Selling to Consumers (Business to Consumer - B2C)
Brands and services fight for the attention of the consumer every day. The considerations used by consumers for making purchasing decisions are very different from those used by businesses. In this lesson we outline the key elements of the consumer buying process.
Challenges Faced in Selling Consumer Products
The consumer products market includes a wide array of goods ranging from video games to egg beaters. Consumer products are generally suitable for mass marketing and wide distribution, and can appeal to large market segments or multiple market niches at once. Understanding the challenges faced by a small business in selling consumer products is the first step toward developing competitive advantages over major competitors.
- Brand Loyalty. Perhaps the greatest challenge faced by small businesses in the consumer-products segment is overcoming the existing brand loyalties in the marketplace. Large, entrenched competitors spend millions of dollars over many years to etch their brand identities in consumers' minds, leading to self-reinforcing cycles of repeat purchase behavior that can be difficult to overcome. Convincing consumers to try new products is a key to overcoming this challenge. In many instances, giving away free product or offering deep discounts can be one of the only ways to convince customers to even try a brand other than their existing favorite.
- Shifting Trends. Consumer products companies must keep abreast of ever-changing trends in consumer preferences throughout the marketplace. This can present a distinct challenge for small businesses without the massive R&D budgets of their large, established competitors. Keep your inventory as lean as possible, and put as much of your budget as possible into continuous market research to be positioned to respond quickly to changes in consumer preferences and popular fads.
- Distribution. Wide and reliable distribution are essential in this market.The issue of gaining market share from loyal customers comes into play in this area, as customers who wish to try new brands will simply buy their old favorites if the new brands are not available in their favorite stores.
The Process of Selling to Consumers
Just like any sale, selling to a consumer is a process and the more adept you are at the process, the more likely you are to generate sales. This lecture provides a breakdown of the steps of the process of selling to a consumer:
- Introduce Yourself: You need to introduce yourself and the company you represent in a positive manner. Thank the consumer for seeing you, and try to build some common ground. Let them know that they have made the right decision in seeing you, and set their expectations by informing them how long you will take.
- Qualify the Customer: You need to have the customer engaged in a conversation where they are talking about themselves, their homes and their goals — building rapport and relationship is key. Based on the feedback you receive, drill down and ask more questions to gather as much information as possible. Find out who else is involved in the decision making process. Creating a conversation using open-ended questions is a great way to identify opportunities:
- What type of product are you interested in?
- What are you looking for in a quality provider?
- What’s important to you in this process?
- How soon are you looking at implementing this?
- Identify Product and Service Needs to Create the Opportunity: Before you present and demonstrate what you can offer to the customer, you need to tick off a few points before you go into sales mode:
- What are the products/services identified?
- How would the customer use them?
- What are the benefits going to be for the customer?
- Why would the customer need your products/services in their home life, etc.?
- Demonstrate Examples of What You Can Do For the Customer: The customer needs to see how your products/services are going to fit into their home or their life. You need to demonstrate how they are going to use your products/ services, what the benefits are, and most importantly, why they would need it. Take your time and only sell the main features of what the customer is looking for. Each feature must have a direct advantage and benefit, which you must relate back to the customer and their home/life.
- Test the Customer’s Interest. When you’re presenting what you can offer the customer, you need to read their verbal and nonverbal buying signals. A great way to test the water to see if you’re on track is to ask, “Is this what you’re looking for?” or “Am I on the right track with what we have discussed so far?” Look for the positive communication and body language.
- Show Your Brochures, Fact Sheets, Case Studies, or Testimonials as Proof: Your sales kit must be fully equipped with all your tools of the trade, and you must be ready for any questions or objections as the customer wants confirmation that you know what you’re talking about. Today, a simple brochure is no longer enough to convince a customer to buy. There is no better proof than current fact sheets, case studies, examples of what you have done for other customers like them, and testimonials that you can provide what you say you offer. These materials ensure your credibility and build the customer’s confidence. Show such materials to the customer using technology like laptops and tablets.
