Understanding Buyers – How and why customers buy

1. Understanding Buyers – How and why customers buy Chapter 3

2. Understanding Buyers Starts with understanding yourself,…..and being confident in what you are selling. Knowledge Bases (from Chapter 2): • Industry • Company • Product • Price and Promotion • Service • Market/Customer • Competitor • Technology

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

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

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

6. In-Class Exercise: I’ll Cook His Goose!

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

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

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

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

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

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

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

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

15. Buying Decision Process Recognition ofthe Need Search and Qualificationof Potential Sources Selection of anOrder Routine Determination of Desired Characteristics Acquisition & Analysisof Proposals Performance Feedback and Evaluation Description ofDesired Characteristics Evaluation of ProposalsSelection of Suppliers

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

17. Chapter Case – p. 75

18. Example of the Multi-Attribute Model Process

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

20. Five Types of Risk inPurchasing Decisions • Financial • Social • Psychological • Performance • Physical • Understanding these are important for effective salespeople

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

22. 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.

23. Individual Factors Affecting the Buying Center