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What factors influence customer purchasing decisions, and why do customers buy?



Kirjoittanut: Yousif Majeed - tiimistä Kaaos.

Esseen tyyppi: Akateeminen essee / 3 esseepistettä.

KIRJALÄHTEET
KIRJA KIRJAILIJA
The psychology of selling
Brian Tracy
Esseen arvioitu lukuaika on 8 minuuttia.

3 – Point Essay What factors influence customer purchasing decisions, and why do customers buy

1     INTRODUCTION

 

The Psychology of Selling was written by Brian Tracy, a talented salesman from whom we can all learn a lot. Some of the things that are mentioned in the book will be explored. You will be astounded by how much you learned in just a few minutes after finishing this essay.

New ideas like the 80/20 rule, one’s own self-concept, and the mirroring effect will be introduced. As a salesperson, you must acknowledge your way of thinking and sense of self-worth in order to start improving these areas.

If I asked you, why do customers purchase the product, what would you say? You would give me a simple answer, but in here we will be going into details of why a customer’s buys and why he doesn’t.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1      80/20 Rule in sales

80/20 Rule

Brian Tracy applies the 80/20 rule to salespeople, claiming that the top 20% make 80% of the sales. To be in the top 10%, you must learn from the top 10% and follow the leaders. Bertrand Russell, a British philosopher, once said, “The very proof that something can be done is that someone else has already done it”. The 80/20 rule is applied in many areas of life, including business.

 

 

 

1.1.1    Self-concept

The self-concept was discovered in the twentieth century. The self-concept is the collection of beliefs we have about ourselves; it is how you see yourself. When you alter and improve your self-concept, you change and improve yourself.

If you have a positive self-concept about prospecting, you will be eager to call and be more confident when selling, and your sales pipeline will eventually fill And if you have a low self-concept, prospecting will cause you anxiety and fear, and you will do as little as possible because it will make you scared and tense, this does not only apply to prospecting but to every aspect of selling.

This is true not only for prospecting, but for all aspects of selling.

A person who started making $100,000 in sales gradually and then the market crashed or the economy tanked, forcing him to start over with a different company. Why did he start earning $100,000 again in the following years? It is because his self-concept has led him to believe that he is a $100,000-a-year salesperson.

 

Every salespeople already has a self-concept of how much money he want to earn.

Psychologist found that you can never earn 10% more or less than your self-concept income. If you exceed by 10% from your self-concept money goal you will engage in compensating behaviours to get of the money and if you are -10%, you will work harder to make it to your self-concept amount, think of it as a thermostat, it is always adjusting it self to be at the perfect temperature.

Be realistic, especially at first. Brian Tracy tells the story of a salesman who was earning $30,000 per year and set a goal of earning $300,000 per year. You’d think it would have motivated him, but it had the opposite effect: it demotivated him. Instead of going to work to figure out how to make that kind of money, his mind shut down like a light switch. He didn’t make any progress after six months of working on it, but then he changed his goal to $50,000 per year and achieved it.

 

1.1.2    THE WAY OF THINKING

Self-concept Psychology plays a critical role in your self-esteem. Your self-esteem refers to how much you like yourself. It will shape your personality as well as your quality of life.

Some people believe that they are bad at closing sales, but if you believe that and tell yourself that, you will be bad at closing sales. You will perform poorly if you continue to tell yourself that you are bad at something.

You will have a positive self-concept if you have high self-esteem. How much you like yourself is an important success factor. “the more you like yourself, the more you like other people” face your fears when selling, you are scared, psychologists say you often act like a child afraid of being spanked.

There are two major obstacles to closing a sale. They are both mental in nature, fear of failure and rejection. When we are children, we are afraid of failing because of destructive criticism from one or both of our parents. You will have to deal with this as an adult until you get rid of it.

Before each sales call, mentally prepare yourself by telling yourself, “I like myself.” This will boost your self-esteem. Positive self-talk leads to successful sales. According to Harvard’s William James, “belief creates the actual fact,” and it will become true to you.

“when you make the decision that no matter what happens you will never give up” your self-esteem increases immediately and you will respect yourself more. The very act of making the decision that you can do it. It improves your reputation with yourself.

 

 

 

1.2      Why customers don’t buy?

Every customer has made a bad purchase and later on found out it was overpriced. The fear of failure and disappointment is the number one reason why customer don’t buy. To begin, you must establish trust and credibility with the customer in order to alleviate his fear and convince him to accept your offer.

I learned this from my sales job: when you put out positive energy, it will come back to you. When you talk, remember that you are the mirror, and people will imitate your energy and enthusiasm.

The possibility of rudeness or disapproval triggers fear of rejection. 80% of sales will end in a no, for a variety of reasons. This does not necessarily imply that the salesperson or the product being sold is defective. They say no for a variety of reasons.

If you work in sales and are afraid of rejection, you have chosen the wrong profession, you will face a lot of it. Every rejection is painful and brings up your worst fears.

 

 

1.2.1    Salesperson average day

 

Salespersons average day and how to improve your sales

According to a study conducted by Columbia University, the average salesperson works about one and a half hours per day. The first call is made at 11 a.m., and the second call is made around 3:30 p.m. After that, he quits.

Salespeople work so little because they are afraid of being rejected. You’d be calling from the crack of dawn if you were guaranteed success.

