We all know the archetype of the salesman. The alpha male, type 1 personality that who’s motto is “Always Be Closing.” Conventional sales training emphasizes five key skills:
- Opening the call. Find ways to connect with the buyer and make some initial benefit statements.
- Investigating needs. Use open questions to get the buyer to describe their needs.
- Giving benefits. Once the needs have been established, traditional training tells you to describe the features of the product that will hopefully meet his needs.
- Objection handling. Here is where you deal with the buyer’s objection to your offer by restating it in a way that allows you to meet their needs.
- Closing techniques. The ability to close has long been regarded as the most important skill for a sales professional.
These aspects of selling have been taught and applied to all types of sales. They appear to be very sensible and and many sales people believe that being proficient in these five areas will translate into success. Anyone that knows me knows that I believe that theories are fine, but without backing evidence, they are just hot air. What if somebody decided to test the effectiveness of closing techniques?
Meet Neil Rackham. He is the president and founder of Huthwaite Inc. He has made it his life’s work to test with scientific experiments what is important in selling. His book, SPIN Selling explodes the myths that are closely-held beliefs. He found that the rules for small sales do not hold for larger sales. More specifically:
- Call opening skill has very little to do with success in the larger sale.
- Open versus closed questions won’t help in the bigger deal. Investigating needs is extremely important in larger sales, but it is more complex than just asking questions in the correct form.
- Providing benefits that a buyer objects to or doesn’t care about will decrease the chance of landing a large scale. It won’t increase it.
- Teaching objection handling is like training your security force to beat up John Wilkes Booth after he shot the President. It is much more effective to prevent the objections before they arise.
- The closing techniques lauded in small sales impedes success in larger sales.
No wonder selling is hard. Why are large sales so different from smaller ones? There are many reasons. In general, the larger sales are more complex, require more people to make the decision, take more time and are more important to the buyers. These decisions can be very risky for the buyers and the companies they represent. If they are pressured into a quick decision, they will be more inclined to refuse the offer. In addition, buyers that make large purchases are normally seasoned professionals who have seen all the tricks of the trade. In fact, many buyers are insulted that sales people try these rudimentary techniques.
So what techniques should be used? Rackham’s research has uncovered a technique that delivers superior results. His SPIN model is:
- Situation. Successful people start calls with general questions about how the buyer is currently managing in the area that the salesman is supplying. The salesman should gather as much information as possible before the meeting, as asking a buyer questions you could get from their website is irritating.
- Problem. Next come the problem questions. Successful sales people ask about difficulties in cost, quality, time, training and reliability. The better sales people ask more of these questions than average sales people.
- Implication. In small sales, asking the first two types of questions is sufficient. With larger sales, the successful sales people dig below the surface of the problem questions. A question like “How will this affect your future growth” will help the seller and the buyer establish how big and how urgent the problem is. A skeptic of this technique may call this inducing panic in a buyer, but it is a necessary step. The buyer is being asked to invest a lot of money and time in a solution the seller is providing. The buyer needs to recognize the risk of not fixing their problem.
- Need-Payoff. The last type of question is the other side of the coin of the implication question. It gets the buyer to describe the benefit of the solution to the seller. This reinforces the value of the seller’s product or service to the buyer. The additional benefit is it trains the buyer to be the internal seller in their organization. Large sales often have many gates to pass before final approval and it is often impossible to have the seller present for every stage. Having an internal champion greatly increases sales success. Rackham found that successful sales people ask 10 times as many need-payoff questions than average performers.
I like this method because it flies in the face of conventional wisdom and is backed up by evidence. This is just a small summary of the book, and it does not replace the benefit of reading it. Anybody that wants to increase sales needs to read this book. It is absolutely necessary for those who think that “Only one thing counts in this life…get them to sign on the line that is dotted.”
Have a great weekend!