Sales Fundamentals

Sales Fundamentals

The definition of a sale is simple enough, the process of turning someone into a buyer can be very complex!

We will go through today a basic sales process, plus some basic sales tools, that you can use to seal the deal, no matter what the size of the sale.

"Before beginning a Hunt, it is wise to ask someone what you are looking for before you begin looking for it" - Winnie the Pooh

Like any profession, sales has its own special vocabulary. There's nothing particularly difficult about the language of sales. Mastering it just takes a little study and practice. Knowing the language will make you feel more confident and prepared to start selling.

"In the modern world of business, it is useless to be a creative original thinker unless you can also sell what you create" - David Ogilvie

Glossary/Sales Terms

Close/closing. It is the second to last step in the sales process. In this step, the salesperson encourages the customer to sign the order. In the past, salespeople often became pushy at this stage, but customers are more sophisticated these days and they don't respond well to aggressive attempts to close a deal.

Cold calling. The first phone call made to a prospective client. 

Customer relationship management (CRM). A system for managing the entire sales relationship with a client. Computerized CRM systems record all customer contacts, purchases, returns, etc.

Decision-maker. The person in an organization who has the authority to agree to a sale.

Networking. An increasingly popular method of finding prospects based on referrals and introductions.

Prequalifying clients. Determining if potential clients are worthwhile prospects.

Qualifying clients. The process of getting to know potential customers (who they are, what they do, what they need).

Sales funnel. A pattern that describes the conversion of prospects into sales. Many prospects enter the funnel at the top, but only a few are converted to sales. (This analogy is actually flawed because in a real funnel everything that goes in the top comes out the bottom.) The term "sales pipeline" has a similar meaning.

Warm calling. Calls made after the initial contact with a customer, often in response to a call from the customer. 

Types of Sales

Here are some characteristics of the different types of sales:

1. Telemarketing.  In theory, the telephone allows you to reach just about anyone on the planet. In practice, however, many people screen their calls and it is often difficult to get through to a real person. If you use the phone for sales, have a brief curiosity-building message ready to leave on the voice mail of potential customers.

2. Direct mail.  Believe it or not, a one percent response rate for direct mail is considered average. Despite these long odds, many companies still rely heavily on direct mail to generate sales.

3. E-mail. Legitimate e-mail selling is different from spam, the carpet bombing approach that sends messages to thousands or millions of people whether or not they have expressed an interest in the product being hyped. If you use e-mail for selling, try to put something in the subject line of your message that will attract attention and keep people from deleting the message without reading it. 

4. The Internet. Most companies offer information about their products on their websites, whether or not they actually do any selling online. If you are in person-to-person sales, you need to be very familiar with what your company says about its products online. The growing interest in social networking sites, such as Facebook, offers new opportunities for online sales.

5. Person-to-person. Most sales are still conducted face to face. When you eat at a restaurant, check into a hotel, or buy bananas in a grocery store, you are the customer in a person-to-person sales transaction. Since this is the most common type of sales, most of this workshop is devoted to it.

Sales approaches:

1. Consultative approach. This is a long-term approach to sales. It may not lead to sales right away, but by building a relationship with a client it aims to create sales opportunities in the future. The more you learn about a client, the better able you are to understand the clients wants and needs. It is an approach which depends upon trust, you trust that the customer will see the benefits of buying from you and they trust that you will give them the correct steer. The danger with this approach is that you may spend a considerable amount of time building a relationship and then having nothing to show for it. By building a relationship, however, you increase the chances of large-scale and repeat business.

2. Hard sell. Many people are turned off by this approach. They consider it too pushy. This approach is used most often with clients who have a hard time making up their minds. It is only advisable to use the hard sell in a one-off setting where time is at a premium if they don't buy now; you are not likely to see them again. Therefore, it'snow or never!

3. Technical sales. This approach is used most often with highly technical products and services. Sales personnel need some technical knowledge so that they will be on an equal footing with clients. The client will have a clear idea of what they are looking for, and a checklist of priorities. You will point them towards a range of items which meet those priorities – if not entirely then as well as possible. You may offer a personal opinion based on an understanding that you know what they want, and they know you have enough product knowledge to point them in the right direction

Identifying a contact person 

There are many ways to find a contact person. Perhaps the most valuable is through networking and referrals. A referral from a third party gives you instant credibility, especially if the third party is well-known and respected by the potential client. 

In looking for a contact person, it is often worthwhile to go through a prequalifying process. This involves doing some research to determine if the contact is really the appropriate person to talk to and if the contact's business actually has a need for your products. 

There is no point in wasting your time chasing contacts that won't do you any good. Their position in the company and their closeness to the decision-maker will decide this. Glean as much information from the third party as is appropriate.

