Sm 9

Cosmopoint International University College 1

Sales Presentation, Negotiation and Sales Approach

Chapter 9


What is a Sales Presentation?

A promotional message where salesperson delivers to a prospect.

To explain, stimulate interest in, and motivate (encourage) the prospect to make a purchase (buy) the product (goods or service) or products recommended in the proposal.


Sales Presentation’s Objective

An effective sales presentation completely and clearly explains all aspects of a salesperson’s proposition as it relates to the buyer’s needs.

A effective presentation is one which attracts the potential customer to make the buying decision.


Method or Approach to effective Sales Presentation (S.P) – Part 1

Step 1 – Select a S.P method according to your previous knowledge of the customer, sales call objective and customer benefit plan.Step 2 – Develop your S.P by choosing an appropriate S.P method of presentation i.e. memorized, formula, need satisfaction or problem- solution selling methods. Step 3 – Proceed with product explanation & demonstration.Step 4 – Explain the marketing plan if you making a presentation to resellers, otherwise if direct to customer the need does not arise.


Method or Approach to effective Sales Presentation (S.P) – Part 2

Step 5 – Proceed to the business proposition.Step 6 – Identify exactly whom you intend to do the sales presentation for i.e. the recipient or person who can ultimately make the decision to buy. Final Step – Select a suitable workable presentation method with a high chances of success previously.The method of S.P has helped your customer in making a positive decision making i.e. it can solve your customer’s problem


Sales Presentation Strategy

Five situation a salesperson can encounter and each situation require a different approach.Salesperson to buyer – A salesperson discusses issues with a prospect or potential customer in person or over the phone.Salesperson to buyer group – A salesperson gets to know as many members of the buyer group as possible.Sales team to buyer group – A company sales team works closely with members of the customer’s buying group.Conference selling – The salesperson brings company resources people to discuss a major problem or opportunity.Seminar selling – A company team conducts an educational seminar for the customer company about the latest developments.


Sales Presentation Methods

The Four Sales Presentation (S.P) Methods are:Memorized Formula Needs – Satisfaction Problem – Solution selling methods

The difference between the various S.P methods is basically on the percentage of conversion controlled by the salesperson. In the case of memorized and formula selling techniques the more structured form of S.P methods the salesperson has a major control on how the conversation goes. Less structured S.P methods allows for greater buyer- seller interaction as in Needs – Satisfaction and Problem – Solution selling methods


Memorized Sales Presentation (MSP)

MSP has two assumption i.e. :That a prospect’s needs can be aroused by direct exposure to the product, via the sales presentation

That these needs have already been aroused because the prospect has already made an effort to seek out the product.


What is MSP is all about?The salesperson does 80 to 90 percent of the talking during a memorized sales presentation, only occasionally allowing the prospect to respond to predetermined questions as shown in diagram below. Hopefully the salesperson does not attempt to determine the prospect’s needs during the interview but give the same repetitive sales talk to all prospects. There is no attempt on the part of the salesperson to perceive the thoughts of the consumer’s mind. Instead the focus of the salesperson is to discuss the products and its benefits and finally concluding the presentation with a purchase request. The salesperson assumes that the convincing talk during presentation would persuade the prospect or customer to make the buy.

Memorized Sales Presentation (MSP)


Canned Sales Presentation

National Cash Register developed an offshoot of the MSP called the Canned Sales Presentation or CSP. The CSP basic structure is:

CSP was developed by NCR where the firm prepares a series of standardised sales presentation based on findings of its sales approach analysis. Finally sales force are required to memorize these approaches during sales calls. Since it worked well with NCR, it was eventually adopted by other firms. CSP are still used today, mainly in telesales and door to door selling. A part of any presentation can be canned, linked with a free form conversation. Overtime, most salespeople develop proven selling sentences, phrases and sequences in which to discuss the information. They can use this all in their presentation.


The Advantages of MSP or CSP

The Advantages of MSP or CSP are as follows:It ensures that the salesperson gives a well planned presentation and that the same information is discussed by the company’s salespeople.It both aids and leads to confidence for the inexperienced salesperson.It is an effective means of presentation when selling time is short, as in telesales or door to door or person to person selling.It is an effective when the product is non technical in nature – such as books, cooking utensils, cosmetics etc.


