Leadership, Attitude, Performance...making learning pay! Set Your Sales. The Selling Process

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1 AP Selling Set Your Sales Leadership, Attitude, Performance...making learning pay! Objective LAP 126 Performance Indicator: SE:048 The Selling Process Route to sales success Six simple phases What your customer needs Set Your Sales LAP-SE-126-CS 2012, MBA Research and Curriculum Center 1

2 Sell Job Selling is a complex process that varies across industries, products, and customers. Whether you re selling cars, clothing, education, or pharmaceuticals, you will be using the selling process. The Selling Process Digital Vision/Digital Vision/Thinkstock Think about some of the products you use or come into contact with on a consistent basis. Laundry detergent, light bulbs, furniture, television programs, medical care, car insurance the list could go on forever. You might not realize it, but there is a selling process in place that brought each of these products to you, either directly or through the businesses that purchased them and resold them to you. This required a certain amount of preparation, skill, and hard work on the part of the salespeople involved. Most salespeople follow the same basic selling process, although it varies greatly from product to product. Learn more about this process, how it s used, why it s important, and how it differs among products and customers. Objectives Explain the nature of the selling process. Describe similarities and differences in the use of the selling process. 1. Preparing to sell 2. Establishing relationships with customers 3. Discovering customer needs 4. Prescribing solutions to customer needs 5. Reaching closure 6. Reaffirming buyer-seller relationships Importance of using the selling process While there are salespeople who can be successful without following a set of logical steps in the selling process, a step-by-step method has been considered the traditional road to effective selling. Reasons for adopting the selling process as the preferred sales approach include the following: An efficient, effective sales process may increase company profits. Salespeople appear organized, gaining customer confidence. The process ensures that customers needs and wants are met. Components of the selling process Keep in mind that there is no one, single, correct selling process for all situations, but a general understanding of the process can be applied to any selling experience. The selling process consists of several phases which should be performed consecutively. These phases include 1. preparing to sell, 2. establishing relationships with customers, 3. discovering customer needs, 4. prescribing solutions to customer needs, 5. reaching closure, and 6. reaffirming buyer-seller relationships. Each phase is important and contributes to accomplishing the salesperson s goal of making the sale. 2 LAP-SE-126-CS 2012, MBA Research and Curriculum Center Set Your Sales

3 Preparing to sell No matter what product s/he is selling, no salesperson can sell without preparation. The first thing a salesperson must do is acquire knowledge about the product. In some situations, this could be a lengthy and involved process. For example, insurance agents receive a great deal of education about their products and even go through a licensing procedure while they re acquiring knowledge for selling. On the other hand, a salesperson acquiring knowledge about a restaurant s menu items may be able to do so sufficiently during a week or two of training. Another aspect of preparing to sell is being able to identify the product s features and benefits. It s not enough for the insurance salesperson to know that a certain life-insurance policy costs $350 per year. S/He must also know that this translates into a $500,000 benefit for the policy s beneficiary if it is used. The restaurant server needs to know what comes on a certain salad (the salad s features), but s/he must also know why the salad is great for customers who are watching their caloric intake (the salad s benefits). In certain cases, salespeople also need to generate and qualify sales leads. This means that they must do the legwork to find potential customers and then determine if those customers are likely to need or want the product and have the ability to buy it. For business customers, qualifying a lead also means making sure that your contact within the company has the authority to make the purchase; otherwise, the salesperson can waste a lot of time. An insurance salesperson selling term life insurance would understand that the product is appropriate for customers under the age of 50. Therefore, s/he would not qualify customers over that age as potential sales leads for this product. A restaurant server, in contrast, doesn t need to generate or qualify leads. When generating and qualifying leads, the salesperson should try to learn as much as s/he can about the business or the personal characteristics of the customer. For example, knowledge of a company s size, purchasing practices, location, and decision makers is helpful in understanding its nature. It can be of great benefit to know how a company operates. Furthermore, learning about the individuals with whom the salesperson will be in contact will aid in establishing good rapport with that customer. The salesperson should try to learn the person s name, position, age, education, experience, hobbies, etc. Many times, just getting to know the right person at a company and getting a foot in the door with a sales appointment make all the difference. The last part of preparing to sell is planning the sales presentation. In many selling situations, the salesperson must have a pitch ready to give customers more information about the product, point out its benefits, and convince them to buy. The salesperson may prepare a general presentation that s/he tailors to fit each individual customer. The presentation could be as elaborate as a representative from a manufacturing firm bidding on a milliondollar government contract or as simple as a hardware-store employee telling you which brand of paint is best. Establishing relationships with customers The completion of a sale is largely determined by the first few minutes that a salesperson spends with his/her customers. During this time, the company may gain a valuable customer for years to come or lose a customer forever. Salespeople can use their initial contact time with customers to: Put customers at ease. Encourage customers to want to hear about the product(s). During the first few minutes that a salesperson spends with her customers, she should put customers at ease and determine what approach to take during the sales presentation. Gain customer confidence. Create favorable impressions of themselves and the business. As a salesperson, your first few minutes with the customer also gives you the chance to size up the customer so that you can adjust your approach to fit that individual. You ll soon find that some customers are not actually aware of their needs, while others know exactly what they want. Your job is to try to determine what buying decisions have been made by the customer. To do this, look for clues to the customer s personality, including general appearance, dress, and nonverbal signs. Set Your Sales LAP-SE-126-CS 2012, MBA Research and Curriculum Center 3

