SPIN Selling by Niel Rackham (Book Summary)
Written by Neil Rackham, former president and founder of Huthwaite corporation, SPIN Selling is the most relevant in terms of sales because it addresses the most common sales problem. The subtitle of the book describes quite well what’s inside; “The Best-Validated Sales Method Available Today”.
Developed From Research Studies Of 35,000 Sales Calls. Used By The Top Sales Forces Across The World.”. Anyone who is committed to selling as a profession can’t ignore this book.
In this article, I will give you an in-depth summary of the SPIN Selling book.
Pin Points: SPIN Selling Book Summary
Let’s understand how this book is different from all the other books. How does it stand out from all other sales books?
The two factors that make the SPIN Selling book unique are-
1. It’s about the larger sale
- Almost all existing books on selling have used models and methods that were developed in low-value, one-call sales.
- For more than 60 years, the same concepts were copied, adapted, and refined with the assumption that they should apply to all sales.
- This is the first book that talks about the large sale and skills required to proceed with your sales journey.
- This book is all about the different sets of skills that the major sales demand.
2. It’s based on research
- The book is based on the largest research project in the selling-skills area.
- Analyzed more than 35,000 sales calls, over 12 years, to provide the hard facts on successful selling.
- This book gives you well-documented evidence about how to be more successful in larger sales.
Summary: SPIN Selling Book
Here is the chapter-by-chapter summary of the SPIN selling book.
Chapter 1: Sales Behavior and Sales Success
Traditional Model of the Sales call:
1. Opening the call
The classic theories of selling teach that the most effective method for opening sales calls is to find ways to relate to the buyer’s interests and to make initial benefit statements.
2. Investigating needs
Almost everybody who’s been through sales training in the last 60 years knows about open and closed questions. These classic questioning methods may work in small sales, but they certainly won’t help you in bigger ones.
3. Giving benefits
Once you’ve uncovered the needs, traditional sales training teaches you to give the benefits of your product or service to the consumer.
4. Objection handling
You’ve probably been taught that overcoming objections is a vital skill for sales success. You’ll know about the standard objection-handling techniques, such as clarifying the objection and rewording it in a way you can meet
5. Closing techniques
The closing techniques that can be effective in smaller accounts will lose your business as the sales grow larger.
A New Direction
According to the book SPIN Selling, the SPIN sequence questions lie in the following order-
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?”.
Once sufficient information has been established about the buyer’s situation. It is about how successful people tend to move to the 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?”
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?”
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?”
Chapter 2: Obtaining Commitment (Closing the sale)
The old standard technique that every seller uses to close the sale are:-
Assuming that the sale has already been made, one asks, for example, “Where would you like it delivered?” before the customer has agreed to buy.
One asks, for example, “Would you prefer delivery on Tuesday or Thursday?”—again before the customer has made a purchasing decision.
One says, for example, “If you can’t make a decision right now, I’ll have to offer it to another customer who’s pressing to buy it.”
One says, for example, “The price goes up next week, so unless you buy now”.
One fills in the customer’s answers on an order form, even though the buyer has not indicated a willingness to make a buying decision.
In addition to these bread-and-butter techniques, Neil, in SPIN Selling book, found a whole encyclopedia of more exotic closes, such as the Sharp Angle, BenFranklin, Puppy Dog, Colombo, and Double-reverse Whammo.
Obtaining Commitment: Four Successful Actions
1. Giving attention to Investigating and Demonstrating Capability
Successful salespeople give their primary attention to the Investigating and Demonstrating Capability stages.
The first successful strategy for obtaining customer commitment is to concentrate your attention on the Investigating stage of the call. If you can convince buyers that they need what you are offering, then they will often close the sale for you.
2. Checking that key concerns are covered
In larger sales, both the product and the customer’s needs are likely to be relatively complex. As a result, there may be areas of confusion or doubt in the customer’s mind as the point of commitment nears.
The sellers must take the initiative and ask the buyer whether there are any further points or concerns that needed to be addressed.
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
Many books on selling point out that the simplest of all closing methods is just to ask for the order.
Consequently, the phrase “asking for the order” is a common one in sales training. But from our studies, “asking” is not what successful sellers do. But it’s here, at the point of commitment, that successful sellers don’t ask—they tell.
The most natural, and most effective, way to bring a call to a successful conclusion is to suggest an appropriate next step to the customer.
Chapter 3: Customer Needs in the Major Sale
How do Needs develop?
They start with minor imperfections.
Then, they evolve into clear problems, difficulties, or dissatisfactions.
And finally become wants, desires, or intentions to act.
Implied and Explicit Needs
I) 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”.
- “We’re not satisfied with the speed of our existing process.”
II) 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.”
In larger sales, the principal differences between very successful and less successful salespeople is-
• Less successful people don’t differentiate between Implied and Explicit Needs, so they treat them in the same way.
• Very successful people, often without realizing they’re doing so, treat Implied Needs in; a very different way than Explicit Needs.
Chapter 4: The SPIN Strategy
We will now look at how the four SPIN questions mentioned in the book SPIN selling—Situation, Problem, Implication, and Need-payoff—can be used to help the needs-development process.
The early questions in the sales call, particularly with new accounts or new customers are-
- What’s your position?
- How long have you been here?
- Do you make the purchasing decisions?
- What do you see as your objectives in this area?
Using these questions, one is collecting 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 people who have longer sales experience.