Disadvantages of MSP or CSP

DisadvantagesIt presents features, advantages and benefits that may not be important to the buyerIt is slow for little prospect participation.It is not suitable for use in selling technical products that requires the prospect’s input and discussion.It proceeds quickly through the sales presentation to the close, requiring the salesperson to close or ask for the order several times, which may be misconstrued as high pressure selling.


The Formula Presentation (FP) Method

What is FP Method?The formula presentation is often referred to as the persuasive selling presentation, and it is similar to the memorized method. It is based on the assumption that similar prospects in similar situations can be approached with similar presentation. It is paramount that the salesperson knows about the potential customer or prospect prior to making any presentation. Here the salesperson follows a less structured general outline in making a presentation, allowing more flexibility and less direction.During the presentation a salesperson generally takes control of the conversion, especially in the beginning.


The following diagram explains how a salesperson should take charge during a FP

selling situation.


Salesperson talking time

Customer talking time

Approach Presentation Close

Sales Presentation time

AI D C A

Par

ticip

atio

n T

ime


For example, the salesperson may make a sales start to draw information from the buyer, using trial closes, answering questions, and handling objections. At the end of the participation curve, the salesperson regains control over the discussion and moves to close the sale.The formula selling approach derives its name from acronym AIDA which stands for attention, interest, desire and action, a procedure of developing and giving the sales presentation.Straight rebuy (repeat buying) and modified rebuy situation, especially with consumer goods lend themselves to this method. Many prospects or customers buy because they are familiar with the salesperson’s company and its product.



The Formula sales presentation’s approach

Step 1 – Summarise the situation for attention and interest

Step 2 – State your marketing plan for interest

Step 3 – Explain your marketing plan (for interest and desire)

Step 4 – Buyer appears to be in conviction stage

Step 5 – Suggest the next course of action


Advantages of FSP

Advantages of Formula SellingFormula selling is an effective tool for calling on customers who currently buy and for prospects about whose operations the salesperson has learned a great deal. Formula selling offers significant advantages:It ensures that all information is presented logicallyIt allows a reasonable amount of buyer-seller interactionIt allows smooth handling of anticipated (expected) questions and objections

Disadvantages of Formula SellingAny stop or disruption, a break in flow may cause the salesperson to lose his or her rhythm of the sales presentation.Failure to correctly identify the prospect’s needs and wants can be disastrous.Possibility of prospect’s or customer’s objection may arise if sufficient prior preparatory work is not done.The formula selling is not adaptable to a number of complex selling situations


The Need- Satisfaction Presentation (NSP) Method

What is the NSP Method?The Need – Satisfaction Presentation designed as flexible, interactive sales presentation. It is considered as the most challenging and creative form of selling. The salesperson may choose to start the presentation with a probing question like: “What are you looking for in the investment property? Or “What type of computer needs does your company have? This type of opening starts a discussion of the prospect’s needs and also gives the salesperson an opportunity to determine whether any of the products being offered might be useful. When the prospect fails to understand the salesperson, the salesperson has to seek an answer by questioning the prospect or repeating what has been said again. Otherwise, the salesperson may also choose to rephrase the said sentence in more simplistic tone or in a language (lingo) familiar to the prospect. The type of presentation is best suited for the sales of industrial and technical goods with stringent specification and high price tags.


THE NSP DIAGRAM

The NSP Diagram explanation will follow in the next slide.

Sales Presentation Time

Need development Need aw

areness

Need satisfaction

Approach ClosePresentation

Salesperson talking time


As per the above diagram, the 50 to 60 percent of the conversation time (also referred to as the need-development phase) is focused to the discussion of the buyer’s needs. Upon becoming aware of the prospect’s needs (the needs awareness phase), from here the salesperson takes charge of the communication by emphasizing the prospect’s needs to clarify any doubts and ensure that prospect is clear or understands completely what is in offer from the salesperson. Towards the last stage of the presentation, at the need fulfilment (or need satisfaction) phase, the salesperson should show how the product would satisfy mutual needs. If you should call back at the prospect’s office for a second time, as it may be in the case of selling industrial product, you may resort to using the formula sales presentation method when calling upon the prospect. From the buyer’s response to your question you can gather what to do. If there is any objection raised, you can respond to it positively. If further information is required you can provide it. Once you are convinced that the buyer is pleased with your product, you may go to close the sale and make a request for a purchase order.

