Chapter 2

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The Process of Selling and

Buying

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 Learning Objectives

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• Recognize key drivers of change in selling and sales management.
• Understand best practices in selling.
• Explain historical basis for stereotypical views of selling.
• Point out reasons why sales jobs can be highly satisfying.
• Identify and explain key success factors for salesperson performance.
• Discuss and give examples of different types of selling jobs.
• List and explain roles of participants in an organizational buying center.
• Describe relationship between buying centers and selling centers and the nature of team
selling.
• Outline stages in organizational buyer decision making.
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Point out the nature of different organizational buying situations.
 Key Terms

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• drivers of change •seller •selling center
• best practices •detailer •team selling
• autonomy •technical seller •matrix organization

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• sales activities •new business seller •key account
• job variety •buying center •organizational buying
• intrinsic rewards •initiator •decision stages
• extrinsic rewards •user •derived demand
• work-family conflict •influencer •single-source suppliers
• telecommute •gatekeeper •commodity products
• virtual office •buyers •slotting allowances
• adaptive selling •decider business-to- •new-task purchases
• job enlargement business (B2B) market •modified re-buy
• cost of a sales call •industrial selling •straight re-buy
• retail selling •trade service •repeat purchases
• end-user consumer •missionary •out supplier
• business-to- •controller
consumer (B2C) •perceived risk
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 Drivers of Change in Selling and
Sales Management
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• Building long-term relationships with customers.
• Creating sales organizational structures that are more nimble and
adaptable to the needs of different customer groups.
• Gaining greater job ownership and commitment from salespeople.
• Shifting sales management style from commanding to coaching.
• Leveraging available technology for sales success.
• Better integrating salesperson performance evaluation. 4
 Best practices
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– Look to the conduct of world-class sales
organizations as indicators of important
agents for change in selling.

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 Autonomy
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– The freedom of action and opportunities for personal
initiative.
– The degree of independence the salesperson can exercise
in making his or her own decisions in the day-today-
operation of the job.

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 Key-Terms
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• Sales activities (pg. 38)

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– Multifaceted and challenging activities that are part of the job of a
salesperson, such as searching out leads, writing up orders, and learning
about the product.
• Job variety (pg. 39)
– Sales jobs are seldom boring because of the different customer needs and
problems for which the salesperson can work to develop unique solutions.

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 Key-Terms
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• Intrinsic rewards (pg. 39)

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– Rewards inherent to satisfaction derived from elements of the job or
role itself.
• Extrinsic rewards (pg. 39)
– Rewards bestowed on the salesperson by the company.
• Work-family conflict (pg. 42)
– A lack of balance between one’s work life and family life such that
work is encroaching on the family.
• Telecommute (pg. 42)
– Working from a remote or virtual office, often at home, and seldom
traveling to company offices.
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 Key-Terms
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• Virtual office (pg. 42)
– A location outside the company’s offices where a salesperson works (often his or her
home).
• Adaptive selling (pg. 47)
– The altering of sales behaviors during a customer interaction or from one situation to
another based on information the sales rep gathers about the nature of the selling
situation.
• Job enlargement (pg. 50)
– The fact that the sales role today is broader and contains substantially more activities
than it once did.
• Cost of a sales call (pg. 50)
- Summation of non-selling activities and selling 9
activities
 Key-Terms
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• Retail selling (pg. 51)
– Involves selling goods and services to end-user consumers for their own
personal use.
• End-user consumer (pg. 51)
– The ultimate user of the goods and services for personal use.
• Business-to-consumer (B2C) market (pg. 51)
– The sale of goods and services to end-user consumers (retail selling).
• Business-to-business (B2B) market (pg. 51)
– Previously called industrial selling.
– The sale of goods and services to buyers who are not the end-users.
– Relationship selling is much more predominant in the B2B market than in
the B2C market.
• Industrial selling (pg. 51) 10
– An old term for business-to-business (B2B) selling.
 Key-Terms
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• Trade servicing (pg. 52)
– A type of B2B sales job in which the sales force’s primary responsibility is to increase
business from current and potential customers by providing them with merchandising
and promotional assistance.
• Missionary seller (pg. 52)
– Salespeople to increase business from current and potential customers by providing
them with product information and other personal selling assistance.
• Detailer (pg. 52)
– Missionary salespeople often do not take orders from customers directly but use
“detailers” to persuade customers to buy their firm’s product from distributors or other
wholesale suppliers.

