ISBN: 0-07-051113-6

My rating: 84/100

See Book Notes for other books I have read. If you like my notes, go buy it!

Tagline: The best validated sales method available today. Developed from research studies of 35,000 sales calls. Used by the top sales forces across the world.

Most of the sales books out there deal with higher quantity, smaller sales, and the research Rackham did shows that larger sales require a fundamentally different approach. This book takes a look at larger deals and the strategies that are necessary to make them successful.

Preface

Many of the things that help you in smaller sales will hurt your success as the sales grows larger.

Chapter 1 Sales Behavior and Sales Success

A good product pitch can have a temporary effect on a customer, but a few days later it’s largely gone.

The building of perceived value is probably the single most important selling skill in larger sales.

Almost every sales call you can think of, from the simplest to the most sophisticated, goes through four distinct stages.

1. Preliminaries. These are the warming up events that occur before the serious selling begins. Preliminaries have less influence on success than we’d first thought.
2. Investigating. Asking questions. Investigating is the most important of all selling skills, and it’s particularly crucial in larger sales.
3. Demonstrating Capability. Demonstrate to customers that you’ve something worthwhile to offer.
4. 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 Investigating Stage

There were a lot more questions in successful calls.

The more you ask questions, the more successful the interaction is likely to be. And some types of questions are more powerful than others.

There is no measurable relationship between the use of open questions and success.

It was clear that successful people didn’t just ask random questions. There was a distinct pattern in the successful call.

We found that questions in the successful call tend to fall into a sequence we call SPIN.

1. Situation Questions. Ask data-gatherting questions about facts and background. Although Situation Questions have an important fact-finding role, successful people don’t overuse them because too many can bore or irritate the buyer.
2. Problem Questions. They ask, for example, “Is this operation difficult to perform?” or “Are you worried about the quality you get from your old machine?” Explore problems, difficulties, and dissatisfactions in areas where the seller’s product can help. Inexperienced people generally don’t ask enough Problem Questions.
3. Implication Questions. Typical examples would be, “How will this problem affect your future profitability?” or “What effect does this reject rate have on customer satisfaction?” Implication Questions take a customer problem and explore its effects or consequences.
4. Need-Payoff Questions. Typical examples would be, “Would it be useful to speed this operation by 10 percent?” or “If we could improve the quality of this operation, how would that help you?”

Chapter 2 Obtaining Commitment: Closing the Sale

I skipped a bunch here where Neil proves that Closing the Sale is not the most important step. Read the book if you’re interested.

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. Take much more time over the Investigating part of the call.
2. Checking that key concerns are covered.
3. Summarizing the benefits.
4. Proposing a commitment. But from our studies, “asking” for the order is not what successful sellers do. 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.

There are two characteristics of the commitments proposed by successful salespeople:

1. The commitment advances the sale. As a result of the commitment, the sale will move forward in some way.
2. The commitment proposed is the highest realistic commitment that the customer is able to give. Successful sellers never push the customer beyond achievable limits.

Chapter 3 Customer Needs in the Major Sale

Broadly speaking, we can say that as the sale becomes larger:

• Needs take longer to develop.
• Needs are likely to involve elements, influences, and inputs from several people, not just the wishes of a single individual.
• Needs are more likely to be expressed on a rational basis, and even if the customer’s underlying motivation is emotional or irrational, the need will usually require a rational justification.
• A purchasing decision that doesn’t adequately meet needs is likely to have more serious consequences for the decision maker.

In our research, we defined need as: Any statement made by the buyer which expresses a want or concern that can be satisfied by the seller.

We can say that needs normally:

• Start with minor imperfections.
• Evolve into clear problems, difficulties, or dissatisfactions.
• Finally become wants, desires, or intentions to act.

In small sales, as we’ve seen, these stages can be almost instantaneous. In larger sales the process may take months or even year.

Implied Needs vs. Explicit Needs

Implied Needs. Statements by the customer of problems, difficulties, and dissatisfactions. Typical examples would be “Our present system can’t cope with the throughput,” “I’m unhappy about wastage rates,” or “We’re not satisfied with the speed of our existing process.”

Explicit Needs. Specific customer statements of wants or desires. Typical examples would include “We need a faster system,” “What we’re looking for is a more reliable machine,” or “I’d like to have a backup capability.”

