Understanding Why Buyers Buy

1
CHAPTER 5

• Understanding Why Buyers Buy

2
Uncovering Needs and Wants

• Salespeople must
• Determine what will motivate the prospect to
  action
• Understand the goal orientation of the prospect
• Assess and adapt to the style of the prospect

3
The Driving Force

• Motivation is what moves people into action
• Drive or arousal
• Provides the energy to act
• Goal-object
• Provides the direction for channeling that energy
• Purposive Behavior
• The use of that energy

4
Persuasion as Motivation

• Persuasion affects the hearts as well as the
  minds of people
• Persuasion is influencing opinions or affecting
  attitudes by means of communication
• Informing
• Educating
• Motivating

5
The Psychological Set

• The psychological set is a function of
• The buyers past experiences
• The buyers personal characteristics
• The buyers motives
• Environmental influences
• Past marketing stimuli

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Arousal Seeking Buying Behavior

• The arousal-seeking motive is a persons internal
  drive to maintain stimulation at an optimal level
  
• Optimal level of stimulation
• The level at which a person feels neither bored
  nor overwhelmed
• Adaptation level of stimulation
• The level of stimulation perceived as normal or
  average

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Adaptive Selling

• Adaptive selling entails
• Gathering information about each customer
• Observing customers reactions during the sales
  call
• Showing agility by making rapid adjustments
• Tailoring the sales presentation to each
  customers social style

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Social Styles Matrix
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Selling to ProspectsNeeds and Wants

• The goal is to reach a common understanding
  between buyer and seller
• How much alike are we?
• Do we share any background experiences?
• Are our language skills, attitudes, and beliefs
  similar or dissimilar?
• What assumptions have we made about each other
  based on stereotypes?

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Figure 5.4Maslows Hierarchy of Needs and
Information
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Organizational Buying

• In many organizations, teams of people do the
  buying
• Salespeople must focus their communications on
  the motivations, perceptions, and power of the
  individuals who make up the buying team

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Perceived Risk

• In many sales situations, the most important
  perception to be dealt with is risk
• Salespeople must provide evidence that their
  solutions will work, reducing perceived risk

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Five Types of Risk inPurchasing Decisions

• Financial
• Social
• Psychological
• Performance
• Physical

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Buying Situations

• Straight rebuy
• Modified rebuy
• New task

15
Discussion Questions?

• Psych Aspects of Buying and Selling?
• Risks in Canned Presentations?
• What Makes Adaptive Selling Difficult?
• Signals/Clues?
• IDing Buying Center People?

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CHAPTER 6

• Preparation

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Preparation

• The preparation step involves finding out
• Who the prospects are
• What they need, and
• Why they need or want it

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Answer These Six Questions

• Who are the people in the buying center?
• What roles do they play, in what products are
  they interested?
• Why do they want or need this product?
• How is the buying decision made?
• Where will the decision be made?
• When will it be made?

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Phases of Preparation

• Preapproach
• The search for people and organizations that have
  a high likelihood of buying
• Prospecting
• Identifying and qualifying the specific people
  who might have a want or need that the
  salespersons market offerings could satisfy

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Personal Knowledge

• Information about the organizations people is
  quite important
• Ask about personal details
• Know the buyers personal interests

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The Sales Organization

• Salespeople must be knowledgeable about their
  organization

• Product
• Personnel
• History
• Organization policies
• Credit terms
• Production methods
• Service

• Distribution
• Communication channels
• Prices
• Rebates and discounts
• Delivery
• Competitive position
• Sales support

Refer to Table 6.2 Areas of Knowledge About the
Sales Organization
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The Environment

• Competitive/prospect interface
• Government policy
• Existing and impending legislation
• Technology
• The economic situation
• Regulatory agencies
• The ecological impact products may have
• The global marketplace

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Figure 6.3Classification of Potentialand
Current Customers
SUSPECT
CUSTOMER
PROSPECT
CLIENT
Someone the salesperson has not yet qualified.
Someone who has met the minimum criteria of
money, authority and desire to buy, but has not
yet purchased.
Someone who has purchased before.
Someone with whom the salesperson has a
partnership.
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Steps in theProspecting Stage

• Identification
• Qualification

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Market Segmentation

• Market segmentation is the division of a market
  into groupings of customers with similar wants
• Geographic territory

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Prospecting Techniques

• Three Categories
• Internal sources of prospects
• Prospects found by market intelligence
• Prospects generated by specific actions

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Internal Sources of Prospects

• Sales records
• Organizational promotional activities
• Referrals
• Walk-ins
• Inquiries

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Identifying ProspectsThrough Market Intelligence

