LESSON 7 AND 8

CONSUMER APPROACH

LESSON OBJECTIVES:

Understand the different factors that affect buying habit

Explain the decision process of how consumers buy

Formulate strategies for approaching consumers

INTRODUCTION:

Selling will always be a challenging work to do, especially when you have different

characteristics to balance like the behavior within the organization and behavior

outside the organization.

It is not an easy task to approach potential buyers especially if you are new to this

kind of work. There will be intimidations, hesitations, and questions inside your

head if what you are doing is right or will it result to a good one.

Having different set of buyers make you flexible and ready to different adjustments

during the process of selling. You should also need to make sure that on every

approach you have with the customer, you will use the right strategies to make

sure that you will have a great chance of making the right move and having a

positive result.

The difference between B2C (Business-to-Consumer) and B2B (Business to-

Business)

Having two different target needs two different approaches as well. B2C is directly

selling the products from person-to-person while B2B are selling to businesses like
retailers and re-sellers.

Consumers will buy the products and use it, while Business buy the products to

sell it again to consumers.

B2C process of selling can negotiate with the price and volume or number of the

products, but not with the specifications of the products. While B2B can have

negotiations on how the product should look like, what are the raw materials that

should be used, and the number of productions. Considering these factors, these

made the two buyers different from one another. Different on the needs, approach,

and the satisfaction.

It is important to remember that there is no on-size-fits-all strategy that can be used

to different target markets or different industries. Even in two different persons, the

sales person should be aware on which approach he or she should be using while

considering the person or the business he or she is talking to.

In dealing with customers, whether it is B2C or B2B, you need to answer these

questions to understand them more and for you to know what are your appropriate

moves to sell your products.

▪ WHO is the decision maker?

▪ HOW do they buy the products?

▪ WHAT are their preferences?

▪ WHERE do they usually buy?

▪ WHEN do they usually buy?

These questions are the major guide of every sales person to make decision on

what strategies they should be using in a target market or customer.

Customer Decision Making Process

her decision in buying a product.

Here’s the step-by-step decision-making process of a typical customer:

1. Need Identification or Problem Identification

2. Gather information

3. Evaluate the alternatives or other options

4. Select the best product or best solution

5. Post-evaluation or feedback

Let’s discuss each step for clearer description of the process.

1. PROBLEM IDENTIFICATION – Most of the buyer or customer will always

look for products that mostly solve a certain problem for them. That is why majority

of the customers are solving their problems in buying products. Like, where do you

want to eat? what do you want to eat? etc.

2. GATHER INFORMATION – Customers familiarize themselves in the

available products in the market by gathering as much information they can,

especially now that we have the internet. Usually, customers are comparing

products before they buy it whether online or offline.

3. ALTERNATIVES – When a customer already has the information, they tend

to look for other options especially when they talk about products specification and

price.

4. SELECT – After a customer have the complete information and compare it

with other options, that is the only time they can make decision on which to buy.

5. FEEDBACK – On this last step, aside from feedback they also evaluate

their experience about using the product they bought and decide if they will buy it

again or not.
Factors that affect in the buying process

During the buying process, customers are considering some factors before

deciding. Aside from their own preference they also identify situations and

influences.

The three factors that affect the customer’s buying decision or buying habit:

▪ Buying Situation

▪ Personal Influences

▪ Social Influences

Buying Situation

It considers how buying the product can solve the buyer’s problem. If it is an

extensive problem to solve, a customer will have more difficult situation in coming

up with a decision in buying the product. Some customers also consider the

amount they will be paying. Remember that buying and selling is an exchange

process, and the speed of the process will depend on how extensive the problem

of the customer who is buying the product.

Personal Influences

This factor involves the buyer’s personality, motivation in buying, perceptions, and

what he or she knows. Buyers’ decision will always linger on how to make choices

based on their understanding of themselves. Sellers should also be aware of the

different personalities that they may encounter in the selling process, so they can

adjust in every situation. Sellers also need to identify how they keep the interest of

the buyer on the product to have that motivation in buying once they have the

capacity to buy the product. This also includes the lifestyle of the buyer. How they

handle themselves can already give the seller how to approach the buyer.
Social Influences

The primary social influences of a buyer are his or her social class, group of friends,

culture, and of course family. The comments and suggestions of these people

really matters in a certain buyer in deciding. Buyers usually make decision if they

have already consulted these people and consolidate their opinions. As sellers,

you should know also how to get along with these influences especially if they are

buying together. Sometimes, the main buyer is already sure about the product that

he or she wants to buy, but in one opinion of a friend or a family member can

change everything. These influences are external factors that are uncontrollable

in the part of the buyer and the seller.

These factors should be address in creating strategies in selling products, whether

it is for a final consumer or a business.

Remember that there is no one-size-fits-all strategy that can used in every type of

customer or buyer. Even if you have a twin client, they still have different

preferences, different personality, different behavior, different beliefs, etc.

A certain strategy can work on a certain segment of the market with the same

description but the tactical approach of executing this strategy will vary from

person-to-person as you need to identify also the mood of a person on a certain

day.

