead generates the name of a person or a biz. Firm that is a probable prospect Prospect is an individual, family or organization that needs the product or service that the salesperson is selling and also has the ability to buy it (Willingness + Ability) Prospecting

Prospecting MethodsSr. no. 1 2 3 4 5 6 Prospecting methods Referrals from existing customers Referrals from internal company Referrals from sources sources external Networking by salespeople Industrial directories Cold canvassing Brief description Requesting existing customers to suggest the names advertising, direct mail, website, Company of prospects. Convincing source of nearly of 2/3rdteleprospecting activities trade shows and of leads bankers, trade Suppliers, intermediaries, associations, commercial dotcom vendors Salespersons become members of Lions Club, Rotary Club, etc. to meet people Yellow pages published by government whoprivate publishers sales people on and may be prospects or may provide Unannounced calls by leads that may need product/service. firms Costly and time consuming.

The Ferris Wheel

The Ferris Wheel concept is part of world sales record holder Joe Girards customer strategy and is aimed at supplying an ongoing list of prospects

Prospect In Referrals Friends and acquaintances Directories Trade publications and trade shows Telemarketing and advertising database Computerised Cold calling Networking

Prospect Out Relationship between customer and salesperson Biz. Failure deterioratesbuys from New buyer another source mergers Acquisitions and Customer moves Death of a customer Customer has only a one time need needs change Customer because of new technology

Qualifying

Lead or probable prospect is qualified To meet the necessary standards or conditions to receive further attention Willingness + Ability Prospects after qualifying are placed in three groups: hot prospects, warm prospects and cold prospects Hot prospects companys salesperson Warm prospects telemarketing team for follow up Cold prospects dealers/distributors or kept in pending list for future follow up Sales people get more than 80% of the buyers biz. If they follow up a sales enquiry as compared to 40% share if not followed up Takes an average of 4 calls to convert initial enquiry into sales

Pre approachInformationprospects biz., its products and services, purchasing practices, locations of plants, names and background of people making buying decisions, purchasing orientations and practices, the major problems or issues faced by prospect, industry report, etc. Sources are internet or online information services, trade magazines, industrial directories, chambers of commerce, annual reports of companies, existing customers and suppliers, and government publications

gathering

Planning

the Sales Call

Setting call objectives -

understanding needs and buyer orientation and preparing a sales pitch/presentation Consists of finding out when and whom to visit by a phone call followed by a visit. Tentative judgment of which

Planning the sales strategy

ApproachMeeting

the buyer for the first time Can MAKE or BREAK a sale! Has to be a favorable first impression Initial impression based on appearance, attitude, opening line Some approaches like free gifts or dramatic alternatives may not be liked Select an appropriate approach that will get the attention and arouse

Approach techniques commonly usedSr. Name of the Brief description Example/Application 1 Salespersonstates his/her name Good morning, Mr. Sharma. I am Sanjay No. Introductory technique2 3 approach Customer benefit approach Product approach and Co.s name, precede by a Identify one major buying friendly and smiling greeting motive (or handshake or that and a firm benefit) new, unique Usefulif product is (an generally a Present biz. card Namaskar. prospect product or colorful.or organization) has individual Carry new or its cutawayit and appeal to cross-section in order to make a smooth transition to the sales presentation Kumar from Kirloskar, here for the 11a.m. By convertingwith firm handshake and appointment your existing insurance policy tosmile. Biz. Card is presented afterget plan, you can friendly our new insurance the new bottle of The2,00,000 more coverage at the same price salesperson hands over Rs. this to the retailer and waits for the retailer Pepsi paying now you are to begin the conversation

Contd.Sr. 4 no.5

Name of the Brief Description Example/Application Question approach The salesperson asks a question to start Typical question May techniquePraise approach a two-way conversation or to make the An indirect praise conveyed sincerely prospect curious about the product or and subtly can have a positive impact service on the prospect

I help you? The prospect may Your answeris so well designed easily office with No, thanks. and comfortable that I would Hence, a question linked to rememberbenefit or making a our customer it when we design new office or Congratulations on prospect curious should be asked. your promotion to General in a What benefits you want most Manager new washing machine? Or Do you know why most organizations are using this brand of photocopier

Presentation and Demonstration

1.Understanding the buyers needs 2.Knowing sales presentation methods (strategies) 3.Developing an effective presentation

ASK QUESTIONS

Understanding the buyers needs

Situational questions about prospects current situation or any facts the salesperson needs. Eg. Who are involved in buying decision making for this product/service?, Or Are you buying this product for the first time or making a change from the existing supplier? Problem identification questions to identify or uncover the customer problems, difficulties or needs. Eg. Have you experienced any problems on the quality or delivery from the existing suppliers? Or Which parts of existing system create errors? Problem impact questions to make the buyer realise the impact or consequences of the problem and the need to solve the problem. Most important questions and a lot of these should be asked. Eg. What impact the quality and delivery problems will have on your costs and customer satisfaction? Or What impact the errors in your system has on your customers?