• Lists
• Crisscross directory
• News media
• Government sources
• Observation
• Computerized databases
• SIC numbers

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Identifying Prospectsby Specific Actions

• Letter with a follow-up phone call
• Referrals
• Bird dogs
• Cold calls
• Networking

• Incentives
• Other sales professionals
• Trade shows
• Educational forums

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Turning Suspects IntoBona Fide Prospects

• Identify MAD Customers
• Money to Buy
• Authority to Buy
• Desire to Buy

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Prospecting Effectively

• Systematize prospecting
• Set prospecting objectives
• Follow through
• Look for new sources of prospects
• Evaluate prospecting activities

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Prospecting Steps Differ According to Types of
Selling

• Responsive Selling
• Trade Selling
• Missionary Selling
• Technical Selling
• New-Business Selling

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Responsive Selling

• Takes place on the sellers premises, in response
  to buyer-initiated contact
• Retailing to consumers
• The inside order desk
• The salesperson qualifies purchasers from
  searchers in terms of type and amount of product
  desired
• Already in the search stage

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Trade Selling

• Takes place on the buyers rather than the
  sellers premises
• Wholesaler and retailer contact
• The salesperson usually sells to all members of
  the buying center
• Already in the search stage

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Missionary Selling

• The salesperson does not attempt to close a sale
  but to gain a commitment from the authorizer or
  influencer
• Sells to all members of the buying center except
  for the end-user or consumer
• May be in any stage of the buying process

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Technical Selling

• Involves marketing fairly complex and
  sophisticated products to organization buyers
• More than one individual is almost always
  involved
• Any individual involved may be in any stage in
  the buying process

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New-Business Selling

• Deals mostly with new customers
• The salesperson identifies and qualifies a large
  pool of potential prospects
• Many will not be converted to the next stage in
  the buying process

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Questions

• Activities for Systematic Prospecting?
• Role of market Segmentation in Prospecting?
• System for Organizing New Leads?
• Three Qualification Criteria for Prospects?
• How to ID Buyers, Not Lookers, at Trade Show?

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CHAPTER 7

• Attention

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Attention

• How can you get a prospect to heed what you are
  saying?
• Just because you meet, is your prospect
  necessarily ready and anxious to talk about what
  you want to talk about?
• How can you be sure you are on the same
  wavelength with your prospect?

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Purpose of the Attention Step

• Personally contact the prospect
• Get the prospect to listen
• Secure a favorable interview

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Influencers

• In order to talk to the right person, you must
  often cooperate with that individuals
  influencers (gatekeepers)
• Household-buying situations
• Spouses
• Oganizational buying situations
• Administrative assistants

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First Impression

• Salespeople must be conscious of the
  communication signals they are sending
• Visual
• Vocal
• Verbal/Non-verbal

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Approaching The Customer

• Sales Call Anxiety
• Sales call anxiety (SCA) is an irrepressible fear
  of being negatively evaluated and rejected by a
  customer
• SCA consists of four components
• Negative self-evaluations
• Negative evaluations from customers
• Awareness of physiological symptoms
• Protective actions

Refer to Table 7.5 - Addressing Sales Call
Anxiety
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Opening the Presentation

• What makes some salespeople standout?
• The best sales professionals know
• How to emphasize benefits in their presentations
• The most effective presentations must start and
  finish with the prospects needs and wants as the
  focus

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Presentation Openers

• Openers are effective and brief introductions to
  the remaining parts of the sales presentation
• The opener should fit the situation of the
  particular prospect
• Salespeople must practice to help reduce the
  risks of trial-and-error

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Referral Opener

• Referrals from existing customers can open doors
  to previously off-limits prospects
• Casual acquaintance of prospect
• Personal friend of prospect
• Referral card of introduction

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The Exhibit Opener

• The exhibit opener immediately captures the
  prospects attention
• The exhibit can be any tangible object
• Calendar
• Newspaper clipping
• Magazine article
• Brochure
• Gift

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The Compliment Opener

• The compliment opener is effective because it
  appeals to basic human instinct
• Appreciation
• Recognition
• A sincere compliment is always true, specific,
  and in good taste

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Prospect Benefits

• Salespeople can use a benefit statement as an
  effective opener
• Must be brief and general
• Preferably demonstrates the salespersons
  advantage over competitors

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Questions - 7

• First Day of College Attention, Words or
  Actions?
• Short Presentation to Gain Admittance to a
  Decision Maker through a Gatekeeper
• Advantages and Disadvantages of Securing an
  Appointment
• Sales Opener Objectives, How Do They Relate to
  Overall Objectives?
• Most Efective Attention-Getters for Sales
  Presentations, and Why?

