Key Business Technique – Develop A Market Intelligence System

Quality Information Yields Quality Decisions

Do you have products sitting in your business waiting for customers to come in to purchase, or do you have customers that come to you wanting to buy your products and services? In today’s price competitive environment, the successful business will be customer driven rather than product driven. They develop their product line and service menu first by testing them in the marketplace and then developing and broadening only as their information or intelligence system applies.

A Market Intelligence System employs various methods of collecting valuable data or information that enables you to forecast the direction of your market. The key is to be sure you are gathering quality information. Truly, the quality of information that you gather will dictate the quality and success of your decisions over time. Businesses do not fail because they don’t have good ideas; they fail because they make poor decisions based on a lack of information. A Market Intelligence System that is tailored to the size of your business helps you fulfill customers’ needs because it identifies their profiles, purchasing habits and motives and their wants and needs.

PRIMARY AND SECONDARY DATA
Starting a Market Intelligence System does not need to be difficult or expensive. The most important initial information that you need is primary data and that consists of names and addresses of your customers. Those can be obtained from customer checks or by having the customer fill out an information card and they are given a membership to your “Shoppers Club”. Primary data also includes what is purchased, how much, how often, when and specifically by whom. The source for this data comes right out of your cash register/computer system. Primary data is the basis for your Market Intelligence System.

Secondary data is the next level of information necessary for an effective system and comes from a variety of sources. Sales associates should be talking to each and every customer that comes into your business. Perish the thought that your sales team would merely be asking, “Can I help you?” It is so easy to gather information with open ended questions such as, “Will this be your first purchase or are you seeking to upgrade your current model?” or “Where do you think you will use this product most often?” to “What have you purchased previously and from whom?” Over time the information garnered from these types of questions will be valuable to your decisions regarding future inventories. Advisory boards and focus groups also are critical to providing the information you need.

IDENTIFY WHAT YOU WANT TO KNOW
Collecting data is important but knowing what you want from it and how you want to apply it is equally important to a successful Market Intelligence System. You must develop specific objective for the data you are collecting. Ultimately you want to own your customers’ buying cycle. How can you do that if you don’t possess the information that helps you determine buying motives? Are you collecting information based on customer wants and needs? Do you track inbound inquiry calls? When you have a customer call asking about an item that he says he’s not ready to buy yet, but will be soon, is that not critical information? Are you tracking the frequency of purchases and the average dollar amount? Granted, large ticket items are not purchased with the frequency of clothing or groceries, but frequent requests for a particular model or item may very well impact your inventory purchase decisions and influence critical changes in your product lines to serve premium customers. Customers who purchase an item above a certain dollar amount should automatically be given a “Be Back Coupon” and a personal thank you note.

If you are not retrieving information from a database that tracks timing on service for a piece of equipment, how can you tell your customer when to buy a new one? There comes a point when a discerning business owner will tell his customer that the purchase of a new piece of equipment will cost less than the continued service on an older model. That is putting a Market Intelligence System to work for you!

Is your database matching customer profiles with purchases? For example, if you notice that a customer or customers in a particular profile typically buys a certain item, and they start purchasing another item, are you offering that item to other customers with the same profile? It sounds complicated, but there are numerous inexpensive software systems that help. I personally recommend a client management system called ACT! It has a wide range of options that allow you to manage your database, establish callback schedules and maintain customer profiles.

I see too many business owners that think a Market Intelligence System consists merely of weekly cash reports. They can’t tell me what their best day was with a particular item over the last six weeks or what people are asking for when they call on the phone. The outstanding owner will know the answers to those questions because his Market Intelligence System has given him the data. It goes back to the quality of information you are gathering with each transaction or inquiry. The key to a successful Market Intelligence System is timely collection of relevant information and processing it quickly so it can be used to support your entire operation. It will help you shift your focus from merely what’s selling to who’s buying.

You can find more of Winninger’s business strategies in his dealer-focused books: Price Wars ($24.95) and Hiring Smart ($15). You can contact the Winninger Institute at (800) 899-8971; e-mail at twinninger@aol.com; or visit our website.

Increase Your Business’s Profit! Educate Your Customers!