4 Discovering customer needs The third phase of the selling process involves discovering customer needs and wants. When customers do not know precisely what they are looking for, the salesperson must be prepared to discover their needs through skillful questioning and careful listening. Each salesperson can develop her/his own way of determining customer needs. One thorough approach that you might try is: 1. Asking the customer questions 2. Listening to the answers 3. Observing customer reactions 4. Analyzing customer reactions and comments This approach will enable you to tailor your sales presentation based on specific information gathered from the customer. Assessing customer needs is also important because it: Reduces the amount of selling time required Reduces dissatisfaction and customer returns Allows salespeople to serve more customers, leading to greater potential profit for their firm and greater potential commission for themselves Determining customer needs can be thought of as a diagnosis. Like a doctor diagnosing patients illnesses based on their symptoms, the salesperson diagnoses customers needs based on the information they ve provided. When selling office copy equipment, for instance, the salesperson should determine such things as the customer s volume of copying, types and sizes of materials to be copied, copier capabilities desired, etc. And, when selling clothes, the salesperson should determine such things as the occasion for which the clothing will be worn, the date of the occasion, the fabric and style desired by the customer, etc. After all, a customer shopping for a prom dress has much different needs than a customer shopping for a swimsuit. After listening to and questioning the customer, the salesperson is ready to recommend a specific product that meets the customer s needs. Prescribing solutions to customer needs The fourth phase of the selling process is the prescription phase. The salesperson should now offer solutions to the customers needs based on the diagnosis that s/he has made for a particular customer. The prescription phase includes the sales presentation (prepared in the first phase), which often consists of two parts the sales talk and the product demonstration. The sales talk should convince the customer of the benefits to be derived from purchasing the product. Throughout the talk, the salesperson must translate product features into benefits that meet the buyer s specific needs. For instance, if the office-equipment salesperson has determined that the customer needs a copy machine that makes color copies, the salesperson would focus on color copiers that also satisfy the customer s other copying needs. A good product demonstration should create interest and allow the customer to interact and become involved in the selling process. The customer should be able to ask questions and discuss important points to clarify photos, computer demonstrations, or videos the salesperson is using to help him/her understand product benefits. This is especially true for products that are large 4 LAP-SE-126-CS 2012, MBA Research and Curriculum Center Set Your Sales

5 or intangible, such as factory machinery or a private security service. However, if possible, the salesperson should get the product into customers hands to show them how it works. In other words, it helps to appeal to their senses. Here are some basic guidelines for prescribing solutions to needs: Sell the benefits of the product rather than its features. Show the customer a limited number of products to avoid confusion. Show only products that relate to customers specific needs. Concentrate on the main item of interest to close the sale. Keep these guidelines in mind, and they will help to focus your sales presentation. Reaching closure Reaching closure is the fifth phase of the selling process. Many salespeople feel that the closing actually has two purposes identifying any remaining objections (resistance) the customer may have and getting the order. An objection is a question or concern raised by customers after they have been shown a product. For example, after listening to a lawn-care service sales representative discuss his/her firm s capabilities, a customer may express concern about how the chemicals will affect the family pet. Salespeople should anticipate objections and learn to use them to their advantage in a sales presentation. Some tips for handling objections are: Welcome them! Clearing up objections can serve as a chance for you to demonstrate your knowledge and further solidify the product s benefits. Listen from the customer s point of view to identify the real objection. Restate the objection to be sure that you understand it. Answer and overcome each objection completely, without arguing with the customer or losing your poise. Review customer benefits. Try to develop customer conviction for the product. When customers are satisfied that their objections have been satisfactorily addressed, they often give off signals that the time has come to close the sale. These signals may be direct statements such as, This is just what we need, or nonverbal signs such as closing and stacking product literature. Generating sales leads can be an important part of the selling process for many salespeople. Often, this task is not easy to complete. Some companies make unsolicited calls to prospective customers (referred to as cold-calling ) in an attempt to generate potential sales leads. Though this practice might actually annoy some customers, it isn t necessarily unethical, unless the customer has specifically requested not to be contacted by the company. However, some companies and salespeople disguise their cold-calling as requests for information similar to market research. A potential customer may believe that s/he is answering survey questions, when, in fact, s/he is giving information that the salesperson may use to qualify him/her as a sales lead. This clever technique may give the salesperson a leg up in the selling process, but is it ethical? What do you think? The close is the logical completion to an effective sales presentation. Essentially, customers are moved to the point where they are convinced the product meets their needs, and they wish to purchase it. When customers have made it clear that they are ready to buy, the salesperson must complete all the necessary forms and paperwork. The nature of the paperwork can vary from a simple sales slip to a complex contract. Set Your Sales LAP-SE-126-CS 2012, MBA Research and Curriculum Center 5

