Personal Selling: Chapter 12


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Personal Selling: Chapter 12

  1. 1. Obtaining Commitment Chapter 12
  2. 2. Important Questions Answered How much emphasis should he placed on closing the sale? Why is obtaining commitment important? When is the best time to obtain commitment? Which methods of securing commitment are appropriate for developing partnerships? 2
  3. 3. Important Questions Answered► How should pricing be presented?► What should a salesperson do when the prospect says yes?► When the prospect says no?► What causes difficulties in obtaining commitment, and how can these issues be overcome? 3
  4. 4. Be A Winner Winners LosersPart of the Solution Part of the problem"It may be difficult but its "It may be possible but its too difficult"possible"Finds an answer for every Finds a problem with every answerproblem"Let me do it for you" "Thats not my job""Theres a green near every sand "There are two or three sand traps near everytrap" greenAlways has a plan Always has an excuse"Ill get it right next time." "It wasnt my fault.""If it is to be, its up to me." "I cant help it."Translate dreams into reality. Losers translate reality into dreams.Empower. Losers control"Lets find out." "Nobody knows." 4
  5. 5. What is a Close? •The process of helping people make a decision that will benefit them. Closing •You help them make that decision by asking them to buy. •A question or action designed to elicit a buying decisionAttempt to Close •The Prospect is Ready. the Sale •The prospect is in the "conviction stage" of When the mental buying process. 5
  6. 6. Perspectives on Closing Closing should be natural and easy It should be planned like the rest of the process Closing is integrated throughout the presentation. It is not a separate event Each point of agreement is a minor close. Failure to close comes from an inadequate performance in other areas 6
  7. 7. Obtaining CommitmentObtaining commitment occurs throughout the salesprocess, beginning With actions such as asking foran appointment and concluding with asking forthe sale. In a partnership sales result only when thebuyer is convinced that the decision to purchase iswise. Once needs are identified and satisfied,attempting to gain commitment is a logical part ofthe selling process. 7
  8. 8. OBTAINING COMMITMENT TODAYWithout a buyers commitment, no sale takes place.Also, buyers will rarely volunteer to make thepurchase, even when that decision is obviously theright thing to do. One company looks at a sale as"just another way of reaffirming the relationship,"meaning that commitment to the relationship ismore important than any single sale. 8
  9. 9. Part of The ProcessThe process of obtaining commitment occursthroughout the natural, logical progression of anysales call. Creeping commitment occurs when acustomer becomes committed to a particular courseof action throughout the buying process.Salespeople actually gain commitment repeatedly:when asking for an appointment, when checking tosee whether all of the customers needs have beenidentified, and when asking whether the prospectwould like to see a demonstration or receive aproposal. Commitment, of course, is more than justsecuring an order. 9
  10. 10. THE IMPORTANCE OF SECURING COMMITMENT Overall, gaining commitment tells the salesperson what to do next and defines the status of the client. Salespeople need to become proficient in obtaining commitment for several reasons. If they fail to obtain commitment, it will take longer to obtain a sale. Assuming the product truly satisfies the prospects needs, the sooner the prospect buys, the sooner she or he can realize the benefits of the product or service. The companys future success depends on goodwill and earning a profit. securing commitment results in financial rewards for the salesperson. 10
  11. 11. FINANCIAL TERMS AND CONDITIONSPrice is often the last element of the deal to bepresented and discussed. Yet it is often one of themost important factors when the buyer makes thedecision. The final price is really a function of theterms and conditions of the sale Factors that affectprice are the use of quantity and other discounts, aswell as credit and shipping terms. Figuring out thefinal actual price can be difficult, especially insituations with many options and packages ratherthan standardized products. 11
  12. 12. DISCOUNTS Discounts are given for many reasons and may be based on the type of customer, quantity purchased, or some other factor. The most common type of discount is the quantity discount. Quantity discounts encourage large purchases by passing along savings resulting from reduced processing costs. Businesses offer two types of quantity discounts:► Single-order discount► Cumulative discount. 12
