1. Stephen B. Castleberry | John F. Tanner Jr. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHAPTER 10 RESPONDING TO OBJECTIONS

2. LEARNING OBJECTIVES How should salespeople sell value and build relationships when responding to objections? When do buyers object? What objections can be expected? Which methods are effective when responding to objections? How do you deal with tough customers? 10-2

3. OBJECTIONS Concern or a question raised by the buyer Proper attitude can be shown by: Answering sincerely Refraining from arguing or contradicting Welcoming objections 10-3

4. OBJECTIONS Salespeople must assume the attitude of: Helper Counselor Advisor Help identify: Sales opportunities Feedback about what is really on the prospect’s mind 10-4

5. WHEN DO BUYERS RAISE OBJECTIONS? Setting up an initial appointment Common when products, services, or concepts are unfamiliar to the buyer The presentation Objections show the prospect’s interest Attempting to obtain commitment After the sale Require careful response 10-5

6. COMMON OBJECTIONS Related to needs I do not need the product or service I’ve never done it that way before Related to the product I don’t like the product or service features I don’t understand I need more information Related to the source I don’t like your company I don’t like you Related to the price I have no money The value does not exceed the cost 10-6

7. COMMON OBJECTIONS Related to time I’m just not interested today I need time to think about it Other objections We have no room for your line There is no demand for your product I’ve heard from my friends that your insurance company isn’t the best one to use I need a kickback to make it worth my time We can do business if I can see you socially It’s a lot of hassle in paperwork and time to switch suppliers 10-7

8. EXHIBIT 10.2 - VALUE: THE RELATIONSHIP BETWEEN COSTS AND BENEFITS Note: If costs outweigh benefits, the decision will be not to buy. If benefits outweigh costs, the decision will be to buy. 10-8

9. BEHAVIORS OF SUCCESSFUL SALESPEOPLE LAARC method: Responding to objections by: Listening Acknowledging Assessing - Validity of the objection Responding Confirming - That the objection has been answered Anticipate objections 10-9

10. BEHAVIORS OF SUCCESSFUL SALESPEOPLE Forestall known concerns Forestall: Prevent by doing something ahead of time Relax and listen, do not interrupt Evaluate objections or excuses Excuses: Concerns expressed by the buyer that mask the buyer’s true objections Tell the truth 10-10

11. EFFECTIVE RESPONSE METHODS Probing method: Clarify prospect’s concerns and ensures that sales people understand the objection Blunders occur when the salesperson: Does not understand the question Answers the wrong question Fails to fully answer the objection Friendly silent questioning stare: Encourage buyers to elaborate or explain fully what their concerns are 10-11

12. EXHIBIT 10.4 - COMMON METHODS FOR RESPONDING TO OBJECTIONS 10-12

13. EFFECTIVE RESPONSE METHODS Direct denial: Salesperson makes a relatively strong statement to indicate the error the prospect has made Appropriate only when the objection is: Blatantly inaccurate Potentially devastating to the presentation Should never be used if the prospect is merely stating an opinion 10-13

14. EFFECTIVE RESPONSE METHODS Indirect denial: Salesperson denies the objection but attempts to soften the response Salesperson must recognize the position of the customer who makes the objection Then continue by introducing substantial evidence Beginning statement should always be true Assure prospect that the question is a good one 10-14

15. EFFECTIVE RESPONSE METHODS Compensation method: Acknowledging objections' validity and then showing any compensating advantages Superior benefit method: Benefit of one attribute overcomes concern about a less important attribute Referral method: Relating how others found initial opinions to be unfounded after they tried the product Known as feel-felt-found method Third-party testimony method: Proof of the salesperson’s assertion in the form of a testimonial letter 10-15

16. EFFECTIVE RESPONSE METHODS Revisit method : Salesperson turns the objection into a reason for buying Knows as boomerang method Saves the buyer substantial amounts of time or money Works with most personality types Acknowledge method : Salesperson lets the buyer talk, acknowledges it and moves on to another topic after a pause Known as the pass-up method Should not be used if the objection is factually false To be used sparingly 10-16

17. EFFECTIVE RESPONSE METHODS Postpone method: Buyer raises an objection which salesperson would prefer to answer later Seek permission to answer the question after the presentation Useful when a price objection occurs early in the presentation Salespeople lose more by making the buyer wait Better to answer questions when buyer strongly requests it 10-17

18. RESPONDING TO OBJECTIONS: USING EACH METHOD Direct denialThat simply is not true. Our product has been rated as the highest in the industry for the last three years Indirect denialI can certainly see why you would be concerned about quality. Actually, though, our product quality has been rated as the highest in the industry for the last three years CompensationI agree that our quality is not as high as that of some of our competitors. However, it was designed that way for consumers who are looking for a lower-priced alternative, perhaps just to use in a weekend cottage. So you see, our somewhat lower quality is actually offset by our much lower price 10-18

19. RESPONDING TO OBJECTIONS: USING EACH METHOD ReferralI can certainly understand how you feel. Mortimer Jiggs felt the same way before he bought the product. But after using it, he found that the quality was actually equal to that of other products RevisitThe fact that the quality is lower than in other products is probably the very reason you should buy it. You said that some of your customers are looking for a low-priced product to buy for their grandchildren. This product fills that need 10-19

20. RESPONDING TO OBJECTIONS: USING EACH METHOD AcknowledgeI understand your concern. You know, one of the things I always look for is how a product’s quality stacks up against its cost. [Pause] Now, we were talking about... PostponeThat’s an interesting point. Before discussing it fully, I would like to cover just two things that I think will help you better understand the product from a different perspective. OK? 10-20

21. OBJECTIONS WHEN SELLING TO A GROUP Get an idea of whether other buyers share the concern Throw the concern back to the group Any response should be directed to all buyers, not just the one who asked the question Make sure that all buyers are satisfied with the answer 10-21

22. PRICE OBJECTION Most frequently mentioned obstacle Don’t lower the price as a first response Use up-to-date information Establish the value - Two step approach Look at the objection from the customer’s viewpoint Sell value and quality rather than price 10-22

23. DEALING WITH TOUGH CUSTOMERS Maintain a positive attitude If appropriate, point out the prospect’s rudeness Buyer’s culture dictates their response to a seller 10-23