Exam 3 Flashcards
Closing:
o When you ask for a buyer’s business and how you will get the decision maker to say yes.
o Closing happens due to the value created not technique used
Obtaining commitment
o Once a sale is made the salespeople begin to plan for the next sale or the next level of commitment
Discount
o Quantity discount: Encourage large purchases because you will get savings from reduced processing costs
• Single order discount: E.g. 10% on a single order
• Cumulative discount: Maybe 10% on all purchases over a one-year period, if they buy more than 5 machines. (either give discount every time and if they do not buy enough, make them pay or make them pay full price and give them discount in the ending of the year.
Credit terms:
o Cash discount: Calculated after other discounts has been removed. E.g. 2/10, n/30: Take 2% from the bill if it is paid within 10 days, otherwise the rest of the amount must be paid in 30 days.
Or 2/10, EOM: This means that the 10-day period start by the end of the month.
Shipping cost
o Free on board (FOB) destination: Buyer take responsibility when they reach buyer’s location and the seller will pay the fright
o FOB installed: Responsibility does not shift until everything is installed.
Price
o Present the price with confident and never apologize
Buying signals / closing clues
o Indications that show that the buyer is ready to buy – shown both in comments and nonverbally
Requirements
o Requirements that have to be satisfied before a purchase can take place, e.g. we need a cash discount, we need to get this in weekly shipments.
Trial closes
o Questions regarding the prospect’s readiness to buy, e.g. how does this sound to you so far? Anything else you would like to know?
Nonverbal clues
o Are just as important as the verbal
Type of salespeople
o Aggressive: Control sales interaction but often fail to gain commitment
o Submissive: Good at socialization, talk about their private lives, they figure out their statements of needs and problems but do not uncover latent needs or opportunities. – Do not obtain commitment because they are afraid of getting a no.
o Assertive: Self-confident and positive. Create new needs through persuasion, look for buyers that truly needs their products and use questions to acquire information.
Trial order:
o Small order to test if the order placed by a buyer to see of the product will work
Direct request method:
o The simplest way to gain commitment is to simply ask for it
Benefit summary method
o Turning products or service features benefits specifically for that buyer
o When presenting each benefit, they ask if it meets the needs.
Balance sheet method (Ben Franklin Method)
o If the buyer has a hard time deciding, you can help by listing the pros and cons together.
o This can seem insulting to the buyer’s intelligence if used inappropriate
Probing method
o If the buyer is hesitant
o Use a series of probing questions designed to discover the reason for hesitation
Trial offer / puppy dog close
o Based on the idea, that once you take the puppy home you do not want to lose it
o Good if you have a simple product with obvious benefits
o Problem if salespeople rely too much on this and do not ask for the order
Buyer’s remorse / post-purchase dissonance
o If they are insecure that they made the right decision after making an important decision
o Successful salespeople reassure that they made the right decision
Show appreciation
o Every buyer likes to feel important even though they only bought a small quantity
Follow up:
o What a salesperson does after achieving commitment
o Making the sales is only the beginning
Reasons for lost opportunities
o Wrong attitudes: Always have a positive attitude
o Poor presentation:
o Poor habits and skills
Reasons for negotiations to occur:
- To agree on how to share or divide limited resource, such as land, time or money
- To create something new that neither party could do on his own
- To resolve a problem or dispute between parties.
Bargaining:
o Competitive, win-lose situations. Haggling over a price at a yard sale for example
Negotiation:
o Win-win situations when parties are trying to find a mutually acceptable solution to a complex conflict
o Many of the important things in negotiation occurs before and is shaped by the context around the negotiation.
o A process between individuals, within groups and between groups
o Negotiate by choice
o Expect a ‘give-and-take’ situation
Interdependence
o When parties depend on each other to achieve their own preferred outcome
o The relationship between people and groups that most often leads them to negotiate
Independent
o Able to meet their own needs without the help or assistance of others
Dependent
o Must rely on others for what they need, because they need the help and more.
o E.g. when you need the boss to get paid and have a job.
Interdependence affect outcomes
o The structure of the situation strongly shapes the negotiation process and outcome.
o Synergy: “The whole is greater than the sum of its parts”
Zero-sum / distributive
o Only one can achieve the goal
o “Individuals are so linked together that there is a negative correlation between their goal attainment”
Distributive bargaining
o They can only be one winner given the situation and pursues a course of action to be that winner
o Purpose is to claim value: Do whatever necessary to claim the reward
Non-zero-sum / integrative
o Mutual gains situation
o One’s person’s goals achievement helps others achieve their goals.
Mutual adjustment
o Happens when both parties influence each other
Integrative negotiation
o Attempts to find a solution so both parties can do well and achieve their goals.
o Purpose: To create value: Find a way that all parties meet their objectives
Most actual negotiations are a combination of claiming and creating value process:
- Negotiators must be able to recognize situations that require more of one approach than the other
- Negotiators must be versatile in their comfort and use of both major strategic approaches
- Negotiator perceptions of situations tend to be biased toward seeing problems as more distributive/competitive than they really are
Tangibles vs. intangibles
o Tangibles: Price or terms of agreement
o Intangibles: underlying psychological motivations that may directly or indirectly influence the parties during the negotiation
e.g. The need to win, the need for looking good, competent and tough and more.
BATNA (Best alternative to negotiated agreement)
o Whether or not you should agree on something in a negotiation depends entirely upon the attractiveness to you of the best available alternative
Concessions
o Restrict the range of options within which a solution or agreement will be reached
o When one party agrees to make a change in his/her position
o The bargaining range Is further constrained
Bargaining range
o The range of possible agreements between two-party’s minimally acceptable settlements
Dilemma of honesty
o How much of the truth you should tell the other party
