Salespersons sell, and you hire a sales force to sell. But your ultimate task is rather different: to get people – customers – to buy.
You must build a responsive program that will attract customers who will respond to your offer by buying from you – preferably on a regular basis. The issues you face and the decisions you make before attempting to sell are far more important to your success and survival than the actual execution of a sale.
Sales is as creative a process as developing a new idea. Sure, each salesperson will have the benefit of the company resources that they have to make the sale and service the customer, but specifically how they make that sale is up to each individual salesperson.
Before you can begin to understand your customers, you have to determine just who your prospective customers are.
If you have done your market analysis, you should already have gathered information regarding current and prospective customers. You should have a snapshot of your target customers.
In fact, you may even have a prospect list from which individual salespeople can work, depending on their territories. The first step in any successful personal sales strategy is effective prospecting.
A list of prospects provided by the sales manager is a good starting point, but that is all it is – a starting point. Your salespeople have to learn to prospect as well. The more efficient they are at prospecting, the more effective they will be at closing sales.
To start prospecting, the first thing your salespeople need is a definition of your target market, which your research should provide. Next, they have to start building a list of possible customers based on those demographics.
Keep in mind one thing, however: the universe of possible customers is not equal to the universe of prospective customers.
Although a possible customer may meet all the demographic requirements set forth in your research, not all of them will have a need for your product, nor will all of them have the financial means to purchase your product. The trick in good prospecting is to qualify possible customers quickly to determine if they will be good, solid prospects.
Some companies use inside salespeople to qualify possible customers by determining their interest level and ordering requirements before setting up an appointment for the outside salesperson.
You may not have the luxury of hiring inside salespeople for your small business. In this case, you can prospect by using other methods, such as direct mail, cold calling, etc.
The idea behind qualifying is to screen the list of possible customers so that your sales force spends less time with individuals and organisations that really have no desire or don’t have the financial means to buy your product, and invests its time in prospects which are more likely to buy.
You can find good prospects through networking. Make it a point to be visible in local community activities as well as industry activities. You don’t have to pitch your products at all the events you attend, but you should keep your eyes and ears open to any opportunities that may arise.
You should also be sure to read the local newspaper(s) each day. You may come across a good prospect in an article or an ad. The point is to be as observant as possible when prospecting because the more avenues that you have, the more successful your sales will be.
Understanding your customers
Once a potential customer has been qualified to determine whether they are a good prospect, your salespeople should start collecting as much information about them as possible to develop an understanding of their needs and goals. We cannot stress this point enough. The more you know about a good, qualified prospect, the better chance you have of closing a sale.
Unfortunately, many entrepreneurs mistakenly believe that satisfying customer needs simply means offering the lowest price. Unfortunately, larger competitors usually enjoy “economies of scale”, enabling them to offer unbeatable prices. When you try to compete with the giants on price alone, you are competing on their turf, not yours.
Although price is important, it is not the only factor in a purchasing decision. Customers buy to satisfy a variety of needs.
If your product or service does not satisfy their needs better than a comparable one with a lower price, they will make their choice based on price. However, if your customers believe your offer satisfies them best, they will happily pay your premium price. Entrepreneurs who understand and satisfy customer needs are following a customer-oriented differentiation strategy.
In order to put together a customer-oriented differentiation strategy, you have to do your homework. In fact, analysing the needs and goals of your customers is a continuing process, one which should be an integral part of the continual refinement of your product or service.
Failure to understand your customers and meet their changing needs, results in the loss of those customers.
Part of the process of analysing your customers’ needs and goals is of course, market research. The other part is to conduct a needs analysis of each prospect. This is different again from the research on customer needs carried out as part of your original market research.
Research to identify the general needs of your customer base should be carried out by the company. Each salesperson however, should make a point of carrying out a specific needs analysis for each prospect, even if the prospect has knocked on your door.
The reason is simple. While a market analysis provides you with information regarding the market in general, a specific needs analysis of a prospect uncovers the unique needs and goals of that person or organisation.
With this information in front of them, your salespeople can develop their own unique selling strategy for each of their prospects. The first thing they have to do however, is conduct the needs analysis.
