Aligning with Buyers
6230 Fairview Road, Suite 200 Charlotte, North Carolina 28210 USA Authors: Keith M. Eades and Jeff Fisher 704-364-9298 www.spisales.com or www.solutionselling.com
Aligning with Buyers Are your sellers stereotyped like used car dealers? Are they regarded in the same fashion as most telemarketers – with hostility? Marketing is also widely regarded with suspicion and hesitation. Why is that?
BUYING IS A PROCESS, TOO Aligning with Buyers 1 Misalignment – Selling Difficulties 1 Misalignment – Sales Management Difficulties 3 Three Levels of Buyer Need 4 Four Buying Concerns 6 Three Buying Phases 8 Conclusion 10
Buyers tend to have poor opinions of sellers and marketers. Names that come to mind include huckster, shyster, and telemarketer. Sales and marketing verbs are no better – pitch, wangle and hook – as though the buyer is a fish to be caught. Why are so many businesses and their sales and marketing teams distrusted by their prospects and customers? Sellers can earn the respect of buyers by studying their actions and aligning with their buying process. Buyers are smart. Buying is a process, just like selling should be a process. Normal buyers go from latent need to admitted need to a vision of a solution. And buyers tend to show four buying concerns: • • • •
Do I need it? How much does it cost? Is it the right solution? What is my risk if I buy?
These concerns shift in importance through three buying phases. This psychological buying model aids the seller in understanding typical buyer actions. It guides sellers to align the sales process with the buying process and prepares them to handle common selling difficulties with ease.
MISALIGNMENT - SELLING DIFFICULTIES Misalignment between a seller and a buyer causes missed sales opportunities and missed sales quotas. Here are three common selling difficulties.
“My prospects object as soon as I begin selling.” Misalignment occurs when prospects are not in a buying cycle and a salesperson starts selling. Buyers protect themselves by objecting. An objection sends a signal: • • • •
The buyer is not ready to buy The buyer is not in a buying cycle The buyer is already happy The buyer is ignorant about what the seller is selling • The buyer has rationalized that there is no need (even though that may not be true) Instead of learning how to overcome objections, are there alternatives? How about not causing objections in the first place? Create curiosity before you start selling. Whether you write an ad or make a call or meet the customer face to face, create interest about what you are doing – first. Most prospects and buyers will let you, if you keep it brief. It is better to make prospects and buyers curious before you start to sell anything.
“I get pressure to discount very early in the sale.”
Sellers feel pressure to discount when buyers ask for a price early in the sale. When cost quoting is not justified, offer a range.
“How much does it cost?” For the seller, that is a stressful question. The stakes can be high. If the seller gives too high a price, the buyer might end the sale. If the price is too low, the buyer might hold the seller to it and the seller loses the profit margin. The pressure to discount exists for several reasons: • When it occurs early in the sale, the seller usually does not know enough about the buyer to give the correct cost. The seller has yet to diagnose the reasons or explore the impact of the problem throughout the buyer’s organization. Cost quoting is not justified at that point. • Smart buyers have been trained to negotiate early and often. For example, you may not be the vendor of choice. The buyer may only be shopping around for a low price with which to threaten the favored vendor. Unless you can successfully convince the buyer to buy from you, why give the competition your price? • The question may be asked quite innocently. The buyer may only want a ballpark figure. A cost range at this point in the sale may suffice. Unfortunately, untrained sellers often do not understand what is happening and panic.
Comparisons are normal buying behavior. Chances are, the buyer will stay with the vendor of first choice.
Sellers who fail to understand how buyers buy can get themselves into trouble at any point during the sale. Trained sellers learn how to avoid these problems and deal with them properly.
“Buyers unnerve me when they compare me.” Shopping a seller’s offering is normal buying behavior. You may not like it, but smart buyers evaluate their alternatives. If the seller has done a good job of need definition, has created a good vision of a solution, and has exerted control of the sale, there is very little need to worry. Chances are, the buyer will stay with the
vendor of first choice. Comparisons happen in at least two ways: • In vision creation, it is good news to learn your buyer has started to shop you. It means the buyer is advancing the buying cycle. However, there is danger: if you do not know how to control your buyer while they shop you, another smart seller may take the sale from you. •
In vision reengineering , the comparison changes direction because you are not the first vendor. Someone else gave the buyer the vision of a solution, so you are being used as a comparison against the original buying vision. Unless the seller knows how to reengineer the buyer’s first vision, chances of winning are remote.