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 Key-Terms
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• Technical seller (pg. 52)
– Salespeople increase business from presently identified
customers and potential customer by providing them with
technical and engineering information and assistance.
• New business seller (pg. 52)
– Salespeople identify and obtain business from new
customers.

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 Key-Terms

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• Buying center (pg. 57)

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– All the people who participate in buying a particular product or service.
– Initiators (pg. 57)

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• The people who perceive a problem or opportunity that may require the purchase
of a new product or service and thereby start the buying process.
– Users (pg. 57)
• The people in the organization who must use or work with the product or service.
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Influencers (pg. 58)
• The people who provide information for evaluating alternative products and
suppliers.
– Gatekeepers (pg. 58)
• The people who control the flow of information to other people involved in the
purchasing process.
– Buyers (pg. 58)
• The people who actually contact the selling organization and place the order.
– Deciders (pg. 58)
• The people with the final authority to make a purchase decision.
– Controllers (pg. 58) 13
• The people who determine the budget for the purchase.
 Key-Terms

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• Perceived risk (pg. 59)
– For a firm when buying a particular product affects the makeup and size of the buying
center.
– It is based on the complexity of the product and situation, the relative importance of
the purchase, time pressure to make a decision, and the degree of uncertainty about
the product’s efficiency.
• Selling center (pg. 59)
– Brings together individuals from around the organization (marketing, customer service,
sales, engineering, and others) to help salespeople do their jobs more effectively.
• Team selling (pg. 59)
– These structures commonly make the salesperson responsible for working with the
entire selling team in order to manage the customer relationship.

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 Key-Terms
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• Matrix organization (pg. 59)
– An organization of direct reports and supporting internal consultants who bring their
collective expertise to bear for a client.
• Key account (pg. 60)
– One of a firm’s largest customers (especially one with a buying center) whose
potential business over time represents enough dollars and entails enough cross-
functional interaction among various areas of both firms to justify the high costs of the
team approach. Key accounts generally have a senior salesperson as the key
account manager (KAM).

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 Key-Terms
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• Organizational buying decision stages (p. 60)
– (1) Anticipation or recognition of a problem or need, (2) determination and description
of the characteristics and the quantity of the needed item, (3) search for and
qualification of potential suppliers, (4) acquisition and analysis of proposals or bids, (5)
evaluation of proposals and selection of suppliers, (6) selection of an order routine,
and (7) performance evaluation and feedback.
• Derived demand (pg. 60)
– A firm’s demand for goods and services.
• Single-source suppliers (pg. 61)
– Only one vendor used by a firm for a particular good or service to minimize the
variation in quality of production inputs.
• Commodity products (pg. 62)
– Standardized, non-technical items.

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 Key-Terms
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• Slotting allowances (pg. 62)
– Fees retailers charge sales organizations for guaranteed shelf space.
– They cover the cost of setting up a new item in their IT system, programming it into
inventory, and ultimately distributing it in stores.
• New-task purchases (pg. 63)
– Customer is buying a relatively complex and expensive product or service for the first
time.
• Modified re-buy (pg. 63)
– Buyer is interested in modifying the product specifications, prices, or other terms it has
been receiving from existing suppliers and is willing to consider dealing with new
suppliers.
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 Key-Terms
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• Straight re-buy (pg. 63)
– Customer is reordering an item it has purchased many times.
• Repeat purchases (p. 63)
– Occurs when a customer buys the same product under the same circumstances again
and again.
– It tends to be much more routine than new-task purchase or modified rebuy.
• Out supplier (pg. 64)
– Potential supplier not on a buyer’s approved list.