THE NSP DIAGRAM(Explanation)


Advantages of the Needs – Satisfaction Presentation (NSP) method

Advantages of NSPIt is a flexible, interactive style of two way communication of sales presentation. Well suited for especially for the sale of industrial and technical goods with stringent specification and high price tags.Helps the prospect to clarify by asking questions or by restating what has been already said by the salesperson A lot can be determined by the prospect or buyer’s response (body language and gestures) during course of the interactive sales presentation It helps to bring about mutual benefits and rapport to both the prospect and the salesperson. It helps to create a better understanding and improved working relationship between both parties.


Drawbacks of the Needs – Satisfaction

Presentation (NSP) method

The disadvantages of NSP method Asking of too many questions can alienate or discourage the prospect.Salesperson may be ill prepared or unaware of the type of probable question that may asked by the prospectSalesperson feels they may be losing control of the selling situation Salesperson may feel there is insufficient time to perform to their best as the time allocated is limited.The salesperson must be observant and monitor any gestures and body language from the prospect during the presentation and act accordingly.


The Problem-Solution Presentation(PSP) Method

What is PSP Method?A salesperson has to make several sales calls to develop a detailed analysis of the prospect’s needs. This arises in the selling of highly complex or technical products such as insurance, industrial equipment, accounting system, office equipment and computers etc. After developing this detailed analysis a written analysis is prepared. The salesperson moves on to arrive at a solution to the prospect’s problems by using written analysis and oral presentation.


The Six Steps in Problem – Solution Presentation

Convince the prospect to allow you the salesperson to conduct the analysis.Making the actual analysisAgreeing on the problems and determining (desire) that the buyer wants to solve them.Preparing the proposal for a solution to the prospect’s needsPreparing the sales presentation based on the analysis and proposal.Making the sales presentation.


NEGOTIATION

What is Negotiation?Negotiation is the process where interested parties resolve disputes, agree upon courses of action, bargain for individual or collective gain (win-lose, or win – win situation), Attempt to generate outcomes which serve both parties interests.


Effective Negotiation

Negotiation is usually regarded as a form of alternative dispute resolution. The first step in negotiation is to determine whether the situation is in fact a negotiation. The essential qualities of negotiation are: the existence of two parties (salesperson and the prospect) who share an important but different objective.The purpose of the negotiating is to seek a compromise and to narrow down the difference(s) between both the negotiating parties. The outcome of the negotiating may be a compromise acceptable to both parties. A standoff (failure to reach a satisfactory compromise) or a standoff with an agreement to try again at a later time may arise if currently no agreement can be reached.


Negotiation Approach

Professional salespeople negotiate in a positive way that achieves satisfaction for both parties. They rely on trust, openness, credibility, integrity and fairness.There must be mutual respect and admiration for one another, and seeing to that both will arrive at a win-win situation once the negotiation is over. The solution arrived at after the completion of negotiation should be suitable and amicable to both the negotiating parties.


Negotiation process

PHASE 1: BEFORE THE NEGOTIATION

PHASE 2: DURING THE NEGOTIATION

PHASE 3: AFTER THE NEGOTIATION


PHASE 1: BEFORE THE NEGOTIATION

Step 1: Preparing and PlanningFirst determine what you must have and what you are willing to give (bargaining chips). Gather facts about the other party to learn about the other party’s negotiating style and expect other side's position and prioritize issues.To ensure smooth negotiation, one should also prepare alternatives proposals and establish BATNA (the Best Alternative to a Negotiated Agreement). Estimate the other party's needs, bargaining chips and BATNA. The most ideal case is to get as much as you can OR a win – win situation provided other bargaining party is agreeable to it.


PHASE 2: DURING THE NEGOTIATION

Step 2: Setting the Tone1. Clarify the purposes of the meeting.2. Frame the issue as a joint problem that you can solve together. 3. Start with the other side's main points or concerns.

Step 3: ExploringAlso important is to actively listen for facts and reasons behind other party’s position and explore underlying needs of the other party. If conflict exists, try to develop creative alternatives. In a difficult situation, do not say anything. Take time out. When we say nothing we give nothing away.

Step 4: Selecting, Refining, and Crafting an AgreementIt is a step in which both parties present the starting proposal. They should listen for new ideas, think creatively to handle conflict and gain power and create cooperative environment.

