PERSONAL SELLING OF INDUSTRIAL PRODUCTS

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PERSONAL SELLING AND NEGOTIATION
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What is Selling?

• Essentially, selling is the process of
  persuasion.
• The actual art of selling has little to do with
  specific features or products and much more to do
  with the art of persuasion.

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Why Personal Selling is More Important in
Business Markets?

• In general, there are far fewer customer firms in
  business markets.
• Furthermore, customers tend to purchase products
  and services in large quantities in business
  markets.
• The products are often complex and the customers
  require technical support.
• Customers prefer closer working relationships
  with suppliers.

Prof. A. K. Biswas
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What is Customer Centered selling?

• Customer being the most important thing in
  business, selling process must be centered around
  the customer.
• A seller must, therefore, first study the
  decision-making process the customers go through.

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What is Customer Centered selling?

• The key concept of Customer Centered Selling is
  to learn to analyze where your customers are in
  the decision cycle and assist in moving them
  through a decision.
• In doing this you must learn what tactics are
  appropriate for which part of the decision cycle.

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Customer Decision Cycle
Satisfaction
Reconsideration
Selection
Acknowledgment
Customer
Decision
Investigation
Criteria
Measurement
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What is Customer Centered Selling Cycle?

• Customer Centered Selling process is designed to
  spell out every move a salesperson need to make
  to persuade a customer to buy his solution.
• Salesperson who does the persuading may see
  customer in any of the stages of decision making
  and need to align himself to match up with the
  customer.

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The Customer Centered Selling Cycle
Seller
Maintenance
Research
Satisfaction
Reconsideration
Analysis
Close
Selection
Acknowledgment
Customer
Decision
Investigation
Confirmation
Solution
Criteria
Measurement
Specification
Requirement
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What is Customer Centered Selling Cycle?

• At the research stage of the selling cycle the
  objective is to study the customers world.
• The first type of question that is used in the
  research stage is background probe.
• It is used to obtain basic information that will
  allow to learn about a customers current
  situation.

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What is Customer Centered Selling Cycle?

• Three rules when asking for background probes
• Keep your questions open regardless of your
  knowledge level within a customers situation,
  let the customer tell you.
• Avoid problems the art of working within the
  research stage is to get a customer to trust you.
  Staying away from customer problems goes a long
  away in beginning to earn trust from the customer
  you intend to persuade.

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What is Customer Centered Selling Cycle?

• Play your strengths asking questions to make a
  case for solutions you want to show your customer
  later.
• Most companies attempt to specialize or have
  particular strengths. The mark of a successful
  salesperson is not only to get the customer want
  the kind of solution where his company is strong
  but to make the customer feel that as if the
  customer came up with the idea.

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What is Customer Centered Selling Cycle?

• A very good approach to finishing off the
  research stage is to ask the customer whether
  there is anything else that he thinks might be
  pertinent to this conversation.
• If there is more, the customer will tell you. If
  not, with the customers permission, you can move
  on.

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What is Customer Centered Selling Cycle?

• The research stage disciplines the seller to
  avoid talking about problems with the customer.
  This is not to imply the customer will not bring
  up potential problems during the conversation.
  Note it down and leave it alone at this stage.
• It is our responsibility to keep learning about
  the customer and looking for more than the
  customer has identified at this stage.

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What is Customer Centered Selling Cycle?

• Even when implementing the concept of playing
  your strengths, this does not mean that every
  customer will have problems or needs in the areas
  you are probing. Be flexible.
• Nothing is more dangerous than an idea when it is
  the only one you have.

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What is Customer Centered Selling Cycle?

• At the analysis stage is the one and only step
  where the problems are the main focus.
• The analysis stage can be broken down to three
  steps which focus on three different types of
  probes that should be used in sequence.

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What is Customer Centered Selling Cycle?

• Identifying Probes When you are using this first
  probe, you must get the customer to identify or
  agree there is a problem.
• Most customers, early on, resist admitting a
  problem. If they do, they often will not admit to
  the size of the problem.

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What is Customer Centered Selling Cycle?

• It is once again critical to use open questions
  and avoid the word problem.
• There are a number of words that can be
  substituted for the word problem
• concern barrier
• difficulty limitation
• dissatisfaction obstacle
• challenge trouble

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What is Customer Centered Selling Cycle?

• Hopefully, by your being patient and using
  non-threatening background probes in the research
  stage, continuing to use open questions, and
  avoiding the word problem, the customer will now
  readily admit to having a particular difficulty.

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What is Customer Centered Selling Cycle?

