Building Performance Institute Webinar Understanding Home Performance Buyers & Segmentation_052317
Understanding Buyers
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Transcript of Understanding Buyers
Understanding BuyersUnderstanding Buyers
Module ThreeModule Three
Learning ObjectivesLearning Objectives
1.1. Categorize primary types of buyers.Categorize primary types of buyers.
2.2. Discuss the distinguishing characteristics Discuss the distinguishing characteristics of business markets. of business markets.
3.3. List the different steps in the business-to-List the different steps in the business-to-business buying process.business buying process.
Learning ObjectivesLearning Objectives
4.4. Discuss the different types of buyer needs.Discuss the different types of buyer needs.
5.5. Describe how buyers evaluate suppliers Describe how buyers evaluate suppliers and alternative sales offerings by using the and alternative sales offerings by using the multiattribute model of evaluation.multiattribute model of evaluation.
6.6. Explain the two-factor model that buyers Explain the two-factor model that buyers use to evaluate the performance of sales use to evaluate the performance of sales offerings and develop satisfaction.offerings and develop satisfaction.
Learning ObjectivesLearning Objectives
7.7. Explain the different types of purchasing Explain the different types of purchasing decisions.decisions.
8.8. Describe the four communication styles and Describe the four communication styles and how salespeople must adapt and flex their how salespeople must adapt and flex their own styles to maximize communication. own styles to maximize communication.
9.9. Explain the concept of buying teams and Explain the concept of buying teams and specify the different member roles.specify the different member roles.
Key ThoughtsKey Thoughts• Business markets operate differently than consumer Business markets operate differently than consumer
markets, and those differences affect the selling markets, and those differences affect the selling process.process.
• The role of the salesperson will vary based on where The role of the salesperson will vary based on where the buyer is in the buying decision process.the buyer is in the buying decision process.
• Buyer’s needs may be a mix of situational, functional, Buyer’s needs may be a mix of situational, functional, social, and knowledge needs.social, and knowledge needs.
• The role of the salesperson will vary basedThe role of the salesperson will vary basedon the type of buying decision. on the type of buying decision.
• Salespeople will benefit from being Salespeople will benefit from being able to identify the buyer’s able to identify the buyer’s communication style.communication style.
Categories of BuyersCategories of Buyers
FirmsFirms
InstitutionsInstitutions
GovernmentsGovernments
Non-Profit OrganizationsNon-Profit Organizations
Business MarketsBusiness Markets
People (Personal Use)People (Personal Use)Consumer MarketsConsumer MarketsConsumer MarketsConsumer Markets
Distinguishing Characteristics Distinguishing Characteristics of Business Marketsof Business Markets
• Concentrated DemandConcentrated Demand
• Derived DemandDerived Demand
• Higher Levels of Demand FluctuationHigher Levels of Demand Fluctuation
• Purchasing ProfessionalsPurchasing Professionals
• Multiple Buying InfluencesMultiple Buying Influences
• Close Buyer-Seller RelationshipsClose Buyer-Seller Relationships
Recognition ofRecognition ofthe Needthe Need
Description ofDescription ofDesired CharacteristicsDesired Characteristics
Determination of Determination of Desired CharacteristicsDesired CharacteristicsSearch and QualificationSearch and Qualification
of Potential Sourcesof Potential SourcesAcquisition & AnalysisAcquisition & Analysis
of Proposalsof ProposalsEvaluation of Proposals &Evaluation of Proposals &
Selection of SuppliersSelection of SuppliersSelection of anSelection of anOrder RoutineOrder Routine
Performance Feedback Performance Feedback and Evaluationand Evaluation
Buying Decision ProcessBuying Decision Process
Initiating the RelationshipInitiating the RelationshipInitiating the RelationshipInitiating the Relationship
Developing the RelationshipsDeveloping the RelationshipsDeveloping the RelationshipsDeveloping the Relationships
Enhancing the RelationshipsEnhancing the RelationshipsEnhancing the RelationshipsEnhancing the Relationships
Buying Decision ProcessBuying Decision Process
Recognition ofRecognition ofthe Needthe Need
Recognition ofRecognition ofthe Needthe Need
Determination of Determination of Desired CharacteristicsDesired Characteristics
Determination of Determination of Desired CharacteristicsDesired Characteristics
Description ofDescription ofDesired CharacteristicsDesired Characteristics
Description ofDescription ofDesired CharacteristicsDesired Characteristics
Search and QualificationSearch and Qualificationof Potential Sourcesof Potential Sources
Search and QualificationSearch and Qualificationof Potential Sourcesof Potential Sources
Acquisition & AnalysisAcquisition & Analysisof Proposalsof Proposals
Acquisition & AnalysisAcquisition & Analysisof Proposalsof Proposals
Evaluation of ProposalsEvaluation of ProposalsSelection of SuppliersSelection of Suppliers
Evaluation of ProposalsEvaluation of ProposalsSelection of SuppliersSelection of Suppliers
Selection of anSelection of anOrder RoutineOrder Routine
Selection of anSelection of anOrder RoutineOrder Routine
Performance Feedback Performance Feedback and Evaluationand Evaluation
Performance Feedback Performance Feedback and Evaluationand Evaluation
Needs Gap – An Example from theNeeds Gap – An Example from theLife of a College SeniorLife of a College Senior
Actual StateActual StateActual StateActual State
Desired StateDesired StateDesired StateDesired State
NeedsNeedsGapGap
I have a job.I have a job.
I do not haveI do not havea job.a job.
The Needs GapThe Needs Gap
Actual StateActual StateActual StateActual State
Desired StateDesired StateProduce 1,250 Units Per DayProduce 1,250 Units Per Day
Produce 1,000 Units Per DayProduce 1,000 Units Per Day
Needs GapNeeds Gap
250 Units Per Day250 Units Per Day
Types of Buyer NeedsTypes of Buyer Needs
Situational NeedsSituational NeedsI need a copier now because I have a major I need a copier now because I have a major project I need to complete.project I need to complete.
I need a copier that sorts and staples.I need a copier that sorts and staples.
I need a state-of-the-art copier so I will be I need a state-of-the-art copier so I will be recognized as of the technology-savvy people recognized as of the technology-savvy people in this company.in this company.
I need an extended warranty with a copier.I need an extended warranty with a copier.
I need comprehensive training on how to use I need comprehensive training on how to use a copier.a copier.
Functional NeedsFunctional Needs
Social NeedsSocial Needs
Psychological NeedsPsychological Needs
Knowledge NeedsKnowledge Needs
Multi-Attribute ModelMulti-Attribute Model
Assessment of Assessment of Product or Supplier Product or Supplier
Performance (P)Performance (P)
Assessing the Relative Assessing the Relative Importance of Each Importance of Each
Characteristic (I)Characteristic (I)
The base scoreThe base scoreThe base scoreThe base score
The weightThe weightThe weightThe weight
Multi-Attribute Model: an ExampleMulti-Attribute Model: an Example
Offer from Offer from Company ACompany A
CompensationCompensation
LocationLocation
TrainingTraining
88 .4.4 3.23.2
33 .4.4 1.21.2
77 .2.2 1.41.4
PP II PxIPxI
ScoreScore5.85.8
Offer from Offer from Company BCompany B
CompensationCompensation
LocationLocation
TrainingTraining
33 .4.4 1.21.2
99 .4.4 3.63.6
88 .2.2 1.61.6
PP II PxIPxI
ScoreScore6.46.4
Which Job Which Job Should I Take?Should I Take?
Which Job Which Job Should I Take?Should I Take?