Step 5: Reviewing and Recapping the Agreement: This is the step in which both parties formalize agreement in a written contract or letter of intent.


PHASE 3: AFTER THE NEGOTIATION

Step 6: Reviewing the NegotiationReviewing the negotiation helps one to learn the lessons on how to achieve a better outcome. Therefore, one should take the time to review each element and ask oneself, "what went well?" and "what could be improved next time"


THE SALES APPROACH

What is an Approach?Initial contact and communication is called the approach. An approach can be communicated by either face to face or by phone.

What is the objective of the Approach?First you want to build rapport with the prospect. Secondly you want to capture the person’s full attentionThirdly you want to generate interest in the product you are selling.


AttentionAttention has become one of today’s scarce resources. Many of the people we need to meet with are facing a time constraint and distracted by bombardment of information overload. They are unable to focus, and must learn how to connect with prospects and then come to a decision on how to get the attention of the prospect (customer).

THE SALES APPROACH


The Various Sales ApproachTelephone Contact – where suitableSocial Contact – building rapport during the first few minutes.Business contact – converting buyer attention

Product demonstration approachReferral approachCustomer benefit approachQuestion approachSurvey approachPremium approach Combination approach

THE SALES APPROACH


Telephone Contact – when required

A telephone call provides a quick and inexpensive way to schedule your appointments with the prospect.Some salespeople use the telephone to establish and maintain contact with the customer. One way is through the Telesales.Telesales should not to be confused with telemarketing, include many of the same elements as traditional sales: gathering customer information, determining needs, prescribing solutions, negotiating objections and closing sales.


Telephone Contact – Guidelines in its usage with prospects or customers

When you make an appointment by telephone use the following practice: Plan in advance what you want to say– Be courteous when you identify yourself for

the company you represent. Inform clearly the receiver the purpose of

your call Be specific and prompt in the time utilized

to meet the prospect. Confirmation of your appointment


The Social Contact

The Social contact can be viewed as an effective communication tool for an individual.

The brief conversation helps to forge a harmonious relationship


The Social Contact

The following guideline can help you to develop your social skills in building a better rapport with your prospect. Prepare for the social contact Begin the social contact – Respond to the customer’s

conversation. Be focused on the customer’s needs


Developing Conversation

Three areas of conversation that should consider in developing a social contact:

1. Comments on observation of general interest.

2. Compliments

3. Search for mutual acquaintances or interests

The Social Contact


The Business Contact

Indirectly directing the prospect’s attention from the social contact to the business proposal has to be subtle and gradual without being obvious to the prospect. When you hold and convert your prospect’s attention you have fulfilled an important step in the selling process.


Salespeople have always been able to identify a number of effective ways to capture the prospect’s attention and arouse (sensational or create a desire) the interest in the presentation.

The approaches are Product demonstration approachReferral approachCustomer benefit approachQuestion approachSurvey approachPremium approach Combination approach

The Business Contact


THE PURPOSE OF THE PRESENTATION

The main goal of your presentation is to provide information to the prospect/customer. Upon giving your presentation, the prospect is in a much better position to know if your product can be considered for purchase.The presentation is a continuation of the approach.


What is the purpose of the presentation?

It provides knowledge to the prospect via the features, advantages and benefits of your product, marketing plan and the business proposal.

This allows the prospect to develop positive personal beliefs towards your company product. These beliefs eventually results in a desire (or need) for the type of product you sell.

A salesperson is to convert that need into a want and into the positive attitude that your product is the best product to fulfil a specific and useful customer need.


What is the purpose of the presentation?

It provides knowledge to the prospect via the features, advantages and benefits of your product, marketing plan and the business proposal. This allows the prospect to develop positive personal beliefs towards your company product. These beliefs eventually results in a desire (or need) for the type of product you sell.Your job, as a salesperson is to convert that need into a want and into the positive attitude that your product is the best product to fulfil a specific and useful customer need.


Is the customer actually buying your product?

What the customer is actually buying is a mental picture of the future in which your product helps to fulfil some expectation.

The buyer has mentally conceived (created) mental images that move your prospect into the conviction (belief) stage.


