Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent 9−1 Chapter 9 Managing objections and buyer concerns

9−2 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Objections and customer relationships The development of new customers Buyer decision making  Some customers are suspicious of salespeople and tend to challenge every point to keep them honest.  Customers may walk away because they do not understand much about the product category and don’t want to appear naive or stupid in public.  Some people are not really interested in purchasing the product at all, but want to challenge the sales person in order to feel superior about their product knowledge.  Whenever a person buys something, there is some level of tension or anxiety related to the purchase. This uncertainty is called perceived risk, and describes the feeling of anxiety relating to whether they are making the right decision

9−3 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Buyer concerns Perceived risk takes a variety of forms  Financial risk: concern over the value of the purchase  Social risk: concern over how others will accept our purchase  Physical risk: concern over the safety of the product  Image risk: concern over whether the customer feels comfortable with the purchase as part of their self image  Time risk: concern over the amount of time needed to learn about the different choices in the market and reach a satisfying purchase decision

9−4 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Buyer concerns cont. Perceived risk – a personal perspective  Consider the hypothetical purchase of a new expensive personal music player that supports the mp3 and Ogg Vorbis music format. The purchase was for a gift to a friend who knows more about the product category than you do.  Outline the different areas of perceived risk that could possibly relate to the purchase.

9−5 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Customer relationships Perceived risk – a personal perspective  Consider a recent significant real purchase that you have made, preferably a purchase over $100 such as new clothing or stereo equipment. Use the questions below to reflect on how you responded to the situation.

9−6 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Customer relationships cont. Customer relationship management  Focus on the long term, not just on this sale.  Try to establish a collaborative framework rather than a confrontational ‘us and them’ mentality.  Do not take objections personally, as these are indicators of the problem, not the person raising them.  Focus energy on the consultation and problem solving rather than a ‘in the deal’ approach.

9−7 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections The development of new customers Learn to recognise certain categories of objections. Avoid common objections by answering them in the sales process. Prepare for objections in other marginal areas that you are still likely to receive. Develop the skills to fully identify and respond appropriately to objections.

9−8 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. The development of new customers Recognising common types of objections  Customer situation and attitude  Loyalty to an existing supplier  contractual  relational  proven and known service commitment  The cost of making a change  Time: genuine objection (not always a diversion)  Lack of understanding  Insufficient need

9−9 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. The development of new customers Recognising common types of objections  Product related  features  reliability  limitations  complexity  changeover  compatibility  safety concerns

9−10 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. The development of new customers Recognising common types of objections  Supplier related  dislike of foreign imports  dislike large corporations that have impersonal structure  dislike small companies that may not be able to honour a long-term service commitment  previous bad experiences  friends, colleagues or the media have expressed a negative opinion

9−11 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. The development of new customers Recognising common types of objections  Interpersonally related Salespeople do not expect that they will get on well with everybody. Sometimes it might be that the buyer’s perception of the salesperson, or of salespeople in general, is the element that is holding things back. Reasons for this may include:  the selling approach used  personality  age, gender, ethnic prejudices  the salesperson’s ability to listen and provide feedback appropriately  perception of the salesperson’s skill, knowledge or experience

9−12 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. The development of new customers Handling objections  In the past, sales people were often trained to attack objections like defensive barriers to knock down until the buyer is left with no valid reason not to buy.  This is no longer considered the correct way to handle objections, for a variety of reasons.  Genuine objections are, in fact, a concern raised by the customer who is contemplating the sale and ramifications of the product in use.  Your objection handling technique may include:  validating an objection to be genuine  using questioning to outline the basis for the concern  working collaboratively through the concern with the buyer to establish a solution

9−13 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. Receiving objections  Anticipate and prepare.  Be positive and confident.  Listen, probe and clarify.  Evaluate.  Acknowledge.

9−14 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. Responding to objections  Important points  Focus on the customer’s best interests in the long term.  Be responsible and ethical in the response to allow the buyer to view the situation in an alternative way, rather than be manipulated into adopting a product.

9−15 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. Responding to objections  Denial  evidence-based response  diplomatic delivery  assess buyer feedback that your summary has been accepted and that your interpersonal relations are still intact and positive

9−16 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. Responding to objections  Price  the price–value relationship  life-cycle costing – TCO

9−17 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Negotiating objections cont. Responding to objections  Price  Specific price objections