Defining customer needs and goals
Every person is different. Every organisation you deal with has a different agenda to any other organisation. It is impossible to guess the motivation behind someone’s decision to purchase a product or use a service. Every prospect has different needs and objectives.
The job of a good salesperson is to learn as much as they can about the needs which motivate a particular person or buyer for an organisation when it comes to the purchasing decision. By understanding a prospect’s needs, your salespeople can tailor their sales presentations to meet those needs.
In order to conduct a needs analysis, you must first understand how people arrive at purchasing decisions. Most people, whether it is an individual or a buyer for an organisation, are motivated by economics.
They consider all the economic factors involved in the purchasing decision such as price, quality, service, performance and convenience. Each of these economic factors has a different value to different people. Discovering the value a particular prospect places on each of these factors is one of the goals of needs analysis.
As an example from a few years ago, the Hyundai was one of the most economically priced cars on the market yet, when it was introduced, the Lada was $1,000 less. The Hyundai became an overwhelming success while the Lada struggled. While price was a significant economic factor, when it came to the sale of these cars, consumers also considered other factors such as service, performance and convenience.
Hyundai had set up a much more aggressive dealership network and supported it well. The Lada, on the other hand, suffered from an inadequate dealership network and a general lack of support from the manufacturer.
As you can see, price is not the only determining factor when it comes to the purchasing decision. Unfortunately, many salespeople make the mistake of believing that price is the only consideration when it comes to sales.
If price was the only consideration, then the only strategy a company could employ to be successful would be to make sure their prices were lower than any other company’s. The reality is, that a price higher than the competitions can be justified if it is offset by other factors.
Apart from economic factors, other motivational elements include individual needs such as basic living requirements, ego, lifestyle, personal goals and safety related requirements.
These needs play a large part in the choice a buyer might make when reaching the final purchasing decision. For instance, ego and lifestyle play a large part for some people when it comes purchasing a car, home, clothing, etc. The primary motivating factor for someone in the market for a Mercedes is not necessarily the price, but may be safety, quality or social impact.
As you can see, there are a variety of needs which affect the purchasing decision. A salesperson’s goal is to identify the needs and goals of each prospect so that they can begin to develop a strategy which meets those needs and goals.
How to analyse your customer needs
To conduct a needs analysis, the two key requirements for a salesperson are the ability to listen and to observe. These two functions are the most critical elements of a needs analysis.
By listening, the salesperson picks up remarks a prospect might make over the phone or at a meeting or in response to a question he/she may ask. For instance, a prospect might say “If I had a personal computer, it would improve my productivity!” or, “My current car is much too small”!
In both statements, the prospect has identified needs. The first statement indicates the prospect is concerned about productivity and thinks a personal computer could help.
The second statement indicates that the prospect wants a car that is more spacious.
Observation is another key requirement. A good salesperson can tell a lot about prospects by the clothes they wear, the car they drive, the furniture they have in their office, etc. If the prospect is wearing a Rolex, an Armani suit, a silk tie and Gucci shoes, the primary motivating factor usually centres around social needs such as ego and lifestyle.
You should also make a point of observing mannerisms and the way in which a prospect answers a question. A prospect’s body language can teach you a great deal. Is there excitement in their voice? What is their physical reaction when price is mentioned? These are all items you should observe when determining a prospect’s needs.
Listening and observing are also important when talking to others about a prospect’s needs. Do not rely totally on the information you have gathered from talking to the prospect.
To do a thorough needs analysis, talk to others familiar with the prospect. For instance, talk to administrative assistants, other managers in an organisation, spouses, etc. Ask questions which deal with the needs of the company or the individual, then listen closely and observe how they answer.
Finally, every person has their own point of view when it comes to the purchasing decision. Try looking at the situation from the customer’s point of view. What would be your primary needs if you were in the same situation as the buyer? Try to empathise with the needs of the buyer so that you are better able to understand where they are coming from.
As you are asking the prospect and individuals close to the prospect, questions concerning their needs, make sure these responses and observations are recorded in a standard form such as a daily sales report.
