Business Marketing Session 2

Dr.R.Satish Master Click to editKumar subtitle style

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B2B Defined

The management process responsible for the facilitation of exchange between producers of goods and services and their organisational customers. B2B marketing and purchasing is a complex and risky business involving a number of different parties.
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Flows within a B2B market

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Differences between B2B and consumer marketing (1 of 3)

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Differences between B2B and consumer marketing (2 of 3)

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Differences between B2B and consumer marketing (3 of 3)

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B2B customers

Commercial enterprises - profit making organisations that produce and/or resell goods and services for a profit. Can be subdivided into users, original equipment manufacturers (OEMs), resellers. Government bodies. Institutions - largely non-profit making organisations, e.g. universities, churches, etc.

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Characteristics of B2B markets

Nature of demand - derived, joint, inelastic. Structure of demand - industrial and geographic concentration. Buying process complexity. Buyer-seller relationships.

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Influences on a B2B purchasing chain

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Sourcing strategies - advantages and disadvantages (1 of 2)

Source: Adapted from Treleven (1987).

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Sourcing strategies - advantages and disadvantages (2 of 2)

Source: Adapted from Hahn (1986) and Ramsey and Wilson (1990). Reprinted by permission of MCB University Press Ltd.

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Models of organisational buying decision making

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Decision problems in B2B purchasing decision making process (1 of 2)

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Decision problems in B2B purchasing decision making process (2 of 2)

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Roles in the buying process

Purchasing - handle relationships with suppliers. Production/operations - meeting targets for the end product in both quantity and quality terms. Engineering - the specification and design. R&D. Finance - devolve budgets to appropriate managers. Marketing - outputs of the production process.

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Unit production model of buyer-seller contact in B2B markets

Source: Adapted from Johanson (1982), copyright 1982 John Wiley & Sons Limited. Reporoduced with permission.

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Mass production model of buyer-seller contact in B2B markets

Source: Adapted from Johanson (1982), copyright 1982 John Wiley & Sons Limited. Reproduced with permission.

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Buying centres - comparison between consumer and B2B markets (1 of 2)

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Buying centres - comparison between consumer and B2B markets (2 of 2)

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Nature of Personal Selling

Sales professionals Well-trained Build long-term customer relationships Order taker Order getters Missionary selling

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How Salespeople Spend Their Time

Service Calls 12.7 % Administrative Task s16 % Telephone Sellin g 25.1 % Waiting/ Traveling 17.4 %

Face-to-Face Sellin g 28.8 %

Companies Look For Ways to Increase the Amount of Time Salespeople Spend Selling.

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Steps in the Selling Process

Prospecting Qualifying Preapproach Approach
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Salesperson Identifies Qualified Potential Customers. Process of Identifying Good Prospects and Screening Out Poor Ones. Salesperson Learns as Much as Possible About a Prospective Customer Before Making a Sales Call. Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start.

The Selling Process

Prospectin g Identify }Potential
& qualify

Custome rs

Preapproach Call Planning

Preparin g

Presentatio n
Approach demonstratio n

Handling Objection s

Closin g

Follow up

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Phases of Preparation

Preapproach

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

Prospecting

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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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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 in Purchasing Decisions

1. Financial 2. Social 3. Psychological 4. Performance 5. Physical

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Presale Approach

Prospecting - sources are Telephone Directory, Yellow Pages, Industrial Directory, Data within the organisation Qualifying prospects into A,B,C categories Prioritising calls Customer Research
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Selling Process

Opening Developing Proposing Elimination of Doubts Closing the sale

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Buying Process

Recognition of Needs Evaluation of options Elimination of Doubts Decision to buy

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Selling & Buying Relation

Selling Process Process
Opening Developing Proposing Elimination of Doubts
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Buying

Recognising Needs Evaluation of options Elimination of Doubts

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 offlimits 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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The Sales Presentation

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The SPIN

Neil Rackham - A British research psychologist developed the SPIN selling system. A precisely defined sequence of four question types Enables the conversation to logically move from

exploring the customers' needs to designing solutions To uncover Implied Needs and develop them into Explicit Needs that You, the salesperson, can resolve.

SPIN is a registered trademark of Huthwaite, Inc

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Situation Questions

Data-gathering questions. Uncover facts and background information

Example: Would you describe your current account documentation system?"

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Situation Questions

When overused, these questions bore the customer. Clarify the customer's current situation Be sure each question is necessary Can be overused (often are by inexperienced salespeople) Don't ask a question to get information that you should have obtained before the call.
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Situation Questions
Individual:

What is your position? How long have you been here? What do you see as your objectives in this area

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Situation Questions
Company:

What sort of business do you run? Is it growing or shrinking? What is your annual sales volume? How many people do you employ?

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Situation Questions
Business:

What equipment do you use at present? How long have you had it? Is it purchased or leased? How many people use it?

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Problem Questions

Here you help prospects define their needs explicitly

Example: "So you're having trouble retrieving account-sensitive data on a timely basis?"

