SPIN SELLING Copyright Stratecent Consulting 2006 Learning Objectives

Learning Objectives q Review q Understanding Large Account Selling q The SPIN Model q Understanding SPIN q Conclusion SPIN SELLING

SPIN Model q q Set of ideas how to sell successfully in large sales, based on the most extensive research ever carried out. More than 90% of Fortune 500 Companies use it to train their sales force. Neil Rackham is the creator of this model, and his book is called ‘SPIN Selling’. Most of the large account selling is done using the SPIN Method. SPIN SELLING

Origin of the SPIN Model q q q Based on massive research conducted on over 35000 sales calls. The research set out to answer a question which was troubling most sales heads. The question was: ‘Are there special skills required to sell large accounts? ’ Or ‘Are selling skills the same in small and large sales? ’ Initial companies were Xerox and IBM. Based on the findings, a new model was developed, called SPIN SELLING

Basic Findings q q In successful sales calls, who does most of the talking? Ø Buyer? Ø Seller? In successful sales, the buyer does most of the talking. You get the buyer to talk by asking questions. It wasn’t any questions, but questions asked in a sequence. SPIN SELLING

Situation Questions q q q Questions of this type ask about facts. Exploring the buyers present situation. You can’t sell without them. Who benefits most from these questions? – Buyer or Seller? q q q The more SQ in a call, the less likelihood of success. Most people ask a lot more SQ than they should. Ask SQs economically. SPIN SELLING

Situation Questions DEFINITION: Finding out facts about the buyer’s existing situation. EXAMPLES: How many people do you employ at this location? Could you tell me how the system is configured? IMPACT: Least powerful of the SPIN questions. Negative relationship to success. Most people ask too many. ADVICE: Eliminate unnecessary Situation Questions by doing your homework in advance. SPIN SELLING

Problem Questions q q q The other 3 types of questions are extremely powerful, and are the foundation of the SPIN Method. These are about the clients present state, dissatisfaction, difficulties and problems. E. g. Ø Ø q How satisfied are you with the present system? What prevents you from achieving that objective? Etc… Most experienced sales people ask more Problem Questions than inexperienced ones. SPIN SELLING

Problem Questions q q Why is the level of PQ higher in successful calls? Because products and services, from cosmetics to consumer, all sell because they solve problems for buyers. A product or a service is a solution to a buyers problems. Even if products at first sight don’t look to solve problems, they always do, if you look closely. SPIN SELLING

DEFINITION: EXAMPLES: Problem Questions IMPACT: ADVICE: SPIN SELLING Finding about problems, difficulties and dissatisfaction. What makes this operation difficult? More powerful than SQs. Most people ask more PQs as they become more experienced. Think of your products and services in terms of problems they solve, not details or characteristics.

Implication Questions q q These are the most powerful of all the questions. SPIN Research pointed out that top sales people introduced products, services or solutions very late in the discussion. q This was true across all industries. q The question is: Why do you think this is the case? q q Inexperienced people do not link problem and solution. Questions about effects or consequences of a Buyers problem is called IQ. SPIN SELLING

Implication Questions q They are powerful because they help the buyer see that the problem is big enough to justify the cost. q E. g. Ø Could that lead to an increase in your cost? q IQs are powerful because they induce and build pain. q They build the consequences of a buyers problem and make him more anxious. q They build pain before any gain, because… SPIN SELLING

DEFINITION: Asking about the consequences or effects. EXAMPLES: Could this lead to more cost? IMPACT: Most powerful of all. ADVICE: Hardest to ask. Plan before you ask. Implication Questions SPIN SELLING

Need Pay Off Questions q q q q This asks about Value or Usefulness about a solution. E. g. Ø What if we could help you save cost by 20%? They focus on solutions. Mirror images of IQ. They get the buyer to list the benefits of your solution. E. g. Ø Our faster system will help you reduce present production bottle-necks. How would a faster system help you? SPIN SELLING

Need Pay Off Questions DEFINITION: Value or usefulness of a solution. EXAMPLES: How would a quieter printer help? IMPACT: Positive impact creates the right condition for selling. ADVICE: Use these to get the buyers to tell you the benefits. SPIN SELLING

Learning Objectives q Stages q Buyer needs q SPIN q Conclusion SPIN SELLING

Good News q Has proved a very versatile sales tool. q Works across cultures. q Applies across industries. q Is equally applicable to selling services or products. SPIN SELLING