6 The actual closing of a sale is something with which many salespeople have difficulty. As a salesperson, you must remember that you will usually need to ask the customer to buy. Few will do so without being asked. No sale is final until the customer signs on the dotted line either figuratively or literally. Reaffirming buyer-seller relationships The final phase in the selling process is reaffirming the buyerseller relationship. During this phase, the salesperson is responsible for helping customers feel confident with their purchase decisions. To do this, salespeople can follow up the sale to reassure customers that they have not been sold something that they do not need. A good sales representative uses various techniques to follow up the sale. These techniques include the following: Reassuring the customer that his/her choice was wise. Simply stating, This is the best product for your needs will be reassuring to the customer. Using suggestion selling. Recommending complementary products, such as shirts and ties for a suit, helps to cement the buyer-seller relationship. Answering any lingering questions the customer may have. Final questions, perhaps about proper product maintenance, should be answered completely. Explaining the sales contract fully. Taking the time to review contract details will reassure the customer that you are concerned s/he understands all facets of the sale. Checking on or being present when the product is delivered. By being present or checking on the delivery of a product, salespeople can reaffirm their reliability. Supervising installation or adjustment of the product. Supervising installation will indicate your desire for everything to be just right for the customer. Training the customer s personnel in the use or sale of the product. By assisting with training, salespeople display their commitment to the customer s needs. Calling the customer to ensure s/he is satisfied. A brief phone call to ensure that the customer is pleased and to express appreciation for the sale requires little effort, yet builds a significant amount of goodwill. Effective follow-up serves to reaffirm the buyer-seller relationship and can help to nurture and maintain this relationship after the initial sale. This may lead to repeat sales. Summary Selling is a complex process that varies across industries, products, and customers. Using the selling process gains customer confidence, ensures that customer needs are met, and increases profits for the company. There is no one, single, correct selling process for all situations, but a general understanding of the process can be applied to any selling experience. The selling process consists of several phases which should be performed consecutively. These phases include preparing to sell, establishing relationships with customers, discovering customer needs, prescribing solutions to customer needs, reaching closure, and reaffirming buyer-seller relationships. 1. Why is using the selling process important? 2. List the six phases of the selling process. 3. How do salespeople prepare to sell? 4. How do salespeople establish relationships with customers? 5. Why is it important to discover customer needs? 6. Describe the two parts of a sales presentation. 7. What are three ways that salespeople can address customer objections? 8. What are four ways that salespeople can follow up on a sale? 6 LAP-SE-126-CS 2012, MBA Research and Curriculum Center Set Your Sales