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Problem Questions

Every problem implies a need! Are designed to identify a customer's problem Are more often asked by experienced salespersons. Inexperienced reps are tempted to see the customer's problems as a distraction or threat. The more experienced you become, the more you want to uncover difficulties The more you realize that customer difficulties present you with an opportunity to be of service.
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Problem Questions
Other examples:

Is this operation difficult to perform? Are you worried about the quality you get from the old machine? How satisfied are you with your present equipment? What are the disadvantages of the way that you're handling this now? Isn't it difficult to process peak loads with your present system? How is the reliability on this system?
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Implication Questions

Get the prospect to discuss the problem and how it might be improved

Example: What kind of closing opportunities do you think your people have missed because of the dataretrieval problem?

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Implication Questions
The customer's problems have:

effects consequences implications

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Implication Questions

Are strongly linked to success in larger-ticket sales Are more difficult to phrase than either Situation Questions or Problem Questions. A problem can generate many implications. You may have to ask several of these for each problem Are essential to moving sales forward Make the problem seem more acute to the buyer Help to make the customer (and the seller) aware of hidden complications or of potential difficulties that may arise if steps are not taken to remedy the immediate problem. By definition these questions make the customer uncomfortable? Be careful not to offend or upset

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Implication Questions
Examples:

How will this problem affect your future profitability? What effect does the reject rate have on customer satisfaction? What effect does that have on your output? You only have three people that can use them. Doesn't that create work bottlenecks? It sounds like the difficulty of using these machines may be leading to an employee turnover problem. Is that right? What does this turnover mean in terms of training cost? Could that lead to increased cost? Could that lead to customer service problems? Will it slow down your growth?
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Need-Payoff Questions

Help to build up the value of your proposed solution in the customers mind Need-Payoff Questions are linked to success in more complex sales. Can be especially useful when you're talking to top decision makers (or those who will influence them) Increase the likelihood that your solution will provide the payoff that answers the need. Focus the customer's attention on the solution rather than the problem Encourage the customer to outline the benefits that your solution will provide his or her company Pre-empts objections Enlists customer buy-in.

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Need-Payoff Questions
Examples:

Would it be useful to speed this operation by 10%? If we could improve the quality of this operation, would that help you? Is it important to solve this problem? Why would you find this solution so useful Is there any other way that this could help you out? So would you be interested in a way to control this cost? Would it help you if ................?
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Would you be happier if.................?

Specific Questioning Techniques

1. .

Closed End Questions: Uncovering specific facts Reducing tension because they are easy to answer Maintain control by directing flow of conversation Bind prospect commitment to a specific position

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Specific Questioning Techniques

2. Open End Questions:

Allow the prospect to move in any direction Cannot be answered with a yes or no Ordinarily begin with Who, What, Where, When, Why or How Stimulates the prospect's thinking and increases dialogue Helps uncover the dominant buying motive Uncovers the personality of the buyer.

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Questioning Drives a Great Presentation

Unrestricted/restricted questions encourage the customer to share information

Unrestricted encourage the customer to speak more freely and salesperson to develop a richer understanding of the customers needs Restricted provide specific information from the customer that the salesperson can use to shape the presentation

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Questioning Drives a Great Presentation

Data collection questions

Gather basic data about customers current business or historical perspective Limit use in presentations

May provide information that interferes with elements of the presentation Customer may perceive a lack of preparation

Investigation questions assess the customers current state of mind

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Questioning Drives a Great Presentation

Validation questions help get agreement from the customer Situation questions provide basic information about the customers situation Problem questions get the customer concentrating on particular issues
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Questioning Drives a Great Presentation

Implication questions help the customer recognize a problems implications Need payoff questions directly connect the problem with the value proposition

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The SPIN Selling Approach

Situation Questions Problem Questions Implication Questions Need Payoff Questions Finding facts about the customers existing situation Learning about the customers problems Learning about the effects of the customers problems Learning about the value of a proposed customer solution

Source: Neil Rackman, SPIN Selling (Burr Ridge, IL: McGraw-Hill, 1988).

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Listening

In sales, listening is as, or more, important than talking Most people listen actively only 25% of the time Most people can hear up to 800 words per minute, but only speak around 140 words per minute Active listening - requires commitment to focus on the speaker, concentrate on what is being said, and take in nonverbal as well as verbal messages
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Guidelines for Active Listening

Listen patiently Try to understand the feeling the other person is expressing Restate the persons feeling Allow time for discussion to continue without interruption Avoid direct questions and arguments about facts
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Guidelines for Active Listening

Repeat points you want to know more about Listen for what is not said When solicited, be honest in your reply Do not get emotionally involved BE QUIET
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Sell FAB

Feature any material characteristic or specification of the companys products or services Advantage a particular product/service characteristic that helps meet the customers needs Benefit the beneficial outcome to the buyer from the advantage found in the product feature
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Satisfy Customer Needs

Get customer agreement Minimize change conflict Establish the relationship

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Keys to a Great Presentation

Demonstrations Three benefits to the salesperson

Can build credibility with customers Create a greater connection between the customer and the product Enhance the effectiveness of your communication

