Unleash Your Idea Power

Demand Stage Selling

Wouldn't it be great if you could read your customers' minds? You know, get inside their heads and walk around a little bit? The very best salespeople seem to have that ability-it's as if they know what customers are going to say before they say it. They have a sixth sense about which objections a particular customer is most likely to raise. They know what benefits ring the prospect's bell.

Some of this clairvoyant ability comes from experience, of course. Even more of it comes from advanced listening skills. Top salespeople really listen when their prospect is talking and pick up small cues that many people miss. Many good salespeople are also students of human psychology. They make it a point to study human nature and learn a lot about their customer in the process.

One important talent top salespeople have is the ability to recognize customers' demand stages and shape their presentations accordingly. They determine if customers are getting ready to place an order or just starting to comparison shop. They can tell whether customers have already decided to buy the product and are negotiating for the best price or whether they're weighing other options. They understand that different things are important to the customer at each step in the buying process. They practice Demand Stage Selling.

Demand Stage Selling is a technique that identifies how far along in the buying process a customer has progressed. This tactic dictates that you create a presentation which appeals specifically to someone at each particular stage. Demand Stage Selling immediately helps block out irrelevant objections and tremendously improves your closing ratios.

Three Stages Of Demand
Clients go through several stages in the decision process. First, they have to recognize a need and decide to buy something to fill that need. This decision creates primary demand. You can equate this stage to that little hunger pang you get in the late afternoon. Your need is the hunger, so you make a decision to purchase something to satisfy that hunger. You're experiencing primary demand.

Customers then have to decide on a type of product or service that will fill their need, thus creating secondary demand. What are you hungry for? That's secondary demand-deciding how you're going to satisfy the primary demand. You have choices-a candy bar, a piece of fruit, or some microwave popcorn.

Finally, the customer must decide which service provider or product brand to buy. This is third-level demand. In my afternoon snack example, this is when you decide whether to buy the Snickers or the Milky Way. You make the final purchase decision. In sales, this is the stage concentrated on most heavily.

More Money = More Stages
Big-ticket purchases often require a drawn out decision-making process that involves many smaller decisions within each demand stage. Consider automobiles. First, customers have to decide to buy a car. They may vacillate between the economy of repairing their old clunker and the ego boost of driving something new. While in this stage, car buyers get estimates for repairs, do some sticker-shopping on car lots, and gather the opinions of friends and relatives.

They then have to decide what type of car they want. There are numerous choices to be made at this stage-new or used, sedan or SUV, front- or rear-wheel-drive, foreign or domestic, convertible or hard-top, etc. At this point, they collect brochures and magazine reviews, do a lot of test-driving, and generally frustrate the dealer's sales staff with their inability to give definite answers to their questions about what they're looking for.

Finally, they have to choose a specific make and model and comparison shop before making the actual purchase. This may involve several visits and negotiating sessions. Buyers may compare dealers and investigate other ways to acquire a car, such as leasing or buying over the Internet.

As a rule, the larger the price tag, the more stages the buyer will go through to reach a final decision.

Match Sales Tactic To Demand Stage
There are many different kinds of selling, each of which influences different demand stages. There's transactional selling, which focuses on filling orders efficiently. There's negotiation, which concentrates on securing the greatest share of business at the most profitable price points. Both of these occur at the third level of demand. There's also missionary selling, which aims to create new primary or secondary demand through educating customers.

Sometimes you make presentations that attempt to persuade prospective clients to choose your need-satisfying mechanism. For example, the TV network salesperson presents reasons prospects should use TV advertising instead of radio, without crowing about the network's ratings. This is a clear attempt to create secondary demand. Prospects have already made the decision to advertise (having self-identified a need), and the salesperson is trying to influence their decision on which medium to use. The grand strategy, of course, is that the salesperson will get a fair share of the buy if his or her medium is chosen.

It's easy to confuse the different types of selling and expect the tools and techniques that apply to one to apply to another. It's also easy to incorrectly identify a customer's demand stage and take the wrong approach.

Most of the time, you concentrate so hard on getting market share and securing the easy order, you forget to create new business-or you try to create primary or secondary demand using tools aimed at the third demand stage (e.g. pricing). Sometimes you concentrate so much on getting new customers that you forget to up-sell your current customers. This can lead to growth-killing customer turnover. The most common mistake is to apply a universal sales approach to all prospects regardless of their demand stage.

Idea Selling Always Applies
There is only one way to influence all three stages of the demand creation process: Sell ideas! When you sell ideas, you create primary demand by identifying the client's needs-it's part of the idea development process. You also create secondary demand by presenting an idea related to your type of need-satisfaction. You most certainly create third-level demand by selling ideas that your competitors can't offer.

One of the biggest obstacles faced by most salespeople and marketing organizations is persuading more clients to enter the market. That's why it's so hard to make cold calls. Prospects who need a missionary-type pitch, but get a third-level demand presentation, aren't likely to bite because they don't perceive a need for the product. Think of it this way: If you don't need a car (say you recently bought one), would you buy another one just because the salesman made a good pitch? Of course not.

Most salespeople aren't usually trying to create primary demand when they cold call. They're really making as many calls as possible in hopes of stumbling across a few prospects who have already made the primary demand-creating decision to buy something, but just haven't decided what to buy. Typical cold-callers then hard-sell the prospect that's already in the market, securing the sale instead of allowing a competitor to get it. In the meantime, the salesperson wastes a great deal of time and effort making the wrong type of pitch to other prospects.

Why do so many salespeople work this way? It's because persuading the prospect that they have a need is the most difficult hurdle to overcome. If I'm not hungry, it does no good to pitch me on a candy bar. But if you waved a little chocolate under my nose, it might stimulate my hunger. It's the same way with ideas. When you can show the prospect an idea, or a new way of looking at the possibilities for their business, they might recognize a need they didn't see before.

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