Comparisons are not unfair; buyers need to evaluate your offering against other options. Therefore, it is the seller’s responsibility to control this phase of buying. MISALIGNMENT - SALES MANAGEMENT DIFFICULTIES Misalignment between sellers and buyers can cause serious sales management problems. These difficulties cause missed sales quotas, missed profits, and missed earnings.
“We are not successful at prospecting.” Prospecting and the ability to create future sales become difficult when sellers and buyers are misaligned. This problem arises when the sales team is not trained to know how buyers buy. Buyers buy according to a process. Meeting this quarter’s quota and building a future sales pipeline requires knowledge of a buying model. If your sales methodology lacks a proven psychological buying model, it is doubtful your sales process is in alignment with your prospects and buyers’ buying processes.
Sales and marketing managers can help their teams by training them in certain principles:
If your sales methodology lacks a proven psychological buying model, it is doubtful your sales process is in alignment with your prospect’s buying process.
Sales organizations that suffer unnecessary losses to the competition are usually misaligned with their prospects and buyers.
In technology sales especially, risk ranks ahead of price toward the end of a sale. Smart sellers can use risk management as a selling point instead of discounting.
• When prospecting for new buyers, learn how to create curiosity, not tension • When selling to existing customers, learn how to take a customer who is not in a buying cycle to the start of one • The buying cycle begins when prospects and buyers move from curiosity to admitted need • If a buyer is using you to negotiate for better terms with another vendor, reengineer their vision • When buyers compare your offering to others, exercise control • It is important to manage your buyers’ post-sale risks
“We lose too many sales to the competition.” Sellers often blame the product or high prices for lost sales. They may say that the customer is ignorant and did not understand what they needed. Or they may claim that the customer did not grasp just how good they are. These are typical sales and marketing issues, and they are not minor problems. • Have your seller’s ever created buying interest only to lose to a competitor or some internal program? • Have your sellers promised to close an important pending sales opportunity only to lose at the last moment? • Are you able to track pending sales and close them with a high certainty of closure? • Have you ever missed your quarterly sales target – the one on which your CEO and CFO depend? At the heart of these issues lies your buyers’ behavior. Are your salespeople – indeed your business – in alignment with their buyers? Can you measure buyer behavior in such a way that you can predict if and when your sales
opportunities are going to close? Sales organizations that suffer unnecessary losses to the competition are usually misaligned with their prospects and buyers.
“We discount too much and lose sales revenues.” It is the end of the quar ter and top management wants a stretch performance to meet or over perform the sales revenue estimates. Have you been there? Anyone in sales or marketing is familiar with that dark hysterical picture.
Discount. Discount and stretch. Grab shortterm revenues. Discount, stretch, and negotiate discounts for more sales revenues. Sadly, this trains customers to hold you up for ransom at the end of each quarter. Why do companies do that? Are there things you can do to avoid that scenario? Or at least minimize its damage? Sellers tend to give too much control of their sale to the buyer, causing unnecessary discounting at the end of the fiscal quarter. Sellers can keep control by understanding and aligning with buyers. Buyers are predictable too. Toward the end of a sale, the order of their buying concerns tends to be: • • • •
Risk Price Solution Need
Yes, in technology sales especially, risk ranks ahead of price. Smart sellers can lear n to work that lever instead of discounting. Risk management is a powerful device. No buyer wants to have bad things happen in their post-buying experience. Post-sale risk management can be an important product feature, minimizing the need to discount. THREE LEVELS OF BUYER NEED The three levels of need are grounded in a useful polarity, called the pleasure-pain
Level Three: Vision of a Solution
Level Two: Admitted Pain
Level One: Latent Pain
principle. The simplest definition of the pleasure-pain principle is that normal humans seek pleasure and avoid pain. The pleasure-pain principle provides a clear focus on buying as a process. Humans will work hard to avoid pain. Pain moves buyers to action, and they develop plans and concentrate efforts to achieve the pleasure of getting rid of the pain.
•
There are three levels of needs: latent pain, admitted pain, and a vision of a solution. It is important to realize that buyers can move forward or backward through these three levels. Moving backward means something went wrong: the solution was not right, the value was not there, or the perceived risk may have been too great.
LEVEL 2: Admitted Pain
LEVEL 1: Latent Pain
Buyers have latent pain when they are unaware of a potential solution or when they have rationalized potential solutions as too expensive, complicated or risky.
