Summer vacation season is coming in Japan now. Many companies, including my customers and partners as well, are closing this week. Therefore, I am spending relaxed days. Thanks to that, I could use my time for learning something new — sales methodologies. This article aims to summarize my learnings.
Currently, I work for the US-based IT company as Sales Engineer. Though I sell company’s products every day, I don’t have solid knowledge in sales. For a long time, I was feeling a necessity to complement it. SPIN Selling, a book recommended by one sales professional, seemed an ideal for my needs. This is a classic book published in 1988 but it is still popular among sales people today. Once starting to read it, I realized that this is the book I was looking for.
Investigation is Crucial than Demonstration
This book defines sales call progresses as following four distinct stages.
1. Preliminaries: The warming-up events at the start of the call
2. Investigating: Finding out facts, information, and needs
3. Demonstrating Capability: Showing that you’ve got something worthwhile to offer
4. Obtaining Commitment: Gaining an agreement to proceed to a further stage of the sales
So, which stage do you think is most important? From nature of Sales Engineer, I thought that the Demonstrating Capability stage is most important. However, this book answers that the Investigating stage is the best based on their extensive research. Since we can find out a problem the customer really wants to solve, we can show a product as the solution for it. Unless the customer has strong needs, a demonstration would be just a time-wasting activity for each other. Thus, we have to think about what we will ask, not about what we will tell.
In this point, I had one question. How to find out customer’s needs? One of the methodologies is the “SPIN” questions introduced in this book. Using it, we can uncover implied needs of customers. Furthermore, even we can develop them into explicit needs!
Situation, Problem, Implication and Need-payoff
SPIN is an acronym for following question names.
1. Situation Questions
2. Problem Questions
3. Implication Questions
4. Need-payoff Questions
I think Situation Questions and Problem Questions are straightforward to understand. Those questions are literally asking “Situation” and “Problem” of a customer. In their research, many sales people stop their investigation in this phase and start to introduce their products as a solution. This way might work in smaller sales, but in larger sales are not. These subsequent questions, Implication Questions, and Need-payoff Questions will be a key to obtain a commitment from the customer in larger sales. (By the way, a unique feature of this book is that the author is talking about “larger” sales. He found that different perspective have to be required to smaller sales or larger sales)
On Implication Questions. This is a question to ask the consequences or effects of a customer’s problem so that the customer perceives the value of the solution we offer. For instance, “Does the slowness of your present system create bottlenecks in other areas of a process?” or “Because the preparation is so labor-intensive, the excessive time presumably means greatly increased cost?” are Implication Questions.
On Need-payoff Questions. This is a question to ask the value, usefulness, or utility that the customer perceives in a solution. For instance, “The preparation stage is an area you’d like to speed up?” or “So what you’d like to see would be a reduction in preparation costs?” are Need-payoff Questions.
I guess the difference between Implication Questions and Need-payoff Questions are confusing to understand. I like the episode that the author included into the book. The 8-year-child son of their team discovered the difference of it. Implication Questions are always sad. Need-payoff Questions are always happy. You might feel it is ridiculous. The author complemented it as follows. Implication Questions are problem-centered, they make the problem more serious, and that’s why they are “sad”. Need-payoff Questions are solution-centered, they ask about the usefulness or value of solving a problem, and that’s why they seem “happy”.
If you want to learn more, I would like to recommend reading the book. However, I know you are a busy person. I found a good summary movie of SPIN selling. It would be a nice alternative to learn it.
SPIN Selling — Business Book Academy:
If we could develop the customer’s implied needs into explicit needs using SPIN questions, the subsequent sales processes should be easier.
On the Demonstrating Capability stage. Generally, we tend to focus features or advantages of product we offer. We have to focus showing how our product or service meets an explicit need expressed by the customer.
On the Obtaining Commitment stage. The author pointed out that the traditional closing techniques possess a risk in large sales. One of the big differences between larger sales and smaller sales is that the existence of the ongoing relationship or not. We should care about the relationship with the customer because larger sales are not a one-time sales call. Pushing purchase might hurt a trust relation. We should confirm and summarize with the customer that our solutions are able to meet the customer’s needs at this stage. After that, we propose an appropriate level of commitment.
I am a newbie in sales. Therefore, I wanted to learn the basic methodologies of it. SPIN Selling exactly fulfilled my needs. I think the concepts which introduced in this book might be obvious for many sales people. Plus, this book was published roughly 30 years ago. However, many sales people are still talking about SPIN Selling today. This would be a proof that this book is worthwhile for learning basic methodologies of sales, especially for new people coming from different field like me.
Again, since we can find out a problem the customer really wants to solve, we can show a product as the solution for it. I recognized that my role in a sales call is that of problem solver.