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Larger Sales v. Smaller Sales
Openers matter less
Investigating Needs matter less
Giving benefits is ineffective
Objection handling is misunderstood
Closing should be thought about differently

In Larger Sales
Longer, multi-call sales cycles. Single call pitches are ineffective.
You need to build the relationship to get to the next call
Ongoing relationships matter

Four Stages of a Sales Call
Preliminaries
Openings
Introductions
Investigating/Discovery
Demonstrating Product
Obtaining Commitment

1. Situation Questions. At the start of the call, successful people tend to ask data-gathering questions about facts and background. Typical Situation Questions would be “How long have you had your present equipment?” or “Could you tell me about your company’s growth plans?” 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. Once sufficient information has been established about the buyer’s situation, successful people tend to move to a second type of question. They ask, for example, “Is this operation difficult to perform?” or “Are you worried about the quality you get from your old machine?” Questions like these, which we call Problem Questions, 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. In smaller sales, sellers can be very successful if they just know how to ask good Situation and Problem Questions. In larger sales this is not enough; successful people need to ask a third type of question. This third type is more complex and sophisticated. It’s called an Implication Question, and 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. As we’ll see, by asking Implication Questions successful people help the customer understand a problem’s seriousness or urgency. Implication Questions are particularly important in large sales, and even very experienced salespeople rarely ask them well. We’ll be giving a lot of attention to Implication Questions in this book. 4. Need-payoff Questions. Finally, we found that very successful salespeople ask a fourth type of question during the Investigating stage. It’s called a Need-payoff Question, and 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?” Need-payoff Questions have several uses, as we’ll see in Chapter 4. For now, perhaps the most important one is that they get the customer to tell you the benefits that your solution could offer. Need-payoff Questions have a very strong relationship to sales success. It’s been common, in our studies, to find that

Rackham, Neil. SPIN Selling (p. 17). McGraw-Hill Education. Kindle Edition.

These four types of questions—Situation, Problem, Implication, and Need-payoff—form a powerful questioning sequence that successful people use during the all-important Investigating stage of the call. I must emphasize that it’s not a rigid sequence. Top people don’t ask all their Situation Questions before moving on to Problem Questions, for example. But it would generally be true that Situation Questions are mostly asked early in the call and that the other questions broadly follow in the S-P-I-N sequence.

Rackham, Neil. SPIN Selling (p. 18). McGraw-Hill Education. Kindle Edition.

The secret of strong closing in a major-account call is to question your objectives ruthlessly. Don’t be content with objectives like “to collect information” or “to build a good relationship.” Of course, these are important objectives—after all, every call affords opportunities to collect information and to improve relationships. The problem is that objectives of this kind just aren’t enough. They lead to Continuations, not to Advances. They may lead you to close for the wrong objective. In your call planning, always include objectives that result in specific action from the customer—objectives like “To get her to come to a demonstration,” “To get a meeting with his boss,” or “To get an introduction to the Planning Department.” In this way you’ll be planning like the top salespeople in our study. You’ll be looking for Advances, not for Continuations.

Rackham, Neil. SPIN Selling (pp. 47-48). McGraw-Hill Education. Kindle Edition.

Giving attention to Investigating and Demonstrating Capability.
Checking that key concerns are covered.
Summarizing the Benefits. And
Proposing a commitment.

Rackham, Neil. SPIN Selling (p. 50). McGraw-Hill Education. Kindle Edition.

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.

Then I might suggest that the most logical next step would be for you and your accountant to come and see one of these systems in operation.

closing is less effective as the size of the decision increases.

The starting point for obtaining a commitment is to know what level of commitment from the customer will be needed to make the call a success.

Rackham, Neil. SPIN Selling (p. 41). McGraw-Hill Education. Kindle Edition.

