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?