McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 The Process of Selling and Buying

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-3 Learning Objectives Recognize key drivers of change in selling and sales management. Understand best practices in selling. Explain historical basis for stereotypical views of selling. Point out reasons why sales jobs can be highly satisfying. Identify and explain key success factors for salesperson performance. Discuss and give examples of different types of selling jobs. List and explain roles of participants in an organizational buying center. Describe relationship between buying centers and selling centers and the nature of team selling. Outline stages in organizational buyer decision making. Point out the nature of different organizational buying situations.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-4 Drivers of Change in Selling and Sales Management Building long-term relationships with customers. Creating sales organizational structures that are more nimble and adaptable to the needs of different customer groups. Gaining greater job ownership and commitment from salespeople. Shifting sales management style from commanding to coaching. Leveraging available technology for sales success. Better integrating salesperson performance evaluation.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-5 What Customers Expect 1.Responsiveness to needs, problems; provides service. 2.Knowledge of products and customer applications. 3.Customer advocacy; partnership development. 4.Ability to keep customer up-to-date. 5.Quality product/service. 6.Offer of technical support. 7.Offer of local or easily accessible representation. 8.Ability to provide a total solution. 9.Understanding of customer’s business. 10.Competitive price.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-6 How Sellers are Responding Establishing a customer-driven culture. Market segmentation. Market adaptability. Information technology. Customer feedback and measuring customer satisfaction. Sales, service, and technical support systems. Recruiting and selecting salespeople. Training and development.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-7 Attractiveness of Sales Careers Autonomy and opportunities for personal initiatives A variety of challenging activities Financial rewards Favorable working conditions Excellent opportunities for development and advancement

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-8 Source: Christine Galea, “2002 Salary Survey,” Sales & Marketing Management, May 2002, pp. 32–36. © 2002 VNU Business Media. Used with permission.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-9

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Selling Success Factors 1.Listening skills 2.Follow-up skills 3.Ability to adapt sales style to situation 4.Tenacity 5.Well organized 6.Verbal communication skills 7.Able to interact with people at all levels of an organization 8.Ability to overcome objections 9.Closing skills 10.Personal planning and time management skills

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Selling Activities Selling Working with others Attending conferences and meetings Training and recruiting Servicing the product Managing information Entertaining Traveling Servicing the account Distribution

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Matrix of New Selling Activities CommunicationSalesRelationshipTeamDatabase Technology Dictaphone Internet Laptop (CD) Voic Cell Phone Pager Web page Newsletters Audiovideo conference Provide tech info Overnight services Maintain virtual office Set up appts Script sales pitch from database Use software for customer background Laptop for presentation VCR for presentation Provide tech ability to customers Web pageConference callsCollect new information Enter information on laptop Update customer files Nontechnology Practice language skillsAdaptive selling Conduct research at customers’ site Avoid potential litigation Plan for multiple calls to close deal Sell value-added services Respond to referrals Write thank-yous Target key accounts Pick up sales supplies Consultative sales Listen Ask questions Read body language Sell unique competencies Bring in vendor/alliance Develop relationship Hand-hold customer Write thank-yous Purchase dealers Call on CEOs Build rapport w/ buying center Network Build trust Train brokers Mentor Make sale and turn over to someone else Coordinate with sales support

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 2-13

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved B2C versus B2B Selling Most salespeople are involved in retail selling – selling goods and services to ultimate consumers (B2C) A much larger volume of sales is accounted for by industrial selling, recently referred to as business-to-business selling (B2B): –Sales to resellers –Sales to business users –Sales to institutions

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Types of B2B Jobs Trade selling – increase business by providing customers with merchandising and promotional assistance Missionary selling – persuade customers to buy products from distributors or other wholesale suppliers Technical selling – increase business from by offering current customers technical/engineering assistance New business selling – identify and obtain business from new customers

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Stages in the Selling Process Servicing the Account Closing the Sale Presenting the Sales Message Qualifying the Prospect Opening the Relationship Prospectin g for Customers

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Prospecting for customers is… A core competency A sales fundamental Critical to increasing sales Hard work Carries a delayed payoff Requires design and discipline Enhanced by software

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Opening the Relationship Often referred to as “the approach.” Determine who is likely to have the greatest influence to initiate the purchase process Generate enough interest to obtain the information needed to become a qualified prospect Identify key decision makers, desires, and relative influence

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Qualifying the Prospect Is the prospect a worthwhile customer? Does the prospect have need for my product? Can I prospect so aware of that need that I can make a sale? Will the sale be profitable to my company?

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Sales Presentation Purpose –Transmit information –Persuade the prospect to become a customer Common complaints about sales presentations: –Running down competitors –Being to aggressive or abrasive –Have inadequate knowledge of competitors’ products and services –Inadequate knowledge of client’s business/organization –Poor delivery

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Closing the Sale Begins with the first contact Requires “asking for the order” Can be tested throughout the presentation—Trial Close Requires understanding the prospect and buying process Should be paced by the salesperson Requires continual improvement

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Servicing the Account Excellent service after the sale bolsters customer loyalty Follow up on each sale to check satisfaction with –Product –Installation –Training –Maintenance –Billing Satisfied customers = Repeat customers

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Participants in the Buying Process Initiators – perceive a problem or opportunity requiring a new product of service Users –must use or work with the product or service Influencers –provide information for evaluating alternative products or suppliers Gatekeepers – control the flow of information to others Buyers – actually contact the selling organization and place the order Deciders – final authority to purchase Controllers – determine the budget

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Organizational Buying Decision Stages 1.Anticipate or recognize a problem or need 2.Determine and describe the traits and quality needed 3.Search for and qualify potential suppliers 4.Acquire and analyze proposals/bids 5.Evaluate proposals and select suppliers 6.Select an order routine 7.Perform evaluation and give feedback

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Organizational Buying Situations New-task purchase – first-time purchase of a complex and expensive product or service Modified rebuy – requires some modification to existing purchase decision and may open the door for new suppliers Straight rebuy – reorder an item purchased many times in the past

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Key Terms drivers of change best practices autonomy sales activities job variety intrinsic rewards extrinsic rewards work-family conflict telecommute virtual office adaptive selling job enlargement cost of a sales call retail selling end-user consumer business-to-consumer (B2C) market selling center team selling matrix organization key account organizational buying decision stages derived demand single-source suppliers commodity products slotting allowances new-task purchases modified rebuy straight rebuy repeat purchases out supplier business-to-business (B2B) market industrial selling trade servicer missionary seller detailer technical seller new business seller buying center initiator user influencer gatekeeper buyers decider controller perceived risk

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Mark W. Johnston Rollins College Greg W. Marshall Rollins College