Advances Where an event takes place, either in the call or after it, that moves the sale forward toward a decision. Typical Advances might include:  A customer’s agreement to attend an off-site demonstration  A clearance that will get you in front of a higher level of decision maker  An agreement to run a trial or test of your product  Access to parts of the account that were previously inaccessible to you All of these represent an agreement with the customer that moves the sale forward toward the ultimate decision. Advances take many forms, but invariably they involve an action that moves the sale forward. In larger sales the most common objective of closing would normally be to obtain an Advance. Successful closing in the major sale starts by knowing what Advance you can realistically obtain from the call.

Rackham, Neil. SPIN Selling (p. 44). McGraw-Hill Education. Kindle Edition.

Huthwaite’s studies of success in the major sale show that effective salespeople use rather simple and straightforward ways of obtaining commitment. 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.

2. Checking that key concerns are covered.

3. Summarizing the Benefits. In a larger sale the call may have taken several hours and covered a wide range of topics. It’s unlikely that the customer has a clear picture of everything that has been discussed. Successful salespeople pull the threads together by summarizing key points of the discussion before moving to the commitment.

4. Proposing a commitment.

Rackham, Neil. SPIN Selling (p. 50). McGraw-Hill Education. Kindle Edition.

We found that sellers who were most effective in obtaining commitment from their customers would invariably take the initiative and ask the buyer whether, there were any further points or concerns that needed to be addressed.

How do you know which commitment to propose? Put simply, 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.

“I’ve never been a believer in closing,” he told me, “because my objective is not to close the sale but to open a relationship.”

Rackham, Neil. SPIN Selling (p. 52). McGraw-Hill Education. Kindle Edition.

Rackham, Neil. SPIN Selling (pp. 50-52). McGraw-Hill Education. Kindle Edition.

Rackham, Neil. SPIN Selling (p. 49). McGraw-Hill Education. Kindle Edition.

Rackham, Neil. SPIN Selling (p. 48). McGraw-Hill Education. Kindle Edition.

Customer Needs
in the Major Sale

people who were most effective during the Investigating stage were the ones most likely to be top sales performers.

Rackham, Neil. SPIN Selling (p. 53). McGraw-Hill Education. Kindle Edition.

a need as: Any statement made by the buyer which expresses a want or concern that can be satisfied by the seller.

Rackham, Neil. SPIN Selling (p. 55). McGraw-Hill Education. Kindle Edition.

So 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.

Rackham, Neil. SPIN Selling (p. 57). McGraw-Hill Education. Kindle Edition.

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.”

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

SPIN Selling

Situational Questions - collects facts, information, and background data about the customer’s existing situation.

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

Inexperienced salespeople ask more Situation Questions than do those who have longer sales experience.  Situation Questions are an essential part of questioning, but they must be used carefully. Successful salespeople ask fewer Situation Questions. Each one they ask has a focus, or purpose.  Buyers quickly become bored or impatient if asked too many Situation Questions.

Does this mean that you shouldn’t ask Situation Questions? No—you can’t sell without them. What the research shows is that successful people don’t ask unnecessary Situation Questions. They do their homework before the call and, through good pre-call planning, eliminate many of the fact-finding questions that can bore the buyer.

As sellers become more experienced, their behavior changes. They no longer spend most of the call collecting background situation information.

Rackham, Neil. SPIN Selling (p. 69). McGraw-Hill Education. Kindle Edition.

Problem Questions - probes for problems, difficulties, or dissatisfactions. Each invites the customer to state Implied Needs.

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

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

Rackham, Neil. SPIN Selling (pp. 70-71). McGraw-Hill Education. Kindle Edition.

the central purpose of Implication Questions in larger sales. They take a problem that the buyer perceives to be small and build it up into a problem large enough to justify action.

Rackham, Neil. SPIN Selling (p. 76). McGraw-Hill Education. Kindle Edition.

Implication Questions are especially powerful in selling to decision makers. It’s often possible to achieve a positive outcome from calls on users or influencers simply by asking Problem Questions, but with calls on decision makers it’s not as easy. Decision makers seem to respond most favorably to salespeople who uncover implications.

