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The Psychology of Selling: Why People Buy Mc. Graw-Hill/Irwin 2 Copyright © 2007 by The Psychology of Selling: Why People Buy Mc. Graw-Hill/Irwin 2 Copyright © 2007 by The Mc. Graw-Hill Companies, Inc. All rights reserved. Chapter 3

3 Chapter 3 3 Chapter 3

Main Topics ù ù ù 4 The Tree of Business Life: Benefits Why People Main Topics ù ù ù 4 The Tree of Business Life: Benefits Why People Buy–The Black Box Approach Psychological Influences on Buying A FABulous Approach to Buyer Need Satisfaction How to Determine Important Buying Needs–a Key to Success Chapter 3

Main Topics ù The Trial Close–a Great Way to Uncover Needs and ù ù Main Topics ù The Trial Close–a Great Way to Uncover Needs and ù ù ù 5 SELL Sequence Your Buyer’s Perceptions, Attitudes, and Beliefs The Buyer’s Personality Should Be Considered Adaptive Selling Based on Buyer’s Style Chapter 3

Main Topics ù ù ù 6 You Can Classify Buying Situations Technology Provides Information Main Topics ù ù ù 6 You Can Classify Buying Situations Technology Provides Information View Buyers as Decision Makers Satisfied Customers Are Easier to Sell to To Buy or Not To Buy–a Choice Decision Chapter 3

The Tree of Business Life: Benefits rv Et hic a l Se T T The Tree of Business Life: Benefits rv Et hic a l Se T T TT T T Builds True ice Relationships T 7 I C Guided by The Golden Rule, emphasize benefits Rule to improve your: ù Communication Skills ù Ability to unselfishly help a person make the correct buying decision

Exhibit 3 -1: Stimulus-Response Model of Buyer Behavior ù Internalization process is referred to Exhibit 3 -1: Stimulus-Response Model of Buyer Behavior ù Internalization process is referred to as a black box ù We cannot see into the buyer’s mind. ù Stimulus-response model Sales Presentation Buyer’s Hidden Mental Process Sale/No Sale Stimulus Black box Response Exhibit 3 -1: Stimulus-response model of buyer behavior 8

What’s Known About Mental Process ù People buy for practical and emotional ù ù What’s Known About Mental Process ù People buy for practical and emotional ù ù reasons. Some of a person’s thoughts can be determined. Buyers consider certain factors in making purchase decisions. 9

Psychological Influences on Buying ù Motivation to buy must be there ù Needs result Psychological Influences on Buying ù Motivation to buy must be there ù Needs result from a lack of something desirable ù Wants are needs learned by the person ù Economic needs: The best value for the money ù The buyer’s need to purchase the most satisfying product for the money 10

Psychological Influences on Buying, cont… ù Awareness of needs: Some buyers are unsure ù Psychological Influences on Buying, cont… ù Awareness of needs: Some buyers are unsure ù Conscious need level ù Preconscious need level ù Unconscious need level 11

A FABulous Approach to Buyer Need Satisfaction ù Stressing benefits is a very ù A FABulous Approach to Buyer Need Satisfaction ù Stressing benefits is a very ù powerful selling technique FAB selling technique helps emphasize benefit ù Feature ù Advantage ù Benefit 12

The Product’s Features: So What? ù Feature – a physical characteristic ù Many salespeople The Product’s Features: So What? ù Feature – a physical characteristic ù Many salespeople emphasize features ù Examples: ù Size ù Color ù Price ù Shape 13

The Product’s Advantages: Prove It! ù Advantage – a performance characteristic ù The chances The Product’s Advantages: Prove It! ù Advantage – a performance characteristic ù The chances of making a sale are increased by describing the product’s advantages. ù How a product can be used ù How a product will help the buyer ù Examples: ù Fastest-selling ù Stores more information ù Copies on both sides of the paper 14

The Product’s Benefits: What’s in it for Me? ù Benefit – a result of The Product’s Benefits: What’s in it for Me? ù Benefit – a result of advantage ù People are interested in what the product will do for them. ù Benefits can be both practical and psychological. ù Benefits should be specific statements, not generalizations. ù Emphasizing benefits increases sales. 15

Why Does Someone Buy These Items? ù Diamond ring ù Camera film ù STP Why Does Someone Buy These Items? ù Diamond ring ù Camera film ù STP motor oil ù Baseball tickets 16

People Buy the Product’s Benefits, Such as: ù Diamond ring – images of success, People Buy the Product’s Benefits, Such as: ù Diamond ring – images of success, ù ù ù investment, to please a loved one Camera film – memories of places, friends, and family STP motor oil – engine protection, car investment, or peace of mind Baseball tickets – entertainment, escape from reality, or relaxation 17