Contd

Solution value questions - to help buyer assess the value or usefulness of a solution. Eg. If the rejection rate due to the quality of this component is reduced to 0.5%, how much amount would you save? Or How would an error free system help? Confirmation questions to get confirmation from prospects to hear about products/service. Eg. If I can show you the proof that our component supply would reduce the rejection rate to less than 0.5%, would you be interested? or Would you be interested to know how our service can minimise the errors in your system to zero level?

Ask fewer situational questions and more questions on problem identification and impact and solution value

Knowing sales presentation methodsStimulus

response method Formula method Need satisfaction method Team selling method Consultative selling method

Stimulus response method

Canned approach, a memorized sales presentation or a prepared sales presentation Assumes that if SP makes the right stimuli (presentation), then he can get favorable response SP does most of the talking Without knowing the needs of the prospects, SP presents all the features of the product and then asks the prospect to buy the product Mostly used by tele-marketing people, door-to-door salespersons, and for training new salespeople (when time for sales presentation is short and product is non-technical) Not very effective

Formula method

Also based on stimulus response thinking and also known as formulated approach or mental states selling. Assume that most buyers can be led thru mental steps in the buying process and hence use a well know formula which has four stages: AIDA Attention makes favorable comment about the prospect or the prospects biz. Objective of first few mins. Is to put prospect in receptive mind. Proper dress, neatness, genuine smile, cheerfull expression, arousal of customers curiosity, prior appointment Interest finds out what aspects or factors of the product appeals. Carry sample of product or visual aid like CD, photos, leaflets. Ask relevant questions to understand need or problem and identify appeal Desire arouse strong feeling of wanting product/service. Demonstration to solve problem. Objections are overcome Action buying action or closing the sale.

Need satisfaction methodMost challenging and creative form of selling Interactive sales presentation Understanding buyers needs and only after clearly understanding the needs do we move into sales presentation to show how our product/service can better address the need/problem than any competitor FAB Analysis Features Our ceiling has two ball bearings Features/characteristics of product/service/market offering Advantages Because of the ball bearings, our ceiling fans make hardly any noise and have a longer life how the feature gives help/advantage to the prospects Benefits Our ceiling fans are used in class rooms where noise level should be low as needed by you how feature and advantage meets a clear and detailed need expressed by the prospect

Use of FAB ApproachProduct /Service FeatureSpecial design for low voltage application

AdvantageThis means the equipment like pump sets can be used even under low voltage situations

BenefitOur motor can be used even when you have low voltage conditions, as needed by you

Electric motor

Annual maintenance We have 12 service contract engineers (AMC) for computer systems

This will ensure quick service Our service person will attend to your service needs within eight working hours as desired by you

Lift table or loading We have offered a and unloading customized design to take equipment care of your loading and unloading tasks

Our lift-table will reduce the Time taken for loading time taken for loading and and unloading of your unloading your finished goods goods is reduced by 50% substantially as required by you

Team selling method

Latest development and growing no. of organisations are using it Mutli-sales team to deal with multi-person buying centres (or buying committees) Not the best alternative in all selling situations Expensive, should be used for major accounts High sales and profit potential Used for complex selling situations, customized products and services, long term contracts and new customers Should not be used for low sales and profit customers as also for repeat customers who can be served by a single salesperson IBM, Xerox, HP, 3M, Wipro, Siemens IBM client executive, systems engineer, consultant, product representative

Relationship Process between a Sales Team and a Buying Centre Members

Sales team

Buying centre

Major accounts executive Technical support engineer Logistics executive Information system executive Finance executive

Exchange/ Purchase/materials executive Relationshi Operations manufacturing executi p Process Logistics/supply chain executive Materials manager Finance executive

