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Module 11: Sales Presentations

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SPIN Selling

What Is SPIN Selling?
SPIN works from the theory that relationship selling is customer-centric. It requires you to adapt your selling process to your customer, and deliver personal solutions.

To make this work, you have to ask your buyer a lot of questions, let him do most of the talking.In the SPIN model, there are four components of a sales call: opening, investigating, demonstrating capability, and obtaining commitment. SPIN gets its name from the four kinds of questions that take place during the investigation stage: Situation, Problem, Implication, and Need-payoff.

With smaller sales, these four components of the sale (opening, investigating, demonstrating capability, and obtaining commitment) often happen sequentially and in a short period of time; a customer might walk onto your car lot and commit to buying a car from you an hour later. But often in business-to-business (B2B) sales, especially complex ones, you will incorporate SPIN components into a number of the steps in your selling process.

SPIN selling is not a rigid, step-by-step model; rather it provides an effective, flexible framework for customer centered selling. [2]


In 1988, Neil Rackham and his company Huthwaite, Inc., researched more than 35,000 sales calls, observing successful and experienced sales professionals doing what they do best. In the process they disproved a number of popular myths about the selling process, and they developed a sales model of their own, which they called SPIN selling. [1]

Today sales professionals around the world incorporate the SPIN selling model into their sales process with great success-and you can too.

Opening
According to Neil Rackham, the opening of the sales call is not the most important part, but it does pave the way for the important steps that come after. [3]

At the beginning of every call, you want to set the preliminaries and make any necessary introductions. In larger B2B sales, you usually won’t spend very long on introductions because 95 percent of the time you will be meeting with an existing customer or a prospect you have already met. [4]

If you are following up on an earlier sales call, it’s important to recap the conclusions of your last discussion:

“The last time we spoke, we talked about pricing and setting a timeline, if we could put together a proposal that matched your budget and would meet your deadlines.” Then, most importantly, you want to begin the conversation by getting your customer’s agreement to let you ask him some questions. [5] This builds rapport and establishes a buyer centered purpose for your call. [6]

Investigation
Asking questions (Investigation) to uncover your buyer’s needs,-is at the heart of SPIN selling. This is the stage during which you ask the types of questions that give SPIN its name: situation, problem, implication, and need-payoff.

Here’s how each of these types of questions works during the sales presentation.

Situation


Situation questions deal with the straightforward facts about the buyer’s existing situation and provide a starting place for understanding your buyer’s needs. [7] If you ask too many situation questions, you risk boring your prospect and damaging your credibility, so ask situation questions sparingly.

If you do careful research before your sales call, you should find out most of the basic information about your customer’s current situation before your meeting. [8]


Problem Questions


Asking problem questions helps customers understand their needs, and it paves the way for you to propose a solution that seems beneficial to your customer. [9]

Problem questions are the most effective in small sales: “Was limited storage space ever an issue with your last computer? How much has the size and weight of your current laptop affected your ability to carry it with you?” But in B2B sales it is still important to ask a few problem questions so that you and your buyer share an understanding of the problem or need. [10]

Implication


In larger sales, implication questions are closely linked to success because they increase a prospect’s motivation to seek change. Implication questions uncover the effects or consequences of a prospect’s problems. These questions are especially effective when your prospect is a decision maker whose success depends on understanding the underlying causes of a problem and its potential long-term consequences. [12]

By asking a set of implication questions you are helping your prospect explicitly state a need (or needs) that you can solve for him. [13]

Need Payoff


Once you help your prospect uncover his specific needs, you can help him to discover a way out by asking how his problem could be resolved. These questions are called need-payoff questions.

If you ask your prospect the right need-payoff questions, he will tell you how your solutions can help him; you won’t even need to spend much time talking about your product’s benefits because your prospect will have already convinced himself that your solution will be valuable to him. [14]

Demonstrating Capability
When you present your solution, you can tell your customer about FAB:

Features
Advantages
Benefits

All three methods demonstrate capability.SPIN selling is all about customization; when you are demonstrating capability, you want to show your prospect how your solution applies to the needs he has expressed.

Product features, or what the product has:

“This car has all-wheel drive, and the back seats fold down to expand the trunk.”
Its Advantages:

“The all-wheel drive capability makes for better handling in ice and snow, and the ability to fold down the seats means you get a larger storage capacity than you would with other cars of its kind.”
The benefits:

“The all-wheel drive will give you peace of mind when your daughter drives the car in the winter, and the added storage capacity will be especially helpful for any odds and ends you need to transport during your upcoming move.”

This includes what the features mean, or the ways in which your solution addresses your prospect’s acknowledged needs. [15]

Listing a product’s advantages demonstrates how that product could be useful to anyone (a generic customer), but you don’t want to treat your buyer like a generic customer. If you take the car sales example, the car you are selling has an excellent sound system that delivers a superior music-listening experience. But what if your prospect only ever listens to talk radio? If you go on at length about the advantages of the sound system, he won’t be impressed.