People Buy Benefits ù Not a product’s features ù Not a product’s advantages 18 People Buy Benefits ù Not a product’s features ù Not a product’s advantages 18

People Buy Benefits, cont… ù Notice national television commercials ù They stress benefits ù People Buy Benefits, cont… ù Notice national television commercials ù They stress benefits ù Advertisers know this helps sell products 19

People Buy Benefits, cont… ù High performing salespeople stress benefits. ù They know this People Buy Benefits, cont… ù High performing salespeople stress benefits. ù They know this increases their chances of making the sale and helping someone 20

What’s In It For Me? ù Stressing benefits in the sales presentation answers the What’s In It For Me? ù Stressing benefits in the sales presentation answers the prospect’s question, “What’s in it for me? ” 21

Cannot Leave Out Features and Advantages ù In the sales presentation, it is also Cannot Leave Out Features and Advantages ù In the sales presentation, it is also important to mention features and advantages. ù Following is an example of how to stress a benefit while including a feature and an advantage. 22

Let’s Review FABs ù “With this ball, you’ll get an extra 10 to 20 Let’s Review FABs ù “With this ball, you’ll get an extra 10 to 20 yards on your drives ( advantage) helping to reduce your score (benefit ) because of its new solid core ( feature). ” 23

FABs Can Be Awkward at First ù New salespeople are frequently not accustomed to FABs Can Be Awkward at First ù New salespeople are frequently not accustomed to using feature, advantage, and benefit phrases. ù They may seem awkward at first. 24

Use Your FABs ù Feature – Physical Characteristic ù Buyer thinks “So What? ” Use Your FABs ù Feature – Physical Characteristic ù Buyer thinks “So What? ” ù Advantage – Performance Characteristic ù Buyer thinks “Prove It!” ù Benefit – Favorable result from advantage ù Benefits are what people buy! ù You can also have a benefit of a benefit – a FABB 25

Use the FAB Sequence ù The standardized FAB Sequence can be used as follows: Use the FAB Sequence ù The standardized FAB Sequence can be used as follows: ù The…(feature)…means you…(advantage)…with the real benefit to you being…(benefit)…. ù Note how a benefit is emphasized. ù Pick a product and insert a FAB of the product into the above sequence ù Put it in your own words ù Try it – it works! 26

Let’s Review FABs, cont… ù Which of the following is a feature, advantage, or Let’s Review FABs, cont… ù Which of the following is a feature, advantage, or benefit? 1. 2. 3. 4. 5. F “Made of pure vinyl” B “Gives 20% more miles to the gallon” F “New” A “Lasts twice as long” B “Saves, time, work, and money” 27

Let’s Review FABs ù “Blade changing is quick ( advantage) and easy (benefit ) Let’s Review FABs ù “Blade changing is quick ( advantage) and easy (benefit ) with this saw because it has a push button blade release (feature). ” 28

Let’s Review FABs, cont… ù “The king size (feature) will bring you additional profits Let’s Review FABs, cont… ù “The king size (feature) will bring you additional profits ( benefit) because it is the fastest growing (advantage ) and a more economical size (feature). ” 29

Let’s Review FABs, cont… ù “For long wear (advantage ) and savings on your Let’s Review FABs, cont… ù “For long wear (advantage ) and savings on your clothing costs ( benefit), you can’t beat these slacks. All the seams are double stitched (feature) and the material is 100% Dacron (feature). ” 30

The Salesperson Needs to be a Detective ù Given that people make a buying The Salesperson Needs to be a Detective ù Given that people make a buying decision based on whether they believe a product’s benefits will satisfy their needs, how can you uncover a buyer’s needs? 31

Exhibit 3 -4: Match Buyer’s Needs to Product’s Benefits and Emphasize Them in the Exhibit 3 -4: Match Buyer’s Needs to Product’s Benefits and Emphasize Them in the Sales Presentation Important Seller Important Needs Benefits Unimportant 32 (emphasize) (de-emphasize) Unimportant Buyer

How to Determine Important Buying Needs–A Key to Success ù L-O-C-A-T-E ù Listen ù How to Determine Important Buying Needs–A Key to Success ù L-O-C-A-T-E ù Listen ù Observe ù Combine ù Ask questions ù T alk to others ù Empathize 33

The Trial Close–a Great Way to Uncover Needs and Sell ù The trial close The Trial Close–a Great Way to Uncover Needs and Sell ù The trial close asks for an opinion, not a decision to buy. ù It gives feedback. ù The trial close is one of the best communication techniques in the sales presentation. 34

The Trial Close Helps You to Determine: ù Whether the prospect likes your product’s The Trial Close Helps You to Determine: ù Whether the prospect likes your product’s features, advantages, or benefits ù Whether you have successfully answered any objections ù Whether any objections remain ù Whether the prospect is ready for you to close the sale 35