Bad News q It’s harder than it seems. q Good questioning is a complex skill. q It has a high percentage of drop outs. q It’s like exercising. You know you get fit, but the pain makes you lazy. q Some lessons that we can learn… SPIN SELLING

Lessons 1. 2. To sell well, you must plan well. SPIN model requires you to invest in planning. Use SPIN as a planning tool, rather than as a magic pill. 3. Building a problem solving orientation. 4. Think of products in terms of problems they solve. 5. Having the right mindset. SPIN SELLING

Putting SPIN to Work Situation Problem Implication Implied Needs Need Pay Off Benefits SPIN SELLING Explicit Needs

Implied Need q A clear statement of a buyers problem, dissatisfaction or difficulty with the current situation SPIN SELLING

Explicit Need q A clear statement of a buyer’s want, desire or intention to act SPIN SELLING

Needs & Sales Success q q A need is any statement a buyer makes that expresses concern or a want There are 2 types: Ø Implied Ø Explicit According to SPIN research, successful sellers uncovered exactly the same number of implied needs as unsuccessful sellers But, successful sellers uncovered twice as many explicit needs as unsuccessful sellers SPIN SELLING

Needs & Sales Success q q q In large sales, effectively developing Explicit Needs is the key to success Uncovering, understanding and developing Buyer’s Implied Needs are the raw materials which can be converted to Explicit Needs later on E. g. Ø I am unhappy about service delays Ø Breakdowns are a problem Ø I want faster response time Ø I need 99% reliability SPIN SELLING

EXPLORING SPIN SELLING Copyright © Stratecent Consulting 2006

Exploring SPIN SITUATION QUESTIONS: q One way of using Situation Questions effectively is identifying high risk and low risk areas High Risk: q Late in selling cycle q Irrelevant business area q Excessive use Low Risk: q New customer q Early in selling cycle SQ should help the buyer see you as a Problem Solver rather than as a Prosecutor SPIN SELLING

Exploring SPIN PROBLEM QUESTIONS q People buy only if they have needs q Needs start with a problem or a dissatisfaction q PQs are asked to reveal buyers Ø Implied Needs Ø Clarify Difficulties Ø Gain Understanding of Buyer Problems Ø Identify Pain q E. g. Ø Where, when, how often, what happens if, etc. SPIN SELLING

Exploring SPIN High Risk: q Sensitive Area q Your own product or service q Low Risk: q Early in the selling cycle q In significant areas q Where we can offer a solution A good way to start planning Problem Questions is by thinking about the problems that our product or service can solve for the buyer SPIN SELLING

Exploring SPIN IMPLICATION QUESTIONS q Their purpose is to develop clarity and strength of Buyer’s problem by: Ø Focusing on consequences of the problem Ø Extending and expanding the effects Ø Linking a problem to other problems Low Risk: q Significant Problems q Unclear Problems SPIN SELLING High Risk: q Too early q Implications you can’t solve

Exploring SPIN IMPLICATION QUESTIONS q The purpose of implication questions is to develop Implied needs so that they become Explicit. q Ask Implication Questions as much to UNDERSTAND as to PERSUADE. SPIN SELLING

Exploring SPIN NEED PAY OFF QUESTIONS q The purpose is to develop buyer’s desire by: Ø Focusing on the Pay Off of the Solution Ø Probing for Explicit Needs Ø Getting the Buyer to tell you the benefits Low Risk: q When the buyer has to justify the decision q When the solution has pay offs elsewhere SPIN SELLING High Risk: q Too early in the call q When buyer need is subjective

Exploring SPIN NEED PAY OFF QUESTIONS q The ICE model Ø Identify Ø Clarify Ø Extend SPIN SELLING

ICE Model How useful would it be to have a faster system? The fastest System available Strength of product or service Is speed important to reduce turn around time Couldn’t a faster system also free up your operations to do other things Clarify the importance of Buyers Need Question to identify Extend the buyers whether the strength perception of this could help the buyer strength SPIN SELLING

Finally q “You never persuade clients of anything. Clients persuade themselves. You have to feel their problems just the way they feel them. You have to sit on their side and look at issues from their point of view. ” q It would be hard to find a better description of the SPIN model in action. SPIN SELLING