- Start Tying Down the Customer for Your Products or Services to Close the Sale: Using trial and alternative closes is the way to close business. These questions can have yes/no answers, but what you’re looking for are lots of confirmation yeses and very little no’s. Example of closed questions:
- Are you looking for something like this in your home
- Do you think this is the right product/service for you?
- Would you prefer the larger or smaller option?
- Can you see this product/service helping to improve your home / life?
- Is there anything I have not covered?
- Can we get this organized?
- Design an Implementation Plan for Approval: Based on the series of confirmations you got from the customer’s answers to your questions, you should assume that the customer has agreed to buy your product, so start discussions about how this is going to fit in their life. Find out how soon they want delivery and what implementation plan is required to meet with their approval.
- Obtain Acceptance and Confirmation of the Customer’s Decision: Ask for the customer’s approval based on the discussion of the implementation plan. Then, do not speak until they have signed the documents. At this point, the customer will either sign or throw you another objection, which means you have not qualified enough at the beginning of the sales cycle. Should you not get the order, you need to ask the customer what is holding them back and overcome that objection. If you are not successful, then you need to end the meeting and set another time to re-qualify and start the sales process all over again.
- Thank the Customer: Give the customer a good, firm handshake and promise that you will deliver as per your discussion. Reconfirm that they have made the right decision.
- Deliver and Get a Testimonial. After you thank the customer for the business, make sure to follow up to ensure that the customer is happy with your product/ service once it has been implemented. Try to get a testimonial and referrals from satisfied customers.
- Identify More Opportunities and Start the Sales Process Over Again. Determine what other products/services you can provide that may have been spoken about when identifying the customer’s three to four hot points. To be successful in sales, sell the customer what they want to buy first, then go back and sell them other products/ services you offer because you now have their trust and the relationship with them.
Types of Consumer Buying Behaviors and Product Decisions
Consumers make purchase decisions when they buy small items, such as a cup of coffee, and when they buy larger items, such as a house. After recognizing a need or a want, consumers begin searching for products or services that fit their needs. They evaluate their options, taking note of everything from pricing to a brand's reputation, before marking a purchase. Four types of consumer buying behavior outline product purchase decisions:
- Impulse Purchases. When a consumer stands at the checkout and notices lip moisturizer, magazines and gum, and adds one of the items to his cart of groceries, it's often referred to as an impulse purchase. The consumer makes a purchase with little to no thought or planning involved. In most instances this happens with low-priced items.
- Routine Purchases. There are items consumers are used to purchasing every day, once a week or monthly. These can range from a morning cup of coffee from a nearby convenience store, to milk, eggs and cheese from the supermarket. Customers spend very little time deciding whether or not to purchase these items and don't typically need to read reviews or consult with friends for their opinions before they make routine purchases.
- Limited Decision Making. When customers engage in purchases that require limited decision making, they may seek advice or a suggestion from a friend. For example, if a young professional is preparing for an interview and wants to get her hair colored the week before, she might solicit advice from friends to find out which salon does good hair coloring work. The consumer may research a few options, but the search is not as thorough, or as time consuming, as with a higher priced item.
- Extensive Decision Making. Purchases for high priced electronics, such as a television, computer or camera, or major purchases such as a home or car require consumers to use extensive decision making. Consumers spend substantial amounts of time researching a high number of potential options before they buy. They speak with trusted friends, family, colleagues and sales professionals, and read reviews and ratings online and in consumer magazines. The decision making process lasts longer, as the consumer is investing a substantial amount of money.
Psychological Factors That Impact Consumer Buying Behavior
Convincing consumers that you're selling what they ought to be buying forms the central job of the marketer and advertiser. Marketing plans the strategies and tactics; advertising implements them and spreads the message. To succeed in positioning your brand as the right solution to consumers' problems or needs, take advantage of the psychological tenets that explain and predict what people buy. Four basic factors underlie the decisions consumers make when they spend.
