Book SummarySPIN Selling, by Neil Rackham

1-Page Summary1-Page Book Summary of SPIN Selling

The first widely used sales model was developed in the 1920s, and it established the basic ideas of traditional selling, such as using open and closed questions, presenting product features and benefits, handling objections, and using standard closing techniques (such as creating artificial time urgency).

However, in the 1990s, the traditional sales model started becoming less effective as sales grew in price and complexity. SPIN Selling by Neil Rackham created a new model for larger sales, based on research into what top salespeople were doing differently to make major sales.

Rackham, founder of Huthwaite International, a sales research and consulting firm, found that winning major sales requires asking customers different types of questions, rather than just open and closed questions. Further, the techniques and strategies effective in small sales can be a hindrance in large sales.

Rackham developed and extensively tested a new model for major sales, SPIN Selling, which uses a questioning method capsulized by the acronym SPIN: S-Situation, P-Problem, I-Implications, and N-Need-Payoff. SPIN Selling is about how to apply this method.

Sales models have continued to evolve in the 32 years since the book was published in 1988; a variety of models are now debated, taught, and practiced. But SPIN selling principles are still core sales practices, and the book has become a classic and a template for successful selling.

Small Versus Large Sales

Rackham’s research found that large sales require a more sophisticated conversation with the customer because they’re different from small sales in key ways:

• Length of the selling cycle: Small sales often can be handled with one call, in which the customer buys on the spot. In contrast, a major sale often requires making many sales calls to a customer over months.
• Size of the commitment: In a small sale, since the customer isn’t spending a lot of money, the rep doesn’t need to strongly emphasize the value of the product to the customer to get him to buy. However, in a large sale where the customer is making a big financial commitment, the rep must increase the perceived value of the product or service to make it seem worth the price.
• The ongoing relationship: In a small sale, there’s usually no long-term relationship. But in large sales, the rep has a long-term relationship with the customer because multiple calls are required to close the sale.
• The risk of mistakes: When the purchase is small, the customer doesn’t worry much about losing money if it doesn’t work out. In contrast, customers are extremely cautious about making large buys because mistakes are costly.

Four Stages of a Sales Call

Despite the differences between small and large sales, all sales calls have basic similarities. There are four typical stages:

1) Warming up/Opening: The opening is how you introduce yourself, establish connection, and start the conversation. Sales training often teaches that the customer’s impression in the first few minutes of the call is critical to the sale. The opening may have a bearing in a brief one-call interaction, but in large, protracted sales, your opening is less important than what you do in the next stage: the investigating stage.

2) Investigating: In this stage, you ask questions to get information. You’re trying to better understand the customer and discover her needs. Sales reps in large sales ask a greater number and type of probing questions than reps do in small sales, because the stakes are higher.

3) Demonstrating value: Once you understand the customer’s needs, the next step is to show how your product or service can help. In larger sales, where you’re often selling a broader solution, you need to show how your solution solves the customer’s specific problems in a way that makes it worth the cost.

4) Getting commitment: To be a success, a sales call must end with a customer commitment.

In small sales, the customer usually commits to buying the product, while in large sales, she may agree to another meeting or to provide access to a decision-maker. Such intermediate steps are called advances because they advance the sale by moving the customer toward a decision.

Traditional sales training emphasizes the commitment stage—the closing—as the most important, and it advocates a variety of high-pressure closing techniques. But in a major sale, investigating is the most important stage.

The SPIN Selling Approach

Huthwaite researchers found that successful reps in large sales spend the most time on the investigating stage and handle it differently from the traditional approach.

In traditional sales, reps emphasize product features and use standard techniques to address objections and close a sale. In contrast, successful reps ignore traditional techniques and instead focus on asking four different types of questions in a certain order, the SPIN sequence. Here’s how to use this process:

1) S-Situation questions: Start by asking fact-finding and background questions, such as, “What do you see as the company’s biggest growth opportunities?” Asking too many of these questions can impose on the customer’s time and patience, so use them judiciously.

2) P-Problem questions: Once you understand the customer’s situation, ask questions that explore problems or issues your product or solution can solve—for instance, “Are you concerned about meeting your clients’ quality standards with your aging equipment?” Less experienced reps don’t ask enough of these questions.

3) I-Implication questions: Asking good situation and problem questions may be enough to win a small, uncomplicated sale. However, you need to go further in large sales and ask more sophisticated questions that explore the implications or ramifications of a customer’s problem—for example, “How will this affect your fourth-quarter results?” or “What will this mean for your...

