Qualification and the Needs Analysis
Here is another excerpt from a course I teach to beginning salespeople. I think some sales managers out there might find it useful.
The second step of the sale combines Qualification and Needs Analysis. Taken separately, Needs Analysis assumes a standard of credit worthiness and capacity and focuses on finding the right vehicle for the customer. Qualification emphasizes an examination of the prospect’s capacity to pay for and/or finance a vehicle and attempts to find acceptable vehicles that the dealership can finance for the prospect. The two processes certainly intermingle as a salesperson attempts to determine the ways the prospect’s financial needs and desires limit choices.
In dealerships that attract huge numbers of credit-challenged customers, the second step can be purely one of Qualification. In a high-end or luxury franchise, a sale rarely needs to take this path. However, even in luxury franchises, when a prospect signals or admits to credit challenges, salespeople need to be trained to guide the process down a pre-determined path towards Qualification. I am going to defer a discussion of the Qualification path until my next post. Right now, let’s examine the Needs Analysis of credit worthy prospects, while recognizing that today approximately half of all Americans have significant credit blemishes.
Needs Are Basic to Human Nature
The purpose of the Needs Analysis is to determine what needs the prospect’s next vehicle must fulfill. Needs are basic to human nature. They include concepts like safety, security, comfort, utility, affordability, and even psychological needs like fulfilling a certain self-image (see Jim Kristoff’s wonderful post on how people “wear” vehicles). When these basic human needs focus into a desire for a particular product I call them “defined needs.” Often a customer will come to a dealership with needs already defined very specifically. This can be good if that exact vehicle is present on the lot, but often if it is not. However, even if the perfect vehicle is sitting right there in front of the prospect, with his drool already all over its fenders, the salesperson must still do a good Needs Analysis. It is almost a knee-jerk reaction from less experienced salesperson to jump right in and start selling the product the customers is drooling over. However, even in the unlikely event that vehicle is the perfect vehicle for the customer, doing a good Needs Analysis will allow the salesperson to confirm the prospect’s choice, enhance the prospect’s desire, make the product worth even more in the prospect’s mind, and make more money.
The Difference Between Needs and “Defined Needs”
Please understand the difference between Needs and Defined Needs in a vehicle. A prospect might say, “I want a 2006 red Chevrolet Tahoe with leather interior.” That description, while it suggests some of the needs the prospect wants fulfilled, really discloses nothing to the salesperson about the prospect’s actual needs. It is a “Defined Need.” A good salesperson must take the time to get behind and into the process the prospect used to go from real needs to that Defined Need, or risk not making a sale.
Opened Ended Questions – A Salespersons Most Valuable Tool
To do this the salesperson must become adept at asking “open-ended” questions. An open-ended question is a question that cannot be answered yes or no. It requires a “story” response. For example, a salesperson might respond to the description above: “A red 2006 Tahoe, huh? That’s pretty specific. Out of all the possible vehicles in the world, how did you happen to decide upon that one?” This kind of open ended question must be asked again and again throughout step two of the sale and even into subsequent steps until the salesperson has a clear understanding of the prospect’s true needs (as opposed to Defined Needs).
The Importance of Understanding How to Re-Weight a Customer’s Needs
It is amazing how many times a prospect is actually open to consider, and eventually actually decides upon, a vehicle that bears little relation to the one initially described to a salesperson. Much too often, following up prospects who did not buy, I discovered that the prospect bought a vehicle elsewhere that bore no relation to the one they described to my salespeople, purchasing a minivan, for example, when they previously expressed a desire to see sedans. Usually, when this kind of dramatic change occurs, what happened is that the prospect ran into good salesperson. That salesperson had the skill to determine the customer’s real needs, and then gave the customer rationales re-weighting those needs in a fashion that literally defined the vehicle the salesperson was selling.
To accomplish a dramatic change in a defined need, a customer doesn’t usually change any of the needs that their ultimate choice fulfills. Often they simply change the “weighting” they give to some needs within their needs set. Affordability might trump a desire for the highest level of luxury, for example, allowing a prospect to rationalize that a lower level of luxury is sufficient. The ability to cause the weighting of a prospect’s needs to be in flux during the selling process is a skilled salesperson’s best tool. During the selling process, a good salesman presents rationales that place more or less emphasis on some of a prospect’s needs such that the resulting defined need literally becomes the vehicle that the salesman is selling. A good salesperson will always take a prospect’s set of needs and provide effective rationales for a product choice that is possible, or possible right now, when otherwise a sale might be lost. However, the salesperson who has not accomplished a good Needs Analysis, and therefore does not have a good idea of what basic needs the prospect must have fulfilled, simply cannot do this.
For example, The prospect expressing a desire for a 2006 red Tahoe with leather might want a 2006 because that year had particular styling or packaging the prospect really wants, but it is far more likely that expressed desire is based upon finding a vehicle in a certain price range, which range might just as easily be met by a very nice 2005 or a less expensive 2007 – or even a vehicle other than a Tahoe when other true needs are considered. That the prospect wants a Tahoe may be a pure product choice, the fulfillment of a personal dream, or it may represent a desire for a certain amount of roominess or towing capacity that can be fulfilled by any number of other vehicles. The color choice – red (and there are many types of red) – may be simply a preference with very little emotional weighting, and be easily shifted by the right rationale for other choices. “Doesn’t this silver one look great? You know a lighter colored vehicle stays a lot cooler in summertime. I hate coming back to a blast furnace in a parking lot. Don’t you?” Similarly, the desire for a leather interior is likely to be lightly weighted preference rather than the conclusion of a heavily weighted physical or psychological need, and open to properly presented alternatives.
Understand and Use the Customer’s “From – To” Rationales to Sell
Each prospect has a unique set of needs, and the salesperson must discover them, not assume that they are like other prospects’ needs. Nor should a salesperson assume that all of a prospect’s needs are equally weighted or cast in stone. Good salespeople use a series of open-ended questions to get a prospect to describe how they came to define their needs. While doing this they keep in mind that prospects often define needs in a “from-to” fashion. That is: the prospect usually is going from one vehicle to another. The prospect wants the second vehicle to be LIKE the first in certain ways and DIFFERENT from the first in certain ways. Often the salesperson can get to the heart of this process by questioning it directly. “What does your current vehicle have that your next vehicle must have? And how do you want your next vehicle to be different from your current vehicle?”
To truly understand a prospect’s needs, the salesperson will probably still have to ask a series of open-ended questions to discover, “How did you come to the decision that you needed a bigger/smaller/more economical/more luxurious etc. vehicle?” However, using the “from-to” framework for questioning will usually get a prospect to open up with the needed information more quickly. When questioned this way, many prospects go to great lengths to describe not only what their reasoning process was in developing their desire for a new/different vehicle, but also their reasoning process when they decided upon the vehicle they currently own. Many also described the entire process of that transaction when prompted, “Tell me how that transaction worked for you?” These descriptions can also help the salesperson avoid missteps peculiar to that customer later in the selling process.
A Good Needs Analysis is Key to Making Money
Most prospects are happy to share their thought processes. However, some don’t understand a salesperson’s need to know the process by which they defined their needs. They think, “I already decided what I want, why should I have to share my reasoning with you?” When salespeople encounter this attitude, the simplest way to deal with it is to explain that knowing the customer’s reasoning will help the salesperson serve them better, and it will. It will also help the salesperson know how to reinforce the product presented in terms that have importance to that customer’s specific needs, thereby making the product more valuable to them, enhancing the chances of making a sale, and a good commission.
More in later posts …