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Retail Selling

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Involves selling goods and services to ultimate consumers for their own personal use

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Examples of Retail Selling

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Door-to-door salespeople Insurance agents Real estate brokers Retail store clerks

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True or False Door-to-Door salespeople Sell Products from Door-to-Door?

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False

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True or False you can make lots of money selling insurance?

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True

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Industrial Selling

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Is the sale of goods and services at the wholesale level

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Industrial Selling Types of Customers

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Sales to resellers (i.e. retailers) Sales to business users (i.e. manufacturers) Sales to institution (i.e. hospitals or governments)

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Similarities Between Retail and Industrial Selling

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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

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Differences Between Retail and industrial Selling

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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

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Types of Sales Jobs

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Order Takers Support Sales People Order Getters

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Order Takers

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Simple skills required Driver sales person Inside order taker Outside order taker

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Support Sales People

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Simple skills required Missionary sales person Sales engineer

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Order Getters

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Complex skills required Creative sales representative: intangibles

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Alternative Selling Techniques

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Stimulus-response approach Mental-states approach Need-satisfaction approach Problem-solving approach

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Stimulus-Response Approach

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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

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Mental-States Approach

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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

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AIDA Model

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Attention Interest Desire Action

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Need-Satisfaction Approach

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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

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Problem-Solving Approcah

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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

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Personal Selling Process

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Can be thought of as a chain, where each link must be successfully close or the seller will fail to get the order

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Personal Selling Process Steps

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Prospecting The preapproach The approach The presentation Meeting objections Closing Follow Up

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Prospecting

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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

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How to Obtain Names and Addresses

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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

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Snowball Techniques

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Asking current customers if they know anyone who is interested in your product

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Competitors customers' can make good prospects

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Competitors customers can give information about competitors suppliers and other information about the competitor

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Sales People Should Devote A large Percentage of Time to Prospecting If:

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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

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Sales Reps Should Spend Most of Their Effort Servicing Existing Customers If:

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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

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The Preapproach

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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

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The Preapproach activities

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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

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Qualifying the Prospect

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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?

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The Preapproach Includes

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Personal Information Business Information

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Personal Information

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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.

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Age

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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

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Education

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May provide a topic of conversation

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Residence

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May reveal something about a person's social position or friends

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The Need for What You Are Selling

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Know how the person can best use what you are selling

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Authority to Buy

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Does the prospect have to ask another person to buy the product?

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Reference Groups

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Rotary club, church, temple, country club, trade associations

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Business Information - Personnel

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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?

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Business information - Company Operations

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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?

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Business Information - Buying Practices

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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?

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The Approach

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Inspires interest in hearing more about the proposition, makes an easy transition into the presentation, and gets the prospects attention

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Objectives of the Approcah

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Attention Interest Transition

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Attention

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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

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Interest

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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

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Transition

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Another objective of the approach is to lead smoothly into the presentation

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Types of Approaches

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Introductory approach Assessment approach Product approach Customer-benefit approach Referral approach Consultative approach

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Introductory Approach

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The sales rep merely introduces him/herself and identifies the company he or she represents

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Assessment Approach

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The sales rep opens the interview with a plea for information or permission to investigate the company's problem

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Product Approach

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Consists of handing the product to the prospect, with little or no conversation

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Customer-Benefit Approach

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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

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Referral Approach

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The sales rep receives permission of past or present customers to use their names as a reference in meeting a new prospect

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Consultative Approach

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The sales rep opens the sale by getting the prospect to talk about the problem

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What are Good Sales Presentations Built Around?

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A forceful product demonstration

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Presentation

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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

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Consultative Sellers

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Form partnerships with business function managers whose processes they improve

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Vending

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Is selling price-performance benefits to purchasing agents Canned presentation Sales presentation

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Canned Presentation

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Are prepared sales presentations Are not used in business-to-business selling Used by telemarketers

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Canned Presentation Advantages

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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

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Consultative Selling

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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

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Consultative Selling According to Hanan

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"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."

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Consultative Selling vs. Vending Selling

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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

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Consultative Selling vs. Vending Selling cont.

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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

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Presentation Cont.

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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

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Is Customer Ready to Buy Questions

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Which model do you like best? Which color do you prefer? Cash or financing?

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Points to Keep in Mind Concerning Sales Presentations

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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

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Understand Group Dynamics

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Find the decision maker Don't ignore anyone

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Meeting Objections

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Objections should be welcomed and indicate that the prospect has some interest in the proposition

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States vs. Hidden Objections

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State objection may be phony

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Objection to Price and Product:

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Price to high Prospect can't afford the price

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Procrastinating Objections

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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

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Ways to Overcome Procrastinating Objections

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Use the standing room only close

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Things to Keep in Mind When Meeting Objections

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Welcome objections Be prepared to answer typical objections Avoid emotional objections - keep cool Visualize the sale

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Typical Objections

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Price objections Quality objections Current vendor objections

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Close

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Asking for the order

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Closing Methods

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The assumptive close The physical action close The standing-room-only close The trap close The special offer close

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The Assumptive Close

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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

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The Physical Action Close

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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

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The Standing-Room-Only-Close

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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

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The Trap Close

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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

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The Special Offer Close

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Giving the customer a special offer to induce them to buy Ex: Giving incentives, like buying concert tickets for customers

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Follow-Up

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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

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Cognitive Dissonance

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Customers worries after they buy a product that they bought the right product

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