SPIN Selling Summary Introduction

The first widely used sales model was developed in the 1920s by E.K. Strong, and it was practiced with few changes for the next 60 years. Strong’s sales model established the basic ideas of traditional selling, such as using open and closed questions, presenting product features and benefits, handling objections, and using closing techniques.

However, in the 1990s, the traditional model started becoming less effective as sales grew in price and complexity. SPIN Selling by Neil Rackham created a new model for larger...

SPIN Selling Summary Chapter 1: The Evolution of Sales

For over 60 years, sales organizations preached and practiced the conventional wisdom that traditional selling methods worked in all sales. Standard techniques and skills included:

• Opening the call: Establish a personal connection with the buyer, or introduce product benefits.
• Investigating the customer’s needs: Use open-ended and closed (yes or no) questions to uncover needs.
• Presenting benefits: Once you’ve determined the customer’s needs, describe the benefits of buying your product by showing how its features can help.
• Handling objections: Use a range of techniques to overcome customer objections or resistance; for instance, rephrase the objection as a question you can answer.
• Closing the sale: Make a strong closing—use pressure if the customer hesitates—that seals the deal.

Sales training placed particular emphasis on asking appropriate open-ended and closed questions during the investigation stage and on making a forceful closing. But Rackham’s field experience and research showed that some of these traditional techniques were a bad fit for large sales because those sales had different characteristics.

The Major Sale

Major...

SPIN Selling Summary Chapter 2: Closing Successfully

Closing—seeking a commitment from the customer—has long gotten more attention than any other selling skill.

It’s obviously important—if you don't win sales, you don’t have a business. But all closing isn’t the same. It works differently in small sales than it does in large sales. Traditional closing techniques that may be effective in small sales backfire in large sales.

The adage on closing is that “The ABC of selling is Always Be Closing.” Many books and articles on selling have the word “closing” in the title. Standard techniques have included these types of closes:

• Assumptive close: Asking questions that assume the customer will buy, although he hasn’t agreed to do so—for example, “When is the best time to schedule installation?”, or “When do you want to start?”
• Alternative close: Asking a question offering several specific alternatives—for instance, “Would you prefer delivery on Wednesday or Thursday?” This is a variation of the assumptive close. Both are based on the “assumption principle” of acting as if the customer has agreed to the sale.
• Standing room only: Pressuring the customer by suggesting that if he doesn’t buy now, he may not be able...

SPIN Selling Summary Chapter 3: Customer Needs

In sales, a need is defined as a want or problem stated by the customer that the seller can address. Salespeople discover, develop, and address customer needs in the investigating stage of a call. This requires both questioning skills and an understanding of how customer needs develop.

Customer needs develop differently in small and large sales, and they require different sales approaches to gain commitment.

A customer’s need to buy a relatively inexpensive item can develop quickly, with little or no input from a salesperson. For example, you might be walking through an airport, and a $15 gadget in a store display catches your eye. Within a few seconds of looking at it, you feel a need to buy it. There’s very little time between the development of the need and your commitment to buy the gadget. Similarly, in a small sale, asking one or two problem questions that highlight a need may be enough to motivate the customer to buy a relatively inexpensive item immediately.

However, a customer's perceived need for a bigger-ticket purchase takes much longer to develop. A sales rep uncovers and “develops” the need by exploring a problem the product will address, and creating an...

Shortform Exercise: Developing a Need

For many purchases, it takes a while to make up your mind to act. You go through a process of need development that starts with a hint of dissatisfaction with the way things are. The steps after that are:

• You start noticing more flaws
• You realize you have problems with it
• You want to change it—now

Think of a time when you went through this process recently. What did you become dissatisfied with? What first caused you to be dissatisfied?

SPIN Selling Summary Chapter 4: The SPIN Strategy

The four question areas of the SPIN strategy—Situation, Problem, Implication, Need-payoff—are the key to converting a customer’s implied needs into explicit needs in a large sale.

Situation Questions

Situation questions are intended to gather facts and background information about the customer’s situation. They’re the first questions asked during a sales call. They’re aimed at getting to know the customer personally and learning about the business and how it operates.

Examples are:

• “How long have you been in your position?”
• “Do you make buying decisions?”
• “What’s your company’s annual sales volume?”
• “What equipment do you use? How old is it?”

Situation questions are the easiest and most straightforward questions to ask, so they tend to be overused by inexperienced sales reps.

Situation questions are necessary in most sales, especially early on, because you need to understand the customer’s business. But research indicates their value is limited:

• Situation questions don’t contribute to success. In successful calls, reps ask fewer of these questions; in unsuccessful calls, they ask more.
• Inexperienced reps use these questions more than...