In major sales, you must develop the need further so that it becomes larger, more serious, and more acute in order to justify the additional cost of your solution.

In larger sales, Implied Needs don’t predict success, but Explicit Needs do.

Successful questioning in the larger sale depends, more than anything else, on how Implied Needs are developed – how they are converted by questions into Explicit Needs.

The purpose of questions in the larger sale is to uncover Implied Needs and to develop them into Explicit Needs.

Chapter 4 The SPIN Strategy

Situation Questions

What’s your position?

How long have you been here?

What equipment are you using at present?

Is it purchased or leased?

Situation Questions are not positively related to success. In calls that succeed, sellers ask fewer Sitaution Questions than in calls that fail.

Problem Questions

Are you satisfied with your present equipment?

What are the disadvantages of the way you’re handling this now?

Isn’t it difficult to process peak loads with your present system?

Does this old machine give you reliability problems?

Problem Questions are more strongly linked to sales success than Situation Question are.

In larger sales, however, Problem Questions are not strongly linked to sales success. There no evidence that by increasin your Problem Questions you can increase your sales effectiveness.

The ratio of Situation to Problem Questions asked by salespeople is a function of their experience. Experienced people ask a higher proportion of Problem questions.

Problem Questions provide the raw material on which the rest of the sale will be built.

Implication Questions

What effect does that have on output?

Will it slow down your proposed expansion?

Could that lead to increased costs?

Implication Questions are about the effects, consequences, or implications of the customer’s problems.

Research shows Implication Questions:

• Are strongly linked to success in larger sales.
• Build up the customer’s perception of value.
• Are harder to ask than Situation or Problem Questions.

Our research found that Implication Questions are especially powerful in selling to decision makers.

Implications are the language of decision makers, and if you can talk their language, you’ll influence them better.

What’s the difference between people who sell used cars and people who sell high tech? Answer: People selling used cars know they are lying!

Need-Payoff Questions

Turn to a second type of question to build up the value or usefulness of the solution.

Is it important to you to solve this problem?

Why would you find this solution so useful?

Is there any other way this could help you?

What’s the psychology of Need-Payoff Questions? They achieve two things:

• They focus the customer’s attention on the solution rather than on the problem. this helps to create a positive problem-solving atmosphere where attention is given to solutions and actions, not just problems and difficulties.
• They get the customer telling you the benefits. For example, a Need-payoff Question like “How do you think a faster machine would help you?” might get a reply like “It would certainly take away the production bottleneck and it would also make better use of skilled operator time.”

Our research found that calls with a high number of Need-payoff Questions were rated by the customers as:

• Positive
• Constructive
• Helpful

How would that help?

What benefits do you see?

Why is it important to solve this problem?

If you can get the customer to tell you the ways in which your solution will help, then you don’t invite objections.

Need-Payoff Questions rehearse the customer for internal selling.

The buyer is explaining the benefits to the seller, not vice versa. If you can get buyers to explain to you the value of your solution, it’s good practice for when they come to give the same explanation to other people in the account.

In summary, Need-payoff Questions are important because they focus attention on solutions, not problems. And they make customers tell you the benefits. Need-payoff Questions are particularly powerful selling tools in the larger sale because they also increase the acceptability of your solution. Equally important, success in large sales depends on internal selling by customers on your behalf, and Need-payoff Questions are one of the best ways to rehearse the customer in presenting your solutions convincingly to others.

Implication Questions are always sad. Need-payoff Questions are always happy.

In summary, our research on questioning skills shows that successful salespeople use the following sequence:

1. Initially they ask Situation Questions to establish background facts. But they don’t ask too many, because Situation Questions can bore or irritate the buyer.
2. Next, they quickly move to Problem Questions to explore problems, difficulties, and dissatisfactions. By asking Problem Questions, they uncover the customer’s Implied Needs.
3. In smaller sales it could be appropriate to offer solutions at this point, but in successful larger sales the seller holds back and asks Implication Questions to make the Implied Needs larger and more urgent.
4. Then, once the buyer agrees that the problem is serious enough to justify action, successful salespeople ask Need-payoff Questions to encourage the buyer to focus on solutions and to describe the benefits that the solution would bring.

