For example, a door-to-door sales representative may go through all the steps from prospecting to the closing of the sale in a matter of ten to fifteen minutes in contrast, the selling process for the computer or electronic typewriter may take several visits, even years, for getting an order.
These are the major steps of the selling process explained below in detail:
The selling process begins with prospecting or finding qualified potential customers. Except in retail selling, it is unlikely that customers will come to the salesperson. In order to sell the product, the salesperson must seek out potential customers, prospecting involves two major activities:
- Identifying potential customers also known as prospects.
- Qualifying them in order to determine if they are valid prospects.
The identification of potential customers is not an easy job, especially for a new salesperson. The rejection rate is quite high and immediate payoffs are usually minimal. In some consumer goods businesses, identification of prospects usually comes from friends and acquaintances, other salespeople, former customers, present customers, etc. A few of the best sources and techniques for finding prospects are discussed below:
- Present Customers
- Endless Chain
- Centre of Influence
- Cold Call
- Trade Shows and Exhibitions
The best source of prospects is usually the salesperson’s existing satisfied customers. It is much easier to sell additional goods and services to existing customers than to attract new customers. Indian companies are using this method of selling successfully.
This is also an effective prospecting tactic. In this method, companies use satisfied customers as the source of referrals. Sales representatives ask current customers for names of friends or business associates who might need similar products or services.
Then, as the salesperson contacts and sells to these prospects, more referrals are solicited. In this way, the process continues further.
Centre of Influence
Another effective prospecting technique based on referrals is the center-of-influence approach. A center of influence is a person with information about other people or influence over them that can help a salesperson identify good prospects. Some frequently used centers of influence are housewives, bankers, local politicians, etc.
Some companies use spotters as a source for prospecting potential customers. Spotters are usually ‘sales trainees’ who help salespersons identify prospects, thus saving time and qualifying sales leads.
A cold call is also known as an unsolicited sales call. This prospecting technique involves knocking on doors. The salesperson makes contact with potential customers, introduces himself or herself, and asks if there is a use for the product or service.
This technique is utilized by the salesperson when they have time available between scheduled appointments.
A wide variety of directories are full of prospects. The classified telephone directory is the most obvious one. A salesperson may also find that membership directories of trade associations, professional societies, and civic and social organizations are good sources for prospects.
In India, specialized companies compile lists of individuals and organizations for direct mail advertisers. These lists may also be used to identify sales prospects. The major advantages of mailing lists are that they are often more current and more selective than directories.
Trade Shows and Exhibitions
A cost-effective way to make personal contacts and locate prospective buyers is to participate in trade shows and exhibitions. Nowadays more and more companies are increasing their participation in these shows and exhibitions to company booths by mailing invitations or promising a gift.
Advance announcements sent to trade publications may also help to attract prospects. In view of the rising costs of personal selling trade shows have become an increasingly important source of prospecting. India International Trade Fair organized by the Trade Fair Authority of India every year provides a good example of the usage of trade shows for prospecting.
Once the salesperson has identified potential customers, he or she must qualify them to determine, if they are valid prospects. Unless this is done, time and energy are wasted in trying to sell to people who cannot or will not purchase the product or service.
There are several factors to consider while qualifying a prospect. One approach to qualifying often called the MAN (Money, Authority, and Need) approach is given below:
Does the prospect have the money or resources to purchase a product or service? The ability to pay is a very critical factor in qualifying a prospect. The salespeople must be familiar with the financial resources of a prospect.
Does the prospect have the authority to make the commitment? This is a particular concern when dealing with corporations, government agencies, or other large organizations.
Even while selling to a married couple, it may be difficult to identify who actually makes the purchase decision. A salesperson must identify the key decision maker early to economize on selling time more effectively.
Does the prospect need the product or service? If a salesperson cannot establish that the customer will benefit from purchasing a product or service, there is no reason to waste a sales call.
The prospect either will refuse the offer or will end up dissatisfied with the purchase. Before proceeding further the salesperson should first appraise whether money, authority, and need exist with the prospect.
After a prospect has been identified and qualified, the salesperson prepares for the sale of a product or service. The preparation stage involves two key activities i.e. Pre-approach and Call Planning.
The pre-approach step includes all the information-gathering activities necessary to learn relevant facts about the prospect and his or her needs and situations. Four necessary steps of pre-approach are:
- It should disclose the party’s need and ability to buy.
- It should provide information that will enable the seller to tailor the presentation to the prospect.
- It should provide information that may keep the salesperson from making serious tactical errors during the presentation.
- Finally, a good pre-approached increases the salesperson’s confidence and makes him confident to handle whatever may arise during the sales.
Call planning involves a specific planning sequence. The salesperson defines the objective of the call, devises a selling strategy to achieve this objective, and makes the appointments. The primary objective of any sales effort is to get an order.
For some sales call intermediate objectives may be needed. Some examples of intermediate objectives are:
- To obtain more information about the prospect.
- To relate the prospect’s needs and concerns to the features and benefits of the product or service.
- To obtain permission for a demonstration of the product.
- To introduce a new distributor.
The salesperson must develop a strategy, or course of action to achieve his or her objective. Careful consideration of the prospect’s background and needs is required in order to able to formulate a tailor-made strategy appropriate for the prospect.
Since sales calls are costly, they should be arranged in advance. Cold calls i.e. calls without a specific appointment may be appropriate for introducing the salesperson or dropping off information. This method is generally inefficient for selling most products and services and is not consistent with modern professional selling.
After establishing rapport with the prospects through calls, the salesperson proceeds to the formal sales presentation. The objective of the presentation is to explain how the product meets the special needs of the consumer.
The job of the salesperson is to inform the prospect about the characteristics, capabilities, and availability of goods and services that are for sale. In order to ensure that the presentation is understood by the prospect, the salesperson should be clear in his/her communication.
