SPIN Selling SITUATION ⋅ PROBLEM ⋅ IMPLICATION ..., Slides of Psychology

SPIN Selling. SITUATION ⋅ PROBLEM ⋅ IMPLICATION ⋅ NEED-PAYOFF. By Neil Rackham. 1. Sales Behavior and Sales Success. Small Sales Selling Techniques.

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SPIN Selling
SITUATION PROBLEM IMPLICATION NEED-PAYOFF
By Neil Rackham
1. Sales Behavior and Sales Success
Small Sales Selling Techniques
The traditional selling techniques that most of us have been trained
to use work best in small sales – a sale which can normally be
completed in a single call and which involves a low dollar value.
These selling techniques don’t work for major sales and in fact can
hurt your success as the sales grow larger.
Characteristics of Major Sales
Longer Selling Cycle - Whereas a simple low-value sale can often
be completed in one call, a major sale may require many calls
spread over a period of months.
Building Value is Critical to Sales Success - As the size of the
sale increases, successful salespeople build up the perceived value
of their products or services. The building of perceived value is
probably the single most important selling skill in larger sales.
On-going Relationship – As the sales grows larger, the customer
puts more emphasis on the salesperson as a factor in the decision.
In a large sale, product and seller may become inseparable in the
customer’s mind.
The Risk of Mistake – Customer’s become more cautious as the
decision size increases. Purchase price is one factor, but fear of
making a public mistake may be even more important.
The Four Stages of a Sales Call
- almost every sales call, from the
simplest to the most sophisticated, goes through four distinct stages:
Preliminaries – These are the warming-up events that occur
before the serious selling begins. This includes such things as the
way you introduce yourself and how you begin the conversation.
Investigating – Almost every sale involves finding something out
by asking questions. Investigating is the most important of all
selling skills.
Demonstrating Capability – In every sales call you must
convince your customer that you have something to offer.
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S ITUATION ⋅ PROBLEM ⋅ I MPLICATION ⋅ N EED-PAYOFF

By Neil Rackham

1. Sales Behavior and Sales Success

Small Sales Selling Techniques

  • The traditional selling techniques that most of us have been trained to use work best in small sales – a sale which can normally be completed in a single call and which involves a low dollar value.
  • These selling techniques don’t work for major sales and in fact can hurt your success as the sales grow larger.

Characteristics of Major Sales

  • Longer Selling Cycle - Whereas a simple low-value sale can often be completed in one call, a major sale may require many calls spread over a period of months.
  • Building Value is Critical to Sales Success - As the size of the sale increases, successful salespeople build up the perceived value of their products or services. The building of perceived value is probably the single most important selling skill in larger sales.
  • On-going Relationship – As the sales grows larger, the customer puts more emphasis on the salesperson as a factor in the decision. In a large sale, product and seller may become inseparable in the customer’s mind.
  • The Risk of Mistake – Customer’s become more cautious as the decision size increases. Purchase price is one factor, but fear of making a public mistake may be even more important.

The Four Stages of a Sales Call - almost every sales call, from the

simplest to the most sophisticated, goes through four distinct stages:

  • Preliminaries – These are the warming-up events that occur before the serious selling begins. This includes such things as the way you introduce yourself and how you begin the conversation.
  • Investigating – Almost every sale involves finding something out by asking questions. Investigating is the most important of all selling skills.
  • Demonstrating Capability – In every sales call you must convince your customer that you have something to offer.

Page 2 of 12

  • Obtaining Commitment – Finally, a successful sales call will end with some sort of commitment from the customer. Larger sales contain a number of intermediate steps that we call Advances. Each step advances the customer’s commitment toward the final decision.

The SPIN Sequence of Questions

  • Situation Questions – At the start of the call, successful people tend to ask data-gathering questions about facts and background.
  • Problem Questions – they explore problems, difficulties, and dissatisfactions in areas where the seller’s product can help. Inexperienced people generally don’t ask enough Problem Questions.
  • Implication Questions – are more complex and sophisticated types of questions. Implication Questions take a customer problem and explore its effects, helping the customer understand a problem’s seriousness.
  • Need - payoff Questions – they get the customer to tell you the benefits that your solution could offer. Need-payoff Questions have a very strong correlation to sales success.

The SPIN Model - These four types of questions – S ituation, P roblem,

I mplication and N eed-payoff – form a powerful questioning sequence that successful sales people use in the Investigating stage of the call.

