Business to Business Selling and the Buy-Class Framework

Business to Business Selling and the Buy-Class Framework 1

Today we will: z. Wrap-up BMW’s and last class z. Talk about how personal selling fits in with overall marketing strategy z. Discuss the organizational buying process and a theoretical framework for thinking about it. 2

Reviewing from last class: the personal selling process z Prospecting z Classifying Leads z Pre-call planning z Approach/relating z Needs discovery z Presentation z Handling Objections z Closing z Follow-up and servicing 3

How salespeople spend their time Face-to-Face Selling 33% Phone Selling Account Service Coordination 16% Administration 10% SOURCE: Travel Internal Meetings 20% 5% William A. O’Connell and William Keenan, Jr. , “The Shape of Things to Come, ” Sales & Marketing Management, January 1990, pp. 36 -41. 4

Let’s step back and talk about how personal selling fits in with overall strategy z Miles & Snow Strategy Typology y Propsector y Defender y Analyzer z Porter Typology y Low Cost y Differentiation y Niche 5

Marketing Strategy Characteristics and the Relative Importance of Personal Selling as a Promotional Tool Advertising Relatively Important Large Low Small Little Low Pull Pre-set Personal Selling Relatively Important Number and Dispersion of Customers Buyers’ Information Needs Size and Importance of Purchase Postpurchase Service Required Product Complexity Distribution Strategy Pricing Policy Small High Large Much High Push Negotiated Adapted from David W. Cravens, Strategic Marketing (Homewood, IL: Richard D. Irwin, Inc. , 1987), p. 508. 6

Stages in the Organizational Buying Process z Anticipation or recognition of problem or need z Determination and description of the characteristics and quantity of the item needed z Search for and qualification of potential suppliers z Acquisition and analysis of proposals & bids z Evaluation of proposals and selection of supplier z Selection of an order routine z Performance evaluation and feedback 7

Buying Decision Grid z. New Task z. Modified Re-buy z. Straight Re-buy 8

Buying Decision Grid 9

The Relative Influence of Representatives from Various Functional Departments at Different Stages in Two Types of Organizational Purchase Decisions. Straight rebuy Relative Influence New buy Purchase Stages SOURCE: Purchase Stages Based on E. Neumann, D. J. Lincoln, and R. D. Mc. Williams, “The Purchase of Components: Functional Areas of Influence, “ Industrial Marketing Management, May 1984, pp. 113 -22. Reprinted by permission of the publisher. Copyright 1984 by Elsevier Science Publishing Co. , Inc. 10

New Task (rarest, most glamorous) z Big DMU (decision-making unit) ylots of people involved in the decision ylots of people indirectly influence the decision z Slower-than-usual process z people think its’ a risky buy; novelty, precedent z Gather and weight a lot of information z Anyone can win z Your past relationship along won’t win the order 11

New Task (continued) z Performance matters a lot, price doesn’t so much z The most influential people are knowledgeable yusers ytechnically competent z They set the specifications & then the game is 75% over z Low ranking experts can be very influential z High ranking non-experts often stand back 12

Effective Salespeople in New Task z Listen, probe y. Understand DMU y. Understand needs, perceptions of you and of competitors z In early, influencing specifications & views of the competitors z Come to be viewed as consultants (“creeping commitment”) z Spend lots of time z Analyze a lot z Bring in support troops 13

Straight Rebuy z Small DMU (usually one person) z Perceived low risk, hence low priority z In a hurry z Close-minded, arrogant, think they know it all z Go on minimum acceptable quality (better doesn’t help) z Then price and assured delivery 14

Straight Rebuy z In Supplier y “Out” suppliers find it hard to get an appointment, let alone break in z Pray for the “in” supplier to screw up noticeably or for requirements to change (pressure from users, staff) 15

Modified Rebuy z A window of opportunity z An “aging” new task z Or a “rejuvenated” straight rebuy z Mini-version of new task strategy can make you the “in” supplier z Then don’t screw-up 16

Buying Influences z In every complex sale, there are four types of buying influences. These people are not necessarily the same for different sales objectives even with the same company. y Economic Buying Influence: gives final approval to buy; one person or set of people. Find EB early and demonstrate the bottom line impact y User Buying Influences: make judgements about the potential impact of your product/service on their job performance; there may be several UB y Technical Buying Influences: screen out possible suppliers; make recommendations based on how well the product meets a variety of objective specifications; can’t give a final yes, buy they can (and often do) give a final no. y Coach: leads you to buyers and provides information you need 17 in order to position yourself effectively with each

Buying Influences z Identify and contact all the key players in each of those four roles for your specific sales objective. z Periodically test your assessment of who plays what role. z You have to sell each buying influence in order to achieve your sales objective Source: Miller & Heiman, Strategic Selling 18

Take-aways z Most of a sales rep’s job is *not* face-to-face selling z The role of the rep is dependent on the overall strategy… they don’t work in a vacuum z Organizational buying can vary widely … from the routine to the intense z Use all this for prepping Lawford Electric for Friday 19