The Multi-Step Sales Process
SS-A and SS-B are typically sold through the retail channel and supported with advertising and sales promotion. There isn't enough margin to support direct marketing, as you can see in our first example.
Products in SS-C would be a relatively simple product or perhaps a product that used to be considered complex but is now well understood by the consumer. A great example of a product in this category which has undergone this transition is office productivity software (e.g., spreadsheets, word processing and presentations). It used to be sold like high-technology software; now it's sold like a consumer good.
Products in SS-E are similar to products in SS-C but are more expensive. Typically, more expensive products need a more complicated and costly selling system because price affects the selling process in three ways:
1. Higher price creates more anxiety.
2. Anxiety creates more questions and the need to handle more objections.
3. Information transfer and objective handling add more steps and "touches" to the sale.
The key questions is: "Do you have enough margin pay for the customer's information needs objections handling? Some clients have found they have to raise price and margins in order to take care of the customer's information needs!
The cost of information delivery is what makes SS-D an unattractive segment for multi-step selling. With a complicated, hard to understand product, there may not be enough margins to sell it through direct channels. Again, go back to our office productivity software example. It started in segment SS-D, and was sold through retail with product demonstration. As it matured, it moved into the SS-C group and became a "shrink wrap" consumer product. It is sometimes sold through catalog but seldom sold as a stand-alone product except as an upgrade.
SS-E and SS-F are the two segments that rely most on multi-step selling. But even here, attributes of product complexity/utility and price can drive very different strategies.