Rackham and his team concluded that salespeople who demonstrate capability by presenting benefits (rather than advantages) don’t have to deal with as many objections from their prospects.

However, you can only demonstrate benefits successfully if you have asked the right questions to uncover your prospect’s specific needs. This is why the investigation stage is so important.

Here are examples of some benefits you might share with a prospect:

Ms. Lewis, you mentioned that you have a long commute to work each day, so I think the podcast versions of our training seminars will be a good solution for you. You can download them onto your iPod and listen to them on your way to work so that you can maximize your time and leave your evenings and weekends open to spend with your family.

Our custom engagement rings will allow you to choose an antique setting in the style you said your fiancée prefers and to pair this setting with a smaller stone that will fit your current budget.

Obtaining Commitment
In smaller sales, obtaining commitment is fairly straightforward: either your prospect decides to buy, or he tells you that he isn’t interested.

In complex sales, on the other hand, fewer than 10 percent of calls have one of those two outcomes. In complex sales it might take several years before your prospect agrees to purchase your solution, so a sales call that ends without a sale is in no way a failure.

In between your first sales call and your prospect’s decision to buy, you will have a number of calls in which you either decide to move the process forward, terminate the process, or continue the process without an advance.

Any time your prospect ends a call by agreeing on an action that moves you closer to the final sale, you have experienced a successful outcome. [16]

Obtaining Commitment
The commitment you propose at the end of the call will depend on your precall objectives. In the SPIN model there are three steps to obtaining commitment:
Check you have addressed key concerns.
Summarize the benefits you presented.
Propose a commitment. [17]According to Rackham and his team, the most effective precall objectives are those that include actions on the part of the customer, such as “get the prospect to agree to call two of your past customers” or “get the prospect’s list of vendor selection criteria.” [18]

Why Use the SPIN Model?
In relationship selling, the idea of a sales presentation can be misleading.

To deliver customized value to your prospect, you have to understand his needs and make sure that you are in agreement with him about a solution he could use.This means the sales presentation can be seen as a two-way communication. When you make the effort to listen to your prospect this way and when you work to understand his needs, not only will you close more sales, but you will also build stronger, lasting customer relationships. Your prospect will come to trust you and to rely on you as a problem-solving expert.

KEY TAKEAWAYS


SPIN selling is a four-step model that relies on the theory that successful selling is customer centered and offers customized solutions to your prospect’s problems.

There are four steps to a SPIN sales call: opening, investigation,demonstrating capability, and obtaining commitment.

The opening stage builds rapport and establishes a buyer centered purpose for your call.

The investigation stage is at the heart of the SPIN model. The goal of this stage is to ask questions that will uncover your buyer’s needs.

There are four types of investigation questions: Situation, Problem,Implication, and Need-payoff (SPIN).

In demonstrating capability, you explain the benefits of your solution by showing your prospect how your product or service meets his explicit needs.

In obtaining commitment, you get your prospect to agree to advance the sale, continue the sale without advancing, or make a purchase.

Exercises
Assume you own a business that rents out retail space in a downtown area. You have found out from your prospect, the owner of a bagel shop, that his current store location is on a side street that doesn’t get much foot traffic. List at least one each of the following kinds of questions that may help uncover his unstated needs: situation, problem, implication, and need-payoff. Discuss how these questions would work during the investigation stage of your SPIN selling presentation?

Bibliography
[1] Neil Rackham, The SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 8; Greg Woodley, “SPIN Selling Is Good,” SellingandPersuasionTechniques.com,http://www.sellingandpersuasiontechniques.com/SPIN-selling.html (accessed May 16, 2010).

[2] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 38.

[3] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 139.

[4] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 40.

[5] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 144.

[6] “SPIN Selling,” review of SPIN Selling, ChangingMinds.org,http://changingminds.org/books/book_reviews/spin.htm (accessed May 16, 2010).

[7] Greg Woodley, “SPIN Selling Is Good,” SellingandPersuasionTechniques.com,http://www.sellingandpersuasiontechniques.com/SPIN-selling.html (accessed May 16, 2010).

[8] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 76; Eric Wolfram, “How to Sell-SPIN Selling,” Wolfram,http://wolfram.org/writing/howto/sell/spin_selling.html (accessed May 16, 2010).

[9] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 90.

[10] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 93.

[11] “SPIN Selling,” review of SPIN Selling, Changing Minds Book Reviews,http://changingminds.org/books/book_reviews/spin.htm (accessed May 16, 2010).

[12] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 108.

[13] “SPIN Selling,” review of SPIN Selling, Changing Minds Book Reviews,http://changingminds.org/books/book_reviews/spin.htm (accessed May 16, 2010).
[14] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 128.

[15] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 148.

[16] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 42-43.

[17] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 44.

[18] Neil Rackham, SPIN Selling Fieldbook (New York: McGraw-Hill, 1996), 45.