Lecture Sales and distribution management: Chapter 2 - Krishna K Havaldar, Vasant M Cavale

Chapter 2, personal selling: Preparation and process. After studying this chapter you will be able: To understand psychology in selling, buying decision process and buying situations; to learn communication skills, sales knowledge, and sales related marketing policies; to understand personal selling process; to learn about negotiation.

Learning Objectives

• To understand psychology in selling, buying decision process and buying situations

• To learn communication skills, sales knowledge, and sales related marketing policies

• To understand personal selling process

• To learn about negotiation

Psychology in

Selling

• If a sales person makes a presentation, the prospect may or may not buy

• The above “buyer behaviour model” does not tell

us the reasons of buying or not buying

• To understand the psychological aspects of selling or buying, salespeople should study consumer or buyer behaviour, including buying process and situations

Stimulus

(Sales Presentation)

Response (buy or no buy) Buyer’s decision

making process

Buying Process of Consumers and Business Buyers

Five – stage model for household 

customers Eight – stage model for business buyers

1 Problem / need recognition 1 Problem / need recognition

2 Characteristics and quantity  determination

3 Specification development

2 Information search / collection 4 Supplier search and qualification

5 Obtain and analyse supplier  proposals

Buying Situations Faced By

Household customers Business Buyers

• Routine decision-making • New task / New purchase

• Limited decision-making • Modified rebuy / change in

supplier

• Extensive decision-making • Straight rebuy / Repeat purchase

• Buying process and situations differ for household consumers and business buyers.

• Consumers / Buyers may skip or reverse some stages in buying process E.G. A consumer buying toothpaste

Knowledge of Sales and Sales-related

Marketing Policies

Sales Knowledge Marketing Policies

• Customer knowledge • Distribution policies

• Competitor knowledge • Promotional policies

Major reasons for giving above information / knowledge through training programmes to salespeople are:

• increase their self-confidence

• Meet customers’ expectations

• Increase sales

• Overcome competition

The Sales Process

As a part of selling activities, if salespeople follow the steps

or phases shown below, their chances of success are far better.

Prospecting &

Qualifying

Preapproach / Precall planning Approach Presentation & Demonstration

Follow-up &

Service

Trail close / Closing the sale

Overcoming Objections

• The sequence of above steps may change to meet the sales situation in hand.

• Some of the above steps may not be applicable for selling

to the trade

• We now discuss application of above steps to industrial selling

• Companies qualify sales leads by contacting them by mail

or phone to find their interests (or needs) and financial capacity

• Leads are categorized as: Hot, Warm, and Cool

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• Information gathering about the prospect.

Sources of information: the Internet, industrial directories, government publications, intermediaries, etc

• Precall planning

• Setting call objectives

• Tentative planning of sales strategy: which products, features and benefits may meet the customer needs

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• Make an appointment to meet the prospect

• Make favourable first impression

• Select an approach technique:

Presentation and Demonstration

There are four components:

• Understanding the buyer’s needs

• Knowing sales presentation methods / strategies

• Developing an effective presentation

• Using demonstration as a tool for selling

We will examine each of the above points

Understanding the buyer’s

Knowing Sales Presentation Methods/Strategies

Firms have developed different methods / styles / strategies of sales presentation

• Stimulus response method / canned approach

• It is a memorised sales talk or a prepared sales presentation

• The sales person talks without knowing the prospect’s needs

E.G. Used by tele-marketing people

• Formula method / formulated approach

• It is also based on stimulus response thinking that all prospects are similar

• The salesperson uses a standard formula – AIDA (attention, interest, desire, and action).

• It is used if time is short and prospects are similar

• Shortcomings are: prospects’ needs are not uncovered and uses same standard formula for different prospects.

Sales Presentation Methods

(Continued)

• Need – satisfaction method

• Interactive sales presentation

• First find prospect’s needs, by asking questions and listening

• Use FAB approach: Features, Advantages, Benefits

• Effective method, as it focuses on customers

• Consultative selling method / Problem-solving

approach

• Salespeople use cross-functional expertise

• Firms adopt team selling approach

• It is used by software / consulting firms

Developing an Effective

Presentation

Some of the guidelines are:

• Plan the sales call

• Adopt presentation to the situation and person

• Communicate the benefits of the purchase

• Present relevant and limited information at a time

• Use the prospect’s language

• Make the presentation convincing – give evidence

• Use technology like multi-media presentation

Using Demonstration

• Sales presentation can be improved by demonstration

• Demonstration is one of the important selling tools EGs: Test drive of cars; demonstration of industrial products in use

• Benefits of using demonstration for selling are:

• Buyers’ objections are cleared

• Improves the buyer’s purchasing interest

• Helps to find specific benefits of the prospect

• The prospect can experience the benefit

Overcoming Sales Objections /

Resistances

• Objections take place during presentations /

when the order is asked

• Two types of sales objections:

• Psychological / hidden

• Logical (real or practical)

• Methods for handling and overcoming

objections: (a) ask questions, (b) turn an objection into a benefit, (c) deny objections tactfully, (d) third-party certificate, (e) compensation

Trial close and Closing the

sale

• Trial close checks the attitude or opinion of the prospect, before closing the sale (or asking for the order)

• If the response to trial close question is favourable, then the salesperson should close the sale

• Some of the techniques used for closing the sale are: (a) alternative-choice, (b) minor points, (c) assumptive, (d) summary-of-benefits, (e) T-account, (f) special-offer, (g) probability, and (h) negotiation

Follow-up and

Service

• Necessary for customer satisfaction

• Successful salespeople follow-up in different ways: For example,

• Check order details

• Follow through delivery schedule

• Visit when the product is delivered

• Build long-term relationship

• Arrange warranty service

• How to prepare for negotiation?

(a) planning, (b) building relationship, (c) purpose

• Styles of negotiation

(a) I win, you lose, (b) Both of us win (or win-win style),

Key Learnings

• For understanding psychology in selling , study consumer or buyer behaviour, buying process and situations

• Salespeople are given knowledge of sales and relevant

marketing policies in order to increase their confidence and sales, and meet customers’ expectations

self-• Typical steps in the sales process include prospecting and qualifying, preapproach, approach, presentation and demonstration, overcoming objections, trial close / closing the sale, follow-up and service

• Salespeople should know when to negotiate, how to prepare for negotiation and which style of negotiation to use