Neil Rackham starts his book Spin Selling with some key advice: “Don’t trust what top performers tell you.“ We could surmise this is so they protect their “secret sauce” and maintain their competitive edge. But Rackham tells us it’s not. By spending a significant number of hours, he and his team have pulled together the real reasons, and all the true information we need to take on board. Having spent time observing top performers, he has distilled their expertise into a methodology we can all use to better our sales: SPIN Selling.
Lesson 1: A sales call in four stages.
Nearly all effective sales calls can be broken down into four stages.
Stage 1: The Preliminaries – the warming up events at the start of the call.
Rackham tells us there is no better way of opening a sales call. Conventional wisdom says that if we can somehow tap into an area of personal interest of the buyer we can form a relationship more quickly and the call will be more successful. For example if there is a family photograph on the desk, talk family: if there’s a golfing trophy – talk golf. But this is all conventional wisdom. It may have worked ten years ago when the world was not as connected and people bought from people they liked (or knew).
Today in the connected and distributed world, this is far from reality. The problem is greater with large sales when the transaction consists of many interconnected discussions and evaluations of your product or service, many taking place when you’re not there. It’s hard to be liked by or known to everyone in that loop. Today we are more likely to hear, “I like ______ [enter your name here], but I buy from his competition because they are cheaper.”
Alternatively we could make an opening benefit statement: “Better performance is a key issue in your market today, Sir, and our product can increase that tenfold!” Again conventional wisdom, but it’s not effective. By immediately focusing on our perception of the buyer’s needs, we are running the risk of alienating them and having them put up barriers. Who are you to tell them what they need? Who are you to offer unsolicited option?
Rackham suggests the preliminaries, whilst needed to break the ice, are not as critical in the successful large sale. Instead, he suggests we should focus more on how long the preliminaries take. Too short and we appear overly keen and abrasive, too long and the buyer can get bored and disengaged. So timing is critical and time is precious. As a rule of thumb, Rackham advocates that it’s best to err on the short side: no-one has ever complained that a seller didn’t waste their time! Get in, focus on your objectives and get on to the more important stage: investigating.
Stage 2: Investigating – Where SPIN begins.
Use open questions to elicit fact. We’ve all heard that advice. Avoid questions that can be answered with a simple yes or no. Structure questions so they invite description. Take a leaf from Inspector Columbo and ask questions and investigate. In essence this is the heart of SPIN Selling… but it’s not without structure. Rackham’s methodology for investigating breaks down into four types of questioning: Situation, Problem, Implication, Need-payoff (or SPIN).
Situation Questions focus on establishing facts. Finding out the background of the customer’s situation and what they are doing now. This is critical if we are to advance our opportunity. For a small sale it’s binary – there are only two stages: Sale or No Sale. For a larger sale there are two more intermediate stages: Continuation and Advance. The continuation stage is effectively permission given to keep talking. We may not be progressing rapidly, but at least we are moving in a forward motion and it’s not a termination of talk. The Advance stage is more positive. It’s the cue to “tell me more”.
So, the more effective situation questions we ask, the more successful the interaction with the buyer will be, and the better chance of advance. Situation questions get the buyer talking. Situation questions control attention, identify needs and give clues. Rackham warns us however that situation questions persuade while reasons don’t. Effectively, when we identify an interest in the buyer’s response, we should avoid jumping in with reasons why our products meet their needs. There’s more benefit to be accrued.
Problem identification is the second element of SPIN. A potential buyer who is 100% satisfied with the way things are, will not feel the need to change. Only when that level of satisfaction drops to 99.99% is there a chance of a sale. What we need to do is establish where there may be a problem, and from that problem, comes a need. It may start small with minor snags in the product or process , then develop into clear dissatisfaction and finally to a want, desire or intention to act. In each of these stages the problem is amplified and the need increases. That is the objective of this stage, to ask questions to identify the problem and grow its perception to the action level. Problem identification is key. Without clear definition of the need, there is simply no need to buy.
The third element of SPIN is Implication.
