50 pages • 1 hour read
Neil RackhamSPIN Selling: Situation Problem Implication Need-payoff
Nonfiction | Book | Adult | Published in 1988A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Chapters 5-6Chapter Summaries & Analyses
Chapter 5 Summary: “Giving Benefits in Major Sales”
Using the SPIN strategy in the investigation stage of a sales call sets up the demonstrating capability stage. Demonstrating capability is where the seller shows the buyer that they have a solution to the buyer’s problem, most commonly by describing features and benefits of a product or service.
Conventional sales training methods differentiate features from benefits when defining products and services. Features are the facts about a product or service—for example, the processor’s speed or the service’s cost. Like situation questions, features are a necessary part of sales, but they do not have much effect on sales success in both small and larger sales transactions. They have a slightly higher success rate in smaller sales, but, for the most part, describing the features of a product or service is a value-neutral action. There are, of course, a few exceptions, as describing features can have a slightly negative effect when used early on a larger scale. Decision makers respond poorly to features, whereas users tend to react more positively. Finally, for technical products, customers may demand to know the features in detail before deciding to purchase. This tends to occur during a transaction. At this point, listing features will have a positive effect. In general, though, describing features neither harms nor helps a potential sale.
In contrast, benefits significantly affect sales, but only when salespeople use the correct type. Unfortunately, there is no consensus on what a benefit is. Some experts claim that benefits are features that specifically assist a buyer. Others state that benefits are statements that meet a client’s need. The chapter breaks benefits into Type A benefits (also called advantages) and Type B benefits (which retain the name benefits). Advantages “show how a product or service can be used to help the customer” (102). Benefits “show how a product or service meets an Explicit Need expressed by a customer” (102). Advantages are taught in conventional sales training classes. Pitching advantages is highly successful in small sales. However, in larger sales, advantages only have a minor effect on success.
Advantages still have a positive effect early in a sales transaction, particularly on the first sales call, but over time, advantages slowly lose their effectiveness on a sales call until they have almost no impact. This decline comes from the salesperson’s enthusiasm early in the transaction, which carries over to the client but has a limited effect. Likewise, advantages are initially attractive to a client but need to be specifically tailored to actions a client is willing to take.
Advantages have a limited effect on larger sales because they focus on implied needs. As previously discussed, implied needs rarely encourage larger sales because there is too much at stake. Advantages are solutions aimed at implied needs, whereas benefits are solutions geared toward explicit needs. If a salesperson successfully develops a client’s needs, offering the client appropriate benefits is easy: “If you can get your customers to say, ‘I want it,’ it’s not difficult to make a Benefit by replying, ‘We can give it to you’” (107). Salespeople that used more benefits had a higher rate of calls leading to orders and advances.
The SPIN method lists three keys to demonstrate capability:
- Salespeople should avoid demonstrating capability too early in a call. Though some clients directly ask what a product can do, this method is ineffective in larger sales. A salesperson must develop needs through the SPIN strategy before moving into the demonstrating capability stage.
- Avoid using advantages. Despite conventional sales training recommending their use, advantages are different from benefits, which can be more helpful in larger sales.
- Be wary of new products. The salesperson should focus on the problems a new product or service can solve rather than the product or service itself.
Chapter 6 Summary: “Preventing Objections”
The chapter begins by describing traditional sales training on objection handling. Trainers often tell their trainees to welcome buyer objections, which indicate buyer interest. In the SPIN method, this belief is erroneous and potentially damaging to sellers. Objection handling is less important than traditional training indicates. The seller often creates objections, and skilled salespeople prevent objections rather than handle them.
A study by Huthwaite co-founder Linda Marsh analyzed sellers’ use of features, advantages, and benefits and their corresponding effects on customers. This study uncovered that sellers who offer many features raise price concerns with the buyer, known as “price sensitivity” (120). Mentioning many features is only successful if the seller’s product or service is less expensive than the competition. Otherwise, this strategy tends to drive customers to the competition. When the seller’s product or service is more costly, it is more advantageous to focus on offering benefits.
Marsh’s study also indicated a strong link between the use of advantages and buyer objections, which leads to failure in larger sales. This happens because the seller offers advantages before building implied needs to explicit needs, causing the buyer to question the product or service’s value. The seller must develop value before offering a solution to a client’s problem. While traditional sales training focuses on handling clients’ objections once mentioned, if sellers build the client’s needs and the value of the product or service first, the objection will be avoided entirely.
