Understanding Buyers How and why customers buy Module

Understanding Buyers – How and why customers buy Module 3

Understanding Buyers Starts with understanding yourself, …. . and being confident in what you are selling. Knowledge Bases: n Industry n Company n Product n Price and Promotion n Service n Market/Customer n Competitor n Technology

Adaptive Selling n Adaptive selling (Module 1 entails): n Gathering information about each customer n Observing customers’ reactions during the sales call n Being able to make rapid adjustments during the sales process/call/presentation n Tailoring the sales presentation to each customer’s social style

Understanding Social Styles n Assertiveness n n n Competitive Rapid movers Quick decision makers Initiative takers Time sensitive n Responsiveness n n n Friendly Talkative Approachable Less time sensitive Slower decision makers More sensitive to others’ feelings

Social Styles Matrix Analytical RESPONSIVENESS Low High Driver “What I need are practical suggestions” • Industrious • Persistent • Serious • Vigilant • Orderly “Show me bottom line results” • Determined • Demanding • Thorough • Decisive • Efficient Amiable Expressive “Show concern for me and my problems” • Supportive • Respectful • Willing • Dependable • Personable “I like competent, imaginative salespeople” • Personable • Stimulating • Enthusiastic • Dramatic • Inspiring Low High ASSERTIVENESS

Exercise: Mirror, Mirror on the Wall

Selling From The Customer’s Perspective n Three conditions constitute a quality buying experience: 1. Customers believe that salespeople’s assessments of their needs and expectations are good (from quality communication) 2. Customers experience fulfillment of these needs on a long-term basis due to the salespeople and the sales support team 3. When customer needs change suddenly, salespeople respond by making every effort to meet new needs

Selling to Prospects’ Needs and Wants – a starting point n The goal is to reach a common understanding between buyer and seller n This can only happen through the process of disclosure – the giving and taking of information n Do we share any background experiences? n Are our language skills, attitudes, and beliefs similar or dissimilar? n What assumptions have we made about each other based on stereotypes?

Uncovering Needs and Wants n Salespeople must: n Determine what will motivate the prospect to act (not necessarily a purchase) n Understand the goal orientation of the prospect n Assess and adapt to the style of the prospect

The Needs Gap – an example Desired State Produce 1, 250 Units Per Day Needs Gap 250 Units Per Day Actual State Produce 1, 000 Units Per Day

Types of Buyer Needs Situational Needs I need a copier now because I have a major project I need to complete. Functional Needs I need a copier that sorts and staples. Social Needs I need a state-of-the-art copier so I will be recognized as of the technology-savvy people in this company. Psychological Needs I need an extended warranty with a copier. Knowledge Needs I need comprehensive training on how to use a copier.

Complex Mix of Business Buyer Needs Functional Attributes “Must-Haves” Psychological Attributes “Delighters” 37% Level of Influence On Buyers’ Satisfaction Buyers’ Level of Satisfaction 63% Level of Influence On Buyers’ Satisfaction

Categories of Buyers Consumer Markets People (Personal Use) Manufacturers Business Markets Institutions/Governments Wholesalers, Retailers Non-Profit Organizations

Distinguishing Characteristics of Business Markets n Concentrated Demand n Derived Demand n Higher Levels of Demand Fluctuation n Purchasing Professionals n Multiple Buying Influences n Close Buyer-Seller Relationships

Buying Decision Process Recognition of the Need Determination of Desired Characteristics Description of Desired Characteristics Search and Qualification of Potential Sources Selection of an Order Routine Acquisition & Analysis of Proposals Performance Feedback and Evaluation of Proposals Selection of Suppliers

Discussion Question # 4 – p. 93

Multi-Attribute Model The base score The weight Assessment of Product or Supplier Performance (P) Assessing the Relative Importance of Each Characteristic (I)

Example of the Multi-Attribute Model Process Vinyl Fabric Characteristi c Performa nce Score Nylon Velvet Fabric Importan ce Weigh t Px. I Performa nce Score Importan ce Weigh t Px. I Comfort 5 9 45 8 9 72 7 8 56 8 8 64 10 6 60 1 6 60 Durability Guarantee Price Evaluation Score 217 260

Discussion Question # 6 – p. 93

Five Types of Risk in Purchasing Decisions 1. 2. 3. 4. 5. • Financial Social Psychological Performance Physical Understanding these are important for effective salespeople

Perceived Risk n In many sales situations, the most important perception to be dealt with is risk n Salespeople must provide evidence that their solutions will work, reducing perceived risk of the buyers decisions

Characteristics of the Three Types of Buying Decisions Straight Modified Rebuy Newness of Problem or Need Information Requirements Information Search Consideration of New Alternatives Multiple Buying Influence Financial Risks Low Minimal None Very Small Low Medium Moderate Limited Moderate New Task High Maximum Extensive Large High

Buying Center Members • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers The roles in the buying center work together to affect the outcome of the purchase decision.

Individual Factors Affecting the Buying Center