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How buying works

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Knowing how buying works help you sell better. This is a presentation I made 1.5 years ago on that topic. My humble attempt at deconstructing the buying process.

Published in: Sales
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How buying works

  1. 1. How Buying Works a guide into your customer’s mind and how you can use it to your advantage
  2. 2. 2
  3. 3. 3
  4. 4. 4
  5. 5. Know your audience HOW BUYING WORKS Know yourself HOW SELLING WORKS 5 Effective Selling
  6. 6. Stages of Buying of the problem Awareness about options Research of options Evaluation $$$ Negotiation & Purchase Post-Purchase 6
  7. 7. Awareness Research Evaluation Post-purchase 7 The Mind of a Buyer Certainty Pressure 😓 Hope Frustration 😡 Clarity Self-doubt 🙄 Determination Anxiety 😥 Satisfaction Remorse 😦 Negotiation & Purchase
  8. 8. 8 + =+ Winning Combination
  9. 9. But before that… …let check out some basics of buying
  10. 10. Buying Basics because they need it Why when they need it When product / service / mix of both What stages of buying How prospects and customers Who marketplace Where 10
  11. 11. Buyer who hasn’t purchased from you before PROSPECT CUSTOMER 11 prospects and customers Who Buyer who has purchased from you before
  12. 12. Single Buyer INDIVIDUAL BUYER Group of Buyers ORGANIZATION 12 prospects and customers Who B2C - Business to Consumer B2B - Business to Business
  13. 13. 13 Who
  14. 14. 01 03 02 04 ECONOMIC / FINANCIAL BUYER Concerned about cost and saving USER / CHAMPION Concerned about whether the product will fulfil the purpose and make his life easier Also, champions your cause internally TECHNICAL BUYER Concerned about installation and quality EXECUTIVE Concerned about strategic advantage, bigger picture 14 Types of Buyers - Recap prospects and customers Who
  15. 15. Case Study SLIPKART PLANNING TO BUY A NEW PAYROLL MANAGEMENT SOFTWARE Slipkart been using Excel sheets to maintain salary records and it has worked well till now. However, as the organization crossed 200 people last month, the Payroll Manager, Mr H.R. Vella is unable to manage the payroll on Excel. It is very difficult to input the sales team’s incentives manually every month and there are lot of errors as well. Last month, 6 employees had wrong TDS deducted from their salary. To make his life easier, he has proposed to the management at Slipkart to buy a new payroll management software. The management weren’t convinced but agreed to look at some solutions is they were not too costly. Their Procurement Manager, Mr Kan Joos, invited bids for this purchase. 4 companies placed their bids. But Mr Joos was concerned because all of them exceeded Slipkart’s budget. However, he didn’t reject them. Mr Joos decided to call in the Head of IT, Mr U.S.B. Dongle, to see whether this system can sync well with the current Finance software used at Slipkart. Mr Dongle studied the technical proposals from all parties and now wants a demo from 3 of them. Mr Vella is really worried because if this doesn’t go through, his life will become hell. To help his case, he has called all 4 companies and given some tips and hints to their representative so that they can demonstrate their capabilities better. Identify the Economic Buyer, The User /Champion, The Technical Buyer and The Executive 15 prospects and customers Who
  16. 16. CUSTOMER
 May or may not be the end-user of the product Normally used for buyers of low- consideration items like grocery, medicine, etc Relationship with buyer may or may not be long term CLIENT
 May or may not be the end-user of the product Normally used for buyers high- consideration items like advertising, consulting, etc Continued relationship with buyer that is nurtured over a period of time CONSUMER
 End-user of the product Term normally used by marketeers, rarely by salespeople 16 prospects and customers Who
  17. 17. 17 because they need it Why Saving money or making money Profitability Faster, stronger, more convenient, efficient, etc Productivity How does the buyer want to be seen? Image
  18. 18. 18 Why
  19. 19. Product or Service? Airtel 4G Product or Service? Construction Product or Service? Groceries Product or Service? Lawyers 19 product / service / mix of both What
  20. 20. PERISHABILITY 01 Inventory HETEROGENIETY 02 Uniformity INTANGIBILITY 03 Touch and feel OWNERSHIP 04 Transfer? 20 product / service / mix of both What Product Service
  21. 21. What is the Product / Service? PVR Flipkart Fine-Dining Restaurant Cobbler (Mochi) 21 product / service / mix of both What What is the Product / Service? What is the Product / Service? What is the Product / Service?
