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The Power of Selling

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Chapter 6 Why and How People Buy: The Power of

Understanding the Customer

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Video Ride-along

• The video, Finding the Decision Maker, features Rachel Gordon, Account Manager, WMGK

• In the video she talks about how she identifies the decision maker versus the influencer in a sales call and why it is important

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Video Ride-along Discussion Questions

• How do we identify the decision makers?

• What is the major difference between an influencer and a decision maker? What role does each play in the selling process?

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Chapter Objectives

• Describe the different types of customers and why this information is important in determining customers’ needs.

• Discuss the implications of Maslow’s hierarchy of needs for selling.

• Learn the types of buyers and buying situations in the B2B environment.

• List the steps in the buying process and describe how and why the process is evolving.

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Chapter Objectives

• Understand the role of emotions in the buying decision.

• Learn how to use FAB for effective selling.

• Understand how to develop your personal FAB message.

• Learn how to make your FAB message memorable in an interview.

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Inside Consumer Behavior

• The science of consumer behavior describes and defines:

– How you shop

– Why you buy

• Consumer behavior patterns

– 86 percent of women look at price tags when they shop, the same applies to 72 percent of men

– The average shopper doesn’t actually notice anything that’s in the entrance of a store

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Inside Consumer Behavior

• Smart retailers include a “transition zone” at the entry to their store because consumers don’t actually begin shopping until a certain point after they enter the store

• The “transition zone” allows customers to get their bearings and choose their shopping paths

• Understanding the customer and the buying process makes your selling efforts successful

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Video Book Review

• The video, Buy.ology – Book Brief, features Martin Lindstrom, the author of Buyology: Truths and Lies about Why We Buy

• In the video he shares the discoveries of the world's largest neuromarketing study conducted by him 

Source: BNET

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Needs Versus Wants

• Needs: Essentials, those products and services you literally cannot live without

• Wants: Products, services, and activities that can improve your quality of life, something you don’t need to exist, but rather you desire to have because you think it will make you happy

• Utilitarian needs: Objective, tangible attributes of a product or service

• Hedonic needs: A subjective, emotional, or experiential requirement

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Needs Versus Wants

• The video, Needs vs Wants, features Dr. Michael R. Solomon, Professor of Marketing, Saint Joseph’s University

• In the video he discuss the difference between needs and wants and the impact it has on selling

Source: YouTube

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Discussion Questions

• Can you name few products, which can be categorized into both, needs and wants?

• Can a salesperson convert a need of a customer into a want?

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Figure 6.3 - Maslow’s Hierarchy of Needs Demonstrates That Humans Fill Higher Needs Only After Lower Needs are met

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Business-to-Consumer (B2C) Buying

• Consumer: The end user of a product or service

• When you are the ultimate consumer of the products or services you buy, you are defined as a B2C customer

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Business-to-Business (B2B) Buying

• B2B customers are referred to as organizational or institutional markets

– Organizational or institutional markets: Selling products or services to another company rather than selling directly to the ultimate consumer

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Figure 6.4 - Types of B2B Buyers

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Big Differences

• B2C - Consumers purchase for their own consumption

• B2B - Customers purchase to produce or resell the product to a company or the ultimate consumer

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Table 6.1 - Comparison of B2C and B2B Buying Decisions

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Figure 6.7 - Comparison of B2C and B2B Buyers

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Business-to-Business Means Person-to-Person

• A business never makes a buying decision; the decision is made by people who work for the company

• B2B buying decisions are subject to the same behaviors as B2C buying decisions, but on a more challenging level because B2B buying decisions include:

– Multiple decision makers

– An extensive evaluation process, extended analysis

– They represent a high risk on the part of the decision makers

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Business-to-Business Means Person-to-Person

• Buying center: Cross-functional team of people who make buying decisions on behalf of the company or organization

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Business-to-Business Means Person-to-Person

Users People in a company who use the product or service, but may not be the decision maker in the buying process

Initiators Person who starts the buying process in a company, but who may not be the decision maker in the buying process

Influencer A person who has a role and perhaps some authority in the purchasing decision at a company, but is not the sole decision maker

Decision maker

The person or people who are responsible for making the final purchasing decision at a company

Power level The level in a company or organization at which the buying decision is made

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Types of B2B Buying Situations

New-task buy A purchase made by a company for the first time

Straight rebuy A routine repurchase of a product or service

Modified rebuy

A product or service that is already being purchased, but the specifications are changed

Strategic alliance

A business partnership in which all parties have something at risk and have something to gain

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Types of B2B Buying Situations

• The people who are responsible for making products, services, and supplies for the company or for the company’s customers:

– Buyer, purchasing manager, materials manager, or procurement manager

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The Traditional View of the Seven Steps of the B2B Buying Process

• Recognizing the need

• Defining the need

• Developing the specifications

• Searching for appropriate suppliers

• Requesting proposals

• Evaluating proposals

• Making the buying decision

• Postpurchase evaluation

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The Internet Changes Everything

• Buyers can research product and supplier options online, see product specifications, view demonstration videos, participate in online forums, get real-time recommendations and feedback from users on social networks

• Successful salespeople truly focus on the buyers needs

– They give up the sale and bring valuable feedback to their company to change the product, service, or other options that are reasons why customers might not buy from them

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The Internet Changes Everything

• Since information is no longer the exclusive domain of the salesperson, great salespeople bring value to their customers with ideas, insights, knowledge, and personal commitment that can’t be duplicated on a Web site, online forum, or on a social network

• Crowdsourcing: Situation in which a company takes a job that is normally performed by an employee and puts out an “open call,” usually on the internet, for people all over the world to work on it

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Crowdsourcing

• The video, Crowdsourcing, features Jeff Howe

• In the video, he explains the concept of crowdsourcing and how it has changed the photography business

• He also considered the online communities as the building blocks of crowdsourcing

Source: Jeff Howe

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Emotions Dominate B2B Buying

• Fear and trust

– People buy when they feel comfortable with the product and the salesperson and when they believe it is the best decision they can make

– Buyers have several fears

– As a salesperson, understand your customer’s fear of buying and replace it with comfort, trust, and confidence—in you

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Emotions Dominate B2B Buying

• The two kinds of risks involved in B2B buying:

– Organizational risk: Potential exposure, hazard or danger for a company

– Personal risk: Potential exposure, hazard or danger for a person, especially the potential of losing his job

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Table 6.2 - The Evolution of the Seven Steps of Selling

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Table 6.2 - The Evolution of the Seven Steps of Selling

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Buying Process Meets FAB

• FAB: Feature Advantage Benefit

– Feature: Physical characteristic of the product

– Advantage: Performance characteristic of the product, or what the feature does

– Benefit: Result the buyer will realize from the product because of the product advantage

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Buying Process Meets FAB

• Why does FAB work?

– Customers want to know what a product or service will do for them—not just what it’s made of

• To be able to use FAB in conversation, simply think in terms of the following:

– Feature: What the product has

– Advantage: What the features do

– Benefits: What the features mean

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Table 6.3 - FAB in Action

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How to use FAB

• Know your customer

• Think outside your box

• Get in touch with your customer’s motivation