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Guided selling is a process that helps potential buyers of products or services to choose the product best fulfilling their needs and hopefully guides the buyer to buy.

Guided selling simplifies and automates the maintenance and deployment of all knowledge that is required to analyze customer needs, define the solution, and generate a proposal to fulfill those needs. A functional definition of the solution is provided to the customer, complete with commercial aspects of the proposal, such as prices, margins, texts, illustrations, and lay-outs. In addition, the technical specification of the solution (such as bills of materials and routings) is generated for manufacturing and distribution.

Contents

Process and Practice

Guided selling is put in practice with an information system that supports the central management and maintenance of knowledge; furthermore, the system supports the use of this knowledge by customers, dealers and sales representatives. Such knowledge is stored in models; these models are interacted with by means of questionnaires. The knowledge stored is related to functional, commercial and technical aspects of the customer needs and the possible solutions. The proposal-specific functions of guided selling are recommender systems, product configuration, technical calculations, commercial calculations and document generation.

Guided selling-solutions are applied in the following use cases:

  • Websites of online-shops, product manufacturer websites and service providers. Guided selling-solutions are used to analyse user requirements and generate buying recommendations to make sure online-shoppers find the product best fitting to their needs
  • Kiosk-applications, call-center solutions and instore-devices in specialised trade stores. Goal is to help the potential buyer and / or the sales representative or service agent to efficiently guide through the product selection and purchasing process.

Guided selling does not address the internal, private, offline, or behind-the-scenes decision issues that buyers must address before they are ready to make a solution choice.

Goal and Approach

The goal of Guided Selling-solutions is to bring together potential buyer's needs and products or services that fulfill his needs in order to facilitate buying decisions. The Guided Selling-system asks questions and offers answer options that help the online-shopper to learn about and define his needs, even for complex and technical solutions. At the same time, the vendor understands step by step the refined customer needs.

Guided Selling-Process

Guided Selling-Systems put in practice the following Guided Selling-Process to advice, convince and sell (based on the need/solution-placement dynamic):

  • understand the customer's needs: The potential customer is asked for his buying needs. The product characteristics that are relevant to a buying decision are explained. Since the Guided Selling-System explains product attributes and use cases, buyers are enabled to express their needs, refine existing needs and discover new needs. Helping the customer to understand his needs and then really understand the attributes important to him is key to calculate product recommendations that fit the customer's requirements.
  • analyse customer's needs: Consumers typically can express buying desires, but not technical specs - a consumer knows how he wants to use the product, but not which exact technical requirements are needed. A Guided Selling-System must thus be able to translate buying desires expressed in consumer language (e.g. "I need a business notebook") or concrete, but non-technical product attributes ("a fast processor") in technical product specifications (e.g. a certain processor type, hard disk size, operating system, RAM-size).
  • recommend products: The technical product specifications inferred from the customer's needs need to be matched on the fact sheets of the available products. In order to calculate valuable product recommendations, it is not enough to filter out products that just fulfill the requirements expressed by the user. However, all relevant product attributes need to be evaluated and matched against the user requirements. Product attributes that are always beneficial (e.g. longer battery lifetime) need to be treated accordingly. If no product fulfills all requirements, the Guided Selling-System needs to calculate alternatives that come close to the actual requirements.
  • provide buying arguments and convince the customer: The goal of the Guided Selling-System is to objectively advise the potential buyer, create trust in the product recommendations and the products offered and thus turn prospects into buyers. Thus, each product recommendation needs to be explained using a reasoning engine and the advantages / disadvantages of each recommendation need to be shown.

Technology Required

Guided Selling-solutions are software systems. The Guided Selling-software allows to simulate a dialog to find out the buyer's needs. A recommender-technology then maps the needs on technical product details and matches the buyer's profile with the available products. Guided Selling-systems are a kind of Recommender systems. Other than Collaborative filtering that calculates recommendations based on historical data (e.g. website usage data such as "users who watched this product also watched these other products"), Guided Selling-systems rather analyse the individual user's input to calculate recommendations that best fulfil his personal needs. Guided Selling-systems thus require product information (fact sheets). Goal of this approach is to calculate objective recommendations that are based on the individual user's needs.

Sources

  • J. Lester, K. Branting, B. Mott: Conversational agents, Practical handbook of Internet computing, 2004, S. 3ff
  • Guided Selling: On demand information for buyers, Executive technology report, IBM, August 2005. The paper shows the challenges of retail as buying decisions are taken only more and more and shows how to face the challenges with Guided Selling-solutions.
  • Axel Schultze: Channel Excellence, published by Lulu.com, 2007, S. 215ff, ISBN 061517759X
  • Sridhar Seshadri, Dana Popescu: Inventory and Ecommerce, Department of Information, Operations and Management Science, Leonard Stern School of Business, New York University, New York, NY 10012
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