Does this mean that only people who graduated with honors will be your best customers? Hardly! Today’s successful business educates customers to expect that whatever we offer is the best. We offer the best in selection, service and integrated value.

Yet, how is it that customers know what to look for? Do they truly know how to shop for real value in an item, not just price? How do they know what to expect in a value versus price merchant? Education is the key! If the only way you are educating your customers is with a sign stating your best price, they can get the same introduction to math at the discounter down the street. The smart independent kitchen design dealer teaches his customer how to recognize a quality cabinet. Price becomes less of the focus when a client is on the lookout for dovetailed drawers and hand-rubbed finishes. Price becomes less of the focus when a customer finds someone who can truly design a special cabinet for her kitchen nook; not just a standard plan forced to fit.

TEACHING THE DIFFERENCE – VALUE SHOPPING
One of the most important things any business can do is to teach customers how to value shop. It can be as simple as providing a chart to point out value versus price differentiation. Very early in our education experience we were taught the difference between apples and oranges. The basic lesson is still very applicable to business today. If you went to the grocery store in search of a nice tart, juicy apple, would you buy a tangy orange? Not if you knew the difference! Why is it then, that we allow our customers to buy the discount model when they truly want the very best their pocketbook can buy? Why give them an orange when they really want a shiny red apple? It is our job to teach them the difference! Teaching differentiation to your customers is not as difficult as it may sound. At its core, it teaches how to recognize quality and what to expect in the product and its dealer or supplier.

A well-known overhead garage door dealer has used an instruction chart that shows residential homeowners how to shop for an overhead garage door. Instructions include specific points that help customers understand how a quality door operates and what its specific features are. It points out safety requirements and what a customer should be able to expect in a reliable and safe door. A leading HVAC manufacturer, Carrier, actually provides written specifications for mechanical contractors who are shopping for their product.

MERCHANDISING – DOES IT EDUCATE?
If you are limiting your merchandising to price stickers, banners and signs, then you will fall far short of educating your customer into bigger profits. Do you provide comparison charting in your dealership that customers can study to learn what is required of a furnace? Are your floor displays set up with special signage pointing out the features that make up a quality dishwasher? Do your customers know what is not negotiable in the safety and reliability of a riding lawn mower? I find it hard to forget the displayed image of a ragged, broken down piece of luggage that has been through the bowels of dozens of airports and only has splitting seams and broken latches to show for it. Sitting next to it is the quality model supplied by a fine leather goods dealer. Although it may be scuffed up a bit, the seams are holding and the latch is secure. As a very frequent traveler, you can bet I want to know how to differentiate between a quality piece of luggage and a bargain bag. Have you made it easy for your customers to know how to recognize quality and value? Is your sales team knowledgeable themselves in all aspects of differentiation?

How does this translate to bigger profits? I know of a retail grocery store that prints a detailed meal-planning guide for customers to purchase. They know just what to buy for a daily meal. This means as an end result, increased sales from spices and seasonings to side dishes and desserts. The customer leaves the store with a sense of satisfaction that she has everything she needs for a complete and healthy meal and consequently, more items in her cart! Are your customers being educated in what to look for in a safe, reliable and quality item? Do they know what horsepower they should be looking for in a boat for family water-skiing and leisure? Although the items you sell or the services you offer cannot fit in a shopping cart, a business with educational, merchandising, a knowledgeable staff and a program to teach value shopping, translates to bigger profits for you as well when your customers leave knowing they got the apple they wanted and not an orange. In addition, it means they will be back to purchase with you again, because they have been educated to know that they can expect you to offer the best and . . . deliver!

You can find more of Winninger’s business strategies in his dealer-focused books: Price Wars ($24.95) and Hiring Smart ($15). You can contact the Winninger Institute at (800) 899-8971; e-mail at twinninger@aol.com; or his website

Customer Satisfaction; Building Customer Relationships and Loyalty

“The creation of value is not about increasing your customer’s satisfaction. It is about taking responsibility for your customer’s results.” – Thom Winninger

Customer satisfaction? Isn’t that what we all strive for, what we drive ourselves for each day? The business owner whose has the most satisfied customers wins, right?