When you first speak to the contact it will be appropriate to let them know who referred you to them: "Hello, I'm from _______and I've been given your name by_______ from _______. I was wondering if you had a few moments to discuss _______". By letting them know that you have dealt with and supplied a person they trust, you will immediately become more trustworthy in their eyes. Don't go straight into a pitch but make preliminary enquiries to strengthen your sales prospects. 

Performing a needs analysis

Clients need many more things than you might be planning to sell them. The more you can do for a client, the more you will be seen as a valuble partner. Here are some suggestions about how it might be possible to meet some other client needs:

1. Information. You might be able to act as a consultant to a client, providing information about the latest developments in your field.

2. Training. If you provide a product that requires some training, make training part of the package.

3. Financing. If your company does not provide financing, put the client in touch with banks that do.

4. Community. Communities often grow up around particular products, especially high-tech products. Introduce clients to user groups or trade organizations.

5. Personnel. You probably know a number of capable people who are thinking about changing jobs. Helping a client find skilled employees can benefit everyone involved. If the people you recommend are hired, they will become some of your strongest advocates.

Creating potential solutions

Providing solutions is a matter of finding ways to address the problems identified through the questions you ask a client. If the client's problems are fairly simple, you may be able to offer a solution on the spot. For more complex problems, you may need some time to study the situation before you come up with a way to deal with it. In addressing these more difficult problems, you might take the same approach you would use with a problem in your own organization. Assemble a group of knowledgeable staff and ask them to brainstorm solutions. 

First impressions

The first impression people form of you is based on both verbal and nonverbal factors. The nonverbal factors may actually be more important when selling in person. These include such things as:

1. Your general appearance: how you dress, personal grooming etc.- blue suite

2. Your facial expression and bearing.

3. Your posture.

4. Your tone of voice 

5. Your nonverbal communications: eye contact, nodding, etc.

None of this means that you should pay any less attention to the verbal factors. Pay attention to the language that you use and ensure that it is appropriate for the circumstances. 

As a rule of thumb, it is advisable to be as polite and formal as you can be on the first meeting. As a business relationship is established you may find that a natural rapport emerges.

Pitching

When making a pitch it is important to get the balance right between attractiveness and believability. You can promise the earth to a potential customer in order to get them to sign on the bottom line, but if they do not believe you can deliver on what you are offering then it will be completely pointless. 

Also, as most deals have a cooling-off period, the chances are that if you oversell your product they will be dissatisfied and bring the deal to an end before it has had time to become established.

"The key to being a professional salesperson is not to sound like one." - Jeffrey Gitomer

In order to convince a customer to part with their money, it is essential to deal with any objections and to make them see how the benefits outweigh the cost.

It is things like this that make a person purchase a specific item. The question that they may ask on the surface is "what does it do?" but the question you need to answer for them is "what will it do for me?" One item may have various selling points for different possible purchasers. 

It is important to be aware of what tack you should take with each customer. A sales pitch is absolutely not a one size fits all matter for the salesperson or for the customer.

Outlining your USP

Some people assume that price is always the deciding factor in purchasing decisions. In fact, these decisions are often based on a variety of factors, such as:

1. Convenience of use: One of the major attractions in buying any item is what kind of difference it makes to day-to-day life. People will spend money on any number of things to simplify their living situation.

2. Convenience of purchasing: It may be that a high-value item is just out of a customers reach in one payment. In such a case, being able to offer a payment arrangement will often make the difference between the customer signing on the dotted line and them refusing to purchase. Flexibility in other areas is also beneficial.

3. Special features: Any customer will be keen to get the best they can from a deal, and there are several informed customers who will be keen to make a set stipulation before agreeing to a purchase. Offering them a few extras on the item which will increase the benefit to them is a good way of encouraging them to sign. 

4. Availability of service: The customer doesn't just want to know that they have got a good deal; they also want to know that it will stay that way after they have taken the product home with them. Whether it is in terms of a competent helpdesk telephone number or a dedicated technical department, this is something that will convince the less technically inclined. 

5. Need for training to use the product: More of an issue in terms of corporate sales, but not specifically limited to that field. The more ready to go a product or service is, the more immediate the benefit and the more likely the customer may be to purchase it. However, if training is necessary, this can still be a way in to make a sale, as the training can be bundled in with the purchase of the goods at a considerable discount as a way of convincing the customer.

6. Your goal is not a simple, straightforward matter of persuading them to buy from you, but also a matter of persuading them not to buy from someone else. 

To make the point clearer, a customer's objections to buying something are not the opposite of their reasons why they should buy it.

It is therefore not the case that you can just reel off a list of reasons why someone should buy something and imagine that this cures their objections. In reality, it is more complicated than that and you need to highlight the positive aspects of the item while dealing with any negatives. 