ù ù In These Examples of Trial Closes, Notice They Do NOT Ask Someone ù ù In These Examples of Trial Closes, Notice They Do NOT Ask Someone to Buy Directly “How does that sound to you? ” “Is this important to you? ” “That’s great – isn’t it? ” “I notice your smile. What do you think about…? ” 36

Do You See How the Trial Close Asks for the Person’s Opinion Concerning What Do You See How the Trial Close Asks for the Person’s Opinion Concerning What Has Just Been Said? ù For example: ù “Does that answer your concern? ” ù “Am I on the right track with this proposal? ” 37

The Trial Close Does Not Ask for a Decision ù It asks a question The Trial Close Does Not Ask for a Decision ù It asks a question to better understand what the person is thinking about what is being said by the salesperson – you 38

To Help You Properly Use the FAB Selling Technique and the Trial Close ù To Help You Properly Use the FAB Selling Technique and the Trial Close ù Incorporate the SELL Sequence into your presentation. 39

SELL Sequence ù S - Show Feature - physical characteristic ù E - Explain SELL Sequence ù S - Show Feature - physical characteristic ù E - Explain advantage - performance characteristic ù L - Lead into benefit - result of advantage ù L - Let customer talk - ask opinion question 40

Exhibit 3 -5: The SELL Sequence: Use It Throughout Your Presentation S E L Exhibit 3 -5: The SELL Sequence: Use It Throughout Your Presentation S E L L Show Explain Lead Let feature advantage into benefit customer talk 41

Let’s Review FABs, cont… ù “This equipment is made of stainless steel (feature), which Let’s Review FABs, cont… ù “This equipment is made of stainless steel (feature), which means it won’t rust (advantage). The real benefit is that it reduces your replacement costs, thus saving you money (benefit )! That’s what you’re interested in – right ( trial close )? ” Skip video 42

To pause the video, click on the video screen. To resume play, click on To pause the video, click on the video screen. To resume play, click on the video screen again. Click outside the video screen twice to advance to the next slide.

The Trial Close Is a Powerful Communication Technique To Produce* ù Two-way communication ù The Trial Close Is a Powerful Communication Technique To Produce* ù Two-way communication ù Participation from the other person 44

A Challenge! Use the Trial Close in Your Normal Conversation To: * ù See A Challenge! Use the Trial Close in Your Normal Conversation To: * ù See if it helps your communication ù See if it gets the other person to participate in the conversation ù All you do is occasionally ask the person an opinion type question such as: ù “Is that a good place to eat? ” ù “What did you think about the movie? ” ù “How does that sound to you? ” 45

Let’s Review! When Are the Times to Use a Trial Close? * 1. After Let’s Review! When Are the Times to Use a Trial Close? * 1. After making a strong selling point in the presentation (FABs) 2. After the presentation but before the close 3. After answering an objection 4. Immediately before you move to close the sale 46

Let’s Review! What Does the Trial Close Allow You to Determine? 1. Whether the Let’s Review! What Does the Trial Close Allow You to Determine? 1. Whether the prospect likes your product’s FAB – the strong selling point 2. Whether you have successfully answered the objection 3. Whether any objections remain 4. Whether the prospect is ready for you to close the sale 47

It Helps to Construct Four Columns when Creating Your SELL Sequence, Exhibit 3 -6 It Helps to Construct Four Columns when Creating Your SELL Sequence, Exhibit 3 -6 Features (physical characteristics) Advantages (performance characteristics) Benefits (result from advantage) Trial Closes (feedback questions) 1. Nationally advertised consumer product 2. Air conditioner with a high energy-efficiency rating 3. Product made of stainless steel 4. Supermarket computer system with IBM 3651 Store Controller 1. Will sell more product 1. Will make you a high profit 2. Saves 10 percent in energy costs 3. Reduces your replacement costs 4. Provides greater accuracy, register balancing, store ordering, and inventory management 1. What do you think? 5. Five percent interest on money in bank checking NOW account 6. Golf club head made of aerodynamically designed titanium steel 48 2. Uses less electricity 3. Will not rust 4. Can store more information and retrieve it rapidly by supervising up to 24 grocery check-out scanners and terminals and look up prices on up to 22, 000 items 5. Earns interest that would not normally be received 6. Increased club head speed, longer drives 2. Is that important to you? 3. How does that sound to you? 4. That’s great–isn’t it? 5. Gives you one extra bag of 5. Do you want to earn extra money? groceries each month 6. Lower scores 6. And that’s what counts– right?