Buyers in latent pain are Not Looking to buy. Typically, this causes big problems for sellers, because a good salesperson is always looking to sell. Thus, it is a step toward misalignment. Buyers in latent pain have not admitted pain, nor do they see your vision of a solution. Latent pain is the lowest rung in the hierarchy of needs. In the first level of need, the buyer is not actively attempting to address a problem for which the seller already sees a solution. Buyers who are Not Looking have latent pain for one of two reasons:
Once a buyer admits pain, the buying cycle can begin.
• Ignorance. Buyers may be unaware that a product or service exists. Part of buyer ignorance comes from buyer disillusionment. Expecting empty promises and half-truths from sellers, buyers are less willing to pay attention to new offers. Further, buyers are so inundated with irrelevant features that they do not listen to, read, or see what is being presented. They have become numb from the neck up. Overcoming buyer ignorance is a huge challenge for sellers.
Rationalization. Many buyers adamantly remain in the Not Looking buying state. They may like their current brand. A new product or service may be perceived to be too complicated or expensive. The risk of change is too great. A product or ser vice may be perceived as a commodity so there is little reason to change.
In Level 2, the buyer recognizes a need or pain but does not know how to solve it. There is an active need, want or desire for a solution. The buyer is unhappy and uncomfortable with the current situation and, in a face-to-face meeting or telephone conversation, admits pain. It is important for the buyer to be willing to admit difficulties or dissatisfaction with an existing situation to the seller. Once a buyer admits pain, both the buyer and seller can work to find the best solution. Misalignment occurs when the seller sees the solution, the buyer does not, and the seller loses the sale. Too many sellers push products and services at buyers. Sellers and telemarketers try to sell buyers all kinds of things without ever asking they need it. Sellers get hostile when buyers push back. For example, how many times have you hung up on a pushy telemarketer? When you shop in a store, how many times have you said, “No, I’m just looking,” in response to a clerk’s hard-sell approach? How many times have you received junk mail and tossed it unopened into the garbage? It is important to get a buyer to admit to some pain. At that point, a buying cycle begins.
LEVEL 3: Vision of a Solution Buyers move to Level 3 when they have a vision of a solution to an admitted pain. The buyer and seller both participate in the development (creation or reengineering) of the vision. Buyers must accept responsibility for solving their
EXAMPLE: Sometimes buyers reach a vision of a solution on their own, and then contact a seller. They may have seen a great ad. While flying from LA to Hong Kong, a sales manager was reading an in-flight magazine. He saw Sony’s ad about a lightweight powerful laptop. The ad addressed a pain – his current laptop was so heavy he had come to hate it. The ad’s text addressed important needs of his. He immediately created a vision of a solution and ordered the product by phone from Hong Kong
problem, and sellers can guide them to a solution. Buyers must be able to see when an activity will prompt whom to take what action, using capabilities specified by the seller. For a vision of a solution, buyers must have one or more capability visions where they can see themselves taking action to solve the problem. The buyer then has a BUYING VISION. To be truly qualified, the buying vision must be confirmed – orally or in writing. Seller beware! If another seller has already developed a vision of a solution for a buyer and that same buyer is shopping for the best deal, be careful. If the buyer just compares your offering to their existing vision, you may end up as their second or third choice. Remember, diagnose before you prescribe. Diagnosing a buyer’s problem allows a seller to reengineer the buyer’s vision. The seller can then offer another solution.
FOUR BUYING CONCERNS CONCERN 1: Do I Need It?
Will you buy a Ford or a BMW or a Porsche?
Early in their buying process, buyers ask, “Do I need it?” It is about needs. Buyers do not start a buying cycle until they have perceived a need. For example, assume that a homeowner in your neighborhood was robbed as they were manually opening the garage door. You have been meaning to install an automatic garage door opener, but have done nothing yet. While reading a magazine, you see an ad about an automatic garage door device, showing a person able to open the garage door and drive into the garage without leaving the locked car. You are now in a buying cycle - you need it - your primary concern is to protect yourself from a thief. Whether the buyer sees an ad, receives a telemarketing phone call, browses the Web, or meets a seller face to face, that buyer’s first moments are spent calculating their need for that product or service. It is a buying phase during which many sellers act wrongly by applying unnecessary pressure.
Consider this - if you phoned the person who loves you the most and said, “You need to do this, then that, and then this one other thing.” Would the objections and rejections come early and loudly? If the people who love you most will not accept “you need to”, why would buyers? As soon as a buyer acknowledges a problem – pain – that buyer experiences need. The buyer’s next move is predictable: after deciding they need a thing, they ask, “How much does it cost?”