2. Obtaining Commitment: Closing the Sale

What is Closing? – A close is anything that puts the customer in a

position involving some kind of commitment from them. Consensus among writers of traditional selling is:

  • Closing techniques are strongly related to success.
  • You should use many types of closes.
  • You should close frequently during the call. A series of studies by Rackham conclude that traditional closing techniques have no place in large sales transactions and can be both ineffective and dangerous.

Conclusions about Closing Techniques

  • By forcing the customer into a decision by using closing techniques, it speeds the sales transaction.

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  • Advances – are those times, either in a call or after it, which moves the sale forward toward a decision. Typical Advances might include: o A clearance that will get you in front of a higher level of decision maker. o An agreement on need, with a promise for the needed information to prepare preliminary loan requests to prospective lenders. o A scheduled meeting to discuss lender proposals. All of these represent an agreement with the customer that moves the sale forward toward the ultimate decision. In larger sales the most common objective of closing would normally be to obtain an Advance. Successful closing in the major sales starts by knowing what Advance you can realistically obtain from the call.
  • Continuations – where the sale will continue but where no specific action has been agreed upon by the customer to move it forward. These calls don’t result in an agreed action, yet neither do they involve a “No” from the customer. For example: o “Thank you for coming. Why don’t you visit us again the next time you’re in the area.” o “We liked what we saw and we’ll be in touch if we need to take things further.” In none of these cases has the buyer agreed to a specific action, so there’s no concrete sign that the sale has progressed. Continuations are considered failures because these positive noises at the end of a call are a polite way to get rid of an unwanted seller. Whether a call has been successfully closed should be determined by customer’s actions, not by their words.
  • No-sales – where the customer actively refuses a commitment.

The Importance of Having a Clear Understanding of These Four

Sales Outcomes

  • Our studies of top salespeople consistently showed that they used their understanding of these different outcomes to help them close calls more effectively by turning Continuations into Advances.
  • What’s more, by understanding what kind of Advance would be required to make a call successful, top salespeople set the kind of realistic closing objectives that moved the sales forward.

Page 5 of 12

Setting Call Objectives – in your planning, always include objectives

that result inspecific action from the customer. Know the difference

between Continuations and Advances and become dissatisfied with setting call objectives that result only in a Continuation.

Obtaining Commitment: Four Successful Actions – we found

that there are four clear actions that successful people tend to use to help them obtain commitment from their customers:

1. Giving attention to Investigating and Demonstrating Capability – Successful salespeople give their primary attention to the Investigating and Demonstrating Capability stages. If you can convince buyers that they need what you are offering, then they will often close the sale for you. 2. Checking that key concerns are covered. The most effective salespeople take the initiative and ask the buyer whether there were any further points or concerns that needed to be addressed. 3. Summarize the Benefits. Successful salespeople summarize key points of the discussion, especially Benefits, before moving to the commitment. 4. Proposing a commitment. At the point of commitment, successful salespeople “don’t ask for the order” – they tell. The most natural, and most effective, way to bring a call to a successful conclusion is to suggest an appropriate next step to the customer. Propose the highest realistic commitment that the customer is able to give. Successful sellers never push the customer beyond achievable limits. Your objective is not to close the sale but to open a relationship.

Page 7 of 12

Problem Questions

  • These questions probe for problems, difficulties or dissatisfactions. Each invites the customer to state Implied Needs.
  • However, they are not positively related to sales success in larger sales.
  • Problem Questions are necessary. If you can’t solve a problem for your customer, then there’s no basis for a sale.
  • By asking Problem Questions, they uncover the Customer’s Implied Needs.

Implication Questions

  • Are questions about the effects, consequences or implications of the customer’s problems? For example, “How does a shorter amortization affect your cash flow from the property?”
  • Are strongly linked to success in larger sales.
  • The central purpose of Implication Questions is to take a problem that a buyer perceives to be small and build it up into a problem large enough to justify action.
  • They are “sad” questions because they identify the problem.

Need-Payoff Questions

  • They ask about the value or usefulness of solving a problem. For example, “Is it important to reduce your monthly mortgage payment?” “Why would you find this solution helpful?”
  • They focus the customer’s attention on the solution rather than the problem creating a positive problem-solving atmosphere.
  • They get the customer telling you the benefits. For example, “Why would a 10 year fixed rate loan be a benefit to you?” “Because I have the peace of mind of knowing that my rate is fixed for a long period of time.”
  • They are “happy” questions because they identify the solution.

