SPIN Selling / Edition 1

SPIN Selling / Edition 1

by Neil Rackham, Rackham Neil Rackham
Pub. Date:
McGraw Hill LLC
Pub. Date:
McGraw Hill LLC
SPIN Selling / Edition 1

SPIN Selling / Edition 1

by Neil Rackham, Rackham Neil Rackham
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The international bestseller that revolutionized high-end selling!

Written by Neil Rackham, former president and founder of Huthwaite corporation, SPIN Selling is essential reading for anyone involved in selling or managing a sales force. Unquestionably the best-documented account of sales success ever collected and the result of the Huthwaite corporation's massive 12-year, $1-million dollar research into effective sales performance, this groundbreaking resource details the revolutionary SPIN (Situation, Problem, Implication, Need-payoff) strategy.

In SPIN Selling, Rackham, who has advised leading companies such as IBM and Honeywell delivers the first book to specifically examine selling high-value product and services. By following the simple, practical, and easy-to-apply techniques of SPIN, readers will be able to dramatically increase their sales volume from major accounts. Rackham answers key questions such as “What makes success in major sales” and “Why do techniques like closing work in small sales but fail in larger ones?”

You will learn why traditional sales methods which were developed for small consumer sales, just won't work for large sales and why conventional selling methods are doomed to fail in major sales. Packed with real-world examples, illuminating graphics, and informative case studies - and backed by hard research data - SPIN Selling is the million-dollar key to understanding and producing record-breaking high-end sales performance.

Product Details

ISBN-13: 9780070511132
Publisher: McGraw Hill LLC
Publication date: 05/01/1988
Edition description: List
Pages: 216
Sales rank: 61,756
Product dimensions: 6.19(w) x 9.29(h) x 0.86(d)

About the Author

NEIL RACKHAM is founder and former president of Huthwaite, Inc. Huthwaite researches, consults, and provides seminars for over 200 leading sales organizations around the world, including Xerox, IBM, and Citicorp. His academic background is in research psychology. It was at the University of Sheffield, England, that he began his research into sales effectiveness that resulted in SPIN. Mr. Rackham is the author of more than 50 articles and several books.

Read an Excerpt

Chapter 6: Preventing Objections

During a visit to the training center of a leading multinational company, I was invited to watch some sales training in progress. Instead of choosing the Advanced Systems Selling class, as my hosts had perhaps expected, I asked instead if I could sit in on a typical basic-skills program for new salespeople. Entering quietly at the back of the room, I looked around. The students all had that unnatural attentive cleanliness that goes with being new to sales. Their instructor, recently promoted from the field, was launching with great vigor into his favorite topic -- objection handling. You couldn't have imagined a more typical scene. It could have been Day 2 of any basic sales-training program in any large corporation.

"The professional salesperson," the instructor began, "welcomes objections because they are a sign of customer interest. In fact, the more objections you get, the easier it will be for you to sell." The class, duly impressed, wrote this down. Meanwhile I groaned behind my mandatory visitor's smile. Here was yet another new generation of salespeople at the receiving end of one of the most misleading myths in selling. Still, as a visitor it would have been improper for me to comment, so I continued to smile through an hour of objection-handling techniques until the coffee break.

During the break, I talked with the instructor. "Did you believe what you were saying in there," I asked, "that stuff about the more objections, the easier to sell?"

"Yes," he replied. "If I didn't believe it, I wouldn't be teaching it."

I hesitated. Clearly theinstructor and I had opposite views about objection handling. It would have been easier to drop the subject, but he'd been kind enough to let me into his class, so I felt I owed him something in return. I asked, "You've been a successful sales performer for several years, haven't you?"

"Yes," he replied with some pride. "I've been with the company five years and I've made President's Club for the last three."

"Look back at your own sales experience," I urged him. "Five years ago, when you were new, did you receive more or fewer objections from your customers than you're getting now?"

He thought for a moment. "More, I guess." Then, as he remembered back, he added, "You know, in the two years when I was new, I seemed to get objections all the time."

"So in those first two years when you were facing all those objections, did you have good sales figures?"

"No," he said uncomfortably. "In fact, my sales weren't too good until my third year with the company."

Pressing the point, I asked him, "Then you did a lot better in that third year?"

"Yes, that was the year I first made President's Club."

"And how about objections? It sounds as if you had more objections in your unsuccessful years. How does that tie in with what you said in class about the more objections, the more successful the call will be?"

He considered the point for a while and said, "You're right. When I look back, I faced many more objections when I was unsuccessful. Perhaps I'm teaching the wrong message."

