Sales Management PowerPoint Slides Chapter 2

Retail Selling
Involves selling goods and services to ultimate consumers for their own personal use
Examples of Retail Selling
Door-to-door salespeople
Insurance agents
Real estate brokers
Retail store clerks
True or False Door-to-Door salespeople Sell Products from Door-to-Door?
False
True or False you can make lots of money selling insurance?
True
Industrial Selling
Is the sale of goods and services at the wholesale level
Industrial Selling Types of Customers
Sales to resellers (i.e. retailers)
Sales to business users (i.e. manufacturers)
Sales to institution (i.e. hospitals or governments)
Similarities Between Retail and Industrial Selling
Require interpersonal skill
Require knowledge of the products being sold
Also knowledge about competitors products being sold
Require an ability to discover the customer’s needs and problems
Differences Between Retail and industrial Selling
Industrial goods and services are more expensive and technically complex
Industrial customers tend to be larger and engage in extensive decision making processes involving many people within their company
Types of Sales Jobs
Order Takers
Support Sales People
Order Getters
Order Takers
Simple skills required
Driver sales person
Inside order taker
Outside order taker
Support Sales People
Simple skills required
Missionary sales person
Sales engineer
Order Getters
Complex skills required
Creative sales representative: intangibles
Alternative Selling Techniques
Stimulus-response approach
Mental-states approach
Need-satisfaction approach
Problem-solving approach
Stimulus-Response Approach
Is based on the notion that every sensory stimulus produces a response
Sales recruits learn what to say (the stimulus) and what the buyers are likely to say (the response) in most circumstances
Telemarketer reads from a script
Mental-States Approach
Is based on the idea that a buyer’s mind passes through successive stages before he or she decides to make a purchase
Based upon the AIDA Model – steps consumers go through before they buy something
Design a sales presentation that leads consumers through various steps of the AIDA model
Ex: Infomercials
AIDA Model
Attention
Interest
Desire
Action
Need-Satisfaction Approach
Is based on the idea that customers are to be served rather than products sold
Uses the marketing approach
Customers needs are the starting point in making a sale
The sales person’s task is to identify the prospects needs, make the prospect aware of that need, and then persuade the prospect that his or her product or service will satisfy that need better than any other alternative
Problem-Solving Approcah
Is similar to the need-satisfaction approach except that the sales person goes one step further to help the prospect identify SEVERAL alternative solutions, analyze their advantages and disadvantages, and select the best solution
The seller recommends other products and builds relationships with customers and generate positive word of mouth
Personal Selling Process
Can be thought of as a chain, where each link must be successfully close or the seller will fail to get the order
Personal Selling Process Steps
Prospecting
The preapproach
The approach
The presentation
Meeting objections
Closing
Follow Up
Prospecting
Is the method or system by which sales people learn the names of the people who need the product and can afford it (where the gold, money come from)
To grow revenue must prospect at a high level by adding customers to your customer list
How to Obtain Names and Addresses
Sales managers can prepare lists of prospects
Customers can suggest new leads (snowball techniques)
Present users may want new or different models
Competitors customers can make good prospects
Trade association and industry directories
Telephone directories
Other sales people
Suppliers, social and professional contacts
Snowball Techniques
Asking current customers if they know anyone who is interested in your product
Competitors customers’ can make good prospects
Competitors customers can give information about competitors suppliers and other information about the competitor
Sales People Should Devote A large Percentage of Time to Prospecting If:
If the firm’s product is in the introductory stage of its product life cycle
If it is in an infrequently purchased durable good
If the typical customer does not require much service after the sale
Sales Reps Should Spend Most of Their Effort Servicing Existing Customers If:
The firm has a large market share
The firm sells frequently purchased nondurable products
The firm’s products require substantial service after the sale to guarantee customer satisfaction
The Preapproach
Includes all the information gathering activities necessary to learn relevant facts about the prospect and his or her needs and situation
Before the sales person attempts to set up an appointment for a major sales presentation, he or she should determine whether the prospect qualifies as a worthwhile potential customer
The Preapproach activities
To qualify the lead or disclose the party’s needs and ability to pay
To provide information that will enable the seller to tailor the presentation to the prospect
To provide information that may keep the sales reps from making serious tactical errors during the presentation
Qualifying the Prospect
Does the prospect have a need for my product or service?