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CHAPTER 8

• Examination

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The Examination Step

• The basic goal of the examination step
• To confirm the salespersons understanding of the
  prospects/customers situation
• To uncover the prospects/customers latent needs

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Uncovering Wants and Needs

• This question-asking/listening step must be
  psychologically structured to help determine
• The prospect's primary concern
• The prospects dominant buying urge

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Dominant Buying Urge

• That inner urge or drive that motivates your
  prospect to take the action required to
  consummate a sale
• Dominant - ruling or controlling
• Buying - acquiring or purchasing
• Urge - motive or impulse

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Two General Types of Questions

• Open-ended questions
• Cant be answered with a yes or no
• Closed-ended questions
• Can be answered with a yes or no

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Questioning Techniques

• Diagnostic and Surgical Inquiries
• Inquiring Questions
• Satisfied Customer Survey
• The What If Technique
• SPIN

(Situation-Problem-Implication, and Need-Payoff)
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Figure 8.1Diagnostic and Surgical Inquiries
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Inquiring Questions

• Inquiring questions are depth-probing questions
  that can be open-ended or closed-ended
• Use a questioning sequence
• Carefully listen
• Evaluate the customers answer
• Determine the dominant buying urge

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Figure 8.2 The SPIN Questioning Strategy

• Situation Questions
• Achieve fact-finding objectives

• Problem Questions
• Achieve objective of uncovering
• Current satisfaction

• Implication Questions
• Achieve objective of developing and channeling
  dissatisfaction
• Have high selling impact

• Need-payoff Questions
• Achieve objectives of rehearsing and selectively
  channeling customer attention
• Have high selling impact

Source Rackham, Neil (1989), Major Account Sales
Strategy. New York McGraw Hill
61
Listening

• Listening is a trainable skill requiring three
  things
• A sense of how well you listen
• Some motivation to improve
• Practice

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Listening Strategies

• Good listening is an art
• Push something aside
• Nod/tilt your head on important points
• Take notes
• Show your interest without interrupting

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Stages in the Listening Process

• Sensing
• The actual receipt of messages
• Processing
• Activities that occur in the mind of the listener
• Responding
• Acknowledgement of the receipt of the message

Ramsey, Rosemary P. and Ravipreet S. Sohi (1997),
Listening to Your Customers The Impact of
Perceived Salesperson Listening Behavior on
Relationship Outcomes, Journal of the Academy of
Marketing Science 25 (2), 127-137.
64
Three Levels of Listening

• Marginal
• Evaluative
• Active

Alessandra, Anthony J., Phillip S. Wexler, and R.
Barrara (1987), Non-manipulative Selling, Reston,
VA Reston Publishing Company.
65
Marginal Listening

• The most basic level of listening
• Recipients hear the words but are easily
  distracted and may allow their minds to wander

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Evaluative Listening

• An improvement over marginal listening
• Listeners are concentrating on what is being said
  but do not sense what is being communicated
  nonverbally or through more subtle verbal cues

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Active Listening

• A process in which the listener receives
  messages, processes them, and responds so as to
  encourage further communication
• The listener is using all of her senses

Refer to Table 8.2--Habits to Differentiate Good
from Poor Listening
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Listening Attentiveness

• Consider how its meaning changes when the accent
  is placed on different words in the following
  sentence
• "I never said that I needed this product
• "I never said that I needed this product
• "I never said that I needed this product

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Nonverbal Communication

• More information is communicated nonverbally than
  through any other form of communication
• Tone of voice and accents
• Body language (facial expressions, gestures, and
  attitudes)
• Choice of dress, housing, and cars

70
Body Language

• Success in sales requires that the salesperson
  observe gestures
• A perceptive salesperson can read a persons
  nonverbal communication and accurately match it
  to that persons verbal communication

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Reading and Reacting to Nonverbal Signals

• Nonverbal signals are processed at a sub-
  conscious level
• There are five major nonverbal communication
  channels
• Body Angle
• Face
• Arms
• Hands
• Legs

Refer to Figure 8.4--Nonverbal signals
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Questions - 8

• Prospects Primary Concern?
• Dominant Buying Urge?
• Is there Always A Reason for Buying?
• Making Prospects Aware of their Needs?
• Poor and Good Listening Behavior?
• How Can You Tell if Someone is Listening?

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CHAPTER 9

• Prescription

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The Prescription Step

• In the prescription stage of a sales
  presentation, the salesperson arouses a
  prospects interest by showing understanding of
  the prospects problem and prescribing
  (presenting) a solution to it.

