Chapter 2

Personal Selling: Preparation and Process

SDM-Ch.2

Psychology in Selling
Stimulus (Sales Presentation) Buyers decision making process Response (buy or no buy)

If a sales person makes a presentation, the prospect may or may not buy The above buyer behaviour model does not tell us the reasons of buying or not buying To understand the psychological aspects of selling or buying, salespeople should study consumer or buyer behaviour, including buying process and situations
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Buying Process of Consumers and Business Buyers

Five stage model for household customers 1. Problem / need recognition Eight stage model for business buyers 1. Problem / need recognition 2. Characteristics and quantity determination 3. Specification development

2. Information search / collection

4. Supplier search and qualification 5. Obtain and analyse supplier proposals

6. Evaluation and selection of suppliers 7. Selection of purchase order routine 8. Performance feedback and postpurchase evaluation
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3. Evaluate alternatives 4. Purchase decision 5. Post purchase behaviour

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Buying Situations Faced By

Household customers Routine decision-making Limited decision-making Extensive decision-making Business Buyers New task / New purchase Modified rebuy / change in supplier Straight rebuy / Repeat purchase

Buying process and situations differ for household consumers and business buyers. Consumers / Buyers may skip or reverse some stages in buying process. E.G. A consumer buying toothpaste
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Knowledge of Sales and Sales-related Marketing Policies

Sales Knowledge Marketing Policies

Company knowledge
Product knowledge Customer knowledge Competitor knowledge

Pricing and Payment policies

Product policies Distribution policies Promotional policies

Major reasons for giving above information / knowledge through training programmes to salespeople are: Increase their Self-Confidence Meet customers expectations Increase sales Overcome competition
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The Sales Process

As a part of selling activities, if salespeople follow the steps or phases shown below, their chances of success are far better.
Prospecting & Qualifying
Preapproach / Precall planning Presentation & Demonstration Overcoming Objections

Approach

Follow-up & Service

Trail close / Closing the sale

The sequence of above steps may change to meet the sales situation in hand Some of the above steps may not be applicable for selling to the trade

SDM-Ch.2

1. Prospecting
It is identifying or finding prospects i.e. prospective or potential customers. Methods of prospecting or sales lead generation are:
Referrals from existing customers, Referrals from company sources (website, ads., tradeshows, teleprospecting), Referrals from external sources (suppliers, intermediaries, trade associations), Salespersons networking, Industrial directories, Cold canvassing.

1. 2. 3. 4. 5. 6.

SDM-Ch.2

Qualifying
Important that lead is qualified (meet standards or conditions) Companies qualify sales leads by contacting them by mail or phone to find their interests (or needs) and financial capacity. Leads are categorized as: HOT WARM Good requirements Medium requirements Low requirements Financially sound Financially sound Not good capacity Handled by salespersons Handled by Telemarketing team By companys intermediaries
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COLD

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2.

Pre-approach

Includes 2 tasks:
1. Information prospect gathering about the

2. Precall planning

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a.

Information gathering about the prospect

Information about: prospects business, products/services, plant location, background, etc.

Sources of information: the Internet, industrial directories, government publications, intermediaries, trade magazines, chambers of commerce, annual reports, etc.

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b.

Precall planning
making sales

Setting Call Objectives: presentation, gather info, etc.

Planning the Sales Strategy: find out when and whom to approach by phone call, followed by personal visit, make tentative plan for presentation and sales strategy.

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3.

Approach

Make an appointment to meet the prospect Make favorable first impression Select an approach technique:
Introductory Customer benefit Product Question Praise

The approach takes a few minutes of a call, but it can make or break a sale
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4.

Presentation and Demonstration

There are four components:

Understanding the buyers needs Knowing sales presentation methods / strategies Developing an effective presentation Using demonstration as a tool for selling

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Understanding the buyers needs Firms and consumers buy products / services to satisfy needs To understand buyers needs, ask questions and listen In business situations, problem identification and impact questions are important
E.G. Have you experienced any problems on quality and delivery from the existing supplies? What impact the quality and delivery problems will have on your costs and customer satisfaction?
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Knowing Sales Presentation Methods/Strategies

Firms have developed different methods / styles / strategies of sales presentation

Stimulus response method / canned approach It is a memorised sales talk or a prepared sales presentation. The sales person talks without knowing the prospects needs. E.G. Used by tele-marketing people
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Contd
Formula method / formulated approach
It is also based on stimulus response thinking that all prospects are similar. The salesperson uses a standard formula AIDA (attention, interest, desire, and action). It is used if time is short and prospects are similar.
Shortcomings are: prospects needs are not uncovered and uses same standard formula for different prospects.
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Contd
Need satisfaction method
Interactive sales presentation First find prospects needs, by asking questions and listening Use FAB approach: Features, Advantages, Benefits Effective method, as it focuses on customers

Consultative selling method / Problem-solving approach

Salespeople use cross-functional expertise Firms adopt team selling approach It is used by software / consulting firms
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Contd
Team selling method
Uses multi-person sales teams to deal with multiperson buying centres of customers A Relationship process develops between the sales team and the buying centre It is very expensive Used for major accounts having high sales and profit potential Used for complex selling situations
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Developing an Effective Presentation

Some of the guidelines are:
Plan the sales call Adopt presentation to the situation and person Communicate the benefits of the purchase Present relevant and limited information at a time Use the prospects language Make the presentation convincing give evidence Use technology like multi-media presentation

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Using Demonstration
Sales presentation can be improved by demonstration Demonstration is one of the important selling tools
EGs: Test drive of cars; demonstration of industrial products in use

Benefits of using demonstration for selling are:

Buyers objections are cleared Improves the buyers purchasing interest Helps to find specific benefits of the prospect The prospect can experience the benefit
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5.

Overcoming Sales Objections

Objections take place during presentations / when the order is asked Two types of sales objections: Psychological / hidden Logical (real or practical) Methods for handling and overcoming objections: (i) For Psychological objections: ask questions. (ii) For logical objections: (a) ask questions, (b) turn an objection into a benefit, (c) deny objections tactfully, (d) third-party certificate, (e) compensation.
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6.

Trial close and Closing the sale

Trial close checks the attitude or opinion of the prospect, before closing the sale If the response to trial close question is favourable, then the salesperson should close the sale Closing the sale means asking for order

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Contd
Techniques used for closing the sale are: (a) alternative-choice, (b) minor points close, (c) assumptive close, (d) summary-of-benefits close, (e) T-account, (f) special-offer close, (g) probability close (h) negotiation close
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7.

Follow-up and Service

Necessary for customer satisfaction Successful salespeople follow-up in different ways: For example,
Check order details Follow through delivery schedule Visit when the product is delivered Build long-term relationship Arrange warranty service
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SDM-Ch.2

Negotiation
Applicable in B2B selling, negotiated on the basis of prices, payment terms, delivery period, etc, Salespeople need negotiating skills like: planning, subject knowledge, listening, patience, communication, intelligence, clear thinking, integrity and trustworthiness.

When to negotiate? (a) When the buyer puts certain conditions for buying to the seller, (b) When agreement between the buyer and the seller is needed on several factors, (c) When the product is customized, (d) When the final price is to be decided

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Contd
How to prepare for negotiation? (a) planning, (b) building relationship, (c) purpose Styles of negotiation (a) I win, you lose (b) Both of us win (or win-win style) (c) You win, I lose (d) Both of us lose
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THE END

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