For years, conventional wisdom has said that a satisfied customer is a loyal customer. The world is full of information and experts that instruct businesses on how to build customer loyalty. Concepts like “customer focus” and “customer satisfaction” are warmly embraced. Businesses have “products” and “services” to sell and we sell these things to customers. Who wouldn’t want to focus on satisfying customers? Who wouldn’t want to build a base of loyal customers who come to us for all their needs? Yet we still find that customer satisfaction is a fleeting thing, captured one day by the best price, the next day by how well a complaint may be handled.

However, satisfaction and focus simply aren’t enough. A leader in today’s market must learn new words like intimacy, interaction, loyalty, and perhaps most important, strategic alliance. Strategic alliance is a single-thread relationship. It is being one with our customer. This type of relationship is very interactive with the customer. Strategic alliance is not just a fancy re-wording of conventional terms. It is not a make over of the same old tired concepts of “sales and service.” A strategic alliance with a client is built on a mutually agreed-to plan that reflects the nature and needs of the parties involved. It will involve a true paradigm shift away from satisfaction and toward loyalty.

PROCESS NOT PRODUCT
The industry leaders of today focus on the program, process or system that surrounds their product or service – not the product or service itself. An industry leader sells a program that helps customers make money or makes their life easier or more enjoyable. Rather than just selling a product or service, they wrap the process around it, thereby anchoring the value to the product and inevitably, achieve full price!

Almost every product sold, whether it is hard goods like cars, boats houses or soft goods like movies, or vacation packages, is intimately tied to several aspects of a process, including production, conversion, technology, logistics and distribution. By the same token, every customer goes through a buying process. The more a business owner learns about that buying process, the more we can help our customer by customizing programs and systems to assist the customers themselves become part of the buying process. The more we can truly help our customers, not just satisfy them, the stronger our relationship with them becomes. Satisfaction has been confused with acceptance of substandard levels of service and product performance. Customers are not really satisfied; they have just learned to deal with it. They have learned to accept the standard opening question of “Can I help you?” They have learned to accept, “Sorry, that’s not my area,” or “We can’t do that.” A business owner who develops a strategic alliance with customers will help them become a part of finding their own definition of satisfaction and the relationship will be greatly strengthened. The end result is a product or service that becomes so critical to customers that they are willing to base all their future purchases on it. The pressure is off price and focus is on the process.

A key to building this invaluable dynamic with our customers is centered on the selling of the program, process or system by which our product is most intricately linked. Take a look at the success of thematic dining. The Rainforest Café or the Hardrock Café offers food that is not particularly any better than other dining establishments yet they offer entertainment wrapped around the product and the service. Rather than a family going out to eat, they attend an “event” and enter into an “environment.” Bu focusing on the program surrounding the food, rather than the food itself, these eateries are able to create more value and therefore can charge much higher prices for the same food.

FOCUS ON WHAT IT DOES – NOT WHAT IT IS
Business leaders can successfully sell the program in three ways. The first method is to focus on what the product or service we offer does, not merely what it is. Concentrate on the benefits of the product instead of simply the product itself. A customer may come in to a dealership looking for an All Terrain Vehicle. Of course he knows what an ATV is, but does he really know or understand what that piece of equipment can do? Does he know it may decrease field time while delivering safe and stabile assistance with difficult chores? Does our personal watercraft client understand that the jet ski she is considering can not only provide hours of fun and enjoyment but also serve as an economical and efficient means of transport? These days it is not at all uncommon to see a large cabin cruiser parked in a quiet bay on a large body of water, with the family jet ski tied along side, ready to make the quick trip to the marina for more supplies? The idea of selling the benefits instead of the product is proactive in nature. It allows us to draw the client in, finding out what his or her need is, and then applying the features and benefits of the product to it. The concept is to tie the product to the lifestyle needs of the user. The client then reveals to us “why” he or she needs our product or service and we can then build the process around the need.

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy. Over 70 major companies in North America depend on him to assist them in maintaining their market dominance. The new millennium has seen the release of his newest book “Full Price!”. He is also the best selling author of “Price Wars” and “Sell Easy”. Contact the Winninger Institute at (612) 896-1900. E-mail: thomas@winninger.com; or visit our website.

