PREPARING FOR THE SALE
Chapter 12
SECTION 12 .1
What is Selling?
Objectives
Define selling and different types of selling situations
Explain the purpose and goals of sellingDefine consultative sellingDifferentiate between rational and emotional
buying motivesList three levels of consumer decision making
Key Terms
Personal sellingBusiness-to-business
sellingTelemarketingConsultative sellingFeature-benefit sellingProduct features
Customer benefitsRational motiveEmotional motiveExtensive decision
makingLimited decision
makingRoutine decision
making
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
Selling
Retail 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
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
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
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
Feature-Benefit Selling
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
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?
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
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
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!
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.
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
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
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
12.1 Critical Thinking Questions
1. What sets personal selling apart from other forms of promotion?
2. Identify a basic, a physical, and an extended product feature for a camera.
3. Explain levels of customer decision making.
4. 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)
SECTION 12 .2
Getting Ready To Sell
Objectives
Name the sources of product informationExplain the main focus of preparation in
business-to-business Explain the main focus of preparation in
retail selling
Key Terms
Pre-approachProspectReferrals
Endless chain methodCold canvassingSales quotas
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
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
Industry Trends
Sales representatives read periodicals related to their trade to gain insight into the industry.
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
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
Prospecting
Directories 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
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
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.
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
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?
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
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
Company Policies and Training
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
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
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
customersA 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
12.2 Critical Thinking Questions
1. In all selling situations, what can salespeople do to prepare for the sale?
2. What is prospecting?3. Which of the three sales compensation
methods would you prefer? Why?4. 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?
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