  22. 22. 22 + + marketplace Where GOODSBUYERS SELLERS Marketplace
  23. 23. 23 marketplace Where Marketplace
  24. 24. 24
  25. 25. 25 AVAILABILITY when they need it When AFFORDABILITY ACCESS
  26. 26. Time for Break 10 mins stages of buying How
  27. 27. 27 stages of buying How of the problem Awareness about options Research of options Evaluation Negotiation & Purchase Post-Purchase $$$ Buyer 2.0 a.k.a “Hamara Baap"
  28. 28. 28 How
  29. 29. 01 DELAYS INVOLVEMENT OF SELLER 02 HIGH RISK AVERSION 03 DEMANDS GREATER TRANSPARENCY 04 MORE PEOPLE INVOLVED IN THE BUYING PROCESS 29 Buyer 2.0 01 03 02 INTERNET MILLENIAL UNPREDICTABLE ECONOMIC TRENDS
  30. 30. 30 stages of buying How of the problem Awareness about options Research of options Evaluation Negotiation & Purchase Post-Purchase $$$ If you can reach the prospects at this phase, you have a chance to influence the rest of the process! On what occasions do people use your service / product? How do you get information about such people? Use Case Analysis 01 02
  31. 31. 31 stages of buying How of the problem Awareness about options Research of options Evaluation Negotiation & Purchase Post-Purchase $$$ Individuals: • Moved cities • Dissatisfied with current connection • Lost phone + SIM • Young adults buying first phone Businesses: • Opening new branches • Hiring more employees • 01 02 Mobile Connection Individuals: • Movers & Packers? • Stand outside the competitors outlet? Businesses: • Visit branch construction site? • liaise with HR? If you can reach the prospects at this phase, you have a chance to influence the rest of the process!
  32. 32. 32 stages of buying How of the problem Awareness about options Research of options Evaluation Negotiation & Purchase Post-Purchase Bank Account Graphic Design Services Pressplay Ads Use Case Analysis 01 02If you can reach the prospects at this phase, you have a chance to influence the rest of the process!
  33. 33. Awareness 33 Uh oh! Trouble! How serious is the problem? Who will it affect? Who will it not affect? Was it my fault? What impact does it have on our business? Have I identified the problem correctly? Symptom or Problem? Can I fix it myself? Now or later? Is there more to it than meets the eye? Do I need to call in a professional to fix this? Will the solution be expensive? How much time will it take to fix? Will it get fixed partially or completely? Will it recur after fixing? In how much time? Problem Definition ++
  34. 34. Awareness 34 Problem Definition ++ What you think is going on in the buyer’s mind What’s actually going on in the buyer’s mind
  35. 35. Awareness 35 Uh oh! Trouble! How serious is the problem? Who will it affect? Who will it not affect? Was it my fault? What impact does it have on our business? Have I identified the problem correctly? Symptom or Problem? Can I fix it myself? Now or later? Is there more to it than meets the eye? Do I need to call in a professional to fix this? Problem Definition ++ Conversation points Answer these questions Help define the problem Build trust
  36. 36. 36 Research “Referrals" stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research
  37. 37. 37 FEATURE 01 FEATURE 02 FEATURE 03 FEATURE 04 PRICE PAYMENT TERMS DELIVERY TIME W3 W7 W4 W6 W1 W5 W2 Decision Making Criteria stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Criteria Weight
  38. 38. 38 How
  39. 39. 39 Research Audi A4 , 35 TDI Premium Sport + Sunroof BMW 3 Series, 320 D Sports Line Mercedes-Benz C Class, C 220 CDI Avantgarde stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Top 5 Criteria Weight (Sum = 100%)
  40. 40. 40 Will I get the solution to my problem? How many options will I get? Will I find something nearby? Will they be too expensive? All of them seem to be the same? How do I differentiate? All of them look different? How will i compare them apple-to- apple? Some of them don’t solve the problem completely. Do I need a combination of both? Some of them have provided enough information. How frustrating! The website looks cheap. Will their service be up to the mark? What if one of them has monopoly and overcharges? Options and Doubts ++ Research
  41. 41. 41 What you think is going on in the buyer’s mind What’s actually going on in the buyer’s mind Research Options and Doubts ++
  42. 42. 42 Research Conversation points Answer these questions Help erase doubts Build trust Options and Doubts ++ Will I get the solution to my problem? How many options will I get? Will I find something nearby? Will they be too expensive? All of them seem to be the same? How do I differentiate? All of them look different? How will i compare them apple-to- apple? Some of them don’t solve the problem completely. Do I need a combination of both?