Satisfy Customer and Consumer Needs!

Price Objections – Can You Handle Them?

Learn how to effectively handle price objections and you’ll increase the percentage of customers who realize the value in your product and services and purchase from you without focusing on price! Remember, only seventeen percent of your customers truly understand value is not embodied in price alone. That leaves fifty-six percent who can’t decide between price or value and the other twenty-seven percent who seek only the lowest price.

How does today’s businesses live with price objections? A keen staff who knows how to effectively sell products and services based on value and not price will bring the “price giant” down to size. Not an easy task when today’s market is flush with people who have money, but are constantly barraged with price-busting campaigns from every discounter in sight, all scrambling for a piece of the pie. In addition, since customers have so much available to them in the market, there’s little to stop them from talking to your competitors, who, of course, will offer them the same thing – only for less. The critical key here is can your sales staff step to the plate and deliver the presentation that will teach your customers what the difference is between price and value?

PRICE – WHAT IS THE RIGHT EQUATION?
What does it really cost to purchase an item? Most people will think the answer is reflected in the price tag. They have been “mis-educated” to believe that price equals value when in reality the savvy business person knows that price minus cost equals value. We must be able to teach our customers that price is merely the money they pay up front. Cost is what it takes to keep the product whatever it may be, in peak condition, season to season. Value then is anchored in the comparison of price to the cost of maintaining it over time.

If a customer purchases a lawnmower, for example, from you but can’t get it serviced promptly or effectively, then the cost of the mower shoots right up. Customers who spend most of their time waiting for their items to be serviced or repaired do understand that cost is escalating. If it wears out faster than expected, cost is more than they expected. They may have paid less up front, but quality, durability and reliability affect the actual cost. Those customers who are looking for merely low price tags from your discount competitors will find that their cost over time is actually greater than the price. Our challenge is to effectively define the difference between price and cost for our customers. A HVAC dealer with a clean, bright attractive showroom, a top-notch service department with uniformed technicians and a knowledgeable staff may present a higher price, but if his products last longer and service response is exceptional, cost, in the minds of the customer, deflates and value escalates.

UNDERSTAND THE ELEMENTS
Price objectives do not have to be the giants we allow them to grow into. Understand that most customers base the cost of making a purchase on several elements. Learn to incorporate these elements into your sales presentations and you will find that the successful response to objectives is not to cut price.
Ease of making the purchase:If you want people to buy your products, goods or services, they must be readily available to them and easy to purchase. Do you have the latest models and styles in your showroom and are they available? A customer who purchases a snowmobile and then can’t have it delivered until mid-season will think the discount dealer is more attractive the next time around.
Reliability:Reliability to directly related to cost. Customers want to know if their snowmobile will provide years of enjoyment for their family. Is it durable and safe? Is it easy to trailer?
Predictability:Many promises are made in selling that aren’t kept. An unmet promise is a cost on its way up. Make everything you promise anchored in reality. If you offer the best service in town, then be the only dealer who services your products overnight with free delivery.
Satisfy needs:Customers have multiple needs. A customer may purchase a motorcycle for fun and enjoyment, but he may also be looking for an opportunity to take his wife on a special cross-country trip. If you can offer information on motorcycle clubs and and put him in touch with a trip consultant then you have met another need. Value goes up.

Customers want to save money, but not every customer will demand the lowest price.

Saving money is not always related to lower price. Saving may be represented in the ease of transaction or the comfort level in shopping or the risk factor. You can purchase almost anything over the Internet today – but the risk may not be worth the savings. Who do you talk to if you have a problem with something you purchase from a computer-generated image?
Response: How you handle your customers after the sale has a great effect on value. Do you respond promptly to questions or problems? Can you offer effective solutions in person and not with a form letter? How do you respond to the customer who is not satisfied?

There even more elements involved in making a powersports purchase than I can discuss here. The greatest challenge we face is to support our uniqueness and difference when faced with price objections. Whatever that is for you, find it and present it to your customers instead of defending price.

Attention Independent Business Owners! Do you have a question that you would like Thom to address in a future article? Fax your questions to Thom at (612) 896-9784 and he will offer a strategy-based solution in the next article!