You should also be ready to sweeten the deal with reference to many of the above terms. If there is room to manoeuvre on payment terms, this may persuade the customer that they are getting a good deal. If you can give them a discount on peripheral equipment to increase the benefits of the item they are interested in, this may also work.

1. Reliability of the product: Guarantees can be given in the shape of a warranty or another; a similar agreement which covers the customer should the item not live up to their wishes.

2. Reputation of the seller: The best demonstration of reputation is word of mouth, checkable statistics on promotional material or testimonials from past customers. Knowing that other customers have been happy puts their mind at ease

3. Friendliness of the salesperson: People are far more likely to make a deal with someone who makes them feel as though they are being taken care of. 

4. Budget: does the item you are aiming to sell fall within their set budget-ask "May I ask what your budget is?"  

5. Sweeten the deal with reference to many of the above terms. 

Customer: What's in it for me?

Customers are always asking, "What's in it for me? N.B. to focus on benefits rather than features AND explain what the products will do for their customers. Customers might not care about all the wonderful features of your products, but they will care about how your products will solve their problems or make their lives easier.

Handling objections

You can overcome these objections if you are prepared to respond to them in a calm, rational way. Often all that customers need is more information to make them feel more confident about their purchase.

In these situations, you need to be careful not to start an argument with a customer or belittle the customer's concerns. In fact, you might decide to agree with a customer to a certain point but then show the customer a different way of thinking about the purchase. For example: "I know that buying new windows is a big investment, but let's look at what you can expect to save on energy costs".

There is a saying: "If life gives you lemons, make lemonade". Although this is something of a cliche and not 100% applicable, it gives a good example of how you can deal with customer objections by turning them to your advantage. 

Naturally, people will be reluctant to part with money that they have worked hard to earn and will not want to spend without being absolutely convinced that the spending will be worthwhile. This means that they will be on the look-out for things that will make the purchase less worthwhile. Your task as a salesperson is to hear and understand their objections but convince them to look at things differently.

Common types of objections

Here are some of the real reasons why people are unwilling to make a purchase:

1. They don't have the money.

2. They can't get financing. 

3. They can't decide on their own.

4. They think they can get a better deal from someone else.

5. They're not sure your product will meet their needs.

6. They think your product is overpriced.

7. They want to shop around.

8. They have an established relationship with another vendor.

Each objection has the potential to be the banana skin on which your sales pitch slips and falls. If you listen to what they have to say and offer a different way of looking at things, they have the potential to be turned into positive reasons for purchasing. 

Often from preliminary conversations, it is possible to foresee what objection will arise and how to counteract that objection, and by your command of the situation, you can convince the customer that you know what you are talking about.

There is a sense in which sales are all about control. If you fail to produce a counterargument for one or more of the customer's reasons for not purchasing, then you have conceded control to them and, more importantly, to their pessimism regarding the purchase. 

How you handle customer objections can be the major influence on your success in making a sale. Anyone can sell to a customer who is on a mission to make a purchase.

Selling to someone who is determined only to buy when they are convinced of a good deal is a far bigger test.

Basic Strategies

Before you can respond to a suggestion, you need to understand the real reasons behind it. You might discover, for example, that

1. The customer can't afford your product.

2. The customer doesn't like your product.

3. The customer has strong personal ties to another vendor.

In these situations, it is probably not worth responding to a customer's objections. Nothing you say will change the customer's mind. If they cannot afford the product, then they cannot afford it. Short of you giving them the money, you cannot influence that and if you cannot extend the payment terms then there is nothing more to say. If they don't like the product, you can offer alternatives, but these may not have much relevance. If their objection is related to having strong personal ties to another vendor, then they may well already have made their mind up but it is worth considering an approach based on the idea that a change is often a good idea. These responses are however at best speculative.

If the objections are less firm then they do have the potential to be turned to your advantage. If the objection is based on cost, then look at creative ways around that. It may be that they do not want to spend so much in one go. 

A payment plan may be the quickest way around this. A certain amount each month might be something they are prepared to do. You can also look at how much money the deal might save them over time. Saying "Yes, R300 sounds like a lot, but when you consider how much use you will get from the product and how much it will save you; it works out quite reasonably" can help. Avoid using words such as "cheap" as it can be insulting to a customer who is spending a lot of money.

If the customer is reluctant to purchase because they feel that the product does not meet their needs, get their needs ironed out and explain how the product does just that. It may be a good idea to call on your experience and mention that another customer had the same objections, but the purchase worked out for them in the end and now they swear by it. 

You can always embellish on a story if you can base that embellishment in something which holds up to analysis. The key point is to emphasize that the product has many more benefits than negative aspects and to chip away at the negative aspects by presenting ways around them.

