SPIN Selling
Stop Fumbling & Start Making Sales
SPIN Selling, a great model, was the brainchild of Neil Rackham who also authored a book of the same name in 1988.
SPIN Selling is based on extensive research by Rackham and his company, Huthwaite. They examined large, complicated sales scenarios. After analysing more than 35,000 sales calls they were able to put to rest a variety of traditional myths about closing sales.The original survey showed that in successful sales calls it's the buyer who does most of the talking, which means that the salespeople are asking questions.
Asking questions means that the salesperson is building Rapport with the buyer, building sales rapport with the buyer allows the buyer to feel more comfortable talking.
SPIN Selling proposes there are four types of questions, thus SPIN stands for :
- Situation ( questions )
- Problem ( questions )
- Implication ( questions )
- Need-payoff ( questions )
A quick review -- First, here are the four basic phases of an ordinary sales meeting -- a simple sales agenda:
- Preliminaries -- Warming up events at the start of the call
How are you? Nice Weather? Is that a picture of your daughter? Did you catch that fish? Keep these questions and this phase short. One or two, and don't let them go on.- Investigation -- Finding out facts, information, and needs.
How much do you see your company growing next year? How do you keep track of how much work your managers are accomplishing? What is your current work order s ystem? Lots of time is spent in this phase. It is here were you try different SPIN® strategies (more on that below.)- Demonstrating Capability -- Showing you can solve their problem
resist going to this phase until the prospect has stated an Explicit need that your demo solves such as, "I'm starting to think that a centralized CRM tracking system could help me keep track of my managers and vendors."- Obtaining Commitment -- Getting an agreement to proceed to a further stage of the sale.
First check that you've covered all of the prospect's key concerns. Then summarize your benefits. Finally, propose the next appropriate level of commitment.
During part 2 above, is where you spin. You ask four types of questions during this phase: Situation, Problem, Implication, and Needs (the acronym of SPIN.) You ask the questions in that order. Most of your questions will be implication questions. Here is a summary of the questions.
Situation Questions
Facts about the background of the customer and what the customer is doing. Do your research before the meeting to find answers to these sorts of questions. Situation questions bore the prospect. You may have to ask a few of them to find out stuff -- place them well to lead you down the SPIN but use them sparingly.
Example situation questions
Tell me about your company?
How many customers do you have?
What type of software do you run here?
Which offices have DSL?
Problem Questions
Questions about the customer's difficulties or dissatisfactions. Problem questions give good results in small sales, however, they don't help us much here. H ere are some examples also use them sparingly.
Example problem questions
Is it frustrating to lose sales to CitiView Painting Supply?
How easy is it to use Yardi?
How do you keep track of all your customer's phone calls between two offices?
When someone goes on vacation, what happens to the properties that he or she manages
Implication Questions
Questions about the consequences or effects of a customer's problems. This is the crucial line of questioning. Practice this skill often. Successful calls contain many of these "implication" questions. The goal of using these questions is to persuade the customer to EXPLICITLY state a need that you can solve. Like Socrates's, you ask many of these questions to get someone to realize that they have a problem. Every business can be improved one way or another. Ideally, you ask these questions to get a customer to admit a costly problem. The ultimate goal is to increase the customer's perception of the value of our solutions. Implication questions are so important that it's often helpful to break down the problems of a specific customer,
More example implication questions
What happens when your managers neglect the property owners needs?
Do you lose customers when people complain?
Do you think it hurts your sales efforts if you're getting bad referrals from your customers?
How much money do you lose when you lose a customer?
How much does it cost you to get a new customer?
What's the lifetime value of your customers and how much will you make when you double it?
Would you make when each of your managers were handling two more properties?
How much does it cost you when three managers are only working at 6o% of your other managers?
How long does it take you to find out who did what every day?
How many more properties can you manage if all your administrative assistants handled 30% of your incoming issues?
Did you have to hire someone to set up JenArk?
How long do you spend going through old email to find old communications?
How do you tell when you're charging a HOA enough?
Will you customers start to insist upon better service now that others are using it?
Will property owners seek and demand better reports?
Do customers get pissed at the service?
Do you get a lot of legal issues in property management?
How much time is wasted with dissatisfied customers?
Questions about the value, usefulness, or utility that the customer perceives in a solution. Like Implication Questions, Need-payoff Questions are strongly linked to success in our type of sale. (Only ask these questions AFTER the customer has confess to a need or else it TOTALLY fails because the customer can deny the existence of the need which you claim to solve.) You could use the questions below or even simply say the part in italics.
Example Need Payoff Questions
How would it help if your offices were connected to a centralized database?
Why is it important to get all your employees accounting for their work?
Would it be useful if your homeowners made most of their requests without bothering anyone?
Is there any other way that this could help you?
Do you see the value in knowing which vendors do the most work?
