David Laube is a securities principal at the Bloomington office of GCG Financial, where he works with a diverse client base including organizations, individuals, and families. Based on his 20-plus vears of experience crafting innovative, effective solu-tions for clients’ complicated financial problems, David emphasizes that customers do not simply buy products and features. Instead, they look for the greatest value in terms of the benefits and satisfaction brought to them by the features of a prod-uct. They make the decision to purchase through a purposeful decision process that begins with the recognition of needs and / or unfulfilled expectations. Like other top sales professional, David is quick to explain that his success stems from an understanding that great salespeople do not sell, but rather serve as a counsel to the buyer to better understand the true nature of their problems and needs.
John and Laura Kent are typical of David’s clients, illustrating the critical role today’s sales professional plays in counseling buyers regarding unrecognized needs and assisting as a trusted parther in moving through the sequential stages of the buyer’s purchase decision process. John and Laura truly believed their existing personal financial plan was working fine for them and their children. Their dual incomes of $165,000 produced adequate cash flow, they both participated in their respective companies’ 401 (k) plans, they were enrolled in their fringe benefit plans, and they received substantial thx refunds annually. Yet, on the advice and referral of a close friend of Laura’s, they decided to seek professional guidance.
Little did the Kents realize that their plan was little more than a good state toward a comprehensive financial plan. After a preliminary meeting with veteran planner David Laube, CLU, CFS, ChFC, their eyes were opened further. The initial brief-ing revealed how little they actually knew about various planning strategies and options, not to mention the breadth of financial products available to them. They also quickly discovered that their “at-home, over-the dinner-table discussions” were sporadic and less communicative than they believed. Their major goals focused on retirement, family security in the event of any setback or setback or tragedy, college funding for their two children, and creating an option plan to become self-employed and free of their stressful and often demanding corporate jobs.
During their second appointment,after deciding a fee-based plan would be more objective, they brought in their tax returns, investment contracts, wills, fringe benefit statements, life and health insurance contracts, and a roughly crafted budget. What they encountered, well beyond the mere contracts, were probing questions about their goals, objectives, dreams, and fears. Laube guided them through a one and one-half hour “discovery” session.
Emotionally, the Kents thought they were both on the “same page” , what the “discovery” appointment revealed to them was how differently they each viewed their financial plan along with their respective personal biases. Laube artfully led them through the difference and “pressure points” that their in-home discussions often avoided.
Financial planning when done correctly, is a trust-based selling process. It is a series of coordinated steps leading to a comprehensive written plan with stated recommendations for implementation tied to the clients’ goals, needs, and personal situation, yet anchored within the parameters of the clients’ budget, risk-tolerance, tax bracket, time frames, and other variables. An effective planner listens and is a skilled and artful questioner. He utilizes a systematic to uncover the clients’ needs, wants, and objectives, plus their conscious and subconscious fears and emotional triggers. Once the plan was designed , planning strategies and financial products that utilize various companies’ products were presented to the Kents in implementing their plan. Together with their advisor, they chose which recommendations to implement and began to follow a timeline to address the issues plan encompassed.
The key to planning is understanding your clients’ needs and dreams. This goes far beyond income, fringe benefits, and contracts they may nold – it encompasses attitudes, values, biases, dreams, and beliefs. Like any contemporary salesperson, educating the client and motivating the client to act-to implement the solution-are perhaps the financial consultant’s greatest challenges.
David Laube’s selling experience in assisting John and Laura Kent with their financial plan illustrates several fundamentals regarding buyer behavior. Principal among these fundamentals are ( 1 ) buyers do not buy products and features-they buy benefits and (2) purchase decisions result from a purposeful buying process that begins with the recognition of needs that are important to the buyer. As illustrated in the opening vignette, Laube recognizes that a family’s financial plans are complicated. There are many needs that buyers are not initially aware of or are not easily recognized or anticipated. These unrecognized needs are opportunities for the salesperson to build and enhance added-value for the buyer while simultaneously generating a long-term buyer-seller relationship for valuable repeat business.
Source: Personal interview with David Laub , July 26, 2004
Following a discussion on different types of buyers, this module develops a model of the buying process and the corresponding roles of the salesperson. Buyer activities characteristic to each of the purchase decision process are explained and related to salesperson activities for effectively interacting with buyers. This is followed by an explanation of different types of purchasing decisions to which salespeople must respond. The influence of individual communication styles on selling effectiveness is also discussed. The growing incidence of multiple buying influences and buying influences and buying teams is then demonstrated, along with their impact on selling strategy. Finally, emergent trends such as relationship strategies, supply-chain management, target pricing, and the growing importance of information and technology are discussed from the perspective of the salesperson.
TYPES OF BUYERS
Salespeople work and interact with many different types of buyers. These buyer types range from heavy industry and manufacturing operation to consumers making a purchase for their own use. These variants of customer types arise out of the unique buying situations they occupy. As a result, one type of buyer will have needs, motivations, and buying behavior that are very different from another type of buyer. Consider the different buying situations and the resulting need of a corporate buyer for Footlocker compared with the athletic equipment buyer for a major university or Joe Smith, attorney at law and weekend warrior in the local YMCA’s basketball league. As illustrated in Exhibit 3.1, each of these buyers may be looking for athletic shoes, but their buying needs are very different. To maximize selling effectiveness, salespeople must understand the type of buyer with whom they are working and respond to their specific needs, wants, and expectations.
The most common categorization of buyers splits them into either (1) consumer markets or (2) business markets. Consumers purchase goods and services for their own use or consumption and highly influenced by peer group behavior, aesthetics, and personal taste. Business markets are composed of firms, institutions, and governments. These members of the business market acquire goods and service to use as inputs into their own manufacturing process (i.e., raw material, component parts, and capital equipment), for use in their day-to-day operations (i.e., office supplies,