• Developing Probes The way you develop a problem
  is to continue to ask questions about it.
• Once a problem has been established, stop
  allowing your customers run away from it.
• People do not look at the impact of many of their
  problems. You must learn to get the customer to
  look down the road a bit at his problems. This is
  done by using developing probes.

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For Want of a Nail For want of a nail,
a shoe was lost For want of a shoe, a horse was
lost For want of a horse, a rider was lost For
want of a rider, a message was lost For want of a
message, a battle was lost For want of a battle,
a war was lost And all that for want of a
nail.. - Ben Franklin
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What is Customer Centered Selling Cycle?

• Some of the words that might be of use in
  developing probes are
• react relate
• link effect
• respond feel
• The developing probes help to evolve the problem
  and clear the way for impact probes.

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What is Customer Centered Selling Cycle?

• The impact probe is designed to allow the
  customer to reflect on the overall consequences
  of his problems. Some of the key words to focus
  on when using impact probes are
• consequences results
• impact effects
• ramifications outcome
• repercussions backlash

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What is Customer Centered Selling Cycle?

• The questions within the probing sequence can be
  disturbing to the customer.
• But when changing a persons behavior,
  consequence is more powerful than value.
• While analyzing concerns, customers from time to
  time will begin to talk about needs. Do not
  discuss them at this stage as they may not be
  fully committed now.

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What is Customer Centered Selling Cycle?

• Neil Rackham suggests four types of questions
  that provide a probing sequence which you can use
  in planning and executing calls to help you to
  meet your objectives at the research and analysis
  stage.
• The initials of each type of question give the
  acronym SPIN.

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What is Customer Centered Selling Cycle?

• SPIN selling is a technique involving a logical
  sequence of questions about situations, problems,
  implications, and need payoff that salespeople
  use to uncover the prospects implied needs and
  develop them into explicit needs.

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What is Customer Centered Selling Cycle?

• Implied needs are vaguely defined areas of
  discontent, dissatisfaction, and discomfort with
  current situations.
• Through the spin questions, the salesperson
  develop these implied needs into explicit needs.
• Explicit needs are precise specifications of
  products and augmenting services that resolve the
  customers problems.

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What is Customer Centered Selling Cycle?

• If the probing sequence has been performed
  properly, the customer should not only be ready
  for change, but there should be a sense of
  urgency to make change.
• This is the confirmation stage.
• There are three quick steps to go before moving
  on to customer needs.

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What is Customer Centered Selling Cycle?

• Step 1. Test understanding this confirmation is
  focused solely on the concerns that have been
  discussed most recently.
• Step 2. Any other concerns? If the customer has
  any other concern he will tell you. Note it down,
  get ready to solve the problem in the next stage,
  and move on.

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What is Customer Centered Selling Cycle?

• Step 3. Commit to Change The most difficult
  decision a customer makes within his decision
  cycle is whether he wants to fix an existing
  problem. At this stage use a closed question
  strategically to confirm that this decision point
  has been crossed.

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What is Customer Centered Selling Cycle?

• If the customer says yes, you have been given the
  green light to move forward.
• If the customer says no, you have to understand
  why the person does not want to move forward and
  chances are that you will have to move back to
  the analysis stage once again.
• This step represents your first trial close. The
  biggest benefit to trial closes is their ability
  to flush out objections.

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What is Customer Centered Selling Cycle?

• The next stage is the requirement stage.
• Within the decision cycle, the customer quite
  naturally wants to begin figuring out what it
  will take to fix his existing problems.
• The seller must parallel that position and work
  with the customer to determine what these
  requirements would be.

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What is Customer Centered Selling Cycle?

• To do this, the seller needs to go through three
  simple steps.
• Step 1. List and Confirm Needs You must avoid
  the temptation to dictate to the customer what it
  is he needs. However, you will lead the customer
  gently with closed questions. These questions are
  to be designed to influence the customers needs
  to be described the way you want them to be
  described.

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What is Customer Centered Selling Cycle?

• Step 2. Any Other Needs? This step is to make
  sure that the customer has no other needs.
  However, do not be surprised if the customer
  comes up with more needs. He may come up with
  needs you cannot address with your
  recommendation.
• However, it would be hypocritical to avoid this
  step with the intention of evading this risk for
  two reasons.

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What is Customer Centered Selling Cycle?

• The whole basis of Customer Centered Selling
  revolves around customers needs.
• The customer may bring this need later when you
  are actually recommending a solution. It is much
  better to confront it now.
• The salesperson must be customer centered and his
  job is to design what the customer wants and
  provide his recommendations to assist in this
  design.