After investigation and getting the customer to admit to some explicit need -- not something vague -- then explain how our service solves the need. Demonstrating our Capacity in that way, after the need is expressed. for the most success. Finally attempt to address all of the prospective client's concerns, and ask them if they have any more concerns. Summarize the benefits of your service. Propose the next appropriate level of commitment.
They also found that there is little difference in the success of calls based on the number of times a sales person asked open as opposed to closed questions. That doesn't matter. What matters more is: To what end is the question being asked.
The research uncovered the following facts :
The first students trained in the "SPIN" model showed an average of 17% improvement in sales results.
This is not surprising, I well remember the quote, (but not the author), that says:
People do not buy from salespeople because they understand their products but because they felt the salesperson understood their problems.
The more Situation Questions asked in a sales call the less likely it was to succeed.
Most salespeople asked more Situation Questions.
The more senior the buyer, the less they like answering factual questions.
( I have some issue with this because I feel that the buyers reaction may also depend on the level of sales rapport developed between the seller and the buyer ).
This implies that successful sellers ask fewer Situation Questions because they do their homework. Good selling = Good planning.
To quote "SPIN Selling" "…effective planning takes you more than half way to effective execution"
More experienced salespeople tended to ask more problem questions and to ask them sooner.
Top salespeople tended to introduce solutions, products or services very late in the discussion.
They held back and discussed the effects of the problem before talking about solutions.
Problem Questions require planning. SPIN Selling suggests working backwards from the problems your products solves for a buyer to generate these questions.
It is better to uncover several problems before asking implication questions. It can be dangerous to focus on one problem as it invites the buyer to raise another area where you solution does not fare so well. (Don't put all your eggs in the one basket)
Implication Questions are the most powerful sales questions and the skill in using them doesn't automatically improve with experience.
There are no perfect solutions in a complex sale.
There is no evidence to establish a link between open questions and sales success.
People buy when the pain of the problem is greater than the cost of the solution.
Opening benefit statements work in smaller sales but much less so than in bigger sales. SPIN Selling strategy would contend that the purpose of the opening is to gain the buyers agreement to ask questions (this is establishing sales rapport) , to establish a buyer-centered purpose (most important) and communicate who you are and why you are there.
Larger, complex sales are different. Rackham believes that the key is to obtain the right commitment. He defines success versus failure by evaluating the level of commitment. An action that moves you closer to a sale, is termed an Advance and constitutes a successful outcome. A buyer's request for a proposal is not an Advance unless the buyer also agrees to take some action. The outcome of a call that does not reach agreement on action that moves the sale forward is termed a Continuation and considered unsuccessful.
Top sellers reach their goals by consistently planning and conducting calls that move the sale forward in steps. "SPIN Selling" rationale suggests that you start by brainstorming to identify the widest variety of Advances that would move you towards a sale. Really skilled sellers then select those ingenious small actions that the buyer is likely to agree to. They also generate alternative actions to propose as needed for the actual sales visit.
"SPIN Selling" suggests you develop a questioning mindset stating it's "more important to understand than to persuade". This is similar to the 5th habit from "The Seven Habits of Highly Successful People" (by Steven Covey) which says "Seek first to understand then to be understood".
There are safe and dangerous areas ( and times ) to use various question types. ( Once again, the effect of bad timing can be dramatically reduced if you have good sales rapport with your prospect.
It states in "SPIN Selling" that "Asking good questions doesn't come easily for most people"
Furthermore Rackham and Huthwaite contend there are four stages to a sale as also mentioned above :
Opening
Investigating
Demonstrating Capability
Obtaining Commitment
And their research shows that the Investigating stage is the most crucial in large, complex sales.
This technique proposes in relation to Demonstrating Capability that you need to sell Benefits rather than Features and Advantages.
In the SPIN model a Benefit shows how a product or service meets an Explicit Need expressed by the buyer. Moreover, the author contends that If you try to sell using Advantages it leads to objections which slow down the sales process.
In my opinion the concepts of "SPIN Selling" are sound and represent a logical and teachable way to move towards a large and complex sale.
The whole focus of this technique is on logical objective planning, investigation of the prospects needs and selling the Benefits of your offering ( Benefits which are based on the prospects needs ).
The problem I have with the model is that not all sales are based on logic and objectivity.
At the opening of any sales call you need to develop Rapport with the buyer. Developing Rapport is not a conscious thing. The best sales rapport, is built at an unconscious level.
Likewise, SPIN Selling is based on asking questions and there is a very large difference in the effectiveness of a question depending on how it is phrased.
I believe the results generated by the rational, objective approach of the SPIN Selling model could be enhanced by the application of various subconscious selling techniques.
I hope you have enjoyed this summary of the SPIN Selling Model.
Ref:
1. Eric Wolfram: How To Sell -- SPIN Selling®
2. http://www.sellingandpersuasiontechniques.com
3. Experience from Training on SPIN & Practicing the Art from Last 3-4 Years
This is great initiative to train employee Skills of a salesman
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