Your Buyer’s Perception ù Perception – how selects, organizes, interprets information ù Selective exposure Your Buyer’s Perception ù Perception – how selects, organizes, interprets information ù Selective exposure – only portion of information used ù Selective distortion – perceptual process may alter information ù Selective retention – may remember only what supports their attitudes and beliefs 49

Perceptions, Attitudes, and Beliefs ù Perceptions are learned. ù Learning – knowledge based on Perceptions, Attitudes, and Beliefs ù Perceptions are learned. ù Learning – knowledge based on past ù Attitude – learned predispositions ù Belief – trust or confidence placed in something/someone 50

The Buyer’s Personality Should Be Considered ù Personality can be viewed as the individual’s The Buyer’s Personality Should Be Considered ù Personality can be viewed as the individual’s distinguishing character traits, attitudes, or habits. ù Self-concept ù Real self ù Self-image ù Ideal self ù Looking-glass self 51

Adaptive Selling Based on Buyer’s Style ù Personality typing ù Adapt your presentation to Adaptive Selling Based on Buyer’s Style ù Personality typing ù Adapt your presentation to the buyer’s style ù Thinker style ù Intuitor style ù Feeler style ù Sensor style 52

Exhibit 3 -8: Guidelines to Identifying Personality Style 53 Exhibit 3 -8: Guidelines to Identifying Personality Style 53

Exhibit 3 -9: Watch for Clues to Someone’s Personality Type ù How would you Exhibit 3 -9: Watch for Clues to Someone’s Personality Type ù How would you describe this person? ù What is her time orientation – past, present, future? ù What does her desk look like? ù What does her room look like? ù How does she dress? 54

Determining Style Can Be Difficult ù What is the person’s primary style? ù What Determining Style Can Be Difficult ù What is the person’s primary style? ù What is the person’s secondary style? ù Does the person’s style comprise all four types? 55

First Know Your Style ù This helps you to adapt to the other person’s First Know Your Style ù This helps you to adapt to the other person’s style ù Which leads to better communication ù Knowing your style helps you identify a person’s style, especially if your styles are the same (It takes one to know one). 56

You Can Classify Buying Situations ù Some decisions are routine ù Some decisions are You Can Classify Buying Situations ù Some decisions are routine ù Some decisions are limited ù Some decisions are extensive 57

Exhibit 3 -10: The Three Classes of Buying Situations 58 Exhibit 3 -10: The Three Classes of Buying Situations 58

Technology Provides Information ù Technology provides information for customer decision making and service. 59 Technology Provides Information ù Technology provides information for customer decision making and service. 59

View Buyers as Decision. Makers ù Five basic steps in the buying decision: 1. View Buyers as Decision. Makers ù Five basic steps in the buying decision: 1. Need arousal 2. Collection of information 3. Information evaluation 4. Purchase decision 5. Postpurchase: ù Satisfaction ù Dissonance 60

Exhibit 3 -12: Personal, Psychological, and Social Forces that Influence Consumers’ Buying Behavior Consumer Exhibit 3 -12: Personal, Psychological, and Social Forces that Influence Consumers’ Buying Behavior Consumer buying decision process 61

Satisfied Customers Are Easier to Sell To ù It is easier to sell to Satisfied Customers Are Easier to Sell To ù It is easier to sell to a customer than to a stranger. ù Building a relationship is important to a salesperson’s success. 62

To Buy or Not to Buy–a Choice Decision ù A salesperson needs to understand: To Buy or Not to Buy–a Choice Decision ù A salesperson needs to understand: ù Factors that can influence the buying decision ù That buyers actually examine various factors that influence these decisions ù That buyers actually go through various steps in making decisions 63

Summary of Major Selling Issues ù As a salesperson, be knowledgeable. ù Understand the Summary of Major Selling Issues ù As a salesperson, be knowledgeable. ù Understand the characteristics of the target market and how these characteristics relate to the buyer’s behavior. ù The individual goes through various steps in the three buying situations of routine decision making, limited decision making, and extensive decision making. ù Uncover who is involved in the buying decision and the main factors that influence the decision. 64

Summary of Major Selling Issues, cont… ù Psychological factors include the buyer’s motives, perceptions, Summary of Major Selling Issues, cont… ù Psychological factors include the buyer’s motives, perceptions, learning, attitudes, beliefs, and personality. ù Not all prospects will buy your products due to the many factors influencing their buying decision. ù You will need to uncover buyer’s needs, solve buyer’s problems, and provide the knowledge that allows them to develop personal attitudes toward the product. 65

End of Chapter 3 Mc. Graw-Hill/Irwin 66 Copyright © 2007 by The Mc. Graw-Hill End of Chapter 3 Mc. Graw-Hill/Irwin 66 Copyright © 2007 by The Mc. Graw-Hill Companies, Inc. All rights reserved. Chapter 3