  13. 13. CREDIT TERMSMost sales are made on a credit basis, with cashdiscounts allowed for early payment. These cashdiscounts are the last discount taken, meaning that ifa quantity discount is also offered, the cash discountis calculated after the quantity discount is taken off.A common discount is 2/10, n/30, which means thatthe buyer can deduct 2 percent from the bill if it ispaid in 10 days from the date of invoice. Otherwise,the full amount must be paid in 30 days. Anothercommon discount is 2/10, EOM, which means thatthe 10-day period begins at the end of the month. 13
  14. 14. SHIPPING COSTSThe terms and conditions of sale include shipping costs. The seller who quotes a free on board (FOB) price agrees to load the goods on board a truck, freight car, or other means of transportation. A great many variations exist in the use of FOB, but the term is used to specify the point at which the buyer assumes responsibility for both the goods and the costs of shipping them. Thus FOB destination means that the buyer will take responsibility for the goods once they reach the buyers location, and the seller will pay the freight. 14
  15. 15. PRESENTING PRICEPrice is often discussed at the end of the presentation simply because the salesperson may not know what that price will be until the final solution is agreed oil. Because price is so important to the buyer, it is worth considering how price should be presented. Most firms set prices after careful study of the competitors offerings, the value delivered by the product or service, and the cost of providing the product or service. For these reasons the price should represent a reasonable and fair picture of the products or services value. Therefore, never apologize for a price or present the price apologetically; rather, present it with confidence. 15
  16. 16. WHEN TO ATTEMPTTO OBTAIN COMMITMENTThe right time to attempt to gain commitment is when the buyer appears ready, as evidenced by buying signals. Some salespeople say that one psychological moment in each sales presentation affords the best opportunity to obtain commitment, and if this opportunity is bypassed, securing commitment will be difficult or impossible. This belief is not true, however. Seldom does one psychological moment govern the complete success or failure of a sales presentation. 16
  17. 17. Buying SignalsBuying signals, or indications that the buyer isready to buy, can be evidenced both in the buyerscomments and nonverbally. A buying signal isanything that a prospect says or does to indicatethat he is ready to buy. 17
  18. 18. Answering a Prospect’s Buying Signal 18
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  22. 22. BUYER QUESTIONS► If I do agree to go with this cooperative advertising program, do you have any ads already developed that I could use?► Do you have any facilities for training our employees in the use of the product?► How soon would you be able to deliver the equipment?► What do we do next? Not all questions signal a readiness to buy. But if the question concerns implementing the purchase and points toward when, not if, the purchase is implemented, the prospect is getting ready to buy 22
  23. 23. REQUIREMENTS Requirements are conditions that have to be satisfied before a purchase can take place.► We need a cash discount for a supply order like this.► We need to get this in weekly shipments. Requirements that are stated near the end of the presentation are need statements that reflect a readiness to buy when they relate to how the purchase will be consummated. 23
  24. 24. BENEFIT STATEMENTS Sometimes prospects offer their own benefit statements► Oh, I like the way this equipment is serviced-it will make it much easier on my staff.► Good, that color will match our office decor. Such positive statements reflect strong feelings in support of the purchase, a sign that the buyer is ready. 24
  25. 25. RESPONSES TO TRIAL CLOSES Salespeople can solicit such comments by continually taking the pulse of the situation with trial closes, or questions regarding the prospects readiness to buy. Throughout the presentation.► How does this sound to you so far?► Is there anything else you would like to know at this point?► How does this compare with what you have seen of competing products?buyers responses to such questions provide good guidance regarding when the salesperson should attempt to obtain commitment 25
  26. 26. NONVERBAL CUESNonverbal cues serve as important indicators of thecustomers state of mind. While attempting to gaincommitment, the salesperson should the use buyersnonverbal signals to better identify areas or concernand see whether the buyer is ready to commit. Facialexpressions most often indicate how ready the buyeris to make a commitment. Positive signals includeeyes that are open and relaxed, face and mouth notcovered with hands, a natural smile, and a relaxedforehead. The reverses of these signals indicate thatthe buyer is not yet ready to commit to the proposal. 26