CONCERN 2: How Much Does It Cost? In the case of the automatic garage door opener, you’ll have to buy a new garage door and electronic opening equipment, and all of this will have to be installed. How much will that cost? For most buyers cost is an important concern, par ticularly for high-cost products and services. On a retail basis, household income places limitations on the price range. For example, once you determine a need for a new car, the cost becomes most important. Will you buy a Ford or a BMW or a Porsche? Businesses face more complex questions and answers. They too will ask, “How much does it cost?” When this question is asked early in a sale, the buyer is curious if the solution is affordable and if the budget allows it. Of course, the seller’s challenge is that there has not been adequate time to diagnose the reasons for the critical business issue and little exploration has been done on the impact of the problem throughout the business. It is too early to know the exact price. Unfortunately, buyers want answers to that question. One reliable alternative is to give a range: “It’s too early to know the exact answer, but with other clients, the price has ranged between $25,000 and $850,000 depending on the nature of the solution.” Then try to go on to diagnosing the nature of the issues.
Trained sellers have tools to keep the seller in control of the sale and the buyer in charge of buying.
If, however, the question arises because the buyer is doing a price comparison between you and the favored vendor, then other challenges exist. If you give a price, the buyer might thank you but buy from someone else. In this case, you can attempt to reengineer the buyer’s vision. If they are willing to add your features and capabilities to their buying requirements, then it may be worthwhile to give a cost range subject to further analysis. Cost hopefully leads to value justification. Many buyers fail to ask for comprehensive value justifications from their sellers. Likewise, many sellers lose deals because they failed to prove the value of their products and services to the buyer’s satisfaction. Justifying cost leads buyers to the next concern, “Is this the right solution?” CONCERN 3: Is It the Right Solution? Buyers ask for proof in their search for answers to the question, “Is it the right solution?” such as:
EXAMPLE: Back in the computer mainframe days, IBM won a lot of contracts it may not have normally won because of this feature – risk management. The saying was that nobody ever lost his or her job buying from IBM. The understanding was that if something bad happened post-purchase, IBM would be there to fix it. Typically, IBM got the sale.
• • • •
Success stories Product demonstrations Cost estimates ROI – Return on Investment
When buyers ask themselves, “Is this the right solution?” they can only find the answer if they shop around. This is the only way to know if something is logically and emotionally the right solution. Buyers shop in a variety of ways. They compare features, evaluate their content and meaning, and establish how much value different and competing features contain. Some sellers mistake this behavior as negative. Consider this scenario: Until now, everything has gone smoothly. The buyer has been cooperative, has answered questions, and even agreed that your vision of a solution is good maybe even the best. Then things go cold. When you call to make sure things are on track, the buyer does not return
your phone calls or e-mail. What is happening? What went wrong? Things seemed to be going well. In fact, things probably are okay. The buyer needs time away from you while they check out other vendors to be sure they know all the alternatives. Trained sellers know this. Trained sellers have sales tools to help in this instance; tools that let the seller sell while the buyer stays in charge of buying. CONCERN 4: What Are My Risks (If I Buy)? Finally, after a need has been defined, the cost question satisfied, and comparisons completed, the buyer faces several purchasing and post-purchase risks. Real risk concerns must be faced and resolved before the buyer can feel comfortable.
• If I buy, will I be able to pay or meet the payment schedule? Is the ordering and payment process difficult and confusing? • After I buy and something bad happens – the product is faulty or the advice is bad – will the vendor guarantee satisfactory performance? • After I buy, will I (and my organization) be able to actually use the product or service? Is education required? Is it available? • After I buy, will the seller support the service warranties? • After I buy, could the manufacturer or vendor go out of business? What then? Would my warranties stay in place? What about support services? As you can see, post-purchase risk management is a key concern for buyers. With unsatisfactory answers, the buyer goes from Looking to Not Looking and the seller loses. Worse, the buyer may decide to do business with a competitor. Again, the seller loses.
Risk is a major buying concern. Few sales organizations include this as an important need to meet. A smart seller can use risk management as a differentiator and a negotiating point. THREE BUYING PHASES: HOW BUYER’S CONCERNS SHIFT OVER TIME One of the most useful pieces of knowledge to acquire is how buyers buy. Buyers go through a series of steps as they buy and their buying concerns shift over time. Trained sellers know this; they listen for verbal cues about where their buyers are in the buying cycle, adjust accordingly, increase rapport, and work to advance the sale. Buying Phases (PHASE II) EVALUATE ALTERNATIVES
LEVEL
(PHASE III) EVALUATE RISK
Risk Needs Cost
Price
OF
CON CERN
(PHASE I) DETERMINE NEEDS
Needs
Solution Risk
As buyers progress through the buying cycle, their concerns change, and their statements and actions provide feedback on the shifting rank of their concerns.