I had to admire him. Most people -- given the astonishing human capacity for dismissing unwanted evidence -- would have dodged the issue and held to their initial position. But the class was reconvening and I had to finish my tour of the facility, so I didn't have time to talk more with the instructor about objection handling. If we'd had more time, I would have told him:

  • 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.
To explain these findings, I'll have to go back to the discussion of Features, Advantages, and Benefits in Chapter 5. You'll remember the definitions of these three behaviors and their links to success in sales of different sizes. One of my colleagues, Linda Marsh, carried out some correlation studies to check whether there are statistically significant links between each of these behaviors and the most probable responses they produce from customers. For example, when sellers use a lot of Features in calls, do customers respond in a different way than in calls where fewer Features are used? She discovered that Features, Advantages, and Benefits each produce a different behavioral response from customers.

Features and Price Concerns

Customers are most likely to raise price concerns in calls where the seller gives lots of Features. Why is this? It seems that the effect of Features is to increase the customer's sensitivity to price. This isn't necessarily a bad thing if you happen to be selling low-cost products that are relatively rich in Features.

Consider the psychology of the advertisement shown in Figure 6.3. This features-rich product is being sold in a way that works well with cheaper goods. You can imagine a television commercial: "We give you multiplication, division, subtraction ... and what do you think that's worth? Well, don't answer yet because you also get mark-up and mark-down percentages -- which is something you don't usually find on watches 10 times the price. And we also give you..." Throughout history, using Features this way has helped sell lower-priced goods. Why? Because Features increase price sensitivity. By listing all the Features, the customer comes to expect a higher price. When the product turns out to be much cheaper than its competition, the increased price sensitivity causes the buyer to feel extra positive about the lower price tag.

I chose a watch example, rather than an industrial product, because there's something unique about watches. In no other market that I can think of is there such an enormous price difference between competitors.

Now consider the advertisement shown in Figure 6.4. This watch is almost 100 times as expensive as the one in Figure 6.3. Do you think you'd be more likely to buy this expensive watch if there was a list of Features down the side of the advertisement to help persuade you? Not on your life! With top-of-the-market products, the price concern created by Features will make people less likely to buy. A list of Features would probably make you ask yourself questions about whether the expensive watch was worth it.

Too Many Features: A Case Study

The relationship between Features and price concerns isn't just a theoretical point that applies only to advertisers. It has clear implications for sales strategy. A major U.S.-based multinational corporation once called us in to help it with a problem. The corporation had been facing tough Japanese competition in its primary marketplace, particularly at the lower end of its product range. The Japanese products were richly featured and, as you might expect, somewhat less expensive than its own machines. As market share began to erode, the corporation looked for alternatives to price cutting. One attractive possibility was to introduce a new product with more Features that could compete directly with the Japanese machines. Such a machine would still be a little more expensive, but because of its added Features, it would provide a much stronger marketplace offering.

But who would sell this new product? The corporation decided to recruit part of the sales force from the competition. After all, nobody knew as much about how to sell these richly featured machines as the people who'd been successful sellers for the Japanese competitor. It seemed, on the face of it, a plausible strategy -- recruiting experienced sellers while simultaneously weakening the competition by raiding its best people. The corporation's agents approached those salespeople who'd been very successful selling the cheaper Japanese machines and succeeded in recruiting some of the competitor's top people.

Unfortunately, these new people's sales results were deeply disappointing. The competition's superstars performed no better than the existing sales force. While trying to discover what was going wrong, I talked with several of the people recruited from the competition and found them puzzled and dejected at their sudden fall from success. "It's price," they explained. "The product's too expensive; we get price objections all the time." And they were right. When we traveled with them on calls, we found that the number of price objections they received from customers was 30 percent higher than for the rest of the sales force who were selling the same product. Why? We couldn't write it off as pure coincidence when two sections of a sales force selling an identical product received different levels of price objections from their customers.

The answer lay in their use of Features. While selling for the cheaper competitor, these salespeople had developed a selling style very high in Features. This was very successful because, as we've seen, Features increase customers' price concerns. But because their product was cheaper, the price concern worked to their advantage. Now that they were selling for a more expensive competitor, the high level of Features they were giving worked against them. Their Features increased price concern and, because their product was more expensive, this turned customers toward the cheaper competitor. I presented our findings to the V.P. of Sales for the division. As he wryly remarked, "Right now, they seem to be doing a better job of selling for our competition than when our competition employed them." How could we help? Not, I suggested, by teaching them how to handle price objections. That was just a symptom. It would be more effective to treat the cause and help these new people adopt a selling style more appropriate to a top-of-the-market product. So we retrained them in SPIN questioning techniques so that they could use a high-Benefits style. As a result, their sales increased, price objections dropped, and the price issues were soon forgotten. ...

Table of Contents

Sales Behavior and Sales Success.
Obtaining Commitment: Closing the Sale.
Customer Needs in the Major Sale.
The SPIN Strategy.
Giving Benefits in Major Sales.
Preventing Objections.
Preliminaries: Opening the Call.
Turning Theory into Practice.
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