  27. 27. Recognizing Buying Signals The CHEF TechniqueC Cheek or Chin •Stroking cheek or chin means satisfaction •Leaning forward and nodding •Open and Relaxed.H Hands •Plams Upward •Rubbing Hands means assumed ownership •Constant contact is goodE Eye Contact •Dilated eyes mean relaxation •Rolling or squinting means confusion or ire •SmilingF Friendliness •Relaxed •Casual conversation 27
  28. 28. Some verbal and non verbal buying signalsResistance •objections mean interest •How much is it? Verbal •How soon can I get it? Signals •Sounds good. •Whats the next step? •Nodding head •Leaning forward Gestures •Rubbing chin •Tugging ear •Reexamines product, sample or paperwork •Relaxes and become friendly. •Stopping just short of buying Other •Asking about price means they are sold on benefits •Reinforcing or agreeing with your ideas •Asks another persons opinion. 28
  29. 29. HOW TO SUCCESSFULLY OBTAIN COMMITMENT► To obtain commitment in a non manipulative manner, salespeople need to follow several principles.► Maintaining a positive attitude.► Letting the customer set the pace.► Being assertive instead of aggressive► Selling the right product in the right amounts. 29
  30. 30. MAINTAIN A POSITIVE ATTITUDECustomers like to deal with salespeople who have con­ fidence in themselves, their products, and their companies. On the other hand unnecessary fear can be a self fulfilling prophecy. The typist who fears making errors will make many; the student who fears essay exams usually does poorly; golfers who believe they will miss short putts usually do. So it is with salespeople: If they fear the customer will not accept their proposal, the chances are good they will be right. 30
  31. 31. LET THE CUSTOMER SET THE PACEAttempts to gain commitment must be geared to fitthe varying reactions, needs, and personalities ofeach buyer. Thus the sales representative needs topractice adaptive selling. Some buyers who react veryslowly may need plenty of time to assimilate thematerial presented. They may ask the same questionseveral times or show they do not understand theimportance of certain product features. In thesecircumstances the salesperson must deliver thepresentation more slowly and may have to repeatcertain parts. Trying to rush buyers is unwise whenthey show they are not yet ready to commit. 31
  32. 32. BE ASSERTIVE, NOT AGGRESSIVE The salesperson should be assertive.There are three types of salespeople► Aggressive► Submissive► Assertive 32
  33. 33. AggressiveAggressive salespeople control the sales interaction but often fail to gain commitment because they prejudge the customers needs and fail to probe for information. Too busy talking to do much listening, they tend to push the buyer too soon, too often, and too vigorously. They might say, I cant understand why you are hesitant, but they do not probe for reasons for the hesitancy. 33
  34. 34. SubmissiveSubmissive salespeople often excel as socializers. With customers they spend a lot of time talking about families, restaurants, and movies. They establish rap­port quite effectively. They accept the customers statements of needs and prob­lems but do not probe to uncover any latent needs or opportunities. Submissive salespeople rarely try to obtain commitment. 34
  35. 35. AssertiveAssertive salespeople are self-confident and positive. They maintain the proper perspective by being responsive to customer needs. Rather than aggressively creating new "needs" in customers through persuasion, they look for buyers who truly need their products and then use questions to acquire information. Their presentations emphasize an exchange of information rather than a one way presentation. 35
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  37. 37. SELL THE RIGHT ITEM IN THE RIGHT AMOUNTSThe chance of obtaining commitment improveswhen the right product is sold in the right amount.Although this principle sounds obvious, it often isnot followed. Customers have long memories; theywill refuse to do business with someone whooversells, and they may also lack confidence insomeone who undersells. The chances to obtaincommitment diminish rapidly when the salespersontries to sell too many or too few units or the wronggrade or style of product. 37
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  42. 42. DIRECT REQUEST The most straight forward, effective method of obtaining commitment is simply to ask for it, called the direct request method. It works best with decisive customers, such as drivers who appreciate getting down to business and not wasting time.► Can I put you down for 100 pairs of model63?► Can we meet with your engineer next Thursday to further discuss this?► Will you come to the home office for a hands-on demonstration?► Can you call the meeting next week?► Is it a deal? 42