Rackham, Neil. SPIN Selling (p. 80). McGraw-Hill Education. Kindle Edition.

Implication Questions have a weakness. By definition, they make customers more uncomfortable with problems. Sellers who ask lots of Implication Questions may make their buyers feel negative or depressed.

Rackham, Neil. SPIN Selling (p. 81). McGraw-Hill Education. Kindle Edition.

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 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.”

Rackham, Neil. SPIN Selling (pp. 81-82). McGraw-Hill Education. Kindle Edition.

Need-Payoff Questions Rehearse the Customer for Internal Selling In smaller sales your success rests on how effectively you can convince the person you sell to, but this is not always the case in larger sales. As the size of the decision grows, more people become involved. Your success may often depend not just on how you sell, but on how well the people in the account sell to each other. In the small sale you’re usually there during the whole sales process. But in larger sales there are likely to be many “sales calls” where influencers and users sell internally on your behalf and where there’s no opportunity for you to be present.

Rackham, Neil. SPIN Selling (p. 85). McGraw-Hill Education. Kindle Edition.

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.

Rackham, Neil. SPIN Selling (pp. 88-89). McGraw-Hill Education. Kindle Edition.

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.

Rackham, Neil. SPIN Selling (pp. 91-93). McGraw-Hill Education. Kindle Edition.

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.

Rackham, Neil. SPIN Selling (p. 94). McGraw-Hill Education. Kindle Edition.

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.
3. For each difficulty, write down the questions it suggests. For instance, in Figure 4.11 the seller has noted that the shortage of qualified people suggests Implication Questions about overtime costs and recruitment difficulties.

Rackham, Neil. SPIN Selling (p. 95). McGraw-Hill Education. Kindle Edition.

Rackham, Neil. SPIN Selling (pp. 94-95). McGraw-Hill Education. Kindle Edition.

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

Rackham, Neil. SPIN Selling (p. 100). McGraw-Hill Education. Kindle Edition.

In larger sales, Features have a negative effect when used early in the call and a neutral effect when used later.

Rackham, Neil. SPIN Selling (p. 100). McGraw-Hill Education. Kindle Edition.

Users respond more positively to Features than do decision makers.

Rackham, Neil. SPIN Selling (p. 100). McGraw-Hill Education. Kindle Edition.

Don’t demonstrate capabilities too early in the call. In smaller sales you can uncover a problem and jump straight in with Advantages about how you can solve it, but this doesn’t work well in larger sales. It’s important in larger sales to develop Explicit Needs—by using Implication and Need-payoff Questions—before you offer solutions.

Rackham, Neil. SPIN Selling (p. 115). McGraw-Hill Education. Kindle Edition.

in larger sales, the powerful statements are those which show that you can meet Explicit Needs. Don’t fool yourself into thinking you’re giving a lot of Benefits if you’re not uncovering and meeting those Explicit Needs.

Rackham, Neil. SPIN Selling (p. 115). McGraw-Hill Education. Kindle Edition.

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.

Objections early in the call. Customers rarely object to questions—unless you’ve found a particularly offensive way to ask them. 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 and capabilities. The cure is simple enough: Don’t talk about solutions until you’ve asked enough questions to develop strong needs.

Rackham, Neil. SPIN Selling (p. 136). McGraw-Hill Education. Kindle Edition.

Objections about value. If most of the objections you receive raise doubts about the value of what you offer, then there’s a good chance that you’re not developing needs strongly enough. Typical value objections would be “It’s too expensive,” “I don’t think it’s worth the trouble of changing from our existing supplier,” or “We’re happy with our existing system.” In cases like these, customer objections tell you that you haven’t succeeded in building a strong need. The solution lies in better needs development, not in objection handling. Particularly if you’re getting a lot of price objections, cut down on the use of Features and, instead, concentrate on asking Problem, Implication, and Need-payoff Questions.

Rackham, Neil. SPIN Selling (p. 136). McGraw-Hill Education. Kindle Edition.

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