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What is Customer Centered Selling Cycle?

• Step 3. Prioritize Needs The final step within
  the required stage is intended to create a
  priority among customers needs.
• You should allow the customer to do this for you.
• Prioritizing customers needs helps you in
  presenting your solution in the order of your
  customers priority.

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What is Customer Centered Selling Cycle?

• The specification stage is important to the
  seller because when customers are unclear in
  communicating their buying criteria, they often
  expose the salesperson as well.
• There are two steps at this stage
• Transfer the customers requirements over to
  specifications.
• Commit the customer to these specifications.

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What is Customer Centered Selling Cycle?

• At the solution stage, you must tie your
  product/service recommendation carefully to
  customers needs.
• This can be done in an effective manner through
  the use of the concept of FABEC feature,
  advantage, benefit, explanation, and confirmation.

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What is Customer Centered Selling Cycle?

• Start with feature or features that address the
  customers most important criteria and stay in
  that prioritized order.
• Bring out the advantage of each of the feature.
• The benefit is the specific value to the
  customer. The benefits, and not the feature, are
  what your customer is using to base a decision
  on.

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What is Customer Centered Selling Cycle?

• The benefit is your opportunity to tell your
  customer why you have chosen this feature.
• The next step is to provide the explanation to
  the customer of the solution you are
  recommending.

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FABEC
Focus of Sales Presentation
Example
Features and Advantages
Our machine runs twice as fast as your current
equipment.
Our machine will allow you to increase your
production output over current levels.
Benefits
By increasing your production output, our machine
will enable your firm to increase annual
revenue by Rs.500,000.
Worth
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What is Customer Centered Selling Cycle?

• After each feature, advantage, benefit, and
  explanation, you are faced with a wonderful
  opportunity to make sure your customer is
  comfortable with your solution. You ask for his
  confirmation.
• The recommendation you are making must be one you
  believe in.

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What is Customer Centered Selling Cycle?

• With the solution presented, explained, and
  confirmed, it is finally the time to close.
• When closing, the goal is to close for the
  highest realistic level of commitment.
• The summary close process has four steps.

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What is Customer Centered Selling Cycle?

• Step 1. Confirm Benefits The first step of the
  summary close is one last check with your
  customer to find out whether your solution did
  everything that he said he wanted it to do.
• By confirming benefits, you are actually
  trial-closing the customer. This step forces out
  any remaining objections which then can be
  handled appropriately.

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What is Customer Centered Selling Cycle?

• Step 2. Ask for Commitment Your strategy here
  should be to close for the highest realistic
  level of commitment.
• How do you ask for commitment? Do it as simply as
  possible. An example
• I would love to have your business.

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What is Customer Centered Selling Cycle?

• Step 3. Discuss Logistics With the commitment in
  hand, you must stay focused and work out the
  logistics to implement the sale you have just
  made for items like delivery, training, and
  follow-up.

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What is Customer Centered Selling Cycle?

• Step 4. Reassure the Customer
• The solution you have recommended may very well
  cost more than he is already paying.
• Reassure him that he has made a wise decision and
  your company would provide all that has been
  promised.

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What is Customer Centered Selling Cycle?

• Coping with rejection No matter how talented you
  are as a salesperson, no one has a 100 closing
  ratio. So what do you do when you lose a sale?
• Call the customer thanking him for the
  opportunity to work for his business. Remind him
  that you intend to be in your business for a long
  time to come, and ask him what you could have
  done better so that you can improve.

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What is Customer Centered Selling Cycle?

• Finally, ask the customer if it would be alright
  to call him in whatever time you feel is a
  reasonable period of time relating to what you
  sell.
• When you lose, pick yourself up, dust yourself
  off, ask yourself what you would do differently
  given the chance to do it again, and get it
  behind you.

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What is Customer Centered Selling Cycle?

• At the maintenance stage, which can also be
  called Development Stage you need to monitor your
  sale.
• There are three steps which will help this
  process. These are fairly generic and should
  apply to whatever solution you and your customer
  have agreed to.
• Review Logistics
• Review the Solution
• Review the Change

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What is Customer Centered Selling Cycle?

• Five simple strategies at the Maintenance or
  Development Stage
• Develop, do not maintain.
• Document the good news.
• Generate leads and references.
• Reassess your understanding of customer needs.
• Influence future decision criteria.

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What are the Strategies for Sales Negotiation?

