ENT4122 Ch2 Building Trust PDF

ENT4122: Go to Market Strategies Chapter 2 – Building Trust Learning Objectives After studying this chapter, you will be able to: 2-1 Explain what trust is. 2-2 Understand why trust is important. 2-3 Explain how to earn trust. 2-4 Discuss the knowledge bases that help build trust...

ENT4122: Go to Market Strategies Chapter 2 – Building Trust Learning Objectives After studying this chapter, you will be able to: 2-1 Explain what trust is. 2-2 Understand why trust is important. 2-3 Explain how to earn trust. 2-4 Discuss the knowledge bases that help build trust and relationships. 2-5 Explain the role of ethics in sales. Integrity Selling Values and Ethics Selling is a mutual exchange of value Selling isn’t something you do to people; it’s something you do for and with them Develop trust and rapport before any selling activity begins Pressure isn’t exerted by the seller; it’s exerted by customers when they recognize they want your products Selling techniques give way to value-driven principles Integrity Selling Values and Ethics Truth, respect, and honesty provide the basis for long- term selling success Ethics and values contribute more to sales success than techniques and strategies Understanding wants or needs must always precede any attempt to sell Negotiation is never manipulation. It’s a strategy to work through concerns— when customers want to work through them Closing is a victory for the customer and the seller 2-1 What Is Trust? Trust*: The extent of the buyer’s confidence that they can rely on the salesperson’s integrity. - Integral part of the relationship between customers and suppliers - Results in increased long-term revenues and profits - Terms used to define trust: Openness* Security* Dependability Reliability* Candor Fairness* Honesty* Predictability Confidentiality * * Words accompanied by an asterisk are key terms from the chapter. Figure 2.1: Trust Builders 2-1 What Is Trust? In relationship selling, trust is based on a larger set of factors beyond the typical transaction-oriented trust schema. Trust answers the questions: - Do you know what you are talking about?—competence; expertise - Will you recommend what is best for me?—customer orientation - Are you truthful?—honesty; candor - Can you and your company back up your promises?—dependability - Will you safeguard confidential information that I share with you?— customer orientation; dependability 2-2 Why Is Trust Important? Buyers are demanding unique solutions to their problems. Long-term relationships develop mutually beneficial outcomes. - Characterized by: Trust Open communication Common goals Commitment to mutual gain Organizational support 2-2 Why Is Trust Important? Trust is positively related to purchase intentions. Contemporary selling process is embedded within the relationship marketing paradigm. - Emphasizes initiation and nurturing of long-term buyer–seller relationships based on mutual trust and value-added benefits - Requires deliberate and purposeful collaboration between both parties - Relies on augmented communication and interpersonal skills Polling Activity As a buyer, would you make a purchase from a seller you didn’t trust?  Yes  No 2-3 How to Earn Trust Several critical variables help salespeople earn a buyer’s trust: - Expertise*: The ability, knowledge, and resources to meet customer expectations. - Dependability*: Predictability* of a person’s actions. - Candor*: Honesty of the spoken word. - Customer orientation*: The act of salespeople placing as much emphasis on the customer’s interests as their own. - Compatibility/likability*: A salesperson’s commonalities with other individuals. * Words accompanied by an asterisk are key terms from the chapter. Exhibit 2.1: Questions That Salespeople Need to Answer Satisfactorily to Gain a Buyer’s Trust Expertise: Does the salesperson know what they need to know? Does the salesperson and their company have the ability and resources to get the job done right? Dependability: Can I rely on the salesperson? Does the salesperson keep promises? Candor: Is the salesperson honest in their spoken word? Is the salesperson’s presentation fair and balanced? Customer Orientation: Does the salesperson truly care about the partnership? Will the salesperson go to bat for the customer (e.g., wrong order, late delivery)? Compatibility: Will the buyer like doing business with the salesperson? Will the buyer like doing business with the salesperson’s company? 2-4 Knowledge Bases Help Build Trust and Relationships Competitor knowledge*: Knowledge of a competitor’s strengths and weaknesses in the market. Product knowledge*: Detailed information on the manufacture of a product and knowing whether the company has up-to-date production methods. Service issues*: Concerns of the buyer that the salesperson should address. Promotion knowledge*: Knowledge tools salespeople must possess to explain their firms’ promotional programs. * Words accompanied by an asterisk are key terms from the chapter. 2-4 Knowledge Bases Help Build Trust and Relationships (2 of 2) Price knowledge*: Knowledge tools salespeople must have about pricing policies in order to quote prices and offer discounts on products. Market knowledge*: Information salespeople must have if larger companies break their customers into distinct markets; salespeople must be familiar with these markets to tailor their sales presentations. Customer knowledge*: Information about customers that is gathered over time and from very different sources that helps the salesperson determine customer needs to better serve them. Technology knowledge*: Information salespeople must have about the latest technology. * Words accompanied by an asterisk are key terms from the chapter. Figure 2.2: Knowledge Bases The more the salesperson knows, the easier it is to build trust and gain the confidence of the buyer. Buyers have certain expectations of the salesperson and the knowledge that they bring to the table. Most knowledge is gained from the sales training and on- the-job training. Exhibit 2.3: Service Superiority Dimension Potential Superiority 1. Delivery Can our company demonstrate speed? Deliver more often? 