The SPIN Model – Asking questions that are important to the

customer is what makes the SPIN model a success.

  • It’s questioning sequence taps directly into the psychology of the

buying process.

  • Buyer’s needs move through a clear progression from Implied to

Explicit.

Page 8 of 12

  • The SPIN questions provide a road map for the seller, guiding the

call through the steps of need development until Explicit Needs

have been reached.

  • The more Explicit Needs you can obtain from buyers, the more

likely the call is to succeed.

How to Use SPIN Questions

  • To ask SPIN questions effectively, begin by recognizing that your role in a sales call is that of problem solver.
  • How To Plan Problem Questions o Before going into a sales call, write down at least three potential problems which the buyer may have and which your products or services may solve. o Then write down some examples of actual Problem Questions that you could ask to uncover each of the potential problems you’ve identified.
  • How To Plan Implication Questions o The Problem Questions are identified, then ask yourself what related difficulties this problem might lead to, and write these down. o Think of these as the implications of the problem. o For each difficulty, write down the question it suggests.
  • Using Need-Payoff Questions – unlike Implication Questions, Need-payoff Questions have wide generality. Some generic Need- payoff Questions are: o Why is that important? o How would that help? o Would it be useful if...? o Is there any other way this could help you? 5. Giving Benefits in Major Sales

The Differences Between Features, Advantages & Benefits

  • Features – facts or information about your products or services. They do little to help you sell.

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Preventing Objections from Your Customers

  • Objections early in the call. Most objections are to solutions that don’t fit needs. If you’re getting a lot of objections early in the call, it probably means that instead of asking questions, you’ve been prematurely offering solutions. The cure is simple: Don’t talk about solutions until you’ve asked enough questions to develop strong needs.
  • Objections about value. If most objections you receive raise doubts about the value of what you offer, you are probably not developing needs strongly enough. The solution lies in better needs development, not in objection handling. Cut down on the use of Features and instead concentrate on asking Problem, Implication and Need-payoff Questions. 7. Preliminaries: Opening the Call

First Impressions – over the years I’ve come to doubt the importance

of first impressions during the Preliminary stage of the call.

Relating to the buyer’s personal interests – the last thing a busy

prospect wants is to tell the tenth seller of the day all about his last game of golf.

A Framework for Opening the Call - there isn’t one best opening

technique but there is a framework that successful people use.

  • Focusing on Your Objective – What’s the purpose of your opening? To get the customer’s consent to move on to the next phase – the Investigating stage. You want them to agree that it’s OK for you to ask them some questions. In order to this you must establish:

o Who you are

o Why you’re there (but not by giving product details)

o Your right to ask questions – you want to establish your role

as the seeker of information and the buyer’s role as the

giver.

  • Making Your Preliminaries Effective – the most important test of whether you’re handling Preliminaries effectively is whether your customers are generally willing to move ahead and answer your questions. Be concerned about these three points.

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1. Get down to business quickly. Don’t dawdle. A common

mistake for inexperienced salespeople is to spend too long on pleasantries.

2. Don’t talk about solutions too soon. Offering solutions too

soon causes objections and greatly reduces the chances that the call will succeed.

3. Concentrate on questions. Never forget that the

Preliminaries are not the most important part of the call. Plan ahead by preparing a list of questions to be used to interview the buyer.

8. Turning Theory into Practice

The Four Golden Rules for Learning Skills – most people can greatly

improve their ability to learn skills if they stick by four simple rules. Rule 1: Practice Only One Behavior at a Time – one principle for successfully learning a skill is to work on one behavior at a time. Don’t move on to the next until you’re confident you’ve got the first behavior right. Rule 2: Try the New Behavior at Least Three Times – you have to try any new behavior several times before it becomes practiced enough to be both comfortable and effective. Rule 3: Quantity Before Quality – When you’re practicing, concentrate on quantity: use a lot of the new behavior. Don’t worry about quality issues, such as whether you’re using it smoothly or whether there might be a better way to phrase it. Use the new behavior often enough and the quality will look after itself. Rule 4: Practice in Safe Situations – Always try out new behaviors in safe situations until they feel comfortable. Don’t use important sales to practice new skills.

A Strategy for Learning the SPIN Behaviors

  • Focus on the Investigating Stage – practice your questioning skills and the other stages of the call will generally look after themselves. Use the SPIN questions to get your customers to feel a genuine need for your product.
  • Develop Questions in the SPIN Sequence –