Thomas J. Winninger, author, speaker and strategist, is under contract with 70 major companies in North America to ensure their competitive market dominance. He is the author of several dealer-focused books including Price Wars: How To Win The Battle For Your Customer ($24.95) and Hiring Smart: How To Grow A Team That Wants To Work ($15.00). You can contact the Winninger Institute at 800-899-8971; e-mail at twinninger@aol.com; web site at www.winninger.com.

Successful Business Customer Care Strategies, Thomas Winninger

Choices – Three, Never More Than Four!

Choices, choices, choices! In today’s strong economy, customers have so many choices of what to buy, where to buy, when and how to pay, why should independent business owners be concerned with giving customers more choices? Because one of the key responsibilities of any successful leader is to help customers sift through the myriad of choices available in the general market and guide them toward our products. The challenge for us is to effectively offer choices without confusing the customer.

I have always followed the rule I learned many years ago from Ray Kroc, founder of McDonald’s, the key to having your customer choose you is to offer choices of your products and services. “Every customer needs choices,” he said. But Ray’s rule was to offer customer three choices, yet never more than four. What kinds of choices are we giving our customers? Don’t force your customers into shopping you against your competition by giving them only once choice of how you can meet their needs or solve their problem. Now you might be thinking, “I give my customers the choice of everything I have in my showroom!” However, with that frame of mind, we are really offering them one overwhelming choice. In essence, we are saying, “It’s something or nothing.” Always remember, a large inventory does not constitute offering choices. Choices must be based on benefits and satisfying your customers’ needs.

PACKAGING
The real key of offering choice is effective packaging. Choices can be offered by packaging models, features, function, etc. A simple but effective example of packaging choices is the method followed by the coin-operated car wash bays. For one amount, the lowest, you can get the Basic wash, rinse and power-dry for your vehicle. Add $1.50 more and you get the Deluxe wash, which includes the basic items, plus wax. For $2.00 more your vehicle gets the Super-Deluxe Care Package which includes the whole job plus under-carriage super power wash and premium wax. You can see how each choice offers more to the customer. A “sell easy” example in the manufactured home industry might offer the following packages:

Package A: House delivered to a building site and laid onto foundation – $50,000.
Package B: House delivered to building site and laid onto foundation, includes utility hook-up with septic and well – $65,000.
Package C: All of the items in Package A and B, but the customers receives assistance in selecting the right lot and placement for the home – $75,000.

The key is to give your customer choices of you, you and you – not you or someone else!

SET A BENCHMARK
A savvy business leader can effectively offer choices and can count on selling more of the higher priced choices by starting with a benchmark package. Choose a basic
item at the lowest price you can offer. This is the benchmark product. Then add accessories to add value. For example, you might offer:

Customer’s Choice: A gourmet cooking set, with a complementary utensil set at no charge.
Silver Choice: Same cooking package utensil group, but with a complete cookbook set.
Premium Gold Choice: All the previous items and including a premier quality knife set.
With each choice, you have added price to the benchmark, but in small increments, with the smallest increment added to the most expensive choice. The customer sees greater perceived value in the Premium Gold Choice and his response is likely to be, “It’s only $300 more and look – I get everything I want.” You will also anchor your customers to you because you have taken them from selection to choice. Selection is two. Choice is three. The third choice has to be extended in terms of value, but not extended in terms of price.

Accessories are an important part of offering choices but will not boost your sales if they are detached from your benchmark. A lawn care dealer may have a showroom full of accessories, but realizes he doesn’t sell very many. If he has them positioned as stand alone items, I can assure you they won’t. Accessories need to be connected to the featured items. Most customers want to make one purchase decision. The more decisions a customer has to make the more complicated it becomes. If you have a primary choice item on the floor and the accessory choice on the wall, your customers will think by purchasing an accessory they are increasing their cost. The accessory will likely stay on the wall.