There are two types of need: implied and explicit. In the first type we find more complaints. “Our current systems doesn’t do X” or “I’m not happy with our product failure rate” are examples. In implied needs there is a problem but no real identification of how it can be resolved. This is not an issue to the SPIN seller. Indeed, developing implied needs is the key to breaking down 100% satisfaction, and identifying the chink in the armour which our product or service can resolve. We need implication questions. Implication questions increase the buyer’s perception of the problem’s seriousness. Implication questions tip the balance from the status quo toward the new problem-free scenario.
Rackham’s research suggests decision makers will respond favourably to a salesperson who uncovers implications. In essence, we are helping them see beyond the now and into the better future. But there is a negative side. Sellers who raise too many implications can make the buyer feel negative and depressed. If we make problems greater, we need to give a way out and that’s the fourth element of SPIN: Need-Payoff.
Need-Payoff. With implication things are a bit open ended. On the other hand explicit needs are more defined. “We need a faster system”, “We must have back-up capability”. These are explicit needs and point us, the seller, and the buyer in the same direction to problem resolution and sale. It’s in this area Rackham suggests that a great salesperson excels. When they hear implied needs they take notice and make the intangible tangible. They turn implied into explicit.
Basically, need-payoff questions build up the value or usefulness of the solution. Need-payoff questions focus the buyer on problems and solutions not problems and difficulties. Good need questions induce the buyer into personalising the benefits of the solution and with personalisation comes adoption. By asking the buyer to verbalise their thoughts we are effectively placing them as the “expert”…and everyone likes being considered an expert! This again, covertly moves the buyer to a positive decision, after all it was their idea – wasn’t it?
Rackham reminds us however, that for large sales many discussions on the viability of our product or service takes place without us being there. By focussing on needs when present, we align discussion to the buyer’s lens – their needs and their business – rather than to our product which perpetuates the need when we are not present.
Stage 3: Demonstrating capability.
In many sales transactions capability is demonstrated by informing the buyer of the features and advantages of the product or service. Better however – according to Rackham – to focus on benefits. So what is the difference? Features describe facts, data and product characteristics. They are merely statements, maybe of use in a small sale but effectively neutral in larger sales. Advantages show how products or services (or their features) can help the customer. These bring some positivity — but more so in small sales than larger. Benefits however, show how products or services meet explicit needs as expressed by the customer.
A major barrier that may remain at this stage of the sales transaction are objections. If we do encounter them then we’ve performed poorly in the earlier stages. Rackham says, rather than skilling up on objection handling – which is a regular focus of other sales training programmes – we should focus on objection prevention. Back to Need-payoff questions. Most objections are to solutions which don’t fit needs. The cure is simple, don’t talk about solutions until enough questions have been asked on needs. If objections are with costs then again there is a weakness in needs alignment. If the solution fully addresses a need, and that need is critically perceived by the buyer, money will be lees of an issue.
So the crux of demonstrating capability is to ensure the buyer embraces the advantages and visualises their use within their organisation. Again its personalisation – putting your solution in the center of your buyer’s vision.
Stage 4: Obtaining Commitment.
The journey is nearly over. We have three more activities to carry out. The first is to check that we’ve covered key concerns. In larger sales both the product and customer needs are likely to be complex. As a result, there may be areas of confusion or doubt in the buyer’s mind as commitment nears. Successful sellers take the initiative and ask the buyer whether there are any further points that need to be addressed. If none, then purchase is one step closer.
The next step is to summarise the benefits. It’s unlikely that the buyer has a clear picture of everything that has been discussed. Successful salespeople pull the threads together by summarizing key points of the discussion before moving to commitment. Finally, we need to propose a commitment. Don’t ask for an order. That is not proposing a commitment. It’s not what successful sales people do.
Successful sales people advance a sale. As a result of the commitment the sale will move forward in some way. (Remember the multiple conversations?). The commitment is the highest realistic pledge they are able to give. Successful sellers don’t push beyond this point. If an order is the commitment – well done – however one step closer is better than nothing.
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