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Solution Selling

• Solution selling is the stage at which the
  salesperson
• Assumes a knowledgeable role
• Begins to earn the right to be an advisor to the
  prospect
• Customizes her presentation of product features
  and benefits to the prospects specific needs and
  wants

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Table 9.1Preferred Information Sourcesand
Buying Situations
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Preparation for Prescription

• Preparation is not completed once the salesperson
  has planned a presentation
• The salesperson can improve it, polish it,
  rehearse it, and use various types of equipment
  to give it
• When salespeople are prepared, they will appear
  professional

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Asking the Right Questions

• Developing a list of questions will allow
  salespeople to target their benefits to
  customers needs
• Astute salespeople anticipate prospects concerns
  and prepare answers before meeting with prospects

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Polishing the Salespersons Story

• Salespeople should
• Work on their attitudes
• Make it easy for the prospect to listen
• Effectively use the prospects time
• Practice their presentations
• Be familiar with their catalogs, demonstrators,
  and visual aids

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Choice of Words

• The salesperson should strive to communicate
  clearly
• Short, simple words convey meanings best
• The words salespeople use can
• Trigger positive or negative emotions
• Gain (or lose) the attention and interest of
  prospects
• Some words have very strong emotional appeal
• Other words should be avoided

Refer to Table 9.2 Choice of Words
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What Your ProspectWants to Know

• What are you offering me?
• Exactly how does it work?
• How will it help me?
• Is it as good as you say it is? Who else says so?
• What evidence can you offer that it is as good as
  you say?
• Is it worth the price?
• Will it help me accomplish what I really want to
  accomplish?

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Components of aSuccessful Presentation

• Create a drama
• Help prospects visualize product/service benefits
• Dont exaggerate
• Keep promises

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Prospect Involvement

• When seeking to partner with prospects,
  salespeople attempt to involve the prospects in
  the prescription for their problems
• Listen carefully to align your suggestions with
  the prospects needs and wants
• Salespeople must show a willingness to collaborate

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Establishing Trust

• Trust can be defined as the prospect having
  confidence that a salesperson will not exploit
  the prospects vulnerabilities
• Salespeople who keep promises
• Sell value
• Create mutually beneficial prescriptions
• Show that they truly want to serve customers

Dyer, J. and W. Chu (1998), Supply Chain
Management, Harvard Business Review,
(January-February), 18-19.
85
Sell Benefits Not Features

• Deal only in facts
• Sell the prospect results
• What the product will do--not what it is!

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Features

• A feature is a desirable characteristic that is
  inherent in the performance of the product
• The technical aspects of the product
• Features are most likely to be tangible
• They can be observed, felt, or experienced

87
Benefits

• A benefit is a definitive advantage, improvement,
  or satisfaction that a customer acquires or
  experiences from a feature of a product
• Benefits are often intangible

Refer to Table 9.3--Examples of Product Features
and Benefits
88
Sales Presentation Structure

• A sales presentation should make the prospect
  want the product/service being prescribed
• Customize the presentation
• Four features
• Completeness
• Elimination of competition
• Clarity
• Prospect confidence

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Winning AProspects Confidence

• Key aspects of winning prospects confidence are
• Confident salespeople
• Salesperson knowledge
• Helping prospects visualize the benefits

Refer to Table 9.4--Seven Steps to Effective
Presentations
90
Demonstrations

• A demonstration can project a prospect into an
  emotional setting
• Prospects like action and will remember results
  better than they will remember facts
• Demonstrations should
• Show a product feature
• How it works
• How the prospect benefits

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Dramatizing the Presentation

• A sales presentation should be interesting,
  visually striking, and forcefully effective
• Showmanship is the skill of presenting something
  in an entertaining and dramatic manner

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Persuading ProspectsTo Buy Whats Prescribed

• Fear appeals
• Discontent
• Empathy
• Presumptions
• Graciousness
• Specificity

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Moving Toward Purchase

• In the purchase stage, the focus of a sales
  presentation shifts from presenting product
  benefits to encouraging the prospect to make a
  buying commitment
• Summarize the benefits and trial close

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Check theProspects Temperature

• Trial closing is like taking the temperature of
  the buyers interest
• The temperature question or trial close is not
  a closing question
• The salesperson is not asking for a decision to
  buy
• Avoid asking closed-ended questions

95
The Climax of aSales Presentation

• Once a salesperson has
• Pointed out the problem
• Prescribed how a product/service will solve that
  problem
• Presented the terms of the sale
• It is time to ascertain if the relationship will
  proceed with or without a transaction

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Questions - 9

• Concern? Discuss
• Fear in a Sales Presentation?
• Feature? List Features of Three
  Products/Services
• What is a Trial Close?