Prepare for a successful demonstration

Develop objectives Get customers involved Practice, practice, practice

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How to be a Better Communicator

Focus on listening Ask for clarification Be brief Dont repeat yourself Ask, Am I making sense? Have an open-door policy Use self-deprecating humor
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Demonstration Checklist

Justify the need for a product demonstration State the objective of the demonstration Design the demonstration Rehearse the demonstration Plan for unforeseen circumstances
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Nonverbal Communication

Nonverbal communication is the most important element in the communication process Less than 10% of communication is based on what we say

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Customer Nonverbal Communication

Face single most important feature in nonverbal communication Arms and hands open indicate person is open to communication Body language

Leaning forward = interest Leaning backward = lack of concentration Quick movements = change of mind

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When Things Go Wrong

Interruptions during the Presentation

Assess nature of interruption Consider as an opportunity to plan where to take the presentation from here

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Inappropriate Environment - be prepared for less than ideal conditions Technology Failure always have a backup plan

When Things Go Wrong

Interruptions during the Presentation

Assess nature of interruption Consider as an opportunity to plan where to take the presentation from here

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Inappropriate Environment - be prepared for less than ideal conditions Technology Failure always have a backup plan

Trial Close Again

n

After answering all the prospect's questions and concerns, it is time to trial close again The salesperson can ask the prospect any of the following questions:

What do you think?" "How does all of this sound?" "How do you feel about what Ive said so far?"

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The Completion & Partnering Steps

n

The close is really an open

The time to complete the transaction and the opportunity to "open the door" to what could be a mutually profitable, long-term business relationship

A Partnership!

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Outcomes of a Presentation
n

Regardless of the outcome of any one sales presentation, there is more work to be done

A prospect buys and becomes a customer A customer buys again (rebuy situation) A customer or prospect makes no purchase but requests additional information A prospect expresses no interest in working with the salesperson's company

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The Salespersons Mentality

n n n

Closing Completion Partnering

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Closing Mentality
n

A closing mentality focuses strictly on the transaction as the end result of a sales presentation Closing questions ask for a definite, immediate decision, triggering one of the following responses:

A decision to buy A reason for not buying A request for additional information

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Nature of the Traditional Sales Close

n

A real issue in closing is the anxiety, hesitancy, or inability of human beings to make decisions Most salespeople are afraid of rejection

Their minds sometimes jump to possible negative consequences, creating a negative attitude

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When It Is Time To Close

n

A salesperson should do the following:

Look Lower Lean Shut Up Nod, and Smile

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Traditional Closing Techniques

n

Professional salespeople often use more than one technique during a presentation Salespeople should pick the techniques with which they feel most comfortable

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Employing Closing Techniques

n

Why should salespeople employ closing techniques?

Many prospects find it difficult to make decisions Prospects want to make the right decisions, but complete certainty in buying never exists Many prospects will postpone decisions if salespeople let them After a sales presentation, prospects often feel confused and hesitant

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Cautions About Traditional Closing Techniques

n

The goal of closing techniques is to make it relatively easy for the prospect/customer to decide to buy Although traditional closing techniques can be effective under the right circumstances, salespeople should use them judiciously

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Completion Mentality
n

A completion mentality emphasizes the point that all sales presentations must reach some type of conclusion, which may or may not result in a transaction On average, it takes five sales calls on a business prospect to complete a transaction

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If a Sale Made
n

Before leaving a customer who has agreed to a sale:

Show appreciation for the customer's business, but do not gloat Reassure the customer that the decision is a good one Solicit sales leads Complete all necessary paperwork, and finalize the details Be sure to leave with a good understanding of the customer's expectations

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There are at least four areas in which salespeople may be of service:

1. Handling

Providing Service

complaints 2. Order expediting 3. Adjustments, returns, and allowances 4. Information

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Organization-Related Duties
n

When the sale is not made:

When the sale is made:

The salespersons duties include the documentation of the sales presentation and the assembly of information useful to the organization The salesperson plays a key role in consummating the exchange transaction

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Partnering Mentality
n

A partnering mentality changes the salesperson's primary goal from one of just completing the transaction to one of beginning a partnership with the prospect

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Partnerships
n

In a partnership, both the seller and the buyer perceive a need for the relationship, and each values the other Benefits of a partnership

Quicker response to change Cost savings Agility in meeting customer needs Increases in sales Quicker identification of problems and opportunities

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Account Management and Partnering

n

Salespeople must develop partnership relations selectively

Extend account bandwidth in both the transactional and partnering directions Craft relationship strategies that more closely meet the requirements of customers

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Sales Managers Role

Mentor help salespeople improve their presentation skills Salesperson especially at presentations to large customers Equip salespeople for success

Training Equipment Motivation

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Conclusion

SPIN selling is one of the most effective selling techniques used by companies such as Xerox Corporation, Motorola, Maruti-Suzuki, NIIT Ltd etc. The right selling technique coupled with product/Company knowledge and positive attitude will make one a successful sales person.
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