- Motivation and Need. Needs motivate buying behavior. You buy food when you're hungry, protective gear to feel safe, brand-name clothing to look stylish, education to enable accomplishment and self-improvement to reach self-actualization, the pinnacle of psychologist Abraham Maslow's hierarchical pyramid of needs. The more basic the need, the greater the priority it assumes in driving consumers to fulfill it. If you can convince consumers that your product or service meets one of their motivating drives, you can convince them to buy what you're selling.
- Perception, Attention, Distortion and Retention. The selective way in which the human mind views the world around it and the information that reaches it forms the basis of perception. To get attention, you can use shock tactics, surprise, humor or any device that makes people watch and listen. Once you get consumers' attention, you must induce them to remember your message without filtering it through the "distortion field" of their outlooks and mindsets. Repetition helps make your information stick. That simple concept helps explain how often you see the same ad and how many times it repeats an important part of its message, such as the phone number to call in a direct-response TV spot.
- Learning and Conditioning. Consumers can gain decision-making information from advertising, especially about products in categories beyond their experience. If a commercial message convinces consumers to try a product but their post-purchase experiences prove dissatisfying, they learn to avoid that product, even if it changes enough to negate their prior dissatisfaction. In response, the advertiser must try to teach consumers another message about the product, one that removes prior conditioning in favor of new information. Conditioning also explains how rewards, gifts with purchases and "but wait, there's more" messages work to train you to prefer one product in a category over another.
- Beliefs and Attitudes. What consumers believe about a seller, product or service affects whether and what they buy. These attitudes can persist even when the situations that produce them change. If a company appears to share your values, it may attract your business. If you perceive a product as beneficial or its competition as harmful, you move toward one and avoid the other. Advertising strives to position products so they appear associated with positive traits and to counteract beliefs that interfere with the products' ability to attract buyers.
The Role of Perception in Consumer Buying Behavior
The perceptions consumers have of a business and its products or service have a dramatic effect on buying behavior. That’s why businesses spend so much money marketing themselves, honing their customer service and doing whatever else they can to favorably influence the perceptions of target consumers. With careful planning and execution, a business can influence those perceptions and foster profitable consumer behaviors.
- Influencing Perception. Consumers continually synthesize all the information they have about a company to form a decision about whether that company offers value. In a sense, consumer perception is an approximation of reality, notes the book “Consumer Behaviour,” by Atul Kr. Sharma. Businesses attempt to influence this perception of reality, sometimes through trickery and manipulation but often just by presenting themselves in the best possible light. For example, advertisements often trumpet the quality and convenience of a product or service, hoping to foster a consumer perception of high value, which can pay off with increased sales.
- Reaching Consumers. A key factor in influencing consumer perception is exposure. The more information consumers have about a product, the more comfortable they are buying it. As a result, businesses do all they can to publicize their offerings. However, this causes a problem: When every business bombards consumers with marketing messages, consumers tend to tune out. To influence consumer perception, a business not only must expose its product to consumers, it also must make its product stand out from the crowd.
- Risk Perception. Consumer risk perception is another factor businesses must take into account when trying to encourage buying behaviors. The more risky a proposition is, the more difficult it is to get consumers to act. If consumers aren’t familiar with a brand of product, they can’t assess the risk involved; it could be poorly built, for instance, or too costly compared to substitutes. Businesses can overcome this hesitancy by offering as much product information as possible in the form of advertisements or by encouraging product reviews. Allowing potential customers to handle the product in stores or test it at home also decreases risk perception, as does offering a flexible return policy.
- Customer Retention. Successful businesses don’t relax once a customer makes a purchase. Rather, they continue to foster perceptions that result in profitable behaviors. Once consumers have tried a product, the task becomes maintaining a good reputation and establishing brand loyalty. Offering superior customer service is an effective tactic because it maintains the perception that the business cares about its customers’ best interests. In return, customers become loyal to the business, which secures a consistent revenue stream for the company and makes it more difficult for competitors to poach customers.
Selling to consumers is a complex process that requires you to have these types of insights about why consumers act.