Can I make the people that are responsible for buying so aware of that need that I can make a sale?
Will the sale be profitable to my company?
The Preapproach Includes
Personal Information
Business Information
Personal Information
Learn to spell and pronounce the name of the prospect(s)
Age
Education
Residence
The need for what you are selling
Authority to buy
Reference groups
Recreation, interests and hobbies.
Age
Older people respond to the respect that is due to them
Younger people in high positions like to be recognized for rising quickly in the organization
Education
May provide a topic of conversation
Residence
May reveal something about a person’s social position or friends
The Need for What You Are Selling
Know how the person can best use what you are selling
Authority to Buy
Does the prospect have to ask another person to buy the product?
Reference Groups
Rotary club, church, temple, country club, trade associations
Business Information – Personnel
Who owns the company?
Who is on the board of directors?
What are the business affiliations of the members of the board?
Who has the final word on purchases?
Who else has an influence on purchases?
Who is in charge of the department that will use my information?
Business information – Company Operations
What does it make or sell?
Who are its customers?
How are its products positioned in the market?
What is the capacity of the plant?
What parts of the finished product do they make/buy?
What manufacturing processes do they employ?
What type of machines do they own?
What types of materials do they buy?
What maintenance schedule do they operate on?
Where does the company rate in the industry – volume?
Business Information – Buying Practices
What purchasing procedures are followed by the purchasing department?
When does the firm buy?
How much do they buy?
Who else do they buy from? Why?
Are they happy with their current sources of supply?
Does the firm practice reciprocity?
The Approach
Inspires interest in hearing more about the proposition, makes an easy transition into the presentation, and gets the prospects attention
Objectives of the Approcah
Attention
Interest
Transition
Attention
Frequently a prospect’s mind is on something else
Under no circumstance should you carry on with the sale while the prospect’s attention is diverted
Interest
It is possible that once you’ve gained attention the prospect will decide that they are not interested in what you have to say
A good approach provides the prospect with a reason for listening
Tell them the benefits of your offer
Transition
Another objective of the approach is to lead smoothly into the presentation
Types of Approaches
Introductory approach
Assessment approach
Product approach
Customer-benefit approach
Referral approach
Consultative approach
Introductory Approach
The sales rep merely introduces him/herself and identifies the company he or she represents
Assessment Approach
The sales rep opens the interview with a plea for information or permission to investigate the company’s problem
Product Approach
Consists of handing the product to the prospect, with little or no conversation
Customer-Benefit Approach
The sales rep selects the benefit package that will likely be of most interest to the prospect – based on what is known about the situation
Referral Approach
The sales rep receives permission of past or present customers to use their names as a reference in meeting a new prospect
Consultative Approach
The sales rep opens the sale by getting the prospect to talk about the problem
What are Good Sales Presentations Built Around?
A forceful product demonstration
Presentation
The main body of the sale where the sales rep presents the product or proposition and shows the prospect its benefits
Involve either consultative or vending selling
Consultative Sellers
Form partnerships with business function managers whose processes they improve
Vending
Is selling price-performance benefits to purchasing agents
Canned presentation
Sales presentation
Canned Presentation
Are prepared sales presentations
Are not used in business-to-business selling
Used by telemarketers
Canned Presentation Advantages
Gives new sales people confidence
Can utilize sales techniques proven effective
Gives some assurance that the complete story will be told
Greatly simplifies sales training
Consultative Selling
According to the consultative selling approach, a sale is not the sale of products or equipment
Rather a sale is the sale of a positive rate of return on the customer’s investment
Basically, the consultative seller re-frames the purchasing problem for the buying firm
The consultative seller gets the buying firm to focus on the savings that result from the purchase rather than on the cost of the purchase
The seller sells based on return of investment
Consultative Selling According to Hanan
“Consultative selling is profit improvement selling. It is selling to the high-level customer decision makers who are concerned with profit…”
“Consultative selling is selling at high margins so that the profits you improve can be shared with you.”