Here is a simple technique to help you plan your call strategy and questions:

• Before the call, write down at least three potential problems which the buyer may have and which your products or services can solve.
• Then write down some examples of actual Problem Questions that you could ask to uncover each of the potential problems you’ve identified.

From our experience, the main reason why people ask so few [Implication Questions] is that they don’t plan them in advance. Here’s a simple way to help you plan Implication Questions.

How to Plan Implication Questions

1. Write down a potential problem the customer is likely to have.
2. Then ask yourself what related difficulties this problem might lead to, and write these down. Think of these difficulties as the implications of the problem – and be especially alert for those implications which reveal the problem to be more severe than it may originally have seemed. A seller planning a call has identified, “Existing machine is hard to use” as a potential problem and has then thought of four related difficulties, one of which is that there may be a shortage of qualified people to operate the machine.
3. For each difficulty, write down the questions it suggests. For instance, the seller has noted that the shortage of qualified people suggests Implication Questions about overtime costs and recruitment difficulties.

Avoid Need-payoff Questions early in the call.

Avoid Need-payoff Questions where you don’t have answers.

Here’s an examples of a simple exercise that helps you practice Need-payoff Questions:

1. Get a friend of colleague to help you. The person you choose needn’t know anything at all about selling. My son has been my “victim” for this exercise.
2. Choose a topic about a need that you believe the other person has. You might, for example, choose to talk about a new car, a vacation, a change of job, or – as in my son’s case – a video camera.
3. Ask Need-payoff Questions to get the other person talking about the benefits of the topic under discussion. In my case, for example, I asked my son questions like these:

• Why do you think it would be good to have a video camera?
• What would it let us do that we can’t do right now?
• Would anyone else in the family be pleased if we bought one?
• Do you think it would have any cost advantages compared with Super 8 film?

There are many generic Need payoff Questions, such as these:

• Why is that important?
• How would that help?
• Would it be useful if …?
• Is there any other way this could help you?

Chapter 5 Giving Benefits in Major Sales

Demonstrating capabilities.

The terms Features and Benefits are two ways that you can describe your products or services.

Features are facts about a product and are unpersuasive, whereas Benefits – which show how Features can help the customer – are a much more powerful way to describe your capabilities.

Benefits, in the way you’ve probably been taught to use them, are ineffective in larger sales and are likely to create a negative response from the customer.

Features are neutral. The don’t help the call, but they don’t harm it much either.

Users respond more positively to Features than do decision makers.

Neil give two definitions for Benefits, and the distinction between the two is important:

• Type A Benefit. [Also referred in the book as an “Advantage” benefit.] This type shows how a product or service can be used or can help the customer.
• Type B Benefit. [referred in the book simply as a “Benefit”.] This type shows how a product or service meets an Explicit Need expressed by the customer.

How Important Is the Difference? In our research test we found that the Type A [Advantage] Benefit is quite strongly related to success in smaller sales but is only slightly related to success in larger sales. (We’ll see why later in this chapter.) In contrast, the Type B [Benefit] benefit is very strongly related to success in all sizes of sales.

Do a good job of developing Explicit Needs and the Benefits almost look after themselves. If you can get your customers to say, “I want it,” it’s not difficult to make a Benefit by replying, “We can give it to you.”

When selling new products, the tendency is toward promoting the product, not on customer needs.

There’s a lesson here for anybody concerned with successful product launches. Instead of giving Features and Advantages when announcing new products to the sales force, they concentrate on explaining the problems the product solves and on thinking up the questions that will uncover and develop these problems.

My thoughts: How can I use this for The FlipStep?

Don’t demonstrate capabilities too early in the call.

Chapter 6 Preventing Objections

• Objection handling is a much less important skill than most training makes it out to be.
• Objections, contrary to common belief, are more often created by the seller than the customer.
• In the average sales team, there’s usually one salesperson who receives 10 times as many objections per selling hour as another person in the same team.
• Skilled people receive fewer objections because they have learned objection prevention, not objection handling.

Customers are most likely to raise concerns in calls where the seller gives lots of features.

see pg 123 for an example of #rootcauseanalysis

Advantages create objections – and this is one reason why they are poorly linked to success in the large sale.

It confirms that the best way to handle objections is through prevention. Treat the cause, not the symptom.