7 The Same But Different The emphasis that each phase of the selling process receives varies according to the product being sold and the customer. Though the basic steps are the same for all salespeople, specific methods vary. Let s take a moment to consider both the similarities and differences in the way the selling process is used. Similarities in the use of the selling process Across industries, products, and clients, similarities in the use of the selling process are apparent. The second phase of the process, establishing relationships with customers, is essential for all salespeople. Both retail and business-to-business salespeople must make initial contact with the customer. Setting the customer at ease and establishing a positive tone for the selling relationship are critical for success in both types of selling. All salespeople need to discover customer needs and wants. In a brief period of time, a retail shoe salesperson must determine the type and size of shoes a customer needs. A sales representative for a heavy-machinery manufacturer must also determine customer needs but may have more time in which to do it. Nearly all salespeople must attempt to fulfill customer needs by recommending specific products. Consider the real-estate agent who seeks to match a client s housing needs with an ideal property on the market. The same is true for a plastic-material sales representative attempting to meet a toy manufacturer s requirements. All salespeople attempt to close the sale. For example, a furniture salesperson and a stockbroker both have to handle any last minute objections raised by customers, close the sale, and complete the appropriate forms and paper work. The final phase of the selling process, reaffirming the buyer-seller relationship, is essential to all sales situations as part of relationship building. By taking the appropriate follow-up measures, a textbook sales representative can ensure that professors are satisfied with the textbooks they ve chosen. The same is true for retail salespeople who sell expensive products. A follow-up letter or phone call can go a long way toward reassuring customers of their purchase decisions. Even if a retail salesperson is unlikely to see the same customer again, s/he can still contribute toward relationship building between the customer and the business. Differences in the use of the selling process Although the selling process comes into play in all sales situations, salespeople will need to modify the process from time to time. The first phase of the selling process, preparing to sell, is the phase that differs most drastically among sales situations. The amount and type of preparation varies considerably according to the sales situation. Consider the differences between selling clothing to customers in a department store and selling costly computer systems to medium-sized businesses. The retail salesperson will probably do very little, if any, generating and qualifying sales leads, while the computer sales representative may devote a lot of effort to these tasks. Other factors that affect the selling process include the nature of the product and the type of customer to whom you are selling. The nature of the product. A product s cost, size, and physical existence will influence the selling process that a salesperson uses. Let s take a look at a few examples: Customers may raise more objections when buying expensive products than less expensive items. This will make the close more difficult and will require additional follow-up to satisfy the client. Home sales require the salesperson to take the customer to the product, increasing the time required for the sales presentation and the close. On the other hand, samples of smaller products, such as office supplies or cosmetics, can be brought to the customer and effectively demonstrated for an immediate sale. When selling intangible products such as insurance, financial products, or interior-design services, salespeople often spend more time establishing relationships, determining needs, and prescribing solutions than they would if they were selling tangible products. Set Your Sales LAP-SE-126-CS 2012, MBA Research and Curriculum Center 7

8 The nature of the customer. Generally, retail salespeople tend to spend little or no time generating and qualifying leads, establishing relationships, or determining customer needs. This is not because they don t care about their customers, but because customers frequently know what they want and simply desire to make the purchase. Customers purchasing frequently bought items of clothing, such as socks, require little sales assistance. On the other hand, salespeople who sell insurance or flooring may spend additional time generating and qualifying leads. These salespeople may try, for instance, to locate families with newborn children who may need additional life insurance or new homeowners who may be in the market for carpet or tile. When selling to a business in an office or industrial setting, the time spent in each phase, especially making initial contact and discovering needs, is likely to be far greater than in retail selling. For example, selling high-priced office equipment places different demands on the selling process. Selling these products requires salespeople to pay additional attention to locating customers for these machines, to understanding the particular needs of customers, and to following up after the sale. Salespeople must understand that business customers have different buying motives than individual customers. A business customer purchases products to fill specific, black-and-white company needs, whereas a retail customer might purchase an item because s/he saw it and just fell in love with it. In other words, individual customers fulfill wants more often than businesses do. In addition, selling to businesses often means selling an entire group or department of people on a product, not just one individual customer as in retail selling. It s not hard to see why selling to businesses generally requires more time spent in each phase than selling to retail customers. Summary There are similarities as well as differences in the way the selling process is used. All salespeople establish relationships with customers, discover needs and wants, recommend products, attempt to close the sale, and reaffirm relationships. However, the amount of time spent in each phase, especially preparing for the sale, varies according to the nature of the product and the nature of the customer. In general, selling to businesses takes longer than selling to retail customers. Jupiterimages/Liquidlibrary/Thinkstock Jupiterimages/Photos.com/Thinkstock 1. Describe at least two similarities in the use of the selling process. 2. Explain how the selling process differs according to product and customer. Think about how the selling process affected the last product you bought. How did the salesperson prepare to sell you the product? How did s/he establish a relationship with you? What about discovering your needs and prescribing a solution? What did s/he do to close the sale? Did s/he take any steps after the sale to reaffirm a relationship with you? How can this experience teach you about the selling process for the future, when you may be the salesperson? 8 LAP-SE-126-CS 2012, 1375 MBA King Research Avenue, and P.O. Curriculum Box 12279, Center Columbus, Ohio Ph: (614) Fax: (614) Set Your Sales Details: Copyright 2012, by MBA Research and Curriculum Center