Principles of sales

and negotiation
Week 7, lecture

Dr. Nikola Drašković, college professor

Agenda

 Sales dialogue: creating and communicating value

 Addressing concerns and earning commitment
Sales dialogue: creating and communicating
value
Effective Sales Dialogues

• Are planned and practiced by salespeople

• Encourage buyer feedback
• Focus on creating value for the buyer
• Present value in an interesting and understandable way
• Engage and involve the buyer
• Support customer value through objective claims
Buyer Feedback

 Salesperson continually assesses and evaluates the reactions and responses of

prospective buyers
 Provides the salesperson with important information measuring:
 The climate between the salesperson and the buyer
 The buyer’s level of interest in the product’s features and benefits
 How well the presentation is progressing toward the buyer’s purchase decision
Check-Backs or Response-Checks

 Questions that salespeople use during a sales dialogue to generate feedback from
the buyer
 Employed to:
 Confirm benefits and assess a prospective buyer’s level of interest
 Evaluate the level to which the salesperson has handled a buyer’s objection
Creating Customer Value

 Salesperson should:
 Identify confirmed benefits for the buyer
 Confirmed benefits: Benefits the buyer indicates are important and represent value
 Present a recommended solution
 Emphasize product features that will produce the confirmed benefits desired by the buyer
 Helps maintain relationships with existing customers
Ethical Dilemma
Interesting and Understandable Sales Dialogue

Salesperson needs to present selling points in an interesting and understandable

manner to the buyer
 Should employ verbal support elements
 Voice characteristics
 Examples and anecdotes
 Comparisons and analogies
Reasons for Using Sales Aids
Types of Sales Aids

 Visual materials
 Electronic materials
 Product demonstrations
Using Sales Aid in the Presentation

 Salesperson should develop multiple aids to create a positive impact

 Effectiveness of a sales aid can be increased by using the SPES Sequence
 S - State the selling point and introduce the sales aid
 P - Present the sales aid
 E - Explain the sales aid
 S - Summarize
Proof Providers

Use of statistics, testimonials, or case histories to support product claims

 Statistics: Facts that lend believability to claims of value and benefit
 Testimonials: Statements from satisfied users of the selling organization’s
products and services
 Case histories: Testimonials in a story or anecdotal form
Group Sales Dialogue

 Involves salespeople interacting with buyer groups

 Salespeople should:
 Prepare for tough questions from the buyers
 Engage in preselling
 Preselling: Presenting the product or service to individual buyers before presenting it to the
whole group
Sales Tactics for Selling to Groups

 Arrival tactics
 Arriving and setting up before the arrival of the buying group
 Eye contact
 Making periodic eye contact with each member of the buying group
 Communication
 Soliciting opinions and feedback from each member of the buying group and avoiding taking
sides
Handling Questions in Group Presentation

Salesperson should:
 Listen carefully and maintain eye contact with the person asking the question
 Repeat or restate the question to ensure understanding
 Show proper respect to the person asking the question
 Address the entire group while answering a question from an individual
 Answer questions as succinctly and convincingly as possible
Addressing concerns and earning commitment
Sales Resistance

 Buyer’s objections to a product or service during a sales presentation

 Viewed as opportunities to sell
 Normal part of a sales conversation
 Salesperson will have to:
 Determine customer interest
 Measure the buyer’s understanding of the problem
 Correct handling of resistance can lead to customer acceptance
Why Prospects Raise Objections and Strategies for Dealing with
Them
Types of Objections

Objection Meaning and example

No need Buyer has recently purchased or does not see a need for the product
category.
“I am not interested at this time.”

Product or Buyer might be afraid of product reliability.

service objection “I am not sure the quality of your product meets our needs.”
Buyer might be afraid of late deliveries, slow repairs, etc.
“I am happy with my current supplier’s service.”
Company Buyer is intensely loyal to the current supplier.
objection “I am happy with my present supplier.”
Price is too high Buyer has a limited budget.
“We have been buying from another supplier that meets our budget
constraints.”
Time or delaying Buyer needs time to think it over.
“Get back with me in a couple of weeks.”
Responding to need objections
Responding to
product/service objections
Responding to company/source objections
Responding to price objections
Responding to time objections
Negotiating Buyer Resistance - LAARC

