1. Chapter 12
Preparing For The Sale

2. What is Selling?
Section 12.1

3. Objectives Define selling and different types of selling situations
Explain the purpose and goals of selling
Define consultative selling
Differentiate between rational and emotional buying motives
List three levels of consumer decision making

4. Key Terms Personal selling Business-to-business selling Telemarketing
Consultative selling
Feature-benefit selling
Product features
Customer benefits
Rational motive
Emotional motive
Extensive decision making
Limited decision making
Routine decision making

5. Selling Personal selling
Any form of direct contact between a salesperson and a customer.
The key factor that sets it apart from other forms of promotion is this two-way communication between seller and buyer.
Types of personal selling
Retail Selling
Business-to-Business Selling
Telemarketing

6. Selling Retail Selling Business-to-Business Selling
Customers come to the store
Salesperson is available to answer any questions about the product or its features
Business-to-Business Selling
Takes place in a manufacturer’s or wholesaler’s showroom or a customer’s place of business
Most sales reps schedule appointments
A few do “cold calls” – show without an appointment

7. Selling Telemarketing The process of selling over the phone
The law prohibits telemarketers from calling any number registered with the National Do Not Call Registry
This law reduces the number of people telemarketers may contact

8. Goals of Selling
The purpose and goals of selling are the same regardless of the sales situations
To help customers make satisfying buying decisions, which creates ongoing, profitable relationships between buyer and seller.
Repeat business is crucial to the success of a company
Easier and less expensive to keep current customers happy than to generate new customers
Happy customers are more likely to pass along positive recommendations

9. Consultative Selling
Sales people accomplish goals by engaging in a process called consultative selling
Consultative selling
Providing solutions to customers’ problems by finding products that meet their needs
Analysis of customer needs combined with product knowledge is the essence consultative selling
Reps should be trained in feature-benefit selling

10. Feature-Benefit Selling
The concept of matching the characteristics of a product to the customer’s needs and wants.
Product Features
Are the basic, physical, or extended attributes of the product or purchase
A salesperson needs to learn how a product’s features will benefit the customer

11. Feature-Benefit Selling
Customer Benefits
The advantages or personal satisfaction a customer will get from a good or service
It is salesperson’s job to analyze the product features from the customer’s point of view
A salesperson will need to answer two questions about each product feature:
How does the feature help with the product’s performance?
How does the performance information give the customer a personal reason to buy the product?

12. Feature-Benefit Selling
Feature Benefit Chart
After identifying the features of a product and their benefits, you should put together a feature-benefit chart.
Product features are listed with its corresponding customer benefits
The more useful a feature, the more valuable the product is to the customer

13. Product Feature
Customer Benefit
100% nylon Hydro Rip-Stop Fabric
Durable, water/wind resistant, washable
100% nylon Hydro Plus shell
Durable, water/wind resistant washable
65% polyester & 35% cotton jersey lining
Comfortable, washable
Designed to fold into zippered pouch that is part of the jacket
Packable, great for hiking and trail trips
Radial sleeve and articulated elbow
Free range of motion, comfortable
Colors: abalone, wink, Columbia navy, tilt blue
Unisex colors, offers variety
Sizes: 7/8, 10/12, 14/16, 18/20, 4/5, 6/6X, 2T, 3T, 4T
Children’s sizes, covers full age range
Limited warranty
Covers defects in materials and workmanship in outerwear manufactured by Columbia Sportswear Company

14. Feature Benefit Chart Project
Consider a Smart Phone you would like to own, or the one that you do own. Think about all its features and what you like about it.
Activity
You will work with a partner to develop a feature-benefit chart for a new Smart Phone coming to the market this holiday season. Use the following features in your chart: reduced physical size, increased storage capacity, improved shock absorption/crack and scratch resistant, music player/music playing ability, voice recorder/recognition, colors, and LCD or touch screen.
Create a table in Microsoft Word to develop your Feature Benefit chart
List all of the phone’s features, plus how each feature will benefit the customer
Include a picture of the new phone
Give your new phone a name
Be Creative!!!!!
Sell me this phone!

15. Customer Buying Motives
Salespeople must know what motivates customers to buy and what decisions customers make before the final purchase.
Customers have rational or emotional motives for making purchases
Rational motives
A conscious, logical reason for a purchase
Product dependability
Time or monetary savings
Health or safety considerations
Service
Quality
Emotional motives
A feeling experienced by a customer through association with a product.
Social approval
Recognition
Power
Love
Prestige
Successful salespeople determine customers’ rational and emotional motives in a potential buying situation. Then they suggest the features and benefits of the product that best match those motives.

16. Customer Decision Making
Some customer need no help from salespeople, while others require significant time and effort.
Three types of decision making
Extensive
Limited
Routine
How a person makes a decision is affected by the following factors:
Previous experience with the product and company
How often the product is purchased
The amount of information necessary to make a wise buying decision
The importance of the purchase
The perceived risk involved in the purchase (product functioning)
The time available to make the decision

17. Customer Decision Making
Extensive Decision Making
Used when there has been little or no previous experience with an item
A customer buying their first home will use extensive decision making
High degree of perceived risk
Limited Decision Making
Used when a person buys goods and services that he or she has purchased before but not regularly
Moderate degree of perceived risk
Person often needs some information before buying the product
A customer purchasing a second car will use limited decision making

18. Customer Decision Making
Routine Decision Making
Used when a person needs little information about a product
Perceived risk may be low
Item may be inexpensive and bought frequently
Grocery purchases fall into this category