2. Inventory Can we meet the demands of our customers at all times? 3. Training Do we offer training? At our site? At our customer’s? 4. Field maintenance Do we go to the field to fix our products? Do our customers have to bring their equipment to us to fix? 5. Credit and financial consideration Do we grant credit? Do we help finance? 6. Installation Do we send a team to your site for start-up? 7. Guarantees and warranties What are our guarantees? How long? What do we cover? 8. Others Do we offer anything unique that our competition does not? Exhibit 2.4: Using Technology to Build Bridges to Customers Technology Bridge Internet Price updates can be placed on the web for customers to access. New product information can be made available to customers and prospects. Email Buyer and salesperson can communicate virtually 24 hours a day. Mass communications can be sent out to all customers and prospects. CRM The salesperson can organize their sales process leads with easy-to-use management software. Smart phones Buyer and seller have immediate access to each other. Voice mail Salesperson and buyer can leave messages for each other and save time and effort. Video conferencing Salespeople can still make presentations face-to-face. Discussion Activity 1 Which knowledge base is the most important for a salesperson to possess when you personally are making a purchase? Exhibit 2.5: What Types of Sales Behaviors Are Unethical? According to a survey of 327 customers, salespeople are acting unethically if they: 1. Show concern for their own interest, not the clients’. 2. Pass the blame for something they did wrong. 3. Take advantage of the marginalized or uneducated. 4. Accept favors from customers so the seller feels obliged to bend policies. 5. Sell products/services that people do not need. 6. Give answers when they do not really know if they are correct or not. 7. Pose as a market researcher when doing phone sales. 8. Sell dangerous or hazardous products. 9. Withhold information. 10. Exaggerate benefits of product. 11. Lie about availability to make sale. 12. Lie about competitors. 13. Falsify product testimonials. Exhibit 2.7: Areas of Unethical Behavior Deceptive Practices Non-Customer- Illegal Activities Oriented Behavior Deceive Pushy Defraud Hustle Hard sell Con Scam Fast talking Misuse company Exaggerate assets High pressure Withhold information/bluff 2-5 Sales Ethics Ways in which seller can create product liabilities for companies: - Express warranty*: Giving a product warranty or guarantee that obligates the selling organization even if the salesperson does not intend to give the warranty. - Misrepresentation*: False claim(s) made by a salesperson. - Negligence*: False claim(s) made by a salesperson about the product or service they are trying to sell. Basis of the bargain*: When a buyer relies on the seller’s statements in making a purchase decision. * Words accompanied by an asterisk are key terms from the chapter. 2-5 Sales Ethics It’s important that salespeople are trained on the following topics: - Appropriateness of gift giving - Use of expense accounts - Dealing with a prospect’s unethical demands Salespeople must be concerned with the legal system of the countries in which they are engaging in business. Discussion Activity 2 Can you recall a time you have experienced or observed any of these unethical selling practices? How should the salesperson have behaved instead? Actions to Build Trust What are some actions we can take to build trust with our customers? - Get to know them - Call them by their name - Make eye contact - Have open body language - Answer questions honestly Upcoming Dates In-Class Activities JMC Student Engagement Presentation – Friday, 9/6 Canvas Submissions Sales Presentation Checkpoint #1 – Due Sunday, 9/15 Conclusion Professor Roberts Email: [email protected] Office: 144 RSB Polling Activity Scenario Antonia Perez needed only one more order to win her company’s “Rookie of the Year” award for the most sales for a first-year salesperson. She had one more week left in the year and one of her prospects had verbally committed to a rather large order that would definitely win her the award. The only catch was her prospect wanted to wait until after the first of the year to sign the order. One of her company’s older sales reps mentioned a technique he had used several times in his career that he would tell the prospect that his discount would only stand until the end of the year and if the prospect waited they would have to pay full price. Antonia wanted to be the “Rookie of the Year” but was not sure if she was comfortable with this tactic. Polling Activity 2 What should Antonia do?  Go ahead and use the tactic and hope for the best.  Explain the predicament to her client and see if they will sign early.  Attempt to find out why the prospect wants to wait until the next fiscal year to sign. Knowledge Check Which knowledge base involves concerns of the buyer that the salesperson should address? A. Customer knowledge B. Service knowledge C. Product knowledge D. Market knowledge