My take on Spin Selling (part 3 of 8)

Spin Selling

by: Neil Rackham

Neil Rackham is a best selling author. You can read more about him at his website linked to his name.

Customer Needs in the Major Sale

The studies at Huthwaite revealed that the stage with the strongest influence on overall call success is Investigating.

Remember, the Investigating stage: Asking questions and collecting data about customers, their business, and their needs.

It’ sin the nature of major sales that needs aren’t instant.

Different Needs in Small Sales and Large

Contrasts between smaller sales and larger sales:

  • Need development is faster in smaller sales than it is is larger sales.
  • Larger sales require consulting with others, smaller sales do not.
  • The strong emotional component of a smaller sale is not acceptable in larger sales.
  • A bad purchasing decