Chapter 5
How People Buy
The salesperson must understand that no purchase is ever made
unless a problem or need is
The customer first must become aware of the product and be convinced of their need for it
Many times, the customer is not aware of a problem or need, or doesn’t believe there is
a cost-effective solution available
It is up to the salesperson to make the customer aware of the problem or “walk” her customers
through logical decision-making process
The Buying Process -- Before any purchase decision is made,
there is a
thought process that every customer moves through
Sometimes the process is very quick (impulse decisions)
Sometimes the process takes months or years
The Buying Decision Process
Step 1: Need Recognition
When customers feel a need strongly enough, they will aggressively search for a
Often customers are not aware they have a problem or need until it is pointed out to them
Salespeople play an important part in helping customers recognize the need to change -Brands
Suppliers
Business
Adapting new technology
Salespeople are effective agents of change
- but only when he/she makes sure the customer recognizes a need to change
Step 2: Information Search
Once a need is felt, customers look for
solutions
about their problem and about alternative
Customers use a variety of information sources
Media
Public contacts
Personal contacts
Professional contacts
Step 3: Examine Alternatives
When the customer senses a need and has collected information they are ready to
alternatives
Analysis may be deliberate and lengthy, using projected profits vs. costs or analysis may be
their
instantaneous -- relying on experience, gut feeling or a
recommendation
Analysis will likely be more thorough when ---Customer has a larger business
Customer is more progressive - interested in innovation
Purchase involves much
Customer is financially conservative or risk-averse
Step 4: Choose Best Alternative
After the customer ----the need
Acquires adequate information
Analyzes alternatives he/she is ready to make a choice
A critical point for the salesperson . . they should be ready to assist the customer through this step
Salespeople can . . .
Clarify information,
Correct misconceptions
the benefits to be gained
Help the customer find a good solution that is also favorable to their company
Step 5: Post Purchase Evaluation
After a decision is made the customer often begins to worry
“Did I do the right thing?”
“Should I have looked around more?”
“Did I get a good deal?”
After the sale, Post Purchase Dissonance sets in ------ sometimes called “Buyers
”
The need to feel that a decision was made is so great the person may go to great lengths
to rationalize the decision with a data and information to justify the decision -Or . . . They may “kick” themselves for making an unwise decision
The salesperson plays an important role at this stage of the purchase decision
The salesperson can
the decision and help the customer feel good about their decision
A follow-up phone call
Providing information and education to help the customer get more satisfaction
from the product or service
Set the stage for sales later on
Relationship Buyers And Their Purchase Decision
Information Search
Word of mouth - friends and neighbors
Trust of source is important factor
Weigh Alternatives
Ask
of their friends
Listen to the advice of trusted salesperson
Make Decision
Make decision quickly - no need to drag it out
Economic Buyers And Their Purchase Decision
Economic Buyers . . .
Extended information search when stakes are high
Searches for cost effective solution
Pits one supplier against another
Weigh alternatives
Very careful to get the
Pit one supplier against another
Business Buyers And Their Purchase Decision
Information Search
Extensive search if situation warrants it
Examines how the solution impacts the
Weighs alternatives
Weighs many factors - both economic and personal
May associate worth with each attribute to determine the best overall value
How Customers Weigh Alternatives
As customers gather information they begin to weigh the alternatives -- they use a “scorecard”
in salesperson
Convenience
Technical information
Need for service
Recognition and ego
Risk aversion
Other things unique to individual
Understanding Customer Loyalty
Customers like to do business with people they can depend on and trust
Closeness of the relationship appears to be the most important element of loyalty
Customers tend to be far more loyal to a (sales) person than to a company or brand
What These Farmers Like in a Salesperson
Adoption of Technology
Adoption refers to the process by which new technologies or ideas are embraced, accepted and
by the customer
Understanding how your customer considers and adopts new ideas can be very important to the
selling process
In his book, Diffusion of Innovators, Everett Rogers placed farmers into five groups:
Innovators
2.5%
Early Adopters
13.5%
Early Majority
%
Late Majority
%
Laggards 16.0%
Innovators - First 2.5% to adopt . . .
