Neil Rackham, an academic, consultant and author, is well known for his research into the techniques and behaviours employed by successful salespeople in their negotiations. Him and a team of 30 consultants worked with major multinational companies and were able to observe 35,000 sales calls in over 20 countries. This research spanned over 12 years and the results were shared by him in various publications including a book entitled "SPIN Selling". So, what were the findings of this research and how can you employ them in your own day to day interaction with both prospective and existing customers to win new business more effectively?
Neil Rackham noted that in smaller sales a simple approach of using questioning to uncover problems, issues and pain points and then matching these to the features, advantages and benefits of the salesperson's solution was effective enough. However, if the sale involved a longer decision making process, was more business critical, required more people's input and was of a higher value, this approach became less so. He concluded that the best salespeople were far better at influencing the decision making process using a technique called SPIN. This acronym stands for Situation, Problem, Implication and Needs-Pay Off.
Situation questions are used first to understand the status quo or what's actually happening right now with your prospects. They uncover aims and objectives, the choices that were made and how the business is currently operating.
Problem questions encourage the prospect to think about the problems, issues and pain points that they've experienced as a result of particular decisions and subsequent actions. They attempt to draw out particular examples of where things haven't gone to plan and objectives that haven't been met.
At the implication stage, the salesperson focuses on these problems and encourages the prospect to really consider the impact that these have had on the business such as increased costs, reduced efficiency, fewer sales, lowered staff morale and motivation, cash flow issues etc. These can encompass areas such as people, processes, customer acquisition and finance and include social, emotional, operational and business growth implications of which many can be monetised.
The final stage of questioning is about Needs-Pay Off. Here the successful salesperson is looking to turn implied needs into explicit needs by using questions that encourage the prospect to focus on all the positive outcomes to be had in changing the status quo. Rather than using the more traditional approach of the salesperson uncovering needs and then selling a proposition that matches the perceived needs, the SPIN approach encourages the prospect to sell a solution to themselves having reflected on a particular situation. In larger sales, this becomes much more powerful as the salesperson is encouraging a change in mindset and for the prospect to become an enthusiastic advocate of the new solution, having more influence through better articulating the positive outcomes to colleagues in the decision making process.
So, using an example of a Search Engine Optimisation (SEO) expert selling to a prospect, here's how the SPIN process might be used:
SEO Expert: How do you go about raising awareness of your business and generating new enquiries?
Prospect: We use a variety of marketing methods but predominantly it comes from having an optimised website.
SEO Expert: Tell me, what's been your experience of getting good rankings in search results with your current web designer/SEO expert?
Prospect: Well, we were told that with their SEO work, that we'd rank highly in organic search results and could expect to appear consistently on the first page of Google.
SEO Expert: How well has that worked for you in reality?
Prospect: Well, to be honest, we've rarely appeared where we'd hoped in search results and that's been frustrating.
SEO Expert: How has that impacted on your business in terms of traffic, enquiries, and subsequent sales?
Prospect: Well, it's undoubtedly impacted on our business and would have ultimately meant that our turnover and profit have suffered.
SEO Expert: Can I ask you, what would a typical order value might be and how many sales might you make in a month, let's say?
Prospect: On average, a typical order would be £45 and we'd like to be doing 300 of those in a month. So we're looking at £13,500 a month turnover at least. Not ranking well in search results could really affect that though. Appearing on page 2 or 3 in Google could mean we get maybe 50-75% fewer orders as people can't be bothered to spend much time researching suppliers.
SEO Expert: So, it's feasible that you could be loosing over £7,000 of turnover each month by not being on the front page of Google?
Prospect: Yes, potentially. Now that you've highlighted it, it's something we really need to prioritise.
SEO Expert: We've talked about the impact on sales but how else might this have affected your business?
Prospect: Well, we're trying to build our mailing list which we do using a form on our home page. If people can't find our website through search results, that's going to impact us and make future marketing and promotion that much more difficult.
SEO Expert: So, in what ways do you think improving your SEO could help your business?
Prospect: Well, undoubtedly we'd do more sales, more quickly which would mean better cashflow into our business. This would allow us to execute our growth plans sooner. We've reached a point where we need to relocate and invest in new equipment. With more sales, we'd be able to grow our market share which would put is in a more competitive position and we could negotiate better terms with our suppliers and benefit from economies of scale. Yes, I'm beginning to see how getting you onboard could make a big difference!
Using the SPIN selling technique and in particular, encouraging prospects to think about the negative impact of certain decisions and the positive outcomes from changing the status quo could really improve your conversion rate in those all-important, larger and more profitable sales.
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