  43. 43. Direct Requestask for the business •We can have it delivered by the end of the month if we can get a signed contract into the implementation department by Thursday. •Should I forward a contract so you can get started? •Would you like to try it for a quarter? •Has the advantage of clarity and •It’ll take a few weeks to process and ship simplicity. the order so if you’re interested in moving •Ask for the order in a forward, we should start the paperworkDirect straightforward manner. now.Appeal •Most direct closing approach and •Let’s get this off your plate and start theClose appeals to many buyers, especially paperwork. decisive people. •What do you think? •Should not come too early. •Let’s start the process so you can get •Highly effective when salesperson onto your other priorities. Sound good? has earned the customers respect. •Would you like to move forward? •Are you ready to get started? •Can we go ahead? •We can start the process today with a credit card if you’d like. •We can deliver it to you by the close of business tomorrow if you’d like 43
  44. 44. BENEFIT SUMMARYEarly in the interview salespeople discover or reiterate theEarly in the interview salespeople discover or reiterate theneeds and problems of the prospect. Then, throughoutthe presentation, they show how their product can meetthose needs. They do this by turning product or servicefeatures into benefits specifically for that buyer. As theypresent each benefit, they ask if that benefit meets theneed. When using this approach, called the benefitsummary method, the salesperson simply reminds theprospect of the agreed on benefits of the proposal. Thismethod simply helps the buyer to synthesize pointscovered in the presentation to make a wise decision. Oneadvantage of the benefit summary method over the directrequest method is that the seller can help the buyerremember all the points discussed in the presentation. 44
  45. 45. BENEFIT SUMMARY Summarize the products benefits in a positive manner so that the prospect agrees with what you are saying Then ask for the order. You can easily adapt Feature / benefit statements for your "summary" close. 45
  46. 46. BALANCE SHEET METHODBalance sheet method aids prospects who cannotmake a decision, even though no reason for theirbehavior is apparent. Such a prospect may be askedto join the salesperson in listing the pros and cons ofbuying now or buying later, of buying thesalespersons product or that of a competitor, or ofbuying the product or not buying it at all. However,this method can insult a buyers intelligence if usedinappropriately. . A more effective start may be tosimply draw a T on a plain piece of paper, placecaptions on each side of the crossbar, and leavespace below for the insertion of specific benefits orsales points. Then just ask the buyer to list pros andcons of making the purchase. 46
  47. 47. BALANCE SHEET METHOD► Often called the Ben Franklin close► Based on the process people go through when they make a decision► Weigh the cons against the pros.► The same as debits and credits, act or not act, etc..► Modified T-Account or Balance Sheet Close -- only list the reasons to buy. Some salespeople do not remind the prospect of any of the reasons not to buy as they attempt to close the sale 47
  48. 48. PROBING METHODIn the probing method salesperson initially attempt to obtain commitment by another method. If unsuccessful, the sales person uses a series of probing questions designed to discover the reason for the hesitation. Once the reason becomes apparent the sales people ask a what-if question. 48
  49. 49. ALTERNATIVE CHOICEIn many situations a salesperson may havemultiple options to present to a buyer. more time isspend on probing about budget and desires andthen only two options are shown at a time,explaining the key characteristics of each. Thisallows the customer to express a preference. 49
  50. 50. ALTERNATIVE CHOICE► Provides prospects with choice as a way of qualifying.► Allow customer to examine several different models and try to assess degree of interest in each one.► Cease showing new products when it appears that the prospect has been given ample selection.► Remove products that the prospect does not seem genuinely interested in.► Place unwanted products aside and concentrate on products the prospect seems to be definitely interested in. 50
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  53. 53. NO SURPRISESCustomers do not like surprises, so this is the time togo over any important information they will need tofully enjoy the benefits of the product or service. Givethe customer as much detail as possible to preparehim or her for that experience. No customer wants tobe kept waiting in the dark, not knowing whether heor she will ever get the new product. 53