Top salespeople have all gotten to the point where they no longer fear rejection. They have improved their self-esteem and self-concept.You must release the keys to dealing with rejection. It’s not personal, it’s not directed at you, it just happens, stop taking yourself so seriously, it’s part of the job.

There is a sales motto that goes, “some will, some won’t, so what?” This should be your sales motto.

Never give up, boldness and persistence are essential qualities for sales success. It takes bravery to confront the fear of calling as well as the fear of failure and rejection. It takes perseverance to return day after day.

People don’t think about it, and if you ask if you want to think about it, he’ll forget.

“Fear leads to excuses, you will justify your behaviour”

 

1.2.2    Friendship factor

Customers will only buy from people they like, this is referred to as the friendship factor. The prospect will not buy from you until he believes you are his friend acting in his best interests. Make a connection.

Win people over by demonstrating that you care about them and want the best for them. Construct a bridge. Build a bridge or friendship with him by convincing him that you are his friend. Be genuine, a healthy personality is one that gets along with a wide range of people, and the opposite is bad.

The more you like yourself, the more you like other people.

People will leave even if the price is reasonable and the product is acceptable if they dislike the salesperson.

The primary emotion in sales success is enthusiasm, which acts as a catalyst. Transfer of energy. Also, the more you like yourself, the more enthusiastic you will be.

Emotions are contagious, everyone is affected by the emotions of others.

 

 

 

1.2.3    Why people buy

Galileo Galilei once said “you cannot teach a man anything, you can only help him discover it within himself”.

People purchase goods and services because they believe doing so will make them better off, not because you want them to. With every selling proposition, a customer has three options: he can buy from you, buy from someone else, or buy nothing at all.

People in our society value freedom above almost all other advantages, and they enjoy some freedom when they have money to their disposal. People are reluctant to part with their money in large part due to this desire for freedom.

Good selling requires knowing the customer’s needs and desires in order to meet those needs and desires. Many people make the error of telling the customer that it is at the lowest price. This does not give the customer freedom, on the contrary, it gives him the impression that he is purchasing something that he will not use. The customer would prefer to purchase an item that costs more but that he values more.

The two main factors influencing people’s purchasing decisions are the desire for gain and the fear of loss. Making the prospect realize how much better his life would be with your product than without it is your responsibility since the prospect’s desire for gain is to be better off after purchasing the good or service. Fear of loss: Because this has happened to them in the past, prospects are cautious to avoid it happening again. They are afraid that if they make a poor purchase decision, they will be stuck with the product and lose their money.

An interesting finding is that fear of loss is 2.5 times more powerful than desire for gain, which has a motivational power of 1. If you’re selling a car, for instance, you could tell the customer how great the car is, but if you tell him that he is the last person, he will be more likely to buy, and if he is undecided, he will buy right away.

 

You must identify the most important needs that your product or service can satisfy, here is a list to help you identify what you’re customers’ needs are.

  • Money

Money is a basic need. Whenever you can link your product or service to making or saving money for the customer, you will have his full attention.

  • Security

People make purchases based on how they hope to feel after using and owning your good or service. It is the feeling of fulfillment or pleasure that the customer expects from making a purchase from you. For ourselves and our families, there is such a strong and deep need for security, whether it be material, emotional, or physical. A multibillion dollar industry exists for home security. “Anytime you can show a customer that he or she can be safer and more secure as a result of owning your product or service, you can create buying desire.”

  • Being liked

People and those around us place a great deal of value on belonging and liking us. We desire the admiration of our friends, neighbors, and coworkers. Does your service or product increase how much others like and respect your prospect?

 

  • Status and prestige

When you buy a watch that cost fifty dollars it is just a timepiece but when you spend more then that it  become jewellery. You  are trying to tell other people in a subtle way that you are successful, it makes us feel important and valued. Perhaps the deepest of all needs is the need to feel important.

  • Health and fitness

Everyone wishes to live a long and healthy life. People that are overweight, overtired or have aches and pains will be highly interested in Health products such as vitamins and other supplements.

  • Praise and Recognition

This is self-explanatory. The feeling that this is so good that someone will compliment me, it is the thought of recognition or status.

  • Power, influence, and popularity

Humans desire power and influence and will purchase items or services that provide them with more of both. Humans desire to be liked by others and to be popular.

  • Leading the field

Another one of our desires is to be considered up-to-date. For example you having the only product in your industry or in your neighbourhood, it bring value to this item and makes you feel more important because of the rarity, and people want to be ahead of their pack and become trend-setters. 5-10 percent of the market represents these kind of people.

  • Love and companionship

One of the services is social media and dating app, they are made to connect with other people. We value human interaction and especially the opposite sex. You can promote your product or service as making the prospect more appealing and desirable as a friend, resulting in an immediate buying desire.

  • Personal Growth

The desire for greater self-awareness and self-actualization is a major selling point for many products. This is due to the profound needs for self-expression and personal fulfillment. People desire to feel as though they are reaching their full potential.

  • Personal transformation

If the product or service that you are offering can change the prospects life to the higher level, there can be no limit to the amount he will spend.

Plastic surgery can cost a lot of money, but some people will do it to look better.

 

 

REFERENCES

Brian tracy,1995, The Psychology of Selling: How to Sell More

 

Names mentioned in this essay in the book, The Psychology of Selling

 

Bertrand Russell

William James

study conducted by Columbia University

Galileo Galilei

 

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