Employing Buyer Evaluation Procedures Employing Buyer Evaluation Procedures to Enhance Selling Strategiesto Enhance Selling Strategies
• Modify the Product Offering Being ProposedModify the Product Offering Being Proposed
• Alter the Buyer’s Beliefs about the Alter the Buyer’s Beliefs about the Proposed OfferingProposed Offering
• Alter the Buyer’s Beliefs about the Alter the Buyer’s Beliefs about the Competitor’s OfferingCompetitor’s Offering
• Alter the Importance WeightsAlter the Importance Weights
• Call Attention to Neglected AttributesCall Attention to Neglected Attributes
Complex Mix of Complex Mix of Business Buyer NeedsBusiness Buyer Needs
Buyers’Buyers’Level of Level of
SatisfactionSatisfaction
Psychological Psychological AttributesAttributes
““Delighters”Delighters”
Functional Functional AttributesAttributes
““Must-Haves”Must-Haves”
63%63%Level of InfluenceLevel of Influence
On Buyers’ SatisfactionOn Buyers’ Satisfaction
37%37%Level of InfluenceLevel of Influence
On Buyers’ SatisfactionOn Buyers’ Satisfaction
Types of Purchasing DecisionsTypes of Purchasing Decisions
• Straight Rebuy Buying SituationStraight Rebuy Buying Situation– Routinized Response BehaviorRoutinized Response Behavior
• Modified Rebuy Buying SituationModified Rebuy Buying Situation– Limited Problem SolvingLimited Problem Solving
• New Task Buying SituationNew Task Buying Situation– Extensive Problem SolvingExtensive Problem Solving
Characteristics of theCharacteristics of theThree Types of Buying DecisionsThree Types of Buying Decisions
Straight Straight RebuyRebuy
Modified Modified RebuyRebuy
New New TaskTask
Newness of Problem or NeedNewness of Problem or Need
Information RequirementsInformation Requirements
Information SearchInformation Search
Consideration of New AlternativesConsideration of New Alternatives
Multiple Buying InfluenceMultiple Buying Influence
Financial RisksFinancial Risks
LowLow
MinimalMinimal
MinimalMinimal
NoneNone
Very SmallVery Small
LowLow
MediumMedium
ModerateModerate
LimitedLimited
LimitedLimited
ModerateModerate
ModerateModerate
HighHigh
MaximumMaximum
ExtensiveExtensive
ExtensiveExtensive
LargeLarge
HighHigh
Buying Decision Types - ContinuumBuying Decision Types - Continuum
Straight Straight RebuyRebuy
Modified Modified RebuyRebuy
New New TaskTask
Habitual and Routine Habitual and Routine Decision MakingDecision Making
Extensive Consideration Extensive Consideration and Decision Makingand Decision Making
Communication Styles MatrixCommunication Styles Matrix
Low Low AssertivenessAssertiveness
High High AssertivenessAssertiveness
Low Low ResponsivenessResponsiveness
Low Low ResponsivenessResponsiveness
High High ResponsivenessResponsiveness
AnalyticalAnalytical DriverDriver
AmiableAmiable ExpressiveExpressive
Slow PacedSlow Paced Fast PacedFast Paced
Relationship OrientedRelationship Oriented
Task OrientedTask Oriented
Communication Style FlexingCommunication Style Flexing
The process by which the salesperson adjusts The process by which the salesperson adjusts his/her communication style to fit that of the his/her communication style to fit that of the
customers in order to facilitate effective customers in order to facilitate effective communication.communication.
Need Need DiscoveryDiscovery
Ask specific, Ask specific, fact-finding fact-finding
questions in a questions in a systematic systematic manner.manner.
Ask fact Ask fact finding finding
questions questions leading to leading to
what the driver what the driver values and values and rewards.rewards.
Create a Create a cooperative cooperative environment environment with an open with an open exchange of exchange of information information
and feelings.and feelings.
Begin by finding Begin by finding out the out the
Expressive’s Expressive’s perception of the perception of the
situation and situation and vision of the vision of the
ideal outcome.ideal outcome.
Buying Center MembersBuying Center Members
• InitiatorsInitiators
• UsersUsers
• GatekeepersGatekeepers
• InfluencersInfluencers
• DecidersDeciders
• PurchasersPurchasers
The roles in the The roles in the buying center work buying center work together to affects together to affects the outcome of the the outcome of the purchase decision.purchase decision.
Current Developments in PurchasingCurrent Developments in Purchasing
Increasing Use of Information TechnologyIncreasing Use of Information Technology
Relationship Emphasis on Relationship Emphasis on Cooperation and CollaborationCooperation and Collaboration
Supply Chain ManagementSupply Chain Management
Target PricingTarget Pricing
Increased Importance of Knowledge and CreativityIncreased Importance of Knowledge and Creativity