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 Drivers of change

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– Six have been identified in reinventing sales organization’s so they can
compete successfully.
• Building long-term relationships with customers.
• Creating sales organizational structures that are more nimble and
adaptable to the needs of different customer groups.
• Gaining greater job ownership and commitment from salespeople.
• Shifting sales management style from commanding to coaching.
• Leveraging available technology for sales success
• Better integrating salesperson performance evaluation.. 19
 What Customers Expect

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1. Knowledge of products and customer applications.
2. Customer advocacy; partnership development.
3. Ability to keep customer up-to-date.
4. Quality product/service.
5. Offer of technical support.
6. Offer of local or easily accessible representation.
7. Responsiveness to needs, problems; provides service.
8. Ability to provide a total solution.
9. Understanding of customer’s business.
10. Competitive price. 20
 How Sellers are Responding
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• Establishing a customer-driven culture.
• Market segmentation.
• Market adaptability.
• Information technology.
• Customer feedback and measuring customer satisfaction.
• Sales, service, and technical support systems.
• Recruiting and selecting salespeople.
• Training and development.
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 Attractiveness of Sales Careers

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• Autonomy and opportunities for personal initiatives
• A variety of challenging activities
• Financial rewards
• Favorable working conditions
• Excellent opportunities for development and advancement

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VNU Business Media. Used with permission.
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Source: Christine Galea, “2002 Salary Survey,” Sales & Marketing Management, May 2002, pp. 32–36. © 2002
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 Selling Success Factors
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1. Listening skills
2. Follow-up skills
3. Ability to adapt sales style to situation
4. Tenacity
5. Well organized
6. Verbal communication skills
7. Able to interact with people at all levels of an organization
8. Ability to overcome objections
9. Closing skills 25
10. Personal planning and time management skills
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 Selling Activities
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Servicing the
Working with Servicing the Managing

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Selling account
others product information

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Attending Training and
Entertaining
conferences recruiting Traveling Distribution
and meetings

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 Matrix of New Selling Activities
Communication Sales Relationship Team Database
Email Set up appts Web page Conference calls Collect new
Dictaphone Script sales pitch from information
Internet database Enter information on
Use software for customer laptop
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Laptop (CD)
background Update customer files
Technology

Voicemail
Cell Phone Laptop for presentation
VCR for presentation
Pager
Provide tech ability to
Web page

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customers
Newsletters

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Audiovideo conference
Provide tech info
Overnight services
Maintain virtual office

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Practice language skills Adaptive selling Bring in vendor/alliance Mentor
Conduct research at Develop relationship Make sale and turn
customers’ site Hand-hold customer over to someone else
Avoid potential litigation Write thank-yous Coordinate with sales
Plan for multiple calls to Purchase dealers support
Nontechnology

close deal Call on CEOs

Sell value-added services Build rapport w/ buying
Respond to referrals center
Write thank-yous Network
Target key accounts Build trust
Pick up sales supplies Train brokers
Consultative sales
Listen
Ask questions
Read body language
Sell unique competencies
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 B2C versus B2B Selling
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• Most salespeople are involved in retail selling – selling goods and
services to ultimate consumers (B2C)
• A much larger volume of sales is accounted for by industrial selling,
recently referred to as business-to-business selling (B2B):
– Sales to resellers
– Sales to business users
– Sales to institutions

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 Types of B2B Jobs
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• Trade selling – increase business by providing customers with

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merchandising and promotional assistance
• Missionary selling – persuade customers to buy products from
distributors or other wholesale suppliers
• Technical selling – increase business from by offering current
customers technical/engineering assistance
• New business selling – identify and obtain business from new
customers

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 Stages in the Selling Process
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Prospectin
g for
Customers