- Buyers quickly become bored or impatient if asked too many Situation Questions.
- As sellers become more experienced, their behavior changes. They no longer spend most of the call collecting background situation information. Instead, their questions move to a different area.
Experienced salespeople are most likely to ask questions like these:
- Are you satisfied with your present equipment?
- What are the disadvantages of the way you’re handling this now?
- Isn’t it difficult to process peak loads with your present system?
- Does this old machine give you reliability problems?
The common factor in all these questions? Each one probe 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 smaller sales the link is very strong: the more Problem Questions the seller asks, the greater the chances that the call will be successful.
- 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.
Implication Questions build up the size of Implied Needs in any decision.
The researcher shows Implication questions
- Are strongly linked to success in larger sales.
- Build up the customer’s perception of value.
- Are harder to ask than Situational and Problem Questions.
They ask about the value or usefulness of solving a problem.
- Is it important to you to solve this problem?
- Why would you find this solution so useful?
- Is there any other way this could help you?
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 to create a positive problem-solving atmosphere where attention is given to solutions and actions, not just to 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.”
Researcher shows that Need- Payoff questions-
- Are strongly linked to success in larger sales.
- Increase the acceptability of the solution.
- Are particularly effective with Influencers who will present your case to the decision-maker.
Chapter 5: Giving Benefits in Major Sales
What’s a Benefit?
Different books have different definiton of benefits.
Which Definition Is Right?
There is only one valid test that can determine which definition is right. The test is the one that has the most positive impact on customers.
The Relative Impacts of Features, Advantages, benefits
Features and Advantages offer solutions to implicit needs while benefits offer solutions to Explicit needs.
Benefits are significantly higher in calls leading to Orders and Advances. In contrast, the level of Advantages(showing how your product can help or be used—what many of us have been taught to call “Benefits”) was not significantly different in successful and unsuccessful calls.
Demonstrating Capability Effectively
According to SPIN selling book, the three main practical points that demonstrate your capability are-
- Don’t demonstrate capabilities too early in the call.
- Beware Advantages.
- Be careful with new products.
Chapter 6- Preventing Objections
What is Objection Handling?
- 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.
Objection Handling versus Objection Prevention
The old objection-handling strategies, which encourage the seller to give Advantages, are much less successful in the larger sales than objection prevention strategies, where the seller first develops value using Implication and Need-payoff Questions before offering capabilities.
Preventing Objections from Your Customers
SPIN Selling book says that the two sure signs that of getting unnecessary objections, that can be prevented by better questioning are-
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.
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.
Chapter 7: Preliminaries: Opening the Call
This chapter talks mainly about first meetings with new customers.
- People notice far less in the early stages of interaction than we may imagine.
- In the early stages of an interaction, we’re usually so overloaded with information that we either don’t notice, or we forget some quite obvious things.
- Don’t expect a smart suit and a good opening sentence to add 20 percent to your sales volume if you’re in major-account selling.
The two successful ways to open a call for smaller sales are-
1. Relate to the buyer’s interests
The conventional sales wisdom says that if you can somehow tap into an area of personal interest, then you can form a relationship more quickly and the call will be more successful.
2. Make an opening benefit statement
Begin with some dramatic statement about the benefits your product can offer. For example, you might say, “Ms. Customer, in today’s marketplace productivity is the central concern of key executives like yourself—and our product will contribute to your productivity.”
Making Your Preliminaries Effective
The most important test of whether you’re handling Preliminaries effectively is whether your customers are generally happy to move ahead and answer your questions.
The main points while handling this stage of the call are-
i) Get down to business quickly
ii) Don’t dawdle. The Preliminaries stage is not the most productive part of the call for you or the customer.
iii) Don’t feel that you’ll offend customers by getting down to business quickly.
iv) Don’t talk about solutions too soon. One of the most common faults in selling is talking about your solutions and capabilities too early in the call.
v) Concentrate on questions. Never forget that the Preliminaries aren’t the most important part of the call. Often, when Neil has been traveling with salespeople, he has noticed that they waste time before a call worrying about how they should open it. They could be using that time far more effectively to plan some questions instead.
Chapter 8: Turning Theory into Practice
According to the book SPIN Selling, the Four Golden Rules for Learning Skills
Rule 1: Practice Only One Behavior at a Time
People who successfully learn complex skills do so by practicing one behavior at a time, and not by trying to handle multiple behaviors at once.
Start by picking one behavior to practice. Don’t move on to the next until you’re confident you’ve got the first behavior right.
Rule 2: Try the New Behavior at least Three Times
The first time you try anything new, it’s bound to feel uncomfortable.
It’s not only new shoes that hurt at first. Never judge whether a new behavior is effective until you’ve tried it at least three times.
Rule 3: Quantity Before Quality
When you’re practicing, concentrate on quantity: use a lot of the new behavior.
Don’t worry about quality issues, such as whether you’re using it smoothly or whether there might be a better way to phrase it. Use the new behaviour often enough and the quality will look after itself.
Conclusion: SPIN Selling Summary
For people who are keen to improve their skills in selling, the book SPIN Selling is one we highly recommend. This is because the content of the book comes from extensive research by the author’s company. As the reader, you will walk away with a process, a structured framework for questions to ask within this process, and a reference book that you will find yourself going back to time and time again.
Practical learning and at the same time very enlightening.
Buy the book here: Amazon