The presentation should also be interesting enough to keep the attention of the prospect focused on the proposal. Sales presentations are classified into different categories:
- Fully Automated
- Organized Presentation
- Unstructured Presentations
The fully automated presentation is the most highly structured approach, based on film or slide presentations. The salesperson simply answers questions or clears up doubts. e.g. selling life insurance to rural or semi-urban prospects.
In this approach, the salesperson reads from brochures or literature, adding comments to the prepared materials when necessary. A common example is the selling of pharmaceutical products by medical representatives.
In the memorized presentation, a company message is presented, with a few changes initiated by the salesperson.
The most popular and often the most effective sales presentation method is the organized presentation. With this method, the salesperson has complete flexibility in oral communication but follows a company-prepared outline or checklist.
The organized approach best exemplifies the selling process in which customers are moved through four stages to a purchase decision; i.e. attention, interest, desire, and action (AIDA).
In this approach, the buyer and seller together explore the problems that are the real sources of the company’s needs. Although unstructured presentations are often effective and widely used, they have a number of limitations. Such presentations tend to be not too well-focused.
As a result, points are often missed and time is wasted. Further, salespersons do not usually anticipate objections but may have to face surprise complaints from prospects. Because it is difficult to teach a salesperson how to use the unstructured method, the problem-solving presentation seems best suited to an experienced, salesperson who is selling to established customers.
When the salesperson has the name of the prospect and adequate pre-approach information, the next step is the actual approach. It frequently makes or breaks the entire presentation. If the approach fails, the salesperson often does not get a chance to give a presentation or demonstration.
It gets the prospect’s attention, it immediately inspires interest in hearing more about the proposition, and it makes an easy transition into the demonstration phase. Four basic approaches are in common use:
- In the introductory approach, the salesperson introduces himself to the prospect and states what company he represents.
- The product consists of handling the product to prospect with little conversation. It can be most effective when the product is unique and creates interest on sight.
- The sales person starts the sale in a consumer-benefit approach by informing the prospect of what the firm can provide in benefits. In other words, directs the prospect’s attention toward the benefits the firm has to deliver.
- Lastly, the referral approach is successful in getting an audience with a prospect who is difficult to see directly. It consists of obtaining the permission of a past or present customer to use his or her name as a reference in meeting a new prospect.
The demonstration is the core of the selling process. The salesperson actually transmits the information and attempts to persuade the prospect through product demonstration to make a customer. Two factors should be taken into consideration in preparing an effective product demonstration:
- The demonstration should be carefully rehearsed to reduce the possibility of even a minor malfunction.
- The demonstration should be designed to give customers a ‘hand on’ experience with the product wherever possible. For example, an industrial sales representative might arrange a demonstration before the purchaser’s technical personnel.
All salespersons confront sales resistance i.e. actions or statements by prospects that postpone, hinder, or prevent the completion of the sale. Normally sales resistance takes the form of an objection which can be classified as stated or hidden.
Prospects may state their objections to a proposition openly and give the salesperson a chance to answer them. This is an ideal situation because everything is out in the open and the salesperson does not need to read the prospect’s mind. Unfortunately, in many instances, prospects hide their real reasons for not buying.
Beside having hidden objections, their stated objection may be phony. Unless one can determine the real barrier to the sale one shall not be able to overcome it. There are two major techniques for discovering hidden objections. One is to keep the prospect talking by asking probing questions.
The other is to use insights gained through experience in selling the product, combined with a knowledge of the prospect’s situation, to perceive the hidden objection. Often objections to price and product are also faced by sales person either in the form of unaffordable or too high price.
Product objections can be answered best when salespeople have extensive product knowledge of both their own products and competitors. Many times prospects may be misinformed or may not understand some of the technical aspects of the proposition. In this case, the salesperson should provide additional information. Even the prospect’s objections can be met simply and effectively by altering the product to suit the customer.
After having answered and overcome objections, it is the stage for a salesperson to ask for the order from the prospects. The entire effort is wasted unless the salesperson can get the prospect to agree to buy the product. There are several closing techniques that are being used by salespersons in India.
A salesperson should select among these techniques one that fits the specific prospect and selling situation. Now we would discuss a few effective closing techniques. In the action close technique, the salesperson takes an action that will complete the sale e.g. in the case of high-priced products like a Motorcar, a photocopier, or an industrial product the sales person may negotiate with the financial institution for financial assistance for the prospects.
The gift-close technique provides the prospect with an added incentive for taking immediate buying action. In one more yes-close technique, the salesperson restates the benefits of the products in a series of questions that will result in positive responses from the prospects. The process may result in an order.
The direct close is a clear and simple technique, many sales persons feel that this is the best approach for closing, especially if there are strong positive buying motives, the salesperson will summarise the major points that were made during the presentation to the prospects prior to asking for the sale.
The selling process is not completed by merely making the sale, as generally assumed by many salespersons. After-sales activities are an important part of the whole selling process. Effective sales follow-up reduces the buyer’s doubt about the product or services and improves the chance that the person will buy again in the future.
In addition to post-sale activities, salespersons are also required to maintain good customer relations. Nowadays many companies are evolving specific policies and practices to ensure that customer’s needs are not neglected. No matter how efficient a company is, there are always some customer complaints.
The complaint should be taken seriously and handled with concern. The customer must know that the company cares about maintaining good customer relations. Reasonably frequent contacts with the present customers are an expected part of the salesperson’s job.
For important customers, personal visits are appropriate. Letters, notes, phone calls, and greetings are also good ways to keep in touch with customers. Many good business houses also offer customer newsletters. Successful sales person never stop serving customers.
What is the selling process?
These are the major steps of the selling process explained below in detail:
4. Handling Objections