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Opening the

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Relationship
Qualifying

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the
Prospect
Presenting
the Sales
Message
Closing the
Sale
Servicing
the
Account

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 Prospecting for customers is…
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• A core competency
• A sales fundamental
• Critical to increasing sales
• Hard work
• Carries a delayed payoff
• Requires design and discipline
• Enhanced by software

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 Opening the Relationship
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• Often referred to as “the approach.”
• Determine who is likely to have the greatest influence to initiate the
purchase process
• Generate enough interest to obtain the information needed to become a
qualified prospect
• Identify key decision makers, desires, and relative influence

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 Qualifying the Prospect
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• Is the prospect a worthwhile customer?
• Does the prospect have need for my product?
• Can I prospect so aware of that need that I can make a sale?
• Will the sale be profitable to my company?

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 Sales Presentation
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• Purpose
– Transmit information
– Persuade the prospect to become a customer
• Common complaints about sales presentations:
– Running down competitors
– Being to aggressive or abrasive
– Have inadequate knowledge of competitors’ products and services
– Inadequate knowledge of client’s business/organization
– Poor delivery

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 Closing the Sale

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• Begins with the first contact
• Requires “asking for the order”
• Can be tested throughout the presentation—Trial Close
• Requires understanding the prospect and buying process
• Should be paced by the salesperson
• Requires continual improvement

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 Servicing the Account
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• Excellent service after the sale bolsters customer loyalty
• Follow up on each sale to check satisfaction with
– Product
– Installation
– Training
– Maintenance
– Billing
• Satisfied customers = Repeat customers
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 Participants in the Buying Process
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• Initiators – perceive a problem or opportunity requiring a new product of
service
• Users –must use or work with the product or service
• Influencers –provide information for evaluating alternative products or
suppliers
• Gatekeepers – control the flow of information to others
• Buyers – actually contact the selling organization and place the order
• Deciders – final authority to purchase
• Controllers – determine the budget
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 Organizational Buying Decision
Stages
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1. Anticipate or recognize a problem or need
2. Determine and describe the traits and quality needed
3. Search for and qualify potential suppliers
4. Acquire and analyze proposals/bids
5. Evaluate proposals and select suppliers
6. Select an order routine
7. Perform evaluation and give feedback

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 *IBM
• The major components of IBM’s approach to
getting close to its customers are:
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– Being more accessible and more visible to customers.
– Training salespeople to be industry experts.
– Organizing sales teams for more efficiency and with a

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single sales method, which allows management to hold

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the sales teams more accountable, creates seamless
information flow, establishes a common culture, and uses

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reps as resources to the client with a whole team to back
them up.
– Selling solutions, not products.
• Because IBM offers technology-based products
and services, customer needs change rapidly and
IBM’s products and services change accordingly.
The sales structure must adapt to this dynamic
business environment. Also, IBM must use training
to keep the expertise of its salespeople current.
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 IBM
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• The six critical drivers of change in relationship selling are:
• Building long-term relationships with customers.
• Creating sales organizational structures that are more nimble and adaptable
to the needs of different customer groups.
• Gaining greater job ownership and commitment from salespeople.
• Shifting sales management style from commanding to coaching.
• Leveraging technology for sales success.
• Evaluating salesperson performance more accurately.

