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Personal Selling
| Term | Definition |
|---|---|
| Customer Co-Creation | customer input that results from the customer playing an active role in the problem solving process |
| SPIN | Situational, problem, implication, and need pay-off questions |
| SPIN Selling | Methodology that lay out a basic sequence of four questions for customer interactions |
| Situational questions | questions designed to help the salesperson better understand the situation the customer is currently facing |
| Problem questions | questions designed to help the customer and salesperson identify issues, sometimes latent, that need to be addressed |
| implication questions | questions designed to help the customer and salesperson better understand the consequences arising from the problems uncovered in situational and problem questions |
| need pay-off questions | questions designed to help the customer and salesperson better understand the benefits available to the firm if the customers problems were solved |
| implied needs | needs known to the customer but not important enough to merit action |
| explicit needs | needs that require immediate attention |
| open-ended questions | questions designed to ensure that customers respond with a dreat deal of information and detail |
| closed ended questions | questions that are specific in nautre and so require short and direct responses - yes or no |
| active listening | listening that occurs when the salesperson is fully engaged with the customer, paying careful attention to all verbal or nonverbal cues and providing appropriate responses |
| passive listening | one way communication in which the salesperson receives the informaton without providing feedback |
| follow up questions | questions asked indirect response to something the customer said |
| summary questions | questions designed to review and verify information previously provided by the customer |
| adaptors | problem-solvers who prefer more structured problem solving methods and are most comfortable when everyone is in agreement about the process and solution |
| innovators | problems solvers who are at ease with a less structered problem solving approach and who tend to look beyond status quo for solutions |
| gaining commitment | portion of the sales call in which the customer commits to the sale |
| primary objective | what the salesperson most wants to accomplish in the sales call |
| secondary objective | objective to which the salesperson is willing to revert if agreement cannot be reached on the primary objective |
| buying signals | cues sent by the customer indicating a shift in thinking from if we should do this to how we should do this |
| summary-benefit approach | approach to gaining commitment in which the salesperson focuses on the benfits being provided to the customer, rather thatn the features of the product or service itself |
| trial closed question | question designed to assess whether the customer has comments or concerns about the salespersons summary |
| alternative choice technique | commitment gaining technique in which the salesperson provides two legitmate options for the customer to choose between along with guidance about which is more appropriate |
| balance sheet technique | commitment gaining technique in which the salesperson lists the positives as well as the negtives associated with commitment |
| direct request techniqe | commitment gaining technique in which the salesperson lists the positives as well as the negatives associated with commitment |
| success story technique | commitment gaining technique in which the salesperson tells the story of another customer who agreed to something similar and has benefitted from the decision |
| objection | explicit expression by a buyer that a barrier exists that needs to be satisfied before buying |
| LAER model | listen, acknowledge, explore, respond. model for handling objections |
| acknowledge technique | technique for overcomingan onjection in which the salesperson admits that the objection is valid |
| boomerang technique | technique for overcoming an objection in which the salesperson tranistions the objection from a negative to a positive by discussion how the perceived negative should actually benefit the customer |
| compensation technique | technique for overcoming an objection in which the salesperson admits the objection is valid and also discusses other benefits that offset the objection |
| forestall technique | technique for overoming objection in which the salesperson brings up an objection they know will arise, instead of waiting for the customer to do so |
| indirect denial technique | the salesperson acknowledges understandingwhy the customer would have the concern but states that the objection is not valid |
| direct denial technique | technique for overcoming an objection in which the salesperson states that the objection is not valid |
| postpone / coming-to-that technique | technique for overcoming an objection in which the salesperson acknowledges the objection and asks if it can instead be disvussed at a later point in the sales call |
| value technique | technique for oercoming an objection in which the salesperson transitions the conversation away from price alone to more fully describe the value being offered through the solution |
| continuous yes close | manipulative closing technique in which the salesperson asks a series of questions designed to elicit a positive(yes) response and concludes by asking for the sale in hope that the customer will again respond yes |
| emotional close | manipulative closing technique in which the salesperson discusses how important the sale is for personal reasons |
| standing room only close | manipulative closing technique in which the salesperson states that due to high demand for the product/service, it may not be available in the future |
| negotiation | dialague between two or more people or parties, intended to reach a beneficial outcome about one or more issues over which a conflict exists |
| negotiation principal | primary decision making authority in a negotiation |
| negotiation agent | thrird-party agent hired to represent the interests or objectives of a principal in a negotiation |
| negotiation agenda | agreed upon list of items to be discussed or goals to be achieved in a particular order during a negotiation |
| negotiation positions | things negotiators demand you give them and also the things on which they are not willing to budge |
| negotiation options | any available choices or alternatives that parties might consider to satisfy their respective interests |
