Theories and Models of Selling

This presentation deals with various theories of sales like AIDAS theory, Right set of circumstances theory, buying formula theory, behavioural equation theory. It also discusses the SPIN model of selling and details the Situation, Problem, Implication and Need Pay-off questions at the heart of SPIN Model. This presentation is useful for practicing professionals, professors and students teaching and studying undergraduate and post graduate courses in marketing and sales & distribution management of GGSIP University, University of Delhi and other universities

1. Models and Theories of Selling Presented by: JATIN VAID

2. Selling theories Is selling a science, taught through concepts or an art, learned through experience Experience psychology V/S Behavioral science Explain the ‘Buyer – Seller’ process Seller orientation or Buyer orientation or Both? [email protected]

3. Types of Selling Theories [email protected]

4. 1. AIDAS Theory Buyers’ mind passes through 5 stages consciously – Attention, Interest, Desire, Action, Satisfaction Securing Attention: Good rapport, conversation openers, first impression, attire, smile, social skills Gaining Interest: V isual aids, effective selling appeal, asking questions, brochures, handing over product to customer Kindling Desire: Ready to buy point, Handling objections, summarizing, focus Inducing actions: Sense timing for trial close, asking for orders, reassuring Building Satisfaction: Thank customer, reassuring decision, written order, following up promises made [email protected]

5. 2. “Right Set of Circumstances” Theory Also called, ‘Situation – Response’ Theory Particular circumstances prevailing in a given selling situation will cause the prospect to respond in a particular way External & internal stimuli Fails to assign importance to external factors (response) Salesperson should control the situation to sell effectively Difficult to apply [email protected]

6. 3. “Buying Formula ” Theory Emphasizes the buyer’s perspective (thought process) to buy or not to buy Buyer’s needs receive major attention & seller’s role is to help buyer find solution. Buying formula is based on a theory by E.K Strong and arranges responses in a psychological sequence [email protected]

7. Buying formula [email protected]

8. 4. “Behavioral Equation” Theory J.A Howard Explains buying behavior in terms of purchasing decision process as a learning process Elements: Drive: Strong internal stimuli (Innate or learned) Cues: Weak stimuli that determines when buyer will buy (Price, advertisement) Response: What buyer does Reinforcement: An event that strengthens the buyer’s tendency to respond [email protected]

9. Behavioral equation B = P X D X K X V Where , B: Buying P: Predisposition D: Drive level K: Incentive potential V: Intensity of all cues [email protected]

10. SPIN Model of Selling By, Neil Rackham (1988) Underlying assumptions: Relationship selling is customer centric Selling process adapted to customers to deliver personal solutions Ask relevant questions Four kinds of questions: Situation, Problem, Implication, Need-payoff (SPIN) [email protected]

11. Steps of SPIN Selling Opening: Builds rapport & establish a buyer – centered purpose for sale call Investigation: Heart of SPIN Model – to ask relevant questions to uncover buyer’s needs (Situation, Problem, Implication & Need – payoff) Demonstrating capability: Explain the benefits of solution and show how the product meets the prospect’s needs Obtaining commitment: To make the prospect agree to advance the sale or make a purchase [email protected]

12. i . Situation Questions S traightforward facts about the buyer’s existing situation & provide a starting place for understanding buyer’s needs To be asked sparingly to avoid monotony Based on careful research about customer [email protected]

13. ii. Problem Questions H elps customers recognize their needs & paves way to propose a solution Helps better understanding of customer’s problem [email protected]

14. iii. Implication Questions I ncrease a prospect’s motivation to seek change . Uncover the causes of the problem & its long term consequences Effective when prospect is the decision maker [email protected]

15. iv. Need-payoff Questions Helps customers to discover a way out by asking how their problem could be resolved R ight ‘ N eed - payoff’ questions can tell seller how his solutions can help the customer Highly convincing [email protected]

16. Thank You! [email protected]