Product churning is the practice of selling more product than is beneficial to the consumer. An example is a stock broker who regularly buys and sells securities in your portfolio. You may or may not gain, but the broker certainly piles up commissions.
It has been claimed that "dollar cost averaging" is a form of product churn. In this strategy, an investor repeatedly buys small lots of a security as the price changes. In this way the overall cost is averaged down as prices fall. The effectiveness of this strategy is open to debate, but one thing is certain: it is a sure way of increasing brokerage commissions.
Another form of product churning is practiced by maintenance and service providers. By replacing worn-out parts with inferior quality parts, they are assured of a greater frequency of service requests.
A more sophisticated version of product churning is used in the razor and blades business model. This involves selling a basic product at a loss (or low profit margin), but receiving very high profit margins on associated products that are necessary for the basic product's continued usage. Example of this strategy include razors (and their blades), computer printers (and their ink cartridge refills), cell phones (and their usage time), and photography (and prints).
Monday, September 21, 2009
How to be Effective Selling over the Phone?
Telephone sales skills are the backbone of the telemarketing industry. Though relatively a new concept, this technique now dominates the market scene and is being increasingly adopted by new businesses.
What make the best telephone Sales Skills.
•Sharp communications skills are the key Communication skills are a vitally important part of telemarketing. A person making a cold call should be articulate and a good talker. He should also be able to deal with an adverse situation. A person involved in tele-calling obviously does not talk to the customer face-to-face. He instantly has to judge via the conversation, whether it is possible to close the deal with the customer. He also makes use of those telemarketing techniques that have been tested by the successful sales professionals.
•Understand the concept of a cold call. A typical cold call begins with an introduction of the seller to the buyer. He then should move on to introduce his company and its products. A good sales pitch requires a seller to be a good listener too. While being a patient listener, he should give the customer an equal chance to speak. This way he will come to know about the customer and his likes and dislikes. It is always advisable to move further in the conversation only after receiving a formal consent from the customer.
•Simplify everything for the customer, put the plan in simple words. The possibility might be that the customer has never heard of such a plan or product before. So if the seller confuses him in the beginning by talking about complex details, the customer will probably not understand what it is the salesperson is trying to put across to him. He will simply hang up.
•Try and read the mind of your customer. The seller should try to read the mind of the customer at various stages of the conversation. Your customer's time is important and so is yours. If it becomes clear to the seller in the middle of the conversation that this customer is not going to buy product, the seller can save his time there. This he can do by making the pitch short and asking for the final word from the customer. He can then invest this time in getting another deal with some prospective customer.
•You should know how to negotiate. The special technique needed is to negotiate over the phone with the customer. The customer will obviously want the best out of the deal. So make them know all the discounts and offers the product has in stock for them and then negotiate with them accordingly.
•Close the deal with care after the deal has been negotiated and the customer agrees to buy the product, it is important to finalise the deal with care. This is because many times a deal can be lost at the time of closing.
Thus, good telephone sales skills are required at every step of making telephone sales calls, and each step has a number of choices for how to deal with a particular situation for closing sales successfully.
Benefits of Selling Over the Phone
1. Connect with clients on a personal level and quickly find out what matters most to them
2. Understand and manage your own and your client's emotional state
3. More confidence in contacting prospects and clients
4. Acquire skills and techniques for successfully handling tough questions in a positive manner
5. Increase your awareness of the impact your behaviour has on other people
6. Win more business and improve profit
What make the best telephone Sales Skills.
•Sharp communications skills are the key Communication skills are a vitally important part of telemarketing. A person making a cold call should be articulate and a good talker. He should also be able to deal with an adverse situation. A person involved in tele-calling obviously does not talk to the customer face-to-face. He instantly has to judge via the conversation, whether it is possible to close the deal with the customer. He also makes use of those telemarketing techniques that have been tested by the successful sales professionals.
•Understand the concept of a cold call. A typical cold call begins with an introduction of the seller to the buyer. He then should move on to introduce his company and its products. A good sales pitch requires a seller to be a good listener too. While being a patient listener, he should give the customer an equal chance to speak. This way he will come to know about the customer and his likes and dislikes. It is always advisable to move further in the conversation only after receiving a formal consent from the customer.
•Simplify everything for the customer, put the plan in simple words. The possibility might be that the customer has never heard of such a plan or product before. So if the seller confuses him in the beginning by talking about complex details, the customer will probably not understand what it is the salesperson is trying to put across to him. He will simply hang up.
•Try and read the mind of your customer. The seller should try to read the mind of the customer at various stages of the conversation. Your customer's time is important and so is yours. If it becomes clear to the seller in the middle of the conversation that this customer is not going to buy product, the seller can save his time there. This he can do by making the pitch short and asking for the final word from the customer. He can then invest this time in getting another deal with some prospective customer.
•You should know how to negotiate. The special technique needed is to negotiate over the phone with the customer. The customer will obviously want the best out of the deal. So make them know all the discounts and offers the product has in stock for them and then negotiate with them accordingly.
•Close the deal with care after the deal has been negotiated and the customer agrees to buy the product, it is important to finalise the deal with care. This is because many times a deal can be lost at the time of closing.
Thus, good telephone sales skills are required at every step of making telephone sales calls, and each step has a number of choices for how to deal with a particular situation for closing sales successfully.
Benefits of Selling Over the Phone
1. Connect with clients on a personal level and quickly find out what matters most to them
2. Understand and manage your own and your client's emotional state
3. More confidence in contacting prospects and clients
4. Acquire skills and techniques for successfully handling tough questions in a positive manner
5. Increase your awareness of the impact your behaviour has on other people
6. Win more business and improve profit
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