Book Digest: SPIN Selling

In SPIN Selling, Neil Rackham argues that the most important determinant of sales success in major sales is building the customer’s perception of value by using specific questioning techniques early in the call. In his view, this is more important than conventional skills like closing techniques or objection handling. He encourages salespeople to focus on developing explicit needs that are stated by the customer and tied to an urgent desire for action.

In Rackham’s view, the critical techniques are implication and need-payoff questions. Implication questions are designed to get a customer to agree that a given issue has impacts across the business. Need-payoff questions invite the customer to state how his business would gain by solving the problem.

Chapter 1: Sales Behavior and Sales Success

  • This book is about major sales, not small sales
  • In major sales, the key discussions happen when you are not present
  • In major sales, there will be an ongoing relationship, they can’t separate you from your product
  • The most important success factor is building perceived value, not features, objection handling, or closing techniques
  • Four stages of a sales call
    • Preliminaries
      • Least important
    • Investigating
      • Most important, but traditional open and closed questions don’t work
    • Demonstrating Capability
      • Medium importance. Traditional methods from small sales don’t work.
    • Obtaining Commitment
      • Not very important, though commonly regarded as critical
  • SPIN questions in the investigation phase
    • Situation. Background facts “How long have you done X?”
    • Problem. “Is X difficult for you?”
    • Implication. “How does X affect your future profitability?”
    • Need-Payoff. The most important. “If we could improve X, how would it help you?”

Chapter 2: Obtaining Commitment: Closing the Sale

  • Closing techniques are not as important as people think in large sales, though they do work in small sales
  • They can be counterproductive if they make the buyer angry
  • But a total absence of closing effort is also counterproductive
  • Data
    • Salespeople who rated closing as important were below sales targets for large sales (chemical company study)
    • Closing techniques do work in small sales and increase success rates (photo store study)
  • Good closers set appropriate objectives for each call – and specify them beforehand. Example: Getting an agreement to advance the sale to the next step, not merely to talk “sometime later.”
  • Four successful actions in obtaining commitment
    • Giving attention to investigating and demonstrating capability
    • Checking that key concerns are covered
    • Summarizing the benefits before asking for commitment
    • Proposing a commitment

Chapter 3: Customer Needs in the Major Sale

  • Implied vs. Explicit Needs
    • Implied needs are statements of dissatisfaction with the status quo: “Wastage rates are too high.”
    • Explicit needs are urgent and tied to action: “I want a better backup system.”
  • Merely uncovering implied needs doesn’t close large sales, you need to make use of them
  • Surfacing explicit needs does predict large sale success
  • Goal is to make implied needs explicit

Chapter 4: The SPIN Strategy

  • Situation Questions
    • Collect information about status quo: “What do you use now?”
    • Not positively correlated with success
  • Problem Questions
    • “Are you satisfied with what you use now?”
    • More of a link to success, but not strongly tied to success in large sales
  • Implication Questions
    • Show how the problem impacts the business: “Sounds like that issue is costing you money, right?”
    • Very important. Use these to increase the drive to take action.
  • Need-Payoff Questions
    • Ask about the value or payoff of solving a problem: “How would it benefit you to get X right?”
    • Most important. Strongly linked to success in large sales. They:
      • Reduce objections
      • Cause the customer to tell you the benefits and understand their magnitude
      • Let your internal advocate practice what he’ll say to sell the idea internally
    • Use late in the investigation stage and only when you have the solution
  • How to use SPIN Questions
    • You need to plan in advance
    • Pre-call, write down three problems you can solve for the customer
    • Write down the actual problem questions you’ll use
    • List difficulties related to each problem (implications)
    • List questions relating to each implication

Chapter 5: Giving Benefits in Major Sales

  • Using benefits in conventional way (ways you can help the customer) is not related to success
  • Benefits work best when tied to an explicit statement of need by the customer
  • Advantages (edge over competition) works best early in sales process but trail off in effectiveness as the sales process proceeds
  • Features (things your product does) are consistently not very effective

Chapter 6: Preventing Objections

  • Conventional wisdom is that objections reflect interest
  • This is wrong. Good salespeople prevent objections, they don’t focus on handling them.
  • Prevent objections by using SPIN questions to develop value and by leaving solutions until late in the call
  • Overuse of features leads to price concerns. Those cool features must cost a lot.
  • Advantages lead to objections to rebut the advantage
  • Objections about value are a sign that you haven’t developed needs strongly enough

Chapter 7: Preliminaries: Opening the Call

  • Least important stage of a sale
  • First impressions and pleasantries don’t matter much in a major sale
  • Opening with a benefit statement is a trap – product details come up too early and the investigation stage is compromised
  • Feel free to just get right to business – people are OK with this in the modern business climate

Chapter 8: Turning Theory Into Practice

  • Practice only one behavior at a time
  • Try the new behavior at least three times
  • Practice a lot – don’t worry about practice quality so much as practice quantity
  • Practice in safe situations