Group presentationNeed

analysis Introduction Convincing Specific benefits Well prepared

Consultative Selling method (or problem solution presentation) knowledge of the SP should have in-depth

customers company and the industry and carry out detailed analysis of the problems or needs Should be aware of key members of the customers buying centre and get their acceptance of the needs Prepare proposal for solving the buyers problems and make sales presentation Use selling firms cross-functional expertise to provide solutions Build long term relationship /partnership What is the diff. between Team selling and Consultative method?? Achieve strategic goals also

Demonstration Ever

tasted a bite in a sweet shop.. Test drive your car! Demo of industrial products Doubts and objections are cleared and questions are answered. Improves purchasing interest Good support in the selling process Helps to bring out specific features and benefits to the prospective customer w.r.to competition Be sure about product/service before demo or it may backfire

Developing An Effective PresentationPlanning Use

technology Adapt presentation Benefit plan Dont overload Prospects language Convincing

Matching presentation methods with situationsSales Presentation methods Stimulus-response, canned or memorised Formula, formulated approach, mental states Need satisfaction Consultative or problem method Suitable Sales Situations Selling time short. Product is simple and nonor repeat SP Straight rebuy technical. with less experience. Door to purchase situation.for is Creative. Suitable Cm door selling or technical SP familiarhi-cost telemarketing industrial products, consumer Selling with product and is aware of buyers need SP durables products where products or services like has to understand the needs computer hardware or first software, power transformer and furnace

Overcoming objections

Objections, resistance or opposition typically take place during sales presentation or when salesperson asks for the order OBJECTIONS SHOULD BE WELCOMED!! Shows that the prospect has interest and if answered satisfactorily, it would result in sales Two types of objections psychological (or hidden) and logical (practical or real) Psychological objections predetermined ideas or beliefs, preference for established brands, dislike of making decisions, anxiety or resistance to spend money Logical objections Quicker delivery schedules, high price, product quality or product availability

Methods of handling and overcoming objectionsAsk

question Turn an objection into a benefit Deny objections tactfully Third party certificate Compensation

Ask QuestionsBUYER: It seems price of your product is higher than your competitor. SP: I accept your concern. Do you want to know why the price of my product is slightly higher than that of another supplier BUYER: Yes, thats what I want to know. SP then explains the benefits of the product to make it worth the price

First listen to the buyers objection carefully. Clarify the objection by rephrasing it into a question Get buyers acceptance of the question

Turn objection into a benefit

PROSPECT: The delivery time of 4 weeks for your equipment seems too long , as we need it in about 2 weeks, so that including installation and commissioning the project will have to be completed in 5 weeks from now. SP: I appreciate your point, but this equipment is specially designed and manufactured to your specific needs. With 4 weeks delivery, we can do installation on less than 1 week, so that overall it would be 5 weeks or earlier. Is that OK with you?

Very powerful method An experienced salesperson with a positive attitude and quick thinking can turn on objection into a benefit or a reason to buy

Deny objections tactfullyBUYER: I dont want to buy your car, because a friend of mine told me that he had a lot of problems when he purchased your newly launched vehicle two years ago. SP: Yes, I agree, two years ago when we launched our new brand of car, we had a few problems, but we solved all those problems within 6 months at our factory and also at our customers premises free of cost. In the last one and a half years, our sales are highest as compared to other brands and you can check with your friend now about the performance of the vehicle. If he gives you a good opinion, would you buy our car?

Sometimes, objections are incomplete or not correct Tactfully deny objections either directly or indirectly SP should not be arrogant or sarcastic when he denies incorrect objections

Third party certificate

Testimonials or referrals Use some other customers experience of using the product as a proof or testimony Get prior approval from such customers Sometime, prospects takes initiative and asks the SP to give the name and nos. of the customers who having been using the product or service Favorable response helps seal the deal Eg. Before buying 6 nos. of equipment used in loading and unloading of trucks, ITPL, Bangalore not only visited the manufacturers plant but also went to Ashok Leylands plant at Hosur to see the performance of the the equipment as well to know the quality of service, including the availability of spare parts

CompensationSometimes, buyer has a valid objection SP offers some kind of compensation or benefits to counter balance the objections Example Reliance Industries wanted to buy certain handling equipment for the first time for their factories in Gujarat from a manufacturer located in Karnataka. Reliance raised an objection about efficient warranty service and aftersales service SP promised to station one service engineer at the customers premises for a year and thereafter open a service centre near Reliance Industries premises. Assurance satisfied customer who place an order initially for a small value with an assurance to place substantial value of orders subsequently