By keeping track of your conversations and observations, you can review them from time to time to determine just what the prospect’s needs and goals are. In this way you can develop an individual strategy for that prospect. In addition, prospects are impressed if you are able to remember details of past conversations.
This shows that you are interested in them and their business and will work hard to make sure they are satisfied.
Working towards customer goals
Once you have worked out what the needs and goals of a prospect are, start developing a strategy to sell the benefits of your product or service so that they meet the prospect’s requirements.
Your salespeople can do this by emphasising the benefits of the product which satisfy the needs of the prospect and de-emphasising the features that do not.
This may seem fairly simple, but too often salespeople get side-tracked into explaining all the features and benefits of the product or service without concentrating on the prospect’s needs and goals. For instance, if you are selling cars and one model is equipped with a global positioning device.
If you make a point of emphasising this feature over everything else, chances are you are not going to make the sale. Why? People do not buy cars just because they have a global positioning device. They buy cars for transport and are usually more concerned about a car which best fits their lifestyle for the money they are willing to spend.
It is therefore necessary to sell benefits they consider to be of more importance like safety, petrol consumption, quality, warranty and of course, price.
This means, as we have stated already, that you have to listen to and observe your customers to find out which needs they consider important, then supply solutions.
People do not buy products or services, they buy the benefits derived from them. It is your salespeople’s responsibility to identify the needs of the prospect and sell those needs, not the product.
The product should be secondary to the benefits which are derived from buying the product or service. When developing your strategy, clearly express the feature or function of your product or service which will satisfy the prospect’s needs.
If this is not done, chances are the prospect will not be able to identify the benefits they will be able to derive from the product or service and will decide not to purchase it.
Clearly expressing the feature or function does not mean talking about the technical aspect of the product or service. If you provide your customers with a stream of facts and figures relating to a computer you are selling them, it will mean very little unless they are computer buffs.
However, if you explain that this particular computer processes data twice as fast as any other model on the market, thereby increasing productivity, you have clearly articulated a major benefit of the product.
The idea is to make sure that the prospect understands how your product or service corresponds to their needs and goals. The easier your salespeople make it for the prospect to understand the features of the product or service they are selling, the easier it will be to make the sale.
Frequently, it is the energy, enthusiasm and creativity with which the product is presented which accelerates the prospect’s interest. A great product poorly presented may not sell, while a product of lesser quality, presented well, will. This is not an argument for emotional pitches instead of well thought out, professional presentations however, meeting a prospect’s needs, coupled with quality service and product will determine the success of the sales presentation.
When detailing the features or functions of your product or service which will benefit the prospect, do not be afraid to ask follow-up questions.
This is especially useful when putting together a proposal. Remember, only by asking questions and listening carefully can you clearly understand a prospect’s needs. Only when you fully understand those needs can you begin to understand how to fulfil the needs of the prospect.
Developing customer profiles
Once you have your needs analysis it will pay you to draw up profiles of your customers. These can be profiles of existing customers, of ideal customers as well as profiles of prospects, or future customers.
Your aim is to develop an idea of who would want or need what you are selling and whether you are successfully matching your sales strategy to them. After all, understanding exactly who is buying from you, or who is likely to buy from you, helps you to fine tune or adjust your selling strategy accordingly.
The information which can be included in a customer profile consists of details such as their:
Approximate income range
Type of employment
Whether they are the decision makers
Who they are answerable to
Level of education
Life cycle situation
Interests or hobbies
Other major influences in their lives.
Obviously you will not know all this information about your existing customers, but should be able to make an educated guess. Additionally this list is a very limited one. Depending on your business you can also include all sorts of other factors such as:
Where your customers live
How much discretionary income they may have
Whether they are likely to be impulsive shoppers or more cautious
Whether most purchases will be for business needs, family needs/wants
Frequency of purchase
Whether price is likely to be a deciding factor
Will service play a more important part
How important after-sales service will be, and so on.
Remember, you are aiming to develop an understanding of who your customers are or are likely to be in the future.
The more you understand them the better able you will be to pitch your sales strategy to suit them.