  43. 43. 43 Evaluationstages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach 01 02 03 04 05 06
  44. 44. 44 Proposalstages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach
  45. 45. 45 Proposalstages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach
  46. 46. 46 Proposalstages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach Scope of work / Product Options Exclusions Price + Validity Payment Terms Delivery Schedule After Sales Contract / Maintenance Contract Others (warranty, etc)
  47. 47. 47 Proposalstages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach
  48. 48. 48 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach
  49. 49. 49 How
  50. 50. 50 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach FEATURE 01 FEATURE 02 FEATURE 03 FEATURE 04 PRICE PAYMENT TERMS DELIVERY TIME W3 W7 W6 W1 W5 W2 Criteria Weight ∑ Cn x Wn Audi A4 BMW 3 Series Mercedes-Benz C Class What’s your pick?
  51. 51. 51 I think service A is better than B. But i’m not a 100% sure. What do I do? Option A is faster but Option B is cheaper. Which one should I select? How do I decide how much weight to give to each feature? One of these seems to be better than the other but is charging too much premium. Will they be ready to negotiate? Both services claim that they are India’s #1 brand. Which one is telling the truth? Hope and Indecision ++ Evaluation Both seem to have similar features. Which one is better? One seems to be better at feature A while the other at feature B. How do I decide?
  52. 52. Evaluation 52 What you think is going on in the buyer’s mind What’s actually going on in the buyer’s mind Hope and Indecision ++
  53. 53. 53 Conversation points Answer these questions Help decide Build trust Hope and Indecision ++ How do I decide how much weight to give to each feature? One of these seems to be better than the other but is charging too much premium. Will they be ready to negotiate? Both services claim that they are India’s #1 brand. Which one is telling the truth? Both seem to have similar features. Which one is better? One seems to be better at feature A while the other at feature B. How do I decide? Evaluation
  54. 54. Time for Break 10 mins stages of buying How
  55. 55. 55 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Price, Terms & Conditions of Sale Contract Paperwork Payment $$$ Negotiation Delivery of service / goods
  56. 56. 56 How 01
  57. 57. 57 How 02
  58. 58. 58 How 03
  59. 59. 59 How 04
  60. 60. 60 How 05
  61. 61. 61 How 06
  62. 62. 62 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Price, Terms & Conditions of Sale Contract Paperwork Payment $$$ Negotiation Delivery of service / goods 💔💔💔
  63. 63. 63 Certainty & Pressure ++ I think A is better than B. But B claims otherwise. What if B is right? I think A and B are both good options. I’ll select the one that offers the lower price and faster delivery. Negotiation & Purchase I know B is better. Why the f**k is B not giving me a discount? If I don’t close in on B quickly, there’ll be a delay. Let me negotiate hard and corner them. B said they’ll speak to their management and get back. Why haven’t they gotten back yet? Was my counter offer poor? Will I have to settle for A?
  64. 64. Negotiation & Purchase Evaluation 64 What you think is going on in the buyer’s mind What’s actually going on in the buyer’s mind Certainty & Pressure ++
  65. 65. 65 Negotiate !! Certainty & Pressure ++ I think A is better than B. But B claims otherwise. What if B is right? I think A and B are both good options. I’ll select the one that offers the lower price and faster delivery. Negotiation & Purchase I know B is better. Why the f**k is B not giving me a discount? If I don’t close in on B quickly, there’ll be a delay. Let me negotiate hard and corner them. B said they’ll speak to their management and get back. Why haven’t they gotten back yet? Was my counter offer poor? Will I have to settle for A?
  66. 66. 66 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Assessment of Value Productivity, Image Technical Assessment Profitability Return on Investment Support Reports Tests
  67. 67. 67 Buyer’s Remorse Post-purchase
  68. 68. 68
  69. 69. Awareness Research Evaluation Post-purchase 69 Dropped Customer Certainty Pressure 😓 Hope Frustration 😡 Clarity Self-doubt 🙄 Determination Anxiety 😥 Satisfaction Remorse 😦 Negotiation & Purchase
  70. 70. 70 stages of buying How of the problem Awareness about options of options Evaluation Negotiation & Purchase Post-Purchase $$$ Research Proposal, Quotation to find solutions Collaboration Selection of most favoured option Outreach FEATURE 01 FEATURE 02 FEATURE 04 PRICE W3 W4 W5 W2 Criteria Weight W1PERFORMANCE

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