SELL EASY RULES
Rule Number One: Offer at least three but never more than four choices. Take your basic product or service and accessorize it into three choices for the customer. Each choice should cost a bit more, but each choice must offer more value.
Rule Number Two: Build vertical packages. Packaging is not just offering more accessory choices but rather building an accessory package around your benchmark item.
Rule Number Three: Price vertically. Always spread the difference in price between package A and B wider than you split the price difference between B and C. Make your greatest value choice the smaller margin difference.

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy and over 70 major companies in North America depend on him to assist them in maintaining their market dominance. Thom is the author of best selling “Price Wars”, “Sell Easy”, and new in 2000, “Full Price!” Contact the Winninger Institute at (612) 896-1900
E-mail: thomas@winninger.com; or visit our website

Steps To Control Your Customer’s Buying Cycles!

Increase Repeat Business for a Successful Business!

Securing repeat business and building a strong referral base is one of the most critical challenges business owners face today. Although the last sale you made may have been very rewarding and brought you a good margin, there is a great probability that customer will never buy from you again.

We have spent a great deal of time in these articles discussing strategies and techniques to build successful sales through defining our customers, identifying their highest needs and becoming a specialist in any industry. All of those things are vital and necessary but will not go far to building continued success unless we learn how to control the buying cycle of our customers. It doesn’t seem to matter much in these flush economic times how good your product is, or how great your service, loyalty is hard to secure. In fact, most customers are not committed enough to return to you for a second or third purchase.

That is sobering to those who recognize that repeat business and referrals are essential to growing a successful business. The current economy just offers too many options and choices for customers to feel any great loyalty to one business. Unless we daily remind ourselves that we are value merchants, industry specialists, not just another store, hoping for a piece of the business. Through a series of well planned steps we can very effectively take control of our customers’ buying cycle, therefore greatly increasing our probability of repeat business.

Before launching into any of the steps we must first identify in what type of sales environment it is that we exist. Most businesses will fall into one of two environments– small or large. Because of the investment factor in most large ticket items, (people don’t purchase automobiles or copiers twice a month like they do groceries) we will place large ticket businesses in the large sales environment. It’s important to know your environment because the number of contacts you will have with your customers during a transaction will vary greatly and will affect the way you approach your “control”.

However, before we can take control of the buying cycle, we must first understand the seven steps customers will go through before they reach the point of purchase. Whether large or small sales environment, these steps exist in both and are essential to the sales process.

Need Identification: A need for products or services is required to stimulate interest in making a purchase. Does anyone really need a snowmobile? Yes! Although many of us purchase them to satisfy an emotional need, there are those who because of the type of country they live in, depend very heavily on snowmobiles for their daily lives. It’s up to us to create the need in the minds of our customers.

The Search: Once need is identified, customers will search for a source. If you are the industry specialist who can offer two or three choices to your customers, it will be most beneficial to you.

A Source is Found: Once the search for a solution is started, eventually customers will find a source that can satisfy their need.

Comparison: Although customers have found a source to satisfy their need, they typically are unable to commit to a purchase yet. They may compare you to a previous purchase they’ve made with you in the past or they may compare you with a competitor. However they do it, most customers will insist on making a comparison before moving towards a purchase.

Decision Time: After comparison, customers are usually confident enough to make a decision – not necessarily a commitment – but this decision will eventually lead to a purchase.

Affirmation: After customers have made a decision, typically they want affirmation before making a purchase commitment. They need assurance that they have made the right choice in purchasing a your product or service. This is when it is critical for salespeople to be able to offer hard facts that affirm a purchase based on the benefits after the sale.

Relationship Established: This final step is critical. A relationship is based on how you relate with your customer. Without “relationships” repeat business will be tenuous at best. Realize that one sales transaction typically does not secure a relationship. This happens when we do something after the sale to create an ongoing need for our customers to return to us.

It is important to note that in a large sales environment, these seven steps will occur through a series of contacts with your customers, often over a period of several weeks. In contrast, in a small environment, several of the steps will be covered in one contact. As value-added merchants it is up to us to manage the steps most effectively. There are three things to consider when trying to control the return of a customer. First, since many items are not consumables, we must have vertical products or services our customers can purchase. Second, consider timeline. How much time usually occurs between the first contact and actual purchase? Third, what is the time line for re-purchase? Do you receive referrals that create new business in between purchases?

