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05 June 2008

Selling & Negotiation Skills_5

Conceptual Selling

Conceptual selling is the opposite of traditional or stereotypical sales. It is recognising that there is a natural thought process that goes on in someone's mind when they are considering buying something. There are three phases;

• Cognition Thinking
• Divergent Thinking
• Convergent Thinking


• Cognition Thinking

• Let's take a look at the example of a person buying a drill. People don't go and buy drills just for the fun of it, they buy drills because they need to create hole in wall. It won't matter if you have the best, state of the art drills in the world. If a person doesn't have a requirement, you will have a pretty hard time selling them a drill. This phase is when a person has a concept of a perceived need. A person won't all of a sudden think, "hey I think I will go out and buy a drill today". When a person is cognizant that their is a discrepancy between where they are and where they want to be, this is called 'Cognition Thinking'. It is at this point a person is developing a concept of what they need.
• A word of warning, even if a person has already formed their concept, it doesn't mean they will automatically buy form you. The first part of you job in selling is connecting with that person, and understanding their concept.
• This process is how rapport is built, if you have someone come to you with a concept of what they want, take the time to understand it, perhaps even expand on it, who knows that person may also leave with drill bits, safety goggles, and an extension lead.


• Divergent Thinking

• Divergent thinking is when the person starts to explore of the possible solutions for their perceived problem. It may well be that they go over to uncle Freddy's and borrow his drill. They may decide to hire a drill for the day. They may decide that they just can't live without a drill in their tools shed.
• This is where your marketing comes in. Bob goes to the web and does a search for 'power drills', and their you are. Jim's Handyman's Tips & Tools website. Bob likes what he reads, thinks that old Jim really knows what he is talking about, goes to the 'contact me' button and makes the call, or sends the e-mail.
• When Bob calls and says, "I am looking for a drill", Jim doesn't start raving about the latest and greatest drill that he has to offer. He asks quietly and calmly, what kind of work are you planning in doing with it? How many holes, What size, What are you drilling into? Jim is a consultant now, not a salesperson. Jim is helping Bob explore his concept and also becoming instrumental in the process of divergent thinking. Bob is thinking, boy that Jim sure knows what he is talking about, what a great guy!

• Convergent Thinking

• This is the part where many traditional or stereotypical sales people often begin, convergence. Convergent thinking is when a person has formed a strong concept of what they need, they have explored possible solutions for the perceived problem. They are now ready to converge on the best solution. Bob is naturally going ask Jim what he recommends. This is because Jim has taken the time to understand Bob's situation and at the same time positioned himself as an expert on this particular subject. Is Bob going to buy from the trusted Jim, or, off one of those gaudy, offensive adds promoting the latest and greatest? It is a 'no brainer' in my opinion.

Strategic selling

• The starting point for strategic selling is figuring out

a) which customers produce the bulk of your sales, and

b) what they are buying. Armed with this information, you can strategically plan how to increase sales If you want to maximize your sales performance, take a strategic approach to selling.

• “The 80/20 rule" applies to customers, where approximately 20 percent of customers produce approximately 80 percent of sales?
• If you want to sell strategically, you need to have access to specific data elements. Plus, you need to be willing to perform data analysis.
• Which data elements do you need? This list provides a reasonable starting point:
• Customer Name
• Revenue by Month by Customer
• Gross Margin or Gross Profit by Month by Customer (this is only necessary if it impacts your performance measurements)
• Product or Service Name (for each product or service purchased by each customer)
• Product or Service Quantity (for each product or service purchased by each customer)
• Product or Service Unit Price (for each product or service purchased by each customer)
• Product or Service Extended Price (quantity x unit price)
• This data can be used to analyze the buying habits of your customers. Sort it in various ways to answer the following questions:
• Which customers buy the most from you?
• What is the trend for each customer's purchases? Are they buying more or less when you compare the current month to preceding months? How about when you compare the current month to the same month in the previous year?
• Which products or services are they buying?
• Are the amounts purchased in line with your expectations and the commitments that have been made by your customers?
• Which products or services are they not buying?
• Why aren't they buying these other products or services?
• Once you have completed the first stage of analysis, consider this next set of questions:
• How much time should you allocate to each customer in your territory? (Tip: You should spend 80 percent of your time with the customers that buy the most and/or offer the greatest potential for sales growth.)
• What is your plan for increasing sales to each of your customers? (This includes selling more of what they have already been buying, and selling other products or services that they haven't purchased from you previously.)
• Which new prospects should you pursue? (Tip: Which prospects can your existing customers refer you to? Which prospects have the greatest potential to produce significant sales?)
• It may not be easy for companies to extract the data that is required to support strategic selling. However, arming salespeople with this data is the best investment a company can possibly make. Strategic selling enables salespeople to maximize their sales, which in turn maximizes the company's overall sales and profitability.
• If sales cycles are relatively short, it would be ideal for the data to be available on demand, with the minimum frequency being weekly. For longer sales cycles, providing the data on a monthly basis may be adequate.