  54. 54. CONFIRM THE CUSTOMERS CHOICECustomers like to believe they have chosenintelligently when they make a decision. Afterimportant decisions, they may feel a little insecureabout whether the sacrifice is worth it. Suchfeelings are called buyers remorse or postpurchase dissonance. Successful salespeoplereassure customers that their choice was judiciousOne way to help customers feel good about theirdecision is to assure them that they have made anintelligent choice 54
  55. 55. GET THE SIGNATURE The buyers signature often formalizes a commitment. Signing the order is a natural part of a well planned procedure. The signing should be treated as a routine matter. Ordinarily, the customer has decided to buy before being asked to sign the order. The salesperson needs to remember several important points.► Make the actual signing an easy, routine procedure.► Fill out the order accurately and promptly.► Be careful not to exhibit any excess eagerness or excitement when the prospect is about to sign. 55
  56. 56. SHOW APPRECIATIONAll buyers like to think that their business isappreciated even if they purchase only smallquantities. Customers like to do business withsalespeople who show that they want the business.Salespeople may show appreciation by writing thepurchaser a letter. This practice especially developsgoodwill after large purchases and with newcustomers. In some situations a small gift, such as apen with the selling companys name on it, may alsobe an effective thank you. Salespeople should alwaysthank the purchaser personally; the thanks should begenuine but not effusive. 56
  57. 57. CULTIVATE FOR FUTU RE CALLSIn most fields of selling, obtaining commitment is not the end of a business transaction; rather, it is only one part of a mutually profitable business relationship. Obtaining commitment is successful only if it results in goodwill and future commitment. Customers like to do business with salespeople who do not lose interest immediately after securing commitment. What a salesperson does after achieving commitment is called follow up. The point here is that the sale does not end with the customers signature on the order form. Effective selling means building relationships with customers, nor just going for the single sale. 57
  58. 58. REVIEW THE ACTIONS TO BE TAKENAn important step, particularly when commitment isto take the next step in the buying process, is toreview what each party has agreed to do. To bewelcomed on repeat calls, salespeople must beconsiderate of all of the parties involved in buying orusing the product. They must explain and review theterms of the purchase so no misunderstandings willoccur, and be sociable and cordial to subordinates aswell as those in key positions. In addition, the buyeror user must get the service promised. 58
  59. 59. Twelve Keys to a Successful Closing 59
  60. 60. After the Close•Confirm the sale when the buyer says yes:•Be sure all details related to the purchase agreement are completed•Check everything with buyer•Ask for signature if necessary.•Reassure customer and confirm •Pointing out that s/he has made the correct decision •Describe the satisfaction that will come with ownership of product or service•Thank customer for the order.•A follow-up thank-you letter is often appropriate.•Ask for referrals.•Provide after-sale service.•Leave Gracefully•Dont talk past the close 60
  61. 61. IF COMMITMENT IS NOT OBTAINEDNaturally, the salesperson does not always obtainthe desired commitment. The salesperson shouldnever take this situation personally (which is easiersaid than done). Doing everything right does notguarantee a sale. Situations change, and customerswho may have really needed the product wheneverything started may find that other prioritiesmake a purchase impossible. 61
  63. 63. WRONG ATTITUDESA fear that obtaining commitment will be difficultmay be impossible to hide. Some salespeople evenfail to ask for the sale because if they never ask, theywill never hear no. As a result, they always have moreprospects but fewer customers than everyone else.But all salespeople know they need to focus onobtaining commitment to keep their jobs. Somesalespeople display unwarranted excitement whenthey see that prospects are ready to commit. Asalesperson who appears excited or overly eager maydisplay nonverbal cues that suggest dishonesty or alack of empathy 63
  64. 64. POOR PRESENTATIONProspects or customers who do not understand thepresentation or see the bene­fits of the purchasecannot be expected to buy. The salesperson must usetrial closes and continually take the pulse of theinterview. A poor presentation can also be caused byhaste. The salesperson who tries to deliver a 60-minute presentation in 20 minutes may skim over oromit important sales points. Further, a salespresentation given at the wrong time or underunfavorable conditions is likely to be ineffective. 64