Anxious to try an untried brand or idea
See themselves as in touch with new ideas
Frequently read research bulletins
Well educated
Have a scientific approach to problem solving
Able to deal with abstract ideas
Early Adopters -- the next 13.5% to adopt
Willing to try a new idea or technology
Not the very first to embrace a new product or idea
Refer to themselves as “one of the first”
Well
Stay up to date with company meetings and trade publications
Early Majority -- next 34% to adopt
Willing to try a new idea or technology
When there is enough evidence for them, they jump aboard the ship too
-oriented people
Many contacts in the community
Late Majority -- Next 34% to pick up the idea
Have a wait-and-see attitude
Are often
about new ideas
Tend to be less well educated
Less well-read
Smaller farms
Rely more on friends and neighbors for info
Travel outside community less
Laggards, the last 16% to adopt a new idea
Least progressive farmers
Averse to taking risks
Less educated
Afraid of debt
Rarely in leadership role
Less well read
Rely on friends and neighbors
Not heavily involved with community groups
Adoption Diffusion Curve --- The Power of Opinion Leaders
An opinion leader is a customer (or potential customer) who is
by his or her peers for business success.
Other potential customers watch the opinion leader and often try to emulate his/her decisions
Opinion Leaders can be found on the boards of directors of cooperatives, school boards,
and churches
They attend a wide variety of public meetings
It is easy to find opinion leaders, not easy to sell to them
Many salespeople calling on them
May not be
easily
Usually curious about better ways to do things and sometimes seek out the info on own
Seem to revel in adopting good new ideas may not be necessary to offer special rewards or deals
It is a good idea for the salesperson to develop a strong relationship with opinion leaders
Can bring salesperson a sizable amount of business themselves
May prove helpful as a source of extremely well-respected testimonials
Their potential for
influence
Buying Decisions In Larger Businesses
Many ag salespeople today deal with a complex buyer that contains multiple decision -makers, with
sometimes differing personal needs and professional priorities.
It’s no longer enough to know one contact person within the organization
For this type of customer, you can’t do enough
Even though a title may imply that someone is responsible for the buying decision,
clarification of roles/responsibilities with tactful questioning is beneficial
Types of Buying Decisions
There are three basic types of business - to- business buying situations
A new task (little or no prior history)
Requires an extensive problem-solving process.
A modified rebuy (some history)
Still requires some problem-solving but usually more limited
A
rebuy (a lot of history)
May require only a routine communication
1. New Task Buying
Customer has little
or knowledge of the product or service
Requires customer exert a great deal of thought, calculation and speculation as to how the idea fits
into operation
The customer, hungry for advice, often seeks out the salesperson
2. Modified Rebuy
Considers making changes in an ongoing supply situation
Has some experience with the solution but has become
with current situation
May bring less frustration and effort for the buyer than a “new task” buy
Will likely “shop around” for opportunities and possibly take business away
from the present vendor
3. Straight Rebuy
purchase - regular or standing order
May be an annual purchase agreement and the blanket purchase order
Blanket purchase order is commonly used with low cost items
Purchase order is signed upon contract agreement, and delivery is made on the set schedule
Often a discount is included
May be formal contract
Can be very advantageous for the salesperson
Summary
No purchase is ever made unless some sort of problem or need is perceived
Before a decision is made there is a logical thought process that every customer must complete
Need recognition
Information search
Examination of alternatives
Decision
Post purchase evaluation
Adoption of new technology:
Innovator
Early adopters
Early majority
Late majority
Laggards
Opinion leaders are often
– They deserve special attention from salespeople
The purchase decision process includes the period immediately post-purchase.
Buyers remorse (post-purchase dissonance) is common
Salespeople have an opportunity and responsibility to support the customer through their decision to
purchase and post purchase period
Large accounts may contain multiple decision-makers.
The purchase decision process will be strongly affected by the level of history and
experience between buyer and seller
Three classes of buying process:
New buy
Modified re-buy
Straight re-buy
Consistent contact and attention to future needs increases your chances for success