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 UPS
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• UPS has undergone many changes in recent years, and two of the drivers of change (no
pun intended) are (1) the need to create sales organizational structures that are more
nimble and adaptable to the needs of different customer groups, and (2) the need to
leverage technology for sales success.
• UPS does not just deliver packages anymore. It provides, among other things,
comprehensive supply chain solutions to companies, which include logistics and
distribution, transportation and freight (ground, sea, air, rail), international trade
management and customs brokerage. Like IBM, UPS’s sales teams have had to adapt to
these changing technologies and services in order to provide industry expertise in a
multitude of areas such as retail, healthcare, high tech, consumer goods, manufacturing,
and automotive. UPS also promotes itself as offering integrated supply chain solutions, not
simply products or services, to clients.
• In addition, UPS has used technology to its advantage to add to its sales success. For
example, UPS offers “UPS Internet Shipping,” which provides client organizations and their
employees quick access to a Web-based shipping application. The Web-application allows
users to prepare domestic and international shipments using their UPS account number or
credit card, determine rates, schedule a pickup, find drop-off locations, and track their
shipments. 45
 Nimble Firms
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• Constantly monitor and communicate with customers.
• Are proactive instead of reactive in meeting customer needs.
• Practice adaptive selling by carefully sensing customer needs in each interaction and

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adapting the form and message of the communication to those needs.
• Are flexible at all times and open to creative, outside-the-box solutions.

• IBM is becoming more nimble by having:

• Its salespeople work as teams rather than individuals. This approach decreases
confusion for customers and allows salespeople to drive sales through the pipeline
faster.
• Every salesperson follows the same seven-step selling method. This approach keeps
all members of the organization on the same page regarding sales and ensures
consistency.
• One universal reporting system that takes the guesswork out of numbers. This
approach allows sales teams and managers to concentrate on the selling functions
rather than debating numbers.
• A structure that requires fewer meetings. This approach allows sellers to be in the field
more with customers. 46
 Pro:
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• Job autonomy – The salesperson is free to get the job done in his or her own

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way and spend time as he or she chooses, as long as he or she gets good
results.
• Job variety – Selling is a complex job that requires creative thinking. The
salesperson will never get bored.
• Financial rewards – These awards can be intrinsic (a feeling of being satisfied)
and extrinsic (more money in the salesperson’s pocket).
• Favorable working conditions – It is often easier to work from home and
telecommute rather than go into a corporate office. Telecommuting helps to
ease the potential for work-family conflict.
• Highly visible results – A great thing when the results are good, as recognition
and rewards follow.
• Ability to move up in the organization – There are promotion opportunities along
a sales management or marketing track. A salesperson can also be given a
more attractive territory or key account as a promotion. 47
 Con:

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• Stigma or negative stereotype associated with selling – May cause lack
of respect or misunderstanding from others.
• Pressure – Constant pressure to make numbers, especially if the
salesperson is being paid on a straight commission.
• Highly visible results – Not such a great thing if a salesperson is not
making quota or is in the bottom ranks of performance. His or her job
could quickly be in jeopardy.
• Frequent travel – It can be difficult on family relationships if frequent
overnight travel is required.
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 Summary
• Selling is a great career path that can also lead to
significant upward mobility professionally,
especially
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• The drivers of change we talked about in this
chapter all translate into opportunities for

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salespeople to contribute a high level of value to

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their customers and their own organizations.
• Salespeople and their managers can and should

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benchmark their own approaches to managing
customer relationships against the best practices
of world-class sales organizational.
• Selling today is so far removed from the
stereotypical societal view of old-style selling as
to bear no resemblance whatsoever. The key
success factors needed in relationship selling all
point to professionalism, strong skills, and broad
and deep content knowledge that allow the
salesperson to maximize his or her performance50
 Summary
• It is especially interesting to examine the sales
activities performed by salespeople today. Quite a few
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largely by technology and the move form transactional
to relationship selling approaches. It is valuable to
understand the process of selling through identification

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of its six stages.

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• Customers are the primary focus of relationship sellers,
gaining knowledge about the world of organizational

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buying greatly enhances the effectiveness of a
salesperson in is or her role as a customer relationship
manager.
• Salespeople must carefully study each of their
customers to learn what dynamics are at play within
each buying center situation. Often, selling firm form
selling centers and initiate team-selling approaches to
better serve buying centers, especially with large and
complex customers (key accounts). Salespeople need
to fully understand and appreciate the stages of the
organizational buying decision process that each of 51
their customers goes through so the salesperson can