The five purpose of the presentation

1. Knowledge

2. Beliefs

3. Desire

4. Attitude

5. Conviction

Sales sucess


Three essential steps within the presentation

Fully discuss your product

Present your marketing plan

Explain your business propositions

Features

Advantages

Benefits

How to resell (resellers)

How to use (for consumers and industrial users)

What’s in it for your customer


Sell Sequence Technique

What is the Sell Sequence Technique?

SELL Sequence Technique is a sequence of things to do and say to stress the importance of benefits to the customer: show the features, explain the advantages, lead into the benefit, and let the customer talk by asking a questions about the benefits.


Sequence Method

Step 1 Fully discuss the features, advantages and benefits of your product. Tell the whole story.

Step 2 Present your marketing plan. For wholesalers and retailers, this is your suggestion on how they should resell the product. For end users, it is your suggestion on how they can use the product.

Step 3 Explain your business proposition. This step relates the value of your product to its cost. It should be discussed last, since you always want to present your product’s benefits and marketing plan relative to your product’s price.

Sell Sequence Technique


THE SALES PRESENTATION MIX

There are six elements that goes to create an effective presentation:

Persuasive communication

Participation

Proof

Visual Aids

Dramatization

Demonstration


Persuasive Communication

Salesperson wants to be good communicators to persuade people to purchase their products. Persuasion is the ability to change a person’s belief, position, or course of action. The more effective you are at communicating with the prospect, the greater your chance of being successful at persuasion.


Factors to develop persuasive communication

Using suitable questions.

Being emphatic (to be able to feel and care for the needs of prospect).

Communicating in a simple language, thus gaining the confidence of the prospect.

Creating mutual trust and understanding.

Listening effectively.

Having a positive attitude and enthusiasm.

Message conveyed is believable.


Prospect’s participation.

The presentation involves techniques for motivating the prospect to participate in the

presentation. There are four ways this can be done:

Questions

Product Use

Visuals

Demonstrations


Proof Statements

Salespeople must prove that they will do what they promise, such as helping to make product displays when the merchandise arrives.Salespeople have the tendency to misrepresent or hype up their statement, thus prospects are doubtful of claims made by the salespeople. Such statements are called merely trade or sales puff made to induce the other party or prospect to make a purchase.By including proof statements into the presentation, the salesperson can increase the prospect’s confidence and trust that product claims are accurate


Past Sales Record

Customers’ past sales record can be used as basis to contact and determine the quantity required by the customer. Customers’ usually maintain record on all their past purchases. Thus a salesperson can use these records to suggest what quantities of each product to purchase.The Salesperson stops talking to see the buyer’s reaction. A suggested order and an alternative on the quantity to purchase have been proposed. Be realistic about your suggested increase in order size.


The Guarantee o This is a powerful proof technique. It assures

prospect that if they are dissatisfied with their purchase, the salesperson or the company will replace or take product back and refund the purchase price to customer.

o This must be done within a stipulated time period usually ranging from 14 days to a month (30 days).

Other Proof Record


Testimonials Testimonials are an excellent way to build trust and confidence during or before presentation of the product’s features, advantages and benefits. Professional buyers are impressed by testimonials from prominent people, experts and satisfied customers

Company Proof ResultsInformation available within a company such product data, test market information, current sales data all act as indicator of the product performance. Company product research information is used by industrial salespeople as proof of product’s performance. Salespeople with consumer goods manufacturer use test market information in their presentation on a new product being market nationally.

Independent Research Results Evidence provided by reputable sources outside the company usually has more creditability than company generated data. Pharmaceutical salespeople frequently tell physician about medical research findings in the medical journals/magazines of Lancet (British Medical Association), JAMA (American Medical Association) and MMA (Malaysian Medical Association) of their company products as proof of the product’s performance.

Other Proof Record


The Visual Presentation

People retain about 10 percent of what they hear but 50 percent of what they see. You have five times the chance of making a lasting impression with an illustrated sales presentation than with words alone.Visuals are most effective when you believe in them and have woven them into your sales presentation message. Use them to:

Increase retention (memory recall)Reinforce the messageReduce misunderstandingCreate a unique and lasting impressionShow the buyer or prospect that you are a professional.


The Visual presentation includes a further three elements of the presentation mix i.e.

