Customer Purchasing Behavior/the Buying Process

Major Faux Pas Results in Lost SaleSelling overseas (or to foreigners visiting the U.S.) demands a high degree of cultural sensitivity. Steve Waterhouse, affiliated with Waterhouse Group of Scarborough, Maine, learned this lesson the hard way. He had been courting a Tokyo-based meeting planning company for six months. Finally, he arranged a meeting with the companys representative who was attending a national convention in the U.S. What breach of etiquette by Mr. Waterhouse resulted in the loss of a $100,000 sale?Source: Selling Today, by Manning and Reece (10th ed., p. 40)

Im Looking for a New ComputerJohn is a salesperson for Micro Solutions, a retail business, that sells personal computers and related products and services. John is about to meet and greet Alex who is in the market for a new computer. What should John know about Alex and how he is likely to make a computer purchase decision?

Your Price Is Too High!Martha is a sales rep for Central Hibreds. The seed varieties she sells typically sell at prices that are in the upper quartile for the market. What can Martha do to deal with the high price objection from a customer?

What You Gonna Sell?Susie calls on buyers for distributors who resell her companys products to their customers who are the end users. Should she emphasize end user benefits to her buyers?

Trivia QRecent surveys of prospective ISU students reveal which of the following is reported as the most important factor to them in selecting a college?Reputation, respect of the schoolUse of progressive technology and career opportunitiesDiversity of experiences and choices for majorsExtent to which the school seems to provide a fun, welcoming, supportive environmentExtent to which the school offers challenging courses

Buyer DecisionsSalesperson Implications

Why buy?How to present?

What to buy?What to offer?

How to buy?When to sell?

(=> often difficult)(=> need to be a buyingfacilitator)

Types of Buyers and PurchaserSource: Reece & Manning

Every customer is a highly unique and complex human, yet there are many things customers have in common when it comes to buying:Buy from people they likeBuy from people they trustWant to feel secure and importantNaturally suspicious of salespeopleWant proper chemistry or human relationshipRespect and acceptance must be earnedPropensity for loyalty if treated wellExpect technical competence and professionalism from salespersonMany factors involved in their buying decision, any one of which can become the deciding factorBuy to satisfy a need (for a reason)

Specific Reasons People Buy:EconomicPsychologicalSociologicalPractical (impractical)Rational (irrational)Factual (emotional)Attitudes, opinions, feelings, beliefs

More Reasons Why People BuyTo IncreaseSalesProfitSatisfactionConfidenceConveniencePleasureProduction

To ProtectInvestmentSelfEmployeesPropertyMoneyFamilyTo MakeMoneySatisfied customersGood impressions

To ImproveCustomer relationsEmployee relationsImageStatusEarningsPerformanceTo ReduceRiskInvestmentExpensesCompetitionWorryTrouble

To SaveTimeMoneyEnergySpace

Maslows Hierarchy of Human Needs & Sales ImplicationsNeed

Physiological

Security

Social

Esteem

Self actualization+s Gained

Health, comfort, ease, pleasure

Safety, protection,stability, confidence

Acceptance, popularity,attention, compliments

Pride, prestige, recognitionworthiness, success

Creativity, growth, Accomplishments, potentialContributions, independence-s Avoided

Sickness, displeasure,discomfort, inconvenience

Worry, loss, danger, fear

Rejection, dislike, criticism, embarassment

Failure, inadequacy,guilt

Boredom, dependence, unfilled potential,restraints

Some Non Traditional Buying MotivesConspicuous consumption or status effects:Lavish spending for the purpose of displaying wealth or social status; preference for buying increases with price.Snob effect:Desire to buy something nobody else has; preference for buying increases with rarity or scarcity.Bandwagon effect:Desire to buy something everybody else is buying; preference for buying increases with perceived popularity.Note: These effects are anomalies within D theory that normally assumes individual preferences are independent of price or other consumers decisions.

Sell ValueBuyers want product solutions that add value which means a salesperson needs to:Sell benefits (and solutions)Be product expertsBe able to develop product packages tailored to individual customer needs

Motivational Selling=Discovering what the dominant buying urge is (often hidden) and tailoring the sales presentation to address that drive.

The Buying ProcessProblem/need recognition Real or imagined Customers often unaware there is a better way . . .Information search Extent depends on Sources-Cost and risk- media (print, broadcast)-Frequency of purchase- public agencies-Style of customer- friends/neighbors-Level of trust w/salesperson- salespeople

The Buying Process3.Evaluate alternativeslike info search, extent variessalespersons role-clarify info-correct misconceptions-explain nuances, details, benefits4.Purchase & evaluation

Multiattribute Evaluation Model of AlternativesA buyer views a product as a collection of characteristics, attributes or benefits. A buyers overall assessment of a products performance rating x the buyers importance rating for each benefit associated with the product.

Alpha Computer Multiattribute Evaluation Example

Multiattribute Implications for SalespeopleBrands the customer is considering

Attributes or benefits being considered as well as their relative importance to the customer

The customers performance rating of each product on each dimension

Alternatives for influencing a customers perceived value of your product: performance rating of your product

performance rating of competitors product

or importance rating

Add an attribute previously not considered

price

Purchase & Post-Purchase ObservationsLet the buyer make the uncoerced purchase decisionThe purchase decision is rational to the buyer (i.e. expect to gain more than they give up)Post purchase dissonance often sets in:Doubts/wonders:Right thing to do?Smart buy?Need justification, reinforcement (e.g. ads, others)Post purchase dissonance often caused by:MisunderstandingMiscommunicationMisuseUnrealistic expectationsPositive post purchase evaluationEnhanced by salespersons presenceIs the 1st step in the next sale

Product Adoption/DiffusionCustomers vary by how quick they adopt a new product or new ideaCategoriesInnovators (first 2-3%)Early adopters (next 13-14%)*Early majority (next 33-34%)Late majority (next 33-34%)Laggards (last 15-16%)*often opinion leaders (i.e. good farmers, community leaders, influential, etc.)

Sales Quotes: Buying Process/Purchasing BehaviorWhen dealing with people, remember you are NOT dealing with creatures of logic, but with creatures of emotion. (Dale Carnegie)People dont buy services, products or ideas. They buy because they have imagined how using them will make them FEEL. (The One Minute Sales Person)Sell the sizzle, not the steak. (Elmer Wheeler)

Sales Quotes: Buying Process/Purchasing BehaviorA chain is only as strong as its weakest link. Likewise, a salespersons performance will only be as strong as his or her weakest step in the selling process.It takes confidence to make a buying decision. But how can a prospect have confidence in you, your product, and your company unless you first have that confidence? (Sales Upbeat, Feb. 2, 1995)

Sales Quotes: Buying Process/Purchasing BehaviorSelling is information. Selling is finding out what the customer needs. (Wililam Devaney, Pres., Stanley-Vidmar)One job of a salesperson is to help people buy.Most people readily agree that they love to buy things, but hate to feel sold. (Mike Bosworth, Solution Selling, Inc.)

Sales Quotes: Buying Process/Purchasing BehaviorWe would like the business card of sellers we train to read Buying Facilitator. (Mike Bosworth, Solution Selling, Inc.)I am the worlds worst salesperson; therefore, I must make it easy for people to buy. (F.W. Woolworth)We dont SELL you tires. We help you BUY tires. (In-store ad, Tires Plus)