Understanding Buyers – How and why customers buy Chapter 3

In-Class Exercise: I’ll Cook His Goose!

Understanding Buyers Starts with understanding yourself,…..and being confident in what you are selling. Knowledge Bases (from Chapter 2): Industry Company Product Price and Promotion Service Market/Customer Competitor Technology

Adaptive Selling Adaptive selling (Chapter 1) entails: Gathering information about each customer Observing customers’ reactions during the sales call Being able to make rapid adjustments during the sales process/call/presentation Tailoring the sales presentation to each customer’s social style

Understanding Social Styles Assertiveness Competitive Rapid movers Quick decision makers Initiative takers Time sensitive Responsiveness Friendly Talkative Approachable Less time sensitive Slower decision makers More sensitive to others’ feelings

Understanding Social Styles Understand and know yourself and your prospect’s dominant personality type.

Social Styles Matrix Amiable “ Show concern for me and my problems” Supportive Respectful Willing Dependable Personable Amiable “ Show concern for me and my problems” Supportive Respectful Willing Dependable Personable Expressive “I like competent, imaginative salespeople” Personable Stimulating Enthusiastic Dramatic Inspiring Expressive “I like competent, imaginative salespeople” Personable Stimulating Enthusiastic Dramatic Inspiring Driver “Show me bottom line results” Determined Demanding Thorough Decisive Efficient Driver “Show me bottom line results” Determined Demanding Thorough Decisive Efficient Analytical “What I need are practical suggestions” Industrious Persistent Serious Vigilant Orderly Analytical “What I need are practical suggestions” Industrious Persistent Serious Vigilant Orderly RESPONSIVENESS ASSERTIVENESS Low High Low

Recap of last class

In-Class Exercise: What Makes Him so Successful?

Selling From The Customer’s Perspective Three conditions constitute a quality buying experience: 1. Customers believe that salespeople’s assessments of their needs and expectations are good (from quality communication) 2. Customers experience fulfillment of these needs on a long-term basis due to the salesperson and the sales support team 3. When customer needs change suddenly, salespeople respond by making every effort to meet new needs

Selling to Prospects’ Needs and Wants – a starting point The goal is to reach a common understanding between buyer and seller This can only happen through the process of disclosure – the giving and taking of information Do we share any background experiences? Are our language skills, attitudes, and beliefs similar or dissimilar? What assumptions have we made about each other based on stereotypes?

Uncovering Needs and Wants Salespeople must: Determine what will motivate the prospect to act (not necessarily a purchase) Understand the goal orientation of the prospect Assess and adapt to the style of the prospect

Types of Buyer Needs Situational Needs I need a copier now because I have a major project I need to complete. I need a copier that sorts and staples. I need a state-of-the-art copier so I will be recognized as of the technology-savvy people in this company. I need an extended warranty with a copier. I need comprehensive training on how to use a copier. Functional Needs Social Needs Psychological Needs Knowledge Needs

Complex Mix of Business Buyer Needs Buyers’ Level of Satisfaction Psychological Attributes “Delighters” Functional Attributes “Must-Haves” 63% Level of Influence On Buyers’ Satisfaction 37% Level of Influence On Buyers’ Satisfaction

Categories of Buyers Manufacturers Institutions/Governments Wholesalers, Retailers Non-Profit Organizations Business Markets People (Personal Use) Consumer Markets

Distinguishing Characteristics of Business Markets Concentrated Demand Derived Demand Higher Levels of Demand Fluctuation Purchasing Professionals Multiple Buying Influences Close Buyer-Seller Relationships – Ethical Dilemma, page 81

Buying Decision Process Recognition of the Need Determination of Desired Characteristics Description of Desired Characteristics Search and Qualification of Potential Sources Acquisition & Analysis of Proposals Evaluation of Proposals Selection of Suppliers Selection of an Order Routine Performance Feedback and Evaluation

Buying Center Members InitiatorsInitiators UsersUsers GatekeepersGatekeepers InfluencersInfluencers DecidersDeciders PurchasersPurchasers The roles in the buying center work together to affect the outcome of the purchase decision.

Individual Factors Affecting the Buying Center

In-Class Exercise: What Makes Him so Successful? Question #3

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 of the buyers decisions

Five Types of Risk in Purchasing Decisions 1.Financial 2.Social 3.Psychological 4.Performance 5.Physical Understanding these are important for effective salespeople

Characteristics of the Three Types of Buying Decisions Straight Rebuy Modified Rebuy New Task Newness of Problem or Need Information Requirements Information Search Consideration of New Alternatives Multiple Buying Influence Financial Risks Low Minimal Minimal None Very Small Low Medium Moderate Limited Limited Moderate Moderate High Maximum Extensive Extensive Large High

Multi-Attribute Model Assessment of Product or Supplier Performance (P) Assessing the Relative Importance of Each Characteristic (I) The base score The weight

Example of the Multi-Attribute Model Process Vinyl FabricNylon Velvet Fabric Characteristic Performance Score Importance WeightPxI Performance Score Importance WeightPxI Comfort Durability Guarantee Price Evaluation Score

Appendix for Chapter 3