19. 12.1 Critical Thinking Questions
What sets personal selling apart from other forms of promotion?
Identify a basic, a physical, and an extended product feature for a camera.
Explain levels of customer decision making.
When buying advertising time on television or in magazines, advertisers calculate the cost per thousand (CPM) people reached by the ad. If the cost of advertising was $100,000 and the reach or circulation was 10,000,000 people, what would be the CPM? (Note: M is the Roman numeral for 1,000)

20. Getting Ready To Sell
Section 12.2

21. Objectives Name the sources of product information
Explain the main focus of preparation in business-to-business
Explain the main focus of preparation in retail selling

22. Key Terms Pre-approach Prospect Referrals Endless chain method
Cold canvassing
Sales quotas

23. The Pre-Approach The Pre-Approach
The preparation for the face-to-face encounter with potential customers.
Salespeople study their products
Keep abreast of industry trends and competitors
Research potential customers
Develop familiarity with their company’s policies and procedures
Review ethical and legal issues involved in their selling situation

24. Product Information
Salespeople can usually find all the product information they need through four main sources:
Direct experience
Some businesses offer employee discounts to encourage employees to become familiar with products
Also study display models and visit manufacturing facilities
Written publications
User manuals
Manufacturer warranty
Catalogs and promotional materials
Labels
Websites
Other people
Formal training
Training sessions on product usage

25. Industry Trends
Sales representatives read periodicals related to their trade to gain insight into the industry.

26. Prospecting Looking for new customers is called prospecting. Prospect
Also called lead
A potential customer
Especially important activity in business-to-business selling situations
Salespeople are evaluated on how many new accounts they open through prospecting efforts

27. Prospecting Employer Leads
Some firms employ entire telemarketing teams to generate leads for their sales staff.
They also attend trade shows, where they display their products for review by buyers in the industry
Other firms rely entirely on their salespeople to find new customers
Many employers will do what they can to help locate potential customers for their salespeople

28. Prospecting Directories Newspapers
The Yellow Pages list businesses that may be potential customers for certain industrial goods and services
Business-to-business sales representatives can use trade and professional directories to locate potential customers.
Newspapers
Provide good leads for some salespeople
Engagement announcement for bridal shops, caterers, florists, and printers

29. Prospecting Commercial Lists
Salespeople may buy a list of potential customers from companies that specialize in categorizing people
Age
Income
Credit card purchases
Location
Businesses may be listed by:
Net sales
Profits
Products
Geographic location

30. Prospecting Customer Referrals
Satisfied customers often give salespeople a referral
The names of other people who might buy the product.
Opens the market to potential customers whom you might not have reached without a recommendation
When salespeople ask previous customers for names of potential customers, they are said to be using the endless chain method.

31. Prospecting Cold Canvassing
Potential customers are selected at random, such as by going door-to-door or selecting names from a telephone directory.
This technique is also called blind prospecting

32. Preparing For The Sale in B2B Selling
In B2B sales, pre-approach activities depend on whether the sales call is with a previous customer or a new prospect.
With previous customers, salespeople can analyze sales records and review notes about the buyer’s personality, family, interests, and hobbies.
When dealing with new customers, the salesperson must do some homework before jumping into the selling process.
Questions should include:
Does the prospect need this product or service?
Does the prospect have the financial resources to pay?
Does the prospect have the authority to buy?

33. Preparing For The Sale In Retail Selling
Since the customer comes to you in retail selling situations, the preparation centers around the merchandise and work area.
Retail sales associates are often responsible for the merchandising, stock keeping, and housekeeping.
Those activities include:
Straightening, rearranging, and replenishing the stock
Adjusting price tickets before and after special sales
Learning where stock is located and how much is available
Arranging displays
Vacuuming the floor, dusting the shelves, and keeping the selling and display areas neat and clean

34. Company Policies and Training
Sales management establishes the guidelines and policies under which salespeople function
Some of their specific duties involve:
scheduling sales staff
overseeing and evaluating their performance
training

35. Company Policies and Training
A four step process is often used by sales managers responsible for training new personnel
Explanation
Demonstration
Trial
Critique
A sales technique is first explained and then demonstrated by the person conducting the training
The new sales associate performs the newly learned task or demonstrates product knowledge in a role-playing format
The trainer then give constructive criticism

36. Compensation and Sales Quota
Salespeople are usually compensated by:
Straight commission
Get paid only when they sell something
Straight salary
Get paid a set amount regardless of how much they sell
Salary plus commission
Have a set salary, and their commission rate is lower than those who are paid only commission
Regardless of the methods of compensation, sales managers often establish sales quotas
Sales quotas
Dollar or unit sales goals set for the sales staff to achieve in a specified period of time
Weekly
Monthly
Quarterly

37. Legal and Ethical Issues
Commission sales and sales quotas can create pressure on the sales staff to produce sales.
Sales associates may engage in hard-sell tactics or lie to prospective customers
A sales order is a legal agreement, or contract, between the buyer and seller, and signed by both parties.
It contains all legal elements of a contract:
Offer
Acceptance
Consideration
Competent parties
Legal form
Legal subject matter
Another aspect of a sales contract is full disclosure of the facts
All services and materials that will be used should be clearly identified

38. 12.2 Critical Thinking Questions
In all selling situations, what can salespeople do to prepare for the sale?
What is prospecting?
Which of the three sales compensation methods would you prefer? Why?
Mark can be paid a straight commission of 8 percent of his sales or a salary of $55,000 plus a 2 percent commission on sales. Which is a better deal for Mark if sales are projected to be $1,000,000 in his territory? Which method of compensation would you recommend? Why?