Consultative Selling vs. Vending Selling
Consultative Selling
The seller supplies profit to the buying firm
The seller offers a return on the customer’s investment
The seller uses a profit improvement proposal
The seller quantifies ($) the benefits from the customer’s investment
The seller attaches the customer’s investment to the customer’s return
The customer closes
The seller’s product is improved customer profit
The seller sells to a business manager
The seller features improved financial performances for the customer
Consultative Selling vs. Vending Selling cont.
Vending Selling
The seller provides product to the buying firm
The seller charges a price
The seller uses an order form
The seller attempts to justify the buying firm’s cost
The seller attaches a price to a product
The seller tries to close
The seller’s product is equipment, a service, a process, or a system
The seller sells to a purchasing manager
The seller features the product’s performance
Presentation Cont.
Throughout the presentation the sales rep makes trial closes to determine weather the customer is ready to buy
If all goes well in the trial close, the sales rep goes right on into an assumptive close and wraps up the sale
Is Customer Ready to Buy Questions
Which model do you like best?
Which color do you prefer?
Cash or financing?
Points to Keep in Mind Concerning Sales Presentations
Don’t run down competitors
Ask open-ended questions
Learn to listen
Don’t be too aggressive or abrasive
Present benefits
Have full knowledge of competitor’s products
Understand group dynamics
Have full knowledge of customer’s business
Deal with personality conflicts
Keep the presentation simple
Establish credibility
Guarantee next call – get an assignment
Understand Group Dynamics
Find the decision maker
Don’t ignore anyone
Meeting Objections
Objections should be welcomed and indicate that the prospect has some interest in the proposition
States vs. Hidden Objections
State objection may be phony
Objection to Price and Product:
Price to high
Prospect can’t afford the price
Procrastinating Objections
Let me think about it for a while
I have to talk it over with my family
I have to wait until next pay check
I have to look around some more
Ways to Overcome Procrastinating Objections
Use the standing room only close
Things to Keep in Mind When Meeting Objections
Welcome objections
Be prepared to answer typical objections
Avoid emotional objections – keep cool
Visualize the sale
Typical Objections
Price objections
Quality objections
Current vendor objections
Close
Asking for the order
Closing Methods
The assumptive close
The physical action close
The standing-room-only close
The trap close
The special offer close
The Assumptive Close
A closing technique in which a salesperson simply assumes that the purchaser has agreed to buy the product, and proceeds to write up the order
Ex:
Test drive in a car sales person will take you into the office to start writing up paperwork for sale
The Physical Action Close
Hand the prospect a pen as an indication it’s time to sign
Ex:
Handing a prospect a pen (keys to a car) as an indication to buy
The Standing-Room-Only-Close
Sales rep tells prospect the product is hard to get in the hopes that the prospect will sign the order
High pressure sales tactic to overcome objections
Ex:
Only one car left and won’t be getting any more and I have a buyer who came in 2 hours ago and he wants to buy it
The Trap Close
Using the prospects objections to close the sale
Ex:
Real-estate, the owner is willing to fulfill prospects objections, like paving a gravel path into a driveway
The Special Offer Close
Giving the customer a special offer to induce them to buy
Ex:
Giving incentives, like buying concert tickets for customers
Follow-Up
After the sale is made the salesperson follows up with the customer to make sure they are satisfied and answer any questions they have
Want to reduce cognitive dissonance
Cheaper to sell to current customers
Customer lifetime value of a customer is increased markedly with small increase in retention rates
Increases Net Profit Value – customer retention in number of years
Cognitive Dissonance
Customers worries after they buy a product that they bought the right product