At the beginning of a buying cycle, buyers are typically concerned with need and cost; however, toward the end of the buying cycle, buyers’ concerns shift to risk and price. In fact, buyers’ shifting priorities determine their buying phase.
are not in a buying cycle until they have perceived a need or want. In the case of our house-hunting couple, they have recognized a pain: they are tired of paying rent when the money could go toward owning a house, plus the rent has been raised three times in two years. They feel they are helping someone else own a house, instead of owning their own. The Smiths have moved from Not Looking to Looking. This is a seller’s dream, a buyer who has recognized a need but has not yet determined the solution. Now Bob and Sharon have to go through needs analysis. Their laundry list of needs includes a number of requirements: three bedrooms, a safe neighborhood, less than a 40-minute commute to and from work, a two-car garage, convenience to shopping, good schools and a one-hour proximity to the airport (Bob’s job requires frequent travel). Phase 2: Evaluate Alternatives Smart buyers evaluate alternatives. Most buyers want to make sure they are buying the right product or service.
Solution
T I M E
Think about the following illustration, a first-time homebuyer. The buyer is a married couple, Bob and Sharon Smith. They are in their late twenties, and both work. They have no children, but are expecting twins in three months. Observe how their shared concerns shift over time in the buying cycle. Phase 1: Define Needs Phase 1 is defined by a buyer’s first buying concern: Do I need it? People
A seller helped the Smiths recognize a need, and together they mutually developed a vision of a solution – one using the seller’s wares. A relationship has also formed, except now Bob and Sharon need answers to new questions. Their buying concerns shift gears: “Can we get a better place? Does someone make a better home with better community services? Do we need so many bedrooms? Will the seller help finance the purchase? Are the seller’s warranties trustworthy? In Phase 2, the Smiths need time to ascertain that choice A, B, or C is the right one. This is a difficult time for the seller. Many sellers become overly anxious and apply pressure, often losing the sale as much for their bad behavior as for perceived inferior products or services. Bob and Sharon may get
annoyed at the pressure to buy, causing them to go elsewhere. The seller must learn how to arrange a scenario where the buyer stays in charge of buying and the seller stays in charge of selling. There is a constant need to be aligned with the Smiths’ shifting concerns and phases of buying. Phase 3: Evaluate Risk Finally, after need is defined and comparisons have been made, Bob and Sharon must make a decision: to buy or not to buy. For the Smiths, the greater the price and the scarcer their money, the more their emotions will be involved in their decisions. Another shift occurs as risk-reward concerns come into play. Although price is undoubtedly important, the highest concern is risk. Smart buyers must address questions of risk such as: §
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What bad thing could go wrong? Does the seller have a reputable return policy? Or will the seller take responsibility for bad advice? Is there a help desk? Does it work? Can I actually get a real, live person to take accountability for fixing my problem? Does the seller have the resources to fix a problem involving their products and ser vices? Will the seller’s warranties be honored? If I am unhappy or something goes wrong and it needs fixing, will I incur legal costs? How great will they be? Can I afford them?
In this day of rapid change and advancing technology, buyers should insist on clear, concise answers. The cost of being wrong can be great.
CONCLUSION Misalignment is a costly sales and marketing critical business issue. Many sales are lost because sellers and marketers do not align with their prospects and buyers. Sales productivity is not optimized, and businesses fail to achieve high-performance sales cultures, but this does not have to continue. Ask happy buyers. Ask successful sellers. Expert buyers and sellers start and end with correct alignment. It is a marriage made in heaven. Aligning with buyers allows you to dump that “shifty seller” stereotype. You will listen to their needs, help them envision a solution, and offer security to riskaverse buyers. Aligning with buyers is rooted in basic selling strategy. Learning how the buyer thinks, uncovering their pain, and guiding them to a solution are all methods to satisfy the customer. Aligning your sales process with their buying process is simply the easiest and most effective way to achieve customer satisfaction. Alignment is only one step in improving your sales performance. It can be achieved more easily through the use of a sales model that respects the buying process.
To learn more about building a highperformance sales culture, please contact Sales Performance International. Keith Eades, President and CEO of SPI, and Jeff Fisher, Director of Strategic Planning based this white paper on the book The Solution Selling® Psychological Buying Model: Aligning with Buyers.
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