Formulating a selling strategy for your product also includes the characteristics of

your sales force, to avoid mismatch and more problems along the way.
Identify and Sell more to your most valuable Customers

LESSON OBJECTIVES:

▪ Discuss the Customer Relations and its features

▪ Explain the advantages of having Customer Relations

▪ Manage the Customer Relations

▪ identify which of your customers are the most valuable to you.

▪ The benefits of understanding the customers

▪ Learn about the customers

▪ Make customer information available

▪ Analyze the customers

▪ What makes your customers valuable?

▪ Enhance the customer experience

▪ Market more effectively

▪ Find new customers

INTRODUCTION:

The most important part of running a business is to have a continuous flow of

customers in your business. But it will be hard for a business to stay operational if

they will always look for a new segment or set of customers to serve, that is why

there is a customer relationship management strategy in business.

It is easier to serve a “suki” in your business rather than to find a new customer
that will always be doubtful on your capacity to provide the product. Aside from

that, maintaining a current market segment is much cheaper than creating or

looking for a new market. More than that, it is exhausting.

Being in a position to focus on your most valuable customers might sound like a

luxury. After all, many small businesses are grateful for customers of any kind.

But every business finds that some customers are more valuable than others.

This can be for a range of reasons, from the size of their purchases to the

relative ease of managing their account. Successful businesses are generally

those that identify these customers, build relationships with them and work to

bring in new customers with a similar profile.

Customer Relationship Management (CRM)

CRM or Customer Relationship Management can be defined as a guideline on how

to identify, attract, satisfy, and retain profitable target market.

This is where businesses build long term relationship with their partner profitable

customers. CRM is a process that retain profitable customer and eliminate less

profitable customers, this strategy is effective in maintaining the financial balance

of a company.

Companies now are focusing more on CRM because of some reasons like

globalization and increase number of competitions.

Features of a Customer Relationship Management

CRM has three main parts that helps the business to maintain its current

customers. These are planning, assessment, and execution. Plans are being used

to create new campaign to make the customer still interested in the products or

services of the business.

Having a CRM in the business is vey important to stay in operation. If one business
will be creating its own CRM system, they should consider these features in

making a CRM:

▪ CRM is more focused on customers than the revenue from any single

transaction

▪ Adding customer value rather than just adding features to the current

product

▪ CRM is for long term

▪ It is more on high customer service

▪ More customer commitment and loyalty

▪ More interaction with the customer to know more their needs more to serve

them better

Advantages of having a CRM in a Business

There are three major advantages of having a CRM in a business. Sometimes,

CRM is more effective than doing a mass media advertisement.

▪ CRM reduces the advertising expenses. CRM is again more on retention of

the current customers and not attracting new customers.

▪ It helps the business to identify the profitable customers and avoid the less

profitable.

▪ A business with CRM has an edge on service than the typical price war in

the competitive market.

CRM is not just a simple system but a business philosophy. A business culture

that is more customer-centered than the product and price. Customer can serve

as the partner of the business in building its process as every feedback from the

customer can mutually benefit the business and the customer himself. Business

can improve their product and service while the customer is having more better
experiences in with what the business can offer.

For the nth time, buying and selling is an exchange process and in CRM it could

be considered as a learning process between the customer and the business.

As the business grow because of the feedback and loyalty of the customer, the

customer is receiving more additional value, not just added features or lesser price,

but value. This relationship is for the long run.

The benefits of understanding your customers

Understanding your customers helps you to sell more. The more you know about

them and their needs, the easier it is to identify opportunities to sell them new

products and target them with appropriate offers.

Profiling existing customers also makes it easier to find new ones. You can look

for similar prospects, and sell to them in a similar way.

understanding your customers helps your planning. You can predict what they

will buy, and estimate how much stock you need. Linking customer management

to purchasing can dramatically improve profitability.

Learn about your customers

Your customers are a valuable source of information, so you should aim to collect

data that lets you identify your customers and how they behave. This will vary

depending on your customer profile. If you sell to individual consumers, you

might want to know about their age, gender, income and so on. For businesses,

you might want to know what industry they operate in and their size.

You should also try to find out what they think about you and your products and

services. For example, learn what they like and dislike and why they choose to

use you.

If you have just a few important customers, it's worth getting detailed feedback
from them. Companies that sell to individual consumers sometimes use customer

surveys.

If you sell online, you can use your website to capture some information

automatically. Of course, as well as collecting the information, you need to store

it.

Make customer information available

Making customer information available to employees can make them more

productive. For example, you could give sales staff access to financial systems

so that they can check orders and payments. You need to decide what

information different employees might need, and how to make it available to

them.

Technology can help. For example, you can share correspondence and other

information on your computer network. Using caller recognition, staff can view an

incoming caller's details and purchasing history before even answering the

phone. Integrated IT systems help different parts of your business to share what

they know.

It's important for information to be accurate. It's a good idea to update records

regularly, taking care to delete duplicate entries. You could also consider giving

customers online access, so that they can update their own details themselves.