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy and over 70 major companies in North America depend on him to assist them in maintaining their market dominance. Thom is the author of best selling “Price Wars”, “Sell Easy”, and new in 2000, “Full Price!” Contact the Winninger Institute at (612) 896-1900; E-mail: thomas@winninger.com; www.winninger.com.

Key Customer Care for Business Owners!

Effectively Answering Your Customers Questions!

When a customer asks us a question with resistance built into it, how do we respond? Do we start defending our prices, our business or ourself? The successful business leader today learns how to respond to customer questions by building functional responses that come naturally and convincingly.

People are conditioned to expect a certain response in a given environment. For example, when we go through a fast food drive through and order a sandwich, we can count on hearing, “Do you want fries with that?” The same thing applies in the sale of value product or services. Sooner or later most customers are going to ask, “Why are your prices so high?” Our choice is to determine how we will respond. The right responses will bring the savvy business owner more “Yes!”

If the customer says, “Your prices are high!” we can choose to start defending our price, blaming the industry or the high cost of advertising. In that case, the focus will remain on price and we stand to lose our customer to our competition. On the other hand we could use a functional response that would encourage the customer to respond much more positively. With the proper functional response we might be able to say, “Yes, I understand our prices are a bit higher than others, but we offer only the finest brands with the best selection and choices. We guarantee your satisfaction. That is what our customers pay for – and they get it.” It is important to immediately follow up with, “Please, tell me, what are you specifically looking for?”

In any business, whether we are selling to the retail consumer, or business to business, the challenge is to know what to say, when we need to say it, and in a manner that creates a connection between our customer, ourselves and our product or service. Since we ourselves have trained consumers to shop price it may seem awkward and foreign to respond to a price question with something other than, “Well, let me check with the boss and see if we can come down on that boat.” Another functional response to price might be, “I appreciate you bringing that up, Mr. Adams. You see, we customize our approach to our fine items. We want to know your specific objectives in purchasing to ensure you get the results you want. Our customers are willing to invest a little more of their dollars to get these kinds of results. Aren’t you?” A functional response is something we have predetermined to say in response or in reply to a specific question or resistance.

Creating A Functional Response
Have we ever taken the time to analyze the types of questions and resistance we most often get from your customers? There is valuable information in this research. If we do the work we will likely find several common areas of concern. By being aware of the types of objections we may get and we can be more prepared for them!

The second step is to create a response to use in those very situations. Practice responses until they become natural. Our responses need to be functional in our system, not in our delivery of them. Sincerity is critical and will be very evident to our customers.

In addition, we should be aware of several important “Sell Easy Rules” to follow when building functional responses.

Building Functional Responses Make Our Presentation More Spontaneous
When a customer asks a question or raises an objection, having a functional response prepared will keep us alert and reactive. We won’t have to stumble around, trying to figure out how to respond. You will have several options planned.

Practice Will Improve Confidence
The longer we work in specific industry the more we will recognize the similarity in objections. We will have the opportunity to practice if we anticipate what might come up during a presentation. The more often we use our functional responses, the smoother and more confident we will sound.

Ask Questions To Maintain Momentum
By asking carefully guided questions, we can alleviate concerns or doubts. We must talk with customers to analyze what it is they need to make a decision about before moving ahead. Asking a question like, “Would you please share with me some of the things you still have questions about?” will generate information and can prevent us from getting “stuck” on one issue or concern.

Put Functional Responses On Cards
It may sound silly, but the best way to achieve a level of comfort with functional responses requires practice. Just as in school we learned multiplication tables through practice, practice, practice, the same goes for sales. By practicing our responses and by writing them down on cards, we will make them second nature. Also, in writing them out we can discover how they actually sound to our customers.

By following these tips we can build functional responses around the most common situations we encounter in our particular industry. When customers bring up an issue that’s important to them, we will know how to respond so much more effectively.

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy and over 70 major companies in North America depend on him to assist them in maintaining their market dominance. Thom is the author of best selling “Price Wars”, “Sell Easy”, and new in 2000, “Full Price!” Contact the Winninger Institute at (612) 896-1900
E-mail: thomas@winninger.com; or visit our website