Shortform Exercise: Weighing Value

When considering purchases, people typically use a value equation: they weigh the magnitude of their need or problem against the cost of the solution. Put another way, they ask themselves, “Is my problem or need big enough to warrant paying this much?”

Think of a situation where you considered replacing something, but decided the cost was greater than your need or desire to have a new version. What factors did you consider in deciding against the purchase?

SPIN Selling Summary Chapter 5: Presenting Benefits

After the investigating stage of a sale where you ask SPIN questions, the next stage is demonstrating value. This stage, also referred to as demonstrating capability, is where you present your solution. In a major sale, some ways are more effective than others.

For the last 60 years, sales training has advocated using features and benefits to demonstrate value, or describe your products and services. The conventional wisdom has been that features are facts or characteristics about a product; they aren’t persuasive. Benefits are the ways features help the customer, and they’re a compelling way to present your solution’s value.

But research indicates that:

• The way reps are trained to use benefits is ineffective in larger sales.
• The traditional approach is likely to get a negative response.
• Defining a benefit is more complicated than it seems.

Features

Conventional wisdom has held that facts/features are neutral, neither helping nor hurting sales success. Examples are: “The cost is $20,000,” “We have two models, basic and enhanced,” or “This computer has X amount of memory.” Facts play out a bit differently in small and large sales—**research has...

SPIN Selling Summary Chapter 6: Limiting Objections

Typical sales training in handling objections contends that reps should welcome objections as a sign of customer interest, and the more objections a rep gets, the more successful she’ll be. Hence, most sales training focuses on teaching reps techniques for handling objections. (This sales training focus is second only to teaching closing techniques.)

But research on objections tells a different story. It shows that:

• Objection handling isn’t as important as trainers contend.
• Objections are prompted by the seller’s actions more often than they’re raised independently by the customer.
• Inexperienced sales reps get more objections than experienced reps.
• Experienced reps prevent objections rather than handling them.

Using features, advantages, or benefits prompt different customer responses. Here’s a summary of the typical customer responses:

Shortform Exercise: Try the SPIN Sequence

In the SPIN sales method, reps ask four types of questions during the investigating stage of a call: Situation, Problem, Implication, and Need-payoff questions. Practice the sequence by thinking through a previous sales meeting or one you're planning for soon.

Picture a customer you've met with or will meet with. What problem questions are most appropriate for this customer?

SPIN Selling Summary Chapter 7: Opening the Call

How you should open a sales call—that is, how to introduce yourself and start the conversation—depends on whether it’s a small sale or large sale. They take different approaches to get the call off on the right foot.

In discussing openings, this chapter focuses on how to approach initial meetings with new customers, as opposed to opening calls in an ongoing sales process.

Most older sales training asserted that first impressions could make or break a new customer interaction. But research indicates first impressions carry less weight than once thought. Of course, a professional overall appearance is important, but small details matter less. The impression you make in the investigating stage is far more crucial to sales success than your initial interaction is.

The reason first interactions matter less than people think is that in the early stages of meeting someone, you’re getting so much information that you immediately forget some things—sometimes even the person’s name.

Certain details, such as dress, may matter more in small sales, but a great outfit and opening line aren’t going to significantly boost your chances of success in a large sale.

Traditional...

SPIN Selling Summary Chapter 8: Implementing the SPIN Model

Successful SPIN selling requires a commitment to diligently practice the skills. This chapter is not only about what skills to practice, but also how to practice.

Four Practice Rules

Everyone has the ability to learn new skills by following four principles.

Rule 1: Practice One New Behavior at a Time

People who are seeking to improve their skills often try to change too much at one time. For instance, after reading this book, you might resolve to eliminate closing techniques, ask more problem questions, ask implication questions instead of jumping into offering solutions, avoid presenting too many features, and so on.

But to learn difficult new skills, you need practice one new behavior at a time, not a half-dozen. So choose one new behavior from the book, and keep practicing it until you’re comfortable with it.

Rule 2: Try a New Behavior at Least Three Times

Expect new behaviors to be awkward when you first try to implement them. For instance, if you’re trying to learn to ask implication questions, they’re going to sound contrived when you first start asking them. You might even be tempted to give up and try another new skill. But you have to...

Shortform Exercise: Learn a New Selling Skill

The best sequence for learning a new sales skill is: pick one skill to work on, choose a low-risk call where you can practice it, and try it at least three times.

What new selling skill from this book would you like to implement and why?

Shortform Exercise: Analyze a Sales Call

One way to improve your selling skills is to review your sales calls after the fact to determine what worked and what you can do better the next time.

Try this with a recent sales call. Did you accomplish your objectives? How so?