Selling to superiors
• Different types of buyers may have very different reasons, or buying motives, for purchasing the very same product or service.
• Understanding each prospect’s unique buying motives allows you to present your product or service in the way that your prospect wants to perceive it – which makes it far more likely that your prospect will be willing to listen to you.
• Building RapportMany organizations look to their executives to help maintain the status quo. Corporate executives are often paid to ensure that the organization doesn’t deviate from its present course. Their role in many organizations is actually to vet new ideas and slow the pace of change in order to keep the organization from making chaotic changes in direction and focus. Executives, must be also answerable for their actions and decisions. In fact, many executives feel they are constantly trying to balance the interests of four different constituencies – their superiors, their peers, their team and their customers. This perspective illustrates why “teamwork” and “consensus” are so appealing to this type of prospect.
• Their success depends on their ability to gain approval from peers and superiors and to get “buy in” from the rank-and-file employees as well.
• Their position in the company often dictates a personal buying agenda that favors solutions that:* Promote teamwork* Are mainstream and widely accepted* Help them avoid “sticking their necks out* ”Are “sensible” or “mainstream”* Help the organization “advance steadily”* Keep everything on a “safe course”* Are predictable and reliable* Support and validate their previous decisions
• Positioning your product or serviceBefore you start describing your product or service, you’ll need to “set the stage” or introduce your product by positioning it as the perfect solution for your individual prospect. When you’re selling to a corporate executive, be aware that unlike the entrepreneur, radical shifts in direction are not part of this prospect’s universe, because shifts invalidate whatever the executive has worked so hard to sustain. Instead, every new purchase must be justified as one more complementary step, another building block that fits in neatly with all the previous steps and blocks.With this in mind, you’ll want to position your product or service using phrases similar to these:* “Supports what you have already accomplished”* “Is not a departure from what you’re doing”* “Right in line with the direction you are taking”
• Positioning your organizationIn order to position your organization as the ideal provider for your corporate prospects, you’ll need to understand that unlike the entrepreneur who answers to no one, the corporate executive feels pressure to choose providers that are acceptable to superiors, peers and subordinates. When talking to a corporate executive you’ll want to use phrases like these to describe your organization:* “Team players”* “Widely accepted”* “Mainstream, balanced”* “Committed to a team-oriented approach”
• Describing your benefitsThe chief benefit that a corporate executive may be looking for is the ability to avoid close scrutiny. Since taking the heat for a bad decision could mean “career suicide,” the corporate executive is likely to want a solution that they won’t have to defend or explain later. With this in mind, you might want to position the benefits of your product or service in the following terms:* “Nothing you have to defend or explain”* “Nothing you have to apologize for”* “Results everyone accepts”* “Outcomes that are widely approved”
• Positioning your price as a true bargain
• Your corporate prospect is likely to be seeking products and services with prices that could be described in terms like these:* “Priced within the mainstream”* “In line with the industry .

Selling to Subordinates, peer groups
• Psychologists have noted for years that people express their personal needs through their behavior. Let’s look again at the two customers I described.
• The first customer is combative — a person showing this behavior may have strong esteem, independence, and ego needs. One way to meet the personal needs of such a customer may be to demonstrate how your product or service is exclusive or represents status.
• The second customer is passive — this person may have personal needs for security or low risk. Here, stressing a product’s safety, reliability, or long-term warranty, could sufficiently meet this customer’s unique needs.
• Another tactic can be effective when dealing with this type of customer behavior. If the product or service is new, limited, or regarded as a status symbol, stress those qualities. They are likely to appeal to this customer’s need for esteem and independence. Above all, present the benefits with conviction. A passive customer, by comparison, may view the sales call as a threat. To get this customer involved in the call may require extra patience and support. By using no threatening, open-ended questions, the salesperson can induce discussion and cooperation regarding business needs, helping the passive customer to recognize the meeting as an opportunity instead of a threat.
• Here again, other tactics may be useful. For example, while a new product or service may appeal to the needs of the combative customer, it may intimidate the security-oriented, passive buyer. In this case, it would be more effective to stress that the item comes with a long-term warranty or represents little change from its predecessors. Continue to be patient; present benefits deliberately, a little at a time, and ask questions to get the customer’s feedback. Make sure not to overwhelm the customer with information.

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