  65. 65. POOR HABITS AND SKILLSObtaining commitment requires proper habits andsome measure of skill. The habit of talking toomuch rather than listening often causes otherwisegood presentations to fail. Knowing when to quittalking is just as important as knowing what to say.Some salespeople become so fascinated by thesound of their own voice that they talk themselvesout of sales they have already made. A presentationthat turns into a monologue is not likely to retainthe buyers interest. 65
  66. 66. Research shows six common closing mistakes1.Talks too much. Doesnt ask enough questions.2.Over-controls the call; asks too many closed-end questions.3.Doesnt respond to customer needs with benefits.4.Doesnt recognize needs, gives benefits prematurely.5.Doesnt recognize or handle negative attitudes effectively.6.Makes weak closing statements, doesnt recognize when or how to close. 66
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  69. 69. DISCOVERING THE CAUSEThe real reasons for not obtaining commitment must be uncovered. Only then can salespeople proceed intelligently to eliminate the barriers. 69
  71. 71. MAINTAIN THE PROPER PERSPECTIVE Probably the inexperienced salespersons most important lesson is that when a buyer says no, the sales process has not necessarily ended. A no may mean► "Not now,"► "I need more information,"► "Dont hurry me,"► "I dont understand." An answer of no should be a challenge to seek the reason behind the buyers negative response. When an earlier visit has not resulted in commitment, careful preparation for succeeding calls becomes more crucial 71
  72. 72. RECOMMEND OTHER SOURCESA sales representative who uses the consultative sellingphilosophy may recommend a competitors product tosolve the prospects needs. When recommending othersources, the sales rep should explain why his or herproduct does not meet the prospects needs and thenprovide the name of the competitive product. Onesalesperson for a welding supply company keeps acurrent list of competitive products. After recommendingother sources, the salesperson usually should ask theprospect for names of people who might be able to buythe sellers product. Also, the salesperson shouldemphasize the desire to maintain contact with theprospect in the event the sellers firm develops acompetitive offering. 72
  73. 73. GOOD MANNERS ARE IMPORTANTIf obtaining commitment fails for any reason, thesalesperson should react good naturedly. Salespeoplehave to learn to accept no if they expect to call onprospects again. Even if salespeople do not obtaincommitment, they should thank prospects for theirtime. Arguing or showing disappointment gainsnothing. The salesperson may plan to keep incontact with these prospects through an occasionalphone call, a follow-up letter, or product literaturemailings. 73
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  76. 76. When You Dont Make The Sale•Recognize hopeless selling situations•Avoid doing or saying anything that will jeopardize the relationship established •Do not take the buyers denial personally •It was a business decision that the buyer made given the circumstances.Act Professional •The proper handling of a no-sale situation actually helpsAct Adult build a sound business relationship with your customers. •Ask why you lost out - learn from your successes and no-sales. •In some situations, it is proper to reopen the presentation. •Do everything possible to help customer make anPrepare prospect for shopping intelligent comparison.the competition •Review strong points of product, giving special emphasis to areas in which product has superior advantage over competition.•Never treat the lost sale as a defeat.•Do not use selling methods that are unethical and/or illegal. 76
  77. 77. Analyze Lost Sales•A lost sale can be a learning experience.•Take a good, objective look at presentation and try to identify weaknesses•Consider how to avoid this problem in the future.•Salvage as much as possible from the experience•Dont give up too soon.•Callbacks are very common, especially in the field of industrial selling. •Your sales managerDiscuss the •Your fellow salespeoplelost sale with •Other people who understand the selling and buying process. •Personal information - family, hobbies, andPrepare for a so forth.possible return •Company information - if selling to ancall by individual buyer, company information isrecording information. quite valuable. •Purchase priorities - every prospect has unique purchase priorities. 77
  78. 78. BRINGING THE INTER­VIEW TO A CLOSEFew buyers are interested in a prolonged visit afterthey commit. Obviously, the departure cannot beabrupt; the salesperson should complete theinterview smoothly. Goodwill is never built bywasting the buyers time after the business isconcluded. Remember that most sales take severalcalls to complete. it is important that you follow uppromptly with a thank-you and reminder note afterthe sales call. 78
  79. 79. End of Chapter 12
  80. 80. Thank you