What does this mean for our sales efforts? Answer #2

We can uncover the decision criteria of our prospects rather simply. We just have to ask:
#1 "When you compare different vendors, what is the most important factor for you in choosing one?" #2 "The last time you made this kind of decision, what factors did you use to guide your decision? What did you look for? Did that work for you?" So the second answer according to the title says: This technique opens up opportunities for us to help the decision maker during the sales process. An inexperienced or a naïve customer may take a simplistic approach, looking only at price. By using the sales process to educate the buyer, we can introduce other factors beyond price that may be more helpful to the buyer in making a good decision and that may give us more of a competitive position. Follow my blog. Welcome once again!

What does this mean for our sales efforts?

Finally, decision makers sometimes go a step further and develop a limited set of criteria by thinking back over several situations in which similar decisions were made. Which criteria produced the best results? Which didn't work? This heuristic, called "taking the best," assumes that some criteria will produce better results than others. What does this mean for our sales efforts? First, it suggests that during our sales contacts with a prospect, we should probe to find out what factors they will use to make a decision. Join our community and don't forget to suscribe to my posts.

What is using the last? You may ask

A slightly more sophisticated version of single-factor decision making involves asking ourselves what criterion we used the last time we made the same or a similar decision and wether that produced a good outcome.This is called "using the last," and some examples might be: # "Whenever we've hired a vendor who has done the same kind of project before, things have turned out pretty well." # "The last time I entered the office pool, I chose teams by flipping a coin and I won $20. I'll do the same thing again." # "When we bought our annuals for planting last spring, we chose specimens with dark green leaves and they did really well in the garden." make sure you come back to receive more updates and don't forget to register with us and again I would like you to leave a comment.

Minimalist Criteria

At the simplest level, the customer may use what the experts call "MINIMALIST" criteria, but which we might call arbitrary. The programmers who work at my company provided a rather amusing instance of this kind of decision making when it comes to choosing a lunch destination. They used to waste a sizable portion of their lunch period arguing and debating about where to go. Finally, they resolved it as only programmers would-they wrote a piece of software that makes the decision for them. At first, it was a random lunch generator, but then they got a bit more sophisticated. Now they enter a single factor, such as proximity or price, and click the mouse. The system generates a lunch destination based on that factor. And off they go, content with the choice.

There are three varieties of single-factor decision making

Even if your customer has not issued an RFP, he or she will probably evaluate competitive offers on the basis of a key criterion. It might be price. It might be timeline. It might be references or relevant experience or the "business fit" of your solution. What if you and your competitor are roughly equal on the first criterion? Then the customer moves on to a second and compares. If you are roughly equal there, the customer will choose a third. But decision makers seldom go beyond two or three factors before reaching a decision. There are three varieties of single-factor decision making that your customer may use.

The recognition heuristic in action

For example,suppose a company issues an RFP and receives twenty proposals in response. Someone at that company has to sort through those submissions to quickly eliminate most of them. At this stage of the evaluation, there is not much in the way of careful analysis, no real weighing of the evidence. An initial set of "no names" will be discarded. That's the recognition heuristic in action. Then the evaluator will begin to apply a decision factor or two. For example, some of the proposals will be eliminated because they did not follow the RFP instructions. Some will be cut because they did not answer all of the questions or indicated by their answer that they were noncompliant with a key requirement. The decision process will move very quickly until the evaluator has the pile down to something more manageable.

Single-Factor Decision Making

But how do customers decide if they recognize both us and our competitors? Or if they have never heard of any of us? Typically, at that point they move to a slightly more complex heuristic and choose among the options based on a single criterion or factor. This single factor is assumed by the decision maker to be a useful indicator to sort among the options.(sometimes there are as many as two or three criteria, but seldom more than that.) Make sure you suscribe to my posts to get more updates through e-mail.

When the customer is ready to buy,what happen?

Conversely, if we receive an RFP from a potential client we have never heard of and with whom we have absolutely no relationship, we probably ought to "no bid" it. Our chances of winning are minimal. Finally, it means that if you are a sales professional, you can't depend solely on the corporation to handle recognition building activities. You should make the effort to communicate with your prospect and leads on a regular basis to maintain recognition. Send the prospect a clipping, drop the prospect an e-mail with an interesting Web link like http://refreshin5minues.wordpress.com that interestingly says:"what the world really needs is more love and less paper work. They say you only fall in love once,but that can't be true.....Everytime I look at you, I fall in love all over again.", leave a voice mail, and make other efforts to communicate something of interest or value every six weeks or so. That way , when the customer is ready to buy, you won't be relegated to the discard pile because the decision maker doesn't recognize you

Our chances of winning are minimal,checkout how

The recognition heuristic indicates the importance of repeated exposure, in the form of advertising and branding activities at the corporate level, and repeated contacts, in the form of phone calls, e-mails, and other forms called "nurturing" the account. Our pre-proposal activities lay the foundation for choice by establishing recognition. What else does the recognition heuristic tell us? Well, it certainly suggests that if we represent a small or new company and our prospects have never heard of us, we may have a difficult time winning deals.

Our pre-proposal activities lay the foundation for choice

To test the principle, I have often shared a "lunch menu"at the outset of seminars. The so-called menu gives ATTENDEES two options: a turkey club sandwich or baked gravlox with crem'ora sauce. As you might expect, over 90% of participants will choose the turkey club sandwich. A few adventurous souls choose the gravlox,and a few will complain that there's no vegetarian option. But people for the most part are not willing to eat something for lunch that they have never heard of. So what does this mean for our proposal efforts? First, it suggests how important pre-proposal activities are. If the evaluator has never heard of us and our proposal comes on his or her office DESK, chances are we won't get much more than a cursory glance. (Converely, if you work for a fortune 500 company, you may get passed along to the next stage of evaluation based on recognition alone.)

The Recognition

The first and simplest technique depends on recognition as a simple cue to make decisions. The basic principle is that given two objects,one recognizable, the other not, we infer that the recognized object has higher value. For instance, suppose your laptop computer suddenly died. You go to your I.T. Manager and tell her that you need a new one. She says, "well, you are lucky, because I happen to have two brand new laptops with all the software installed. You can have either this IBM Thinkpad or this kretzenheimer millennial. Which one do you want?" Chances are, you will take IBM. Why? Because you've never heard of the other one.

Understand how people gather and process information

How long does it take people to make a "keep/discard" decision? On average, a little over six minutes. Infact, fast and frugal! By understanding how people gather and process information, we can gain good insight into the best way to organize our proposals. Also,we can structure our evidence for maximum effectiveness and can prioritize the content to match the kind of information the customer is looking for based on the decision techniques he or she is using. In simple Heuristics the authors describe seven heuristics of choice, but of those there are three that are particularly important for making business decisions.