E.g. equipment cost vs preventing a claim from noise-induced hearing loss sold the machine

Advanced objections

Here are some possible questions you might ask in response to customer objections:

1. That's more than I wanted to spend. 

How much were you thinking of spending?

Do you know about the trade-off between price and reliability?

2. I'm not ready to make a decision.

What additional information would be helpful to you?

3. I'm not sure this product is right for us.

What features are you looking for?

4. I'm too busy to decide right now.

When can we get together when you have more time?

These questions might not help you close a sale, but they will at least keep the discussion going. It's important not to push too hard with questions like these. 

You want to come across more as a consultant than a salesperson. Even though the customer is a customer and you are a salesperson, if they feel like they are being sold to rather than dealt with like a human being, they will be far more likely to walk away from the sale. You need to keep away from appearing as though you have dollar signs in your eyes. This is where it is essential to maintain a balance between being a salesman and acting as a friend. 

Sealing the deal

You have worked hard to get your foot in the door, tell customers what your product can do for them, and respond to any objections they might have. Now it's time to seal the deal. Or is it? A good salesperson needs to know when it's time to close and how to go about doing it. 

Misidentifying the moment to close can carry numerous problems with it, not least the fact that a customer with extra thinking time can very easily suddenly decide that they are not so interested after all, and a customer who is pressed to complete the deal too early can be left with a negative impression of the salesperson  one which may be impossible to conquer.

The point at which it is advisable to close on a deal will be fairly obvious to any experienced salesperson. The moment will become apparent, usually, after you have gone through a typical sales pitch, responded to the potential customer's objections and talked them around, and they have begun to give a positive impression with regards to buying whether they do this verbally or through their body language and non-verbal comportment. 

At this point, you should begin to speak as though they are going to buy, while not talking as though they have already bought the product or service.

Understanding when it's time to close

Once you start picking up signals that it may be time to close, you can ask a confirmation question such as "How soon do you need this?" If the customer gives you a date, you can proceed with the closing. If the customer still has objections or questions, you will have to handle those first. This process of asking a confirmation question is sometimes called a trial close.

Rather than asking "So, would you like me to package this up for you?" the confirmation question allows you to garner that information without having to put the customer in a position where they answer a Yes/No question.

At this point, it is more than likely that the customer's verbal and non-verbal signals will already have given a big lead as to their intentions. If they are making statements which pertain to where in their house the product would fit, or how they would use the service, then they are clearly already picturing themselves with the item, and they are as likely as they ever will be to be receptive to an attempt at closing. 

The nature of your closing technique is important here, but the main thing to remember is that as long as you are respectful to any concerns they may have, you are all but guaranteed the sale.

Powerful closing techniques

A closing question should give customers alternatives other than yes or no. This approach effectively closes the deal but makes the customer feel that they are in charge.

Some sample alternatives:

1. Delivery dates

2. Colours

3. Models

4. Quantity

For example, from the above list of alternatives you can craft a question that does not have a yes or no answer, allowing the customer to feel that they are in the driving seat while edging them towards deciding what you want them to decide. 

Taking each of the above examples consecutively, these questions might go something along the lines of:

Delivery Date: "So, when were you thinking of having the item installed?"

Colours: "We do have a range of colours in which you can have the item, which of these do you like best?"

Models: "Well, there is this model, and there is another here with some extra facilities, which of those would you prefer?"

Quantity: "How many of these items would you like?"

It can be tempting to add at this point that other customers have tended to go for this colour, or that many items, or to suggest when they could have the item delivered. It is wise, however, to avoid doing this as it looks like little more than over-efficiency and pushy salesmanship. Rather than doing this, you should pause and allow the customer to have the next word. 

If they are not a hundred per cent decided on the item and have a follow-up question, they may resent you talking in a way which more or less celebrates the fact that they have decided to spend their money. What they say next will be the springboard for what you want to say, whether it be to formally close the sale or edge them further towards buying. 

Things to remember

Most people have had a buying experience that they felt good about. They were happy with the product and the terms of the deal. They may have felt so good about the experience that they told their friends about it and patronized the business again.

Often this kind of good feeling is a result of being treated with warmth and respect by salespeople before, during, and after the closing. Remember that the impression you make in the closing is the one that will stay with the customer. Try to make the experience as positive as possible. The way that you treat a customer will have a real impact. 

This can be very straightforward and simple, and just requires you to be polite and friendly. You should always ask what more you can do for the customer, whether it be something like getting them an earlier delivery than expected, helping them out to their car with the item or just asking them how you can help further.

All the same, you should not grin like a Stepford Wife when making a sale as this can be off-putting. Just being polite and friendly when closing the sale and wishing the customer a good day as they leave the store can make a huge difference. What you can do practically, and how you do things, will serve you well in any sale.