 Acronym for listen, acknowledge, assess, respond, and confirm

 Describes an effective process for salespeople to follow to overcome
sales resistance
Techniques to Answer Sales Resistance
Technique How it works
Forestalling Take care of the objection before the
prospect brings it up.
Direct denial Give a rather harsh response that the
prospect is wrong.
Indirect denial Soften the blow when correcting a
prospect’s information.
Example
Many of my customers have had a concern
going into my presentation that we do not
have a warranty program. Let me put this to
rest that we have one-, three-, and five-year
warranty programs that match our
competitors. I hope this answers your concern.
You have heard incorrectly. We are not raising
prices.
We have heard that rumor, too—even some of
our best customers asked us about it. Our
senior management team has guaranteed us
our prices will hold firm through the rest of
the year.
Techniques to Answer Sales Resistance
Technique How it works Example
Translation or Turn a reason not to buy into a Buyer: Your company is too small to meet our
boomerang reason to buy. needs.
Salesperson: That is just the reason you want
to do business with us. Because we are smaller,
you will get the individual attention you said
you wanted.
Compensation Counterbalance the objection Yes, our price is higher, but you are going to
with an offsetting benefit. get the quality you said that you needed to
keep your customers happy.
Questioning or Ask the buyer assessment Your concern is price. Can you please tell me
assessing questions to gain a better who you are comparing us with, and does their
understanding of what they are quote include any service agreement?
objecting to.
Techniques to Answer Sales Resistance
Technique How it works
Third-party Use the opinion or data from
reinforcement a third-party source to help
overcome the objection.
Coming-to-that The salesperson tells the
buyer that he or she will be
covering the objection later
in his or her presentation.
Example
Bill Middleton from Dial Electronics had the same
concern going in. Let me tell you why he is
comfortable with our proposal . . .
Buyer: I have some concerns about your delivery
dates.
Salesperson: I am glad you brought that up. Before
fully discussing our delivery, I want to go over the
features that you said were important to you that
will help you better understand our product. Is that
okay?
Techniques to Answer Sales Resistance
Technique How it works
Feel-felt-found Salesperson relates that others
actually found their initial
opinions to be unfounded.
Example
Buyer: I do not think my customers will want to buy
a product with all those features. We generally sell
scaled-down models.
Salesperson: I can certainly see how you feel. Lisa
Richardson down the road in Louisville felt the same
way when I first proposed that she go with these
models. However, after she agreed to display them in
the front of her store, she found that her customers
started buying the models with more features—and
that, in turn, provided her with larger margins. In fact,
she called me less than a week later to order more!
Securing commitment and closing

Commitment
 Often referred to as “closing,” gaining commitment refers to
the prospect’s willingness to make a purchase from the
salesperson.
 LO 6

Securing Commitment and Closing

• Salesperson should allow the prospect to make a rational choice by giving him or
her enough mental space
• Commitment signals
• Allow the salesperson to move the process forward
• Salespeople should make sure that the buyer has the right information to make an
intelligent decision
Securing Commitment and Closing (continued)

• Commitments may be determined through the use of trial commitments

• A prospect’s readiness to buy can be tested by asking open-ended questions
• Red light statements
• Commitment caution signals
• Must be resolved to the buyer’s satisfaction before asking for a commitment
Securing commitment and closing

 Look for commitment signals

 “That will get the job done”
 “I didn’t realize you delivered everyday.”
 “The price is lower than I thought
it would be.”

 Ask trial commitment questions

 “What do you think about what
we’ve discussed?”
 “Do you see how this will help
your organization?”
Securing commitment and closing

 Resolve “red light” statements made by the prospect

 “I’m not sure that will work."
 “The price is higher than I thought it would be.”
 “Your delivery schedule does not
work for us.”
 “I don’t see the advantage of
going with your proposal.”
Techniques to Earn Commitment
T-account example
Traditional Commitment Method (to avoid)
Method How to use it
Standing-room-only This close puts a time limit on the client in an attempt to
close hurry the decision to close. “These prices are good only
until tomorrow.”
Assumptive close The salesperson assumes that an agreement has been
reached. The salesperson places the order form in front
of the buyer and hands him or her a pen.
Fear or emotional The salesperson tells a story of something bad happening
close if the purchase is not made. “If you do not purchase this
insurance and you die, your wife will have to sell the house
and live on the street.”
Continuous yes close This close uses the principle that saying yes gets to be a
habit. The salesperson asks a number of questions, each
formulated so that the prospect answers yes.
Minor-points close Seeks agreement on relatively minor (trivial) issues associated
with the full order. “Do you prefer cash or charge?”
 LO 6

Ethical Dilemma
Thank you for your attention!