Trial CloseTrial close - Checks the attitude or asks the opinion of the prospect Does not ask the decision of the prospect to buy Used after sales presentation after an objection is answered or before closing the sale Example To what extent this product meets your needs? Which of these benefits are important to you? Out of the three models that are here, I think you like this model. Am I right Why is trial close used? q If closing is tried without this and prospect gets no as an answer, it is difficult to change mind of prospect q If prospect answers favorably to trail close questions, then it is time to close the sale q If feedback is negative, then SP should go back to the presentation (since FAB is not liked by prospect)

U n fa vo ra b l re sp o n se e

S a l sp e rso n m a ke s a p re se n ta ti n e o

G o b a ck to th e p re se n ta t

S a l sp e rso n u se s a tri l cl se e a o

S a l sp e rso n a n sw e rs p ro sp e ct s o b j cti n s e e o

C l se th e sa l s o e

Fa vo ra b l re sp o n se e

Closing techniquesAlternative

choice close Minor points close Assumptive close Summary of benefits close T account (or modified T-account) or balance sheet close Special offer (or special deal) close Probability close Negotiation close

Alternative Close Prospect

is given a choice between two or more items or models and not between buying or not buying Which of the three models do you prefer? By giving a choice, either the SP gets a yes, I prefer this model, or kind of objections Objections has to be then satisfactorily handled to close the deal Effective if used correctly

Minor Points Close Similar

to Alternative point Sometimes easier for prospect to decide on many minor points than to make a bigger decision on whether to buy or not buy By having the prospect make decisions on a products minor points, the SP can cleverly lead into the decision to buy If you buy this solar heater, which model would you prefer?, How soon would you like it to be delivered, Would you like to pay on installment basis? Develops a positive inclination towards the product

Assumptive Close Effective

when SP has earned the customer trust to such an extent that SP prepares the order and hands it over to the customer for his signature SP assumes that the prospect will buy and conveys his assumption through comments and non verbal actions Comments Would you like to take it with you or have it delivered? Non verbal actions Starting to wrap the package or getting out the credit card charge plate machine

Summary-of-benefits CloseVery popular technique, simple an straightforward 1. Find out the important benefits of product/service that appeal to the prospect, during the sales presentation 2. Summarize these benefits by using FAB (features, advantages, benefits) statements and SELL sequence (Show feature, Explain advantage, Lead into benefit, Let customer talk) 3. Make a proposal Illustration: The AC SP would say: Our AC has a high efficiency rating (feature), due to which it uses less electricity (advantage), which results in 15% saving in your electricity bill (benefit). Thats good, isnt it? (trial close) If response is favorable, then SP When do you

T-account (or modified Taccount) or balance sheet Closesheet of paper and draw a large T on it Take a

Place to act (or assets) on left side and not to act (liabilities) on right side Write all positive points (advantages and benefits) on left side and all negative points on the right side Eg. Mam, this vacuum cleaners high speed motor (feature) works very fast (advantage) with less effort (advantage) and saves about 20 mins. In cleaning time (benefit). We will also give you immediate delivery (benefit) and easy installation payment scheme (benefit). Which of these benefits do you like (write on left of T section)? Anything that you want us to improve on? (Right hand side) Use trial close or overcome objections and close sale In modified T-account, SP makes a list of positive points only and avoids the negative

Special offer (or special deal) CloseWhen

SP has done his best and prospect is still resisting, the special offer or special deal may close the sale If you buy the refrigerator today, I can give you a discount of 2%, because I can reach my monthly quota

Probability Close Is

used when the prospect says I will think it over or I will let you know SP allows real or hidden objections to come out by asking the prospect Please tell me what is the probability in % terms that next week when I call you back, you will take the decision of buying If probability is more than 50%, the SP can convert the real objection to closing sales by various techniques. If probability is less than 50%, the chances of closing the sale is low. In such a case, return to original position and start the selling process again

Negotiation Close Most

deals are closed after successful negotiations The attitude and style of negotiations determines outcome Positive and helpful Win-Win style Helps build mutually beneficial relationship Negotiation skills a must for any Salesperson

Closing techniques

Sales Situations Buyer is hostile Buyer is a friend

Neg Proba SpeciT- Sum Assu Mino Alte otiat bility al acco mary mptiv r rnati ion offer unt of e points ve or benef choi modi its ce fied Tacco . . unt . . .

Buyer is unable to make a . decision Buyer is selfish or greedy . Buyer has certain opinion . in advance Buyer is an expert with a . large ego

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Follow up and serviceCheck

customer order Plan follow up visit at the time of delivery Account penetration Relationship marketing