• Negotiation should never be a substitute for
  selling.
• When you are selling you do not give anything
  away.
• Think of negotiation as something which will only
  be effective after you have done the best
  possible job of selling.

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What are the Strategies for Sales Negotiation?

• Everyone wants value but not everyone is willing
  to pay for it.
• To be successful salespeople need to recognize
  the differences among the buyers and craft the
  right sales approaches if they do not want to
  waste their time and leave money on the table.

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What are the Strategies for Sales Negotiation?

• There are four types of buyers
• Price buyers buy exclusively on price. Price
  buyers are very careful not to let themselves get
  committed to any particular supplier by making
  sure they have no switching cost.
• Value buyers are willing to switch from one
  supplier to another based on their ability to
  improve their financial picture or impact for
  their clients.

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What are the Strategies for Sales Negotiation?

• Relationship buyers rely on close relationships
  with their suppliers and trust that they will
  provide them solutions and services to win market
  share against their competitors.
• Poker-playing buyers appears to be focusing on
  price but are really driving the vendors to leave
  money on the table and still continue to provide
  high-value features and services.

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What are the Strategies for Sales Negotiation?

• It is vital that a company going into
  negotiations with a customer knows in advance
  what kind of buyer that customer is.
• With the price buyers, the purchasing agent will
  qualify quite a few suppliers that can meet the
  specifications.
• Thereafter, they would use their bargaining power
  ruthlessly to extract the best deal from the
  suppliers.

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What are the Strategies for Sales Negotiation?

• Price buyers use bidding wars to drive prices
  down.
• The first rule in dealing with price buyers is to
  be careful in getting into bidding wars with
  competitors as no supplier really wins in a price
  war.
• It is vital that salespeople establish the bottom
  price based on the current business loading and
  cost structure before entering into the
  negotiation with such buyers.

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What are the Strategies for Sales Negotiation?

• Secondly, all extra features and services must be
  stripped away, and only the bare minimum
  solutions should be offered to the price buyers.
• Value buyers want clear demonstrable value from
  suppliers.
• They have internal expertise to evaluate that
  value to the organization or to their clients.

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What are the Strategies for Sales Negotiation?

• In dealing with the value buyers, salespersons
  must invest in understanding the value buyers
  business.
• They must take ownership of the customers
  results.
• Salespersons must give such buyers choices while
  putting together the offering package and provide
  the necessary analysis to help them make the best
  choice.

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What are the Strategies for Sales Negotiation?

• Relationship customers expect their vendors to do
  the best job possible meeting their needs.
• They usually rely on their vendors to provide
  them with technical expertise to make systems,
  machines, and processes work.
• These are customers that need to connect with the
  selling organizations senior executives on a
  regular and planned basis.

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What are the Strategies for Sales Negotiation?

• It is best to start working slowly with a
  relationship customer.
• The salesperson may identify a problem which
  their current vendor missed and offer to solve
  it.
• The job then must be done well so that trust is
  build with the buyer.
• Offering choices to relationship customers is
  important as in case of value buyers.

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What are the Strategies for Sales Negotiation?

• Poker players are the hardest customers to deal
  with because they want to get high value for low
  price and are accustomed to getting it.
• To effectively deal with poker customers,
  salespersons must do homework on the estimated
  value of their products and services to these
  customers.

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What are the Strategies for Sales Negotiation?

• Often the poker playing is done by a purchasing
  agent and usually there is a strong gatekeeper to
  keep the vendor away from the real influencers
  and decision makers.
• The trick here is to do everything possible to
  get access to the other members of the buying
  centre.
• Prepare technical and financial questions to get
  past the buyer to the right people.

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What are the Strategies for Sales Negotiation?

• With poker players, the negotiation planning is
  very important and the pricing strategy must be
  well thought out and agreed between the
  salesperson and the senior managers.
• The salesperson must learn to bluff and learn to
  get up and walk away from the table when there is
  still some value in the hand.
• Then the salesperson can begin to close the deal
  confidently and profitably.

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What are the Strategies for Sales Negotiation?

• Regardless of the negotiation approach taken, the
  sales person should develop a best alternative to
  a negotiated agreement (BATNA).
• A BATNA is the most favourable option that the
  supplier can pursue if the supplier firm cannot
  reach an equitable agreement with a prospect.

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What are the Strategies for Sales Negotiation?

• If the terms of an agreement exceed the BATNA,
  the sales representative accepts the terms of the
  deal.
• On the other hand, if it falls below the BATNA,
  he declines and either makes a counteroffer or
  terminates the discussion.

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