In large sales, buyer objections are unavoidable because it is almost impossible for any product or service to meet all of a larger company’s needs. Likewise, competitors may be able to meet more or different needs than the seller. However, concerns about the price or hassle of a new solution are wholly avoidable and generally created by the seller: “Traditional sales training actually teaches people to create objections, then teaches them techniques for handling the objections they’ve inadvertently created” (131). This is because traditional sales training is based on smaller sales, in which advantages have a higher impact on the buyer. Traditional training instructs sellers to offer as many advantages as possible. However, research indicates that advantages cause more than half of customer objections. They are not “sales opportunities in disguise” despite the claims of traditional trainers (132). Unfortunately, the more objections raised in a sales call, the less likely the call will be successful. Objections, rather than indicating interest, indicate a barrier between the buyer and the seller. The seller has to remove the barriers to build the relationship. As such, it is easier to avoid them in the first place.
Sellers can avoid these barriers by effectively using the SPIN strategy to develop the value of a solution for the client. This strategy allows the seller to prevent objections rather than handling them. There are two clear signs that a seller needs to use questioning to build more value. First, if the client states objections early in a call, a seller has offered a solution too early. Second, if the buyer objects to the value of a product or service, the seller has ineffectively developed needs.
Chapters 5-6 Analysis
These chapters expand on the importance of using the SPIN strategy, specifically implication and need-payoff questions, to build implied needs into explicit needs. The seller can offer a solution once the client has expressed an explicit need, highlighting The Power of Effective Questioning. Thus, the seller becomes a problem solver for the buyer instead of a salesman. This teamwork approach builds a positive relationship with the client and encourages orders and advances.
The difficulty lies in traditional sales training, which emphasizes offering solutions without developing problems. This highlights the theme that Traditional Methods Are Not Always the Best. Large companies often have several issues, and there is no perfect solution to solve them. Throwing solutions at larger buyers tends to put them on the defensive. In one example, the seller, who sells a word processor, asks the buyer if retyping wastes time. The buyer responds that it does, but it is a bigger problem for other divisions. The seller then proceeds to point out that the seller’s product would save the buyer the retyping time. The buyer responds that they are unwilling to spend $15,000 to save time on retyping. Throughout the example, the seller continues to throw out advantages only to be immediately met with objections from the buyer.
This is a natural response, as the seller is pitching solutions to problems the buyer is not ready to solve. The seller then tries to handle the buyer’s objections with even more features and advantages, which is like treating a disease’s symptoms rather than the cause. The cause is that the seller has not put in enough time developing needs and increasing the value of their product or service.
When a more skilled salesperson was given the same scenario, they offered suggestions on ways the original salesperson could have improved. Using questioning, the skilled salesperson pointed out how much time the buyer spent each day on editing and retyping—this time created a bottleneck that slowed work and discouraged staff. Working with the client to uncover these problems and their effects led the client to view the solution as more valuable. The seller created value for the client to balance the cost and difficulty of implementing a new solution.
Traditional sales training claims that objections are “sales opportunities in disguise” (132). To assess this theory, Huthwaite studied 694 sales calls, examining the number of objections as a percentage of customer behavior in each one. They found that calls that ended in orders saw objections at 6.4% of client behavior, and advances saw objections at 6.5%. Calls that ended in continuations saw objections at 9.3% of client behavior, and no sales averaged 13.4%. The common wisdom that objections are good for sales is not valid for larger sales.
Features are also not beneficial for larger sales. For example, watches have a vast range in price points, from extremely cheap to prohibitively expensive. Inexpensive watches often offer features such as water resistance up to a certain depth or GPS syncing. There is a great deal of competition in affordable watch brands. Luxury watches, in contrast, offer very few features, if any at all. The competition is also less fierce, as certain brands are associated with quality and luxury, and buyers gravitate toward them. When dealing with luxury watches, if a buyer decides they need a particular brand or style, nothing but that brand or type will do, regardless of its features.
The problem with selling based on features is most apparent when companies launch new products. Companies generally have a new product launch, in which they extol the virtues of the new product and work to get the salespeople excited about it. The prevailing wisdom is that this enthusiasm will rub off on the clients. Huthwaite’s research illustrates that the opposite is true. Salespeople tend to focus on the product rather than the client when introducing new products. When dealing with new products, salespeople ask fewer questions to develop client needs. On average, salespeople asked about 24 need-developing questions per sales transaction when dealing with existing products, which fell to roughly 16 questions with new products.
In contrast, salespeople averaged almost six features or advantages per sales transaction when dealing with existing products. This rose to over 18 instances of features or advantages with new products. These shifts are attributed to the failure of many new product launches, as the salespeople become overly focused on the product rather than the client.