You must ensure that any confidential or important information is protected

against misuse or accidental deletion.

Remember you must also comply with data protection rules for any personal

information on existing and potential customers you collect, keep and use. This

may affect your IT systems and which staff have access to the information.

Analyze your customers

typically includes the following:

- who they are - the age and gender of individual consumers, or industry

and business size for corporate customers

- what they think and believe, what interests them and their opinion of you

and your product

- their purchasing behavior- which products they buy, where they buy them,

when, and how they pay

Profiling your customers in this way helps you group them into different

segments, each of which can be approached separately. For example, you might

produce customized products or services for different segments. You can also

focus the way you market to different groups of customers.

You can use specific IT software to help you collect and analyze your data. For

example, linking customer records to your accounting system makes it easier to

see how profitable different customers are.

What makes your customers valuable?

Analyzing your customers allows you to identify those who best fit your business

priorities. These will depend on your strategy - for example, if you are launching

a new product your aim might be to build sales as quickly as possible, whereas if

you have cash flow problems you might value customers who pay quickly.

However, most businesses want customers who are as profitable as possible.

Customers tend to be more profitable if they:

- buy high-margin products

- pay full price without negotiating discounts

- place a small number of large orders rather than many small orders
- do not cancel or amend orders

- pay on time, without being chased for payment

- do not require extensive after-sales service

By analyzing your records, you can assess how profitable each customer is. In

some businesses, just a few customers are responsible for almost all the profits.

Some of your largest customers might be among your least profitable. You may

even find that there are some customers you would be better off without.

You should also try to look ahead. For example, a business customer that is

expanding might become more profitable for you in the future. It's important to

anticipate changes and how they might affect different customers.

Enhance the customer experience

Looking after your customers helps build customer loyalty. Selling more to

existing customers can be far more cost-effective and profitable than finding new

ones.

However, you will still need to divide your time up between finding new

customers and selling more to existing ones depending on your business.

Focus on your most valuable customers

- Tailor your products and service to meet their specific requirements. If a

customer prefers delivery before noon, organize your delivery schedule to

make sure that happens.

- Don't stretch yourself too thin. Make sure enough time is given to

managing each of your key accounts.

- Identify and resolve problems quickly. It is better to under-promise and

overdeliver, but make sure you always live up to your promises.

- Keep in touch. Let them know when service contracts need to be renewed
or when better deals become available.

- Build personal relationships with key decision-makers.

- Consider offering preferential terms - e.g. a bulk discount.

Technology can help you improve the service you offer. For example, you might

be able to let customers track deliveries through your delivery company's

website. You can use your website to provide useful information, such as product

details or instruction manuals. Also, ensure that staff are given adequate

customer service training - they can make or break your reputation with

customers.

Market more effectively

The more you know about your customers, the more effectively you can market

to them.

Understanding your customers lets you tailor your marketing to different

segments. You can ensure that each customer gets the right marketing

messages, at the right time. Advertising and other promotions can be more

effective if they are targeted.

You can also sell more effectively. Understanding your customers helps you see

which of their needs your product can satisfy. You may, for example, be able to

up-sell, explaining why a higher priced product would suit them better. You may

also find opportunities to cross-sell other products that fit their profile. For

example, if you know why they are buying a particular product, you can tell which

other products they may also need.

Technology can help automate some of these processes. For example, you can

set up different mailshots, social media or emails to go to different customer

segments. E-commerce software can allow you to offer discounts to particular

store.

Find new customers

Understanding who your most valuable customers are helps focus your efforts to

find new customers. Often, the most effective approach is to look for similar

prospects.

At the same time, diversification is important. It's risky relying too heavily on just a

few key customers. Even if you have many customers, it's risky if they are too

similar. A change in circumstances could mean that all of them reduce their

purchases at the same time – e.g. if your three largest customers are based in the

US, a change in the exchange rate could see them drastically reduce their orders.

As markets change, you should regularly review your marketing strategy. Particular

market segments may become less profitable as competition increases.

Customers' requirements may change, for example, as individual consumers

become older.

Continually review how valuable your existing customers are. Over time,

customers who used to be highly profitable might demand lower prices. Other

customers may increase their turnover with you as they grow.

Keep an eye on customers' future potential as well. It may be worth nurturing a

relationship with a small customer with high growth potential. Working with your

customers can also help you identify ways to develop new and improved products.

KEY TAKEAWAYS:

▪ CRM is not just a simple system but a business philosophy.

▪ CRM is for long term

▪ CRM is a process that retain profitable customer and eliminate less

▪ The most important part of running a business is to have a continuous flow

of customers in your business.

▪ Adding customer value rather than just adding features to the current

product▪ Understanding your customers helps you to sell more.

▪ Your customers are a valuable source of information, so you should aim to

collect data that lets you identify your customers and how they behave.

▪ Making customer information available to employees can make them more

productive

▪ You can use specific IT software to help you collect and analyze your data.

▪ Looking after your customers helps build customer loyalty.