| distributive negotiation | negotiation in which the goals of the negotiating parties are in direct opposition |
| integrative negotiation | negotiation in which the parties place different value on various issues and resolutions occur through cooperative exchanges |
| dual-concern model | theory of conflict resolution that assumes people's preferred method of dealing with conflict is based on two-dimensions: assertiveness and empathy |
| accomadators | negotiators who focus on preserving relationships and building a friendly rapport by sacrificing some of their companys interests in favor of the opposite partys interests; max empathy, min assertiveness |
| avoiders | negotiators who do not like to negotiate and dont do it unless necessary; low assertiveness and empathy |
| collaborators | negotiators who see conflict as a creative opportunity to satisfy both parties goals; high assertiveness and empathy |
| competitors | negotiators who see conflict as a win-lose situation and are intent on winning; max assertiveness and mini empathy |
| compromisers | negotiators who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation; they are intermediate on both assertiveness and empathy |
| BATNA | Best Alternative to a Negotiated Agreement; often determines whether the other party will walk away |
| ZOPA | Zone of Possible Agreement; the gap between the seller's walk away point and the buyers highest willingness to pay |
| Log Rolling | negotiation strategy that invloves adding elements to a negotiation so that more items are negotiatble; helps redefine issues from a win-lose perspective to a win-win perspective |
| concession | act of yielding a positition in a negotiation |
| contingent concession | concession made only if the other party agrees to make a specified concession in return |
| dilemma of trust | situation in which a negotiator who believes everything the other party says can be manipulated by dishonesty |
| dilemma of honesty | situation in which a negotiator who shares all of their exact requirements and limits will never achieve an outcome better than their walk-away point |
| misrepresentation by omission | failure to disclose all information that would benefit the other party; seen as sometimes acceptable |
| misrepresentation by commision | outright falsification of information; nearly always viewed as unethical |
| base salary | fixed amount of money put to an employer in return for work performed; does not include benefits,bonuses, or any other potential compensation |
| commissions | per unit payout on sales beyond the salespersons quota |
| recoverable draw | set amount of money paid to the sales representative by the company at regular intervals |
| bonus | lump sum paid out to salespeople for the achievement of their respective sales quota |
| salesperson compensation plan choice | selection of a compensation plan alternative from a set of choice |
| incentive pay horizon | time between incentive payments |
| salary-only compensation | payment structure in which organizations decide ahead of time how much they will pay their salesperson; take home earnings each month are set, regardless of how much a rep sells |
| commission only compensation | payment structure in which organizations pay salespeople based purely on their performance |
| base salary plus commission | payment structure in which organizations pay a fixed base salary as well as a commission |
| base salary plus bonus | payment structure in which organizations augment a base salary with a bonus when the salesperson meets presetsales targets |
| absolute commission plan | sales compensation plan in which organizations pay reps when they reach specific targets or milestones |
| relative commission plan | sales compensation plan that bases pay on performance against the preset target, called a quota |
| straight line commission | commission based on how close salespeople get to their quota |
| gross margin commission | commission based on profit rather than sales amount |
| price | amount of something - money or effort- that a buyer exchanges with a seller to obtain a product |
| revenue | result of the number of units sold multiplied by the price charged to customers; units sold x price = |
| profitability | ability to use resources to generate revenue in excess of expense |
| profitology | study of increasing profit through sales - way to maximize profits |
| sellers opportunity cost | value of what a seller gives up (time, money) in pursuing a particular sale; essentially, the investment a salesperson must make to achieve a sale |
| fixed costs | costs that remain constant and do not vary based on the number of units produced or sold |
| variable costs | costs that vary depending on the number of units produced or sold |
| markup pricing / cost-plus pricing | pricing tactic in which marketers add a certain amount, usually a %, to the cost of the product, to set the final price; unit cost of product + (desired % return + unit cost) |
| profit margin | amount a product sells for above the total cost of the product itself |
| strategic pricing | proctively creating conditions under which better and more-profitable pricing outcomes are the result |
| gross margin | net sales revenue minus the cost of goods sold |
| predictive analytics | use of data, statistical algorithms, and machine-learning techniques to identify the likelihood of future outcomes based on historical data |
| lead scoring | analytics-based application in which a company numerically rates its best prospective customers |
| price discrimination | practice of charging different customers different prices for the same product, only illegal if it injures competition |
| pricing fixing | collusion of two or more companies to set a product's price; illegal under the Sherman Anti trust act of 1890 and the federal trade commission act |
| predatory pricing | practice of first setting prices low with the intention of reducing competition and then raising prices to normal levels |
| deceptive pricing | illegal practice that invloves intentionally misleading customers with price promotions |
| profitability analysis | analysis that measures how much profit the firm generates; can be broken down to measure the profit contribution of regions, products, channels, or customer segments |
| customer acquisition analysis | analysis that measures how much a firm spends to gain new customers |
| individual customer profitability | profit a firm makes from a customer over a specific period of time |
Created by:
Grace.Jensen