Notice that our training didn’t prevent objections completely.

The higher the percentage of objections in the customer’s behavior, the less likely that the call will succeed.

Preventing Objections from your Customers

Here are two sure signs that you’re getting unnecessary objections that can be prevented by better questioning:

1. Objections early in the call. Don’t talk about solutions until you’ve asked enough questions to develop strong needs.
2. Objections about value. “It’s too expensive.” Concentrate on asking Problem, Implication, and Need-payoff Questions.

Chapter 7 Preliminaries: Opening the Call

Most of the recent research suggests that initial appearances are far less important than these older writers have claimed.

Since the 1920s, salespeople have been taught that there are two successful ways to open a call:

• Relate to the buyer’s personal interests.
• Make an opening benefit statement.

Our evidence suggests that, while these two methods might be successful in smaller sales, there’s little to show that they help you when the sale is larger.

A Framework for Opening the Call

At its very simplest, what you’re trying to do is to get the customer’s consent to move on to the next phase – the Investigating stage. You want customers to agree that it’s legitimate for you to ask them some questions. In order to do this, you must establish:

• Who you are
• Why you’re there (but not giving product details)
• Your right to ask questions

Obviously there are many ways to open the call, but the common factor of most good openings is that they lead the customer to agree that you should ask questions. Early in the call you want to establish your role as the seeker of information and the buyer’s role as the giver.

Making Your Preliminaries Effective

1. Get down to business quickly.
2. Don’t talk about solutions too soon.
3. Concentrate on [Implication] questions.

Chapter 8 Turning Theory into Practice

The four golden rules for learning skills.

Rule 1: Practice only one behavior at a time.

Start by picking just one behavior to practice. Don’t more 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.

Never judge whether a new behavior is effective until you’ve tried it at least three times.

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. Those things get in the way of effective skills learning. 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.

Here’s a game plan:

1. First decide whether you’re asking enough questions of any type. If you’ve built up selling patterns that involve telling – in other words if you’re giving a lot of Features and Advantages – then start by just asking more questions. Most of the questions you ask will be Situation Questions, but this is fine. Just keep asking questions for a few weeks until asking feels as comfortable as telling.
2. Next plan and ask Problem Questions. Aim, in the average call, to ask a customer about problems, difficulties, and dissatisfactions at least half a dozen times. Concentrate on building up the quantity of your Problem Questions; don’t worry about whether or not each question is a “good” one.
3. If you feel you’re doing an effective job of uncovering customer problems, it’s time to move on to Implication Questions. These are more difficult to ask, and you may need a couple months’ practice before you become entirely comfortable with Implication Questions. Plan them carefully. Turn each of my arguments into a question – “What effect is the problem having on your efficiency?” and “How much is it increasing your costs?” and “What impact does it have on the motivation of your better people?”
4. Finally, when you’re comfortable with Situation, Problem, and Implication Questions, turn your attention to Need-payoff Questions. Instead of giving Benefits to the customer, concentrate on asking questions that get the customer to tell you the Benefits. Ask questions like these: “How would that help you?” “What do you see as the pluses of this approach?” “Is there any other way our product could be useful?”

Over the years I’ve had the opportunity to travel with dozens of the world’s top salespeople- and as a researcher, I’ve looked for any differences that distinguish them from those who haven’t made it to the top. Two differences stand out. The first is that the top people I’ve traveled with put great emphasis on reviewing each call – dissecting what they’ve learned and thinking about possible improvement.

The second difference is that most of the really successful salespeople I’ve studied recognize that their success depends on getting details right.

It’s worth asking yourself whether you are giving enough time to reviewing the details of what happened in the call. Never be content with global conclusions like “it went quite well.” Ask yourself about the details. Did some parts of the call go better than others? Why? Which specific questions you asked had the most influence on the customer? Which needs did the customer feel strongly? Which needs changed during the discussion? Why? Which of the behaviors you used had the most impact? Unless you analyze your selling on this level of detail, you’ll miss important opportunities for learning and improving your selling skills.

My notes: Create a sales call review form, include these questions.

In 1810 William Blake wrote:

He who would do good to another must do it in Minute Particulars. General Good is the plea of the scoundrel, hypocrite, and flatterer; For Art and Science cannot exist but in minutely organized particulars.