Visual Aids

Dramatization

Demonstration

The Visual Presentation


Visual Aids, Dramatics and Demonstration

Reasons for using Visual Aids, Dramatics and Demonstration There are many obvious reasons why salespeople use various Visual Aids to assist them in their sales presentation. The reason is to: -Capture, attention and interestCreate two way communicationsInvolve the prospect through participationHave a more complete and clear explanation of the products.Increase a salesperson’s persuasive powers by obtaining positive commitments on a product’s single FABs (feature, advantage and benefits).


Visual Aids

Visuals, or visual aids, are devices that chiefly appeal to the prospect’s vision, with the intent of producing mental images of the product’s features, advantages, and benefits. Some of the common visuals supplied by companies to salespeople are:

The product.Charts and graphic illustrations – product features and advantages – performance and sales data.Photographs and videos – the product and its uses.Models or mock up (made up) of products – large & bulky products.Audio visual equipment – videos, slides, audiocassettes and computers.Sales manual and product catalogues.Order forms.Letters of testimony.A guarantee.Flip boards & posters.Sample Advertisements.


Guidelines for using Visual Aids

Rehearse by practicing in front of a mirror, on a tape recorder, and/or on videotape. Once you have finished you may begin using it with the less important prospects. This allows you time to polish up the presentation before contacting important key accounts.Customizing them to the sales call objective – the prospect’s customer profile and the customer benefit plan – and concentrating on the prospect’s important buying motives, using suitable multiple appeals to sight, touch, hearing, smell and taste. E.g. At a perfume/cologne counter in a shopping mall you can get the salesperson to allow you to experience your sensory reception to a particular perfume or cologne.Making them simple, clear and straightforward.Being sure you control the demonstration by not letting the prospect divert you from selling.Making them true to life.Encouraging prospect participation.Include trial closes (questions) after showing or demonstrating major FABs to determine if the prospect believes the presentation and considers its importance.


Dramatization

Dramatics refers to talking or presenting the product in a striking (unique way), showy (acting), or extravagant manner. Sales expertise can involve dramatization or a theatrical presentation of products.

You must be 100 percent sure that it would work effectively before you engage dramatics in your presentation. If implemented correctly, dramatics will be an effective way of a good presentation. One can develop your skills in dramatics by watching television commercials.

Use a dramatic demonstration to set yourself apart from many mundane salespeople that buyers see daily. Buyers, such as industrial purchasing agents, like to see you, as they know you will have an informative and often entertaining sales presentation.


Demonstration

One of the best ways to convince a prospect that a product is needed is to show the merits (good side) of the product through a demonstration. If a picture is worth a thousand words, then a demonstration is a thousand pictures. Therefore, it is best to show how the product/s, if possible, and have the prospect to use it. If this is not possible, then use pictures, models, videotapes, films or slides as the best alternatives. Whatever the salesperson is attempting to sell, the prospect should be able to see it. Demonstrations are part of the dramatization and fun of your presentation. Do not think demonstrations are not important, no matter how simple they are, they are most helpful and capable of making sales.The only way to ensure a smooth demonstration is to practice (practice make perfect). Yet, there is always the possibility that the demonstration will not go as planned or will backfire (something may go wrong) no matter how simple, but most of all be prepared at all times


SEVEN POINTS TO REMEMBER ABOUT DEMONSTRATION

Is the demonstration needed and appropriate?Have I as salesperson developed a specific demonstration objective?Have I as salesperson properly planned and organized the demonstrationHave I as salesperson rehearsed to the point that the demonstration flow smoothly and appears to be natural?What is the probability that the demonstration will go as planned?What is the probability that the demonstration will backfire (fail)?Does any demonstration present my product in an ethical and professional manner?

Demonstration


THE IDEAL PRESENTATION

In an ideal presentation, your approach technique quickly captures your prospect’s interest and immediately identifies signals (non verbal cues) that the prospect has a need for your product and is ready to listen actively. The ideal prospect is friendly, polite and relaxed, will not allow you to be interrupted, asks questions, and participates in your demonstration as planned. This helps you to move on swiftly with ease through your presentation without much difficulty. The satisfied customer gladly answers each of your questions, allowing you to anticipate the correct moment to ask for an order. You should be at ease and completely relaxed and know for sure when to come to a close. The customer is happy and says yes and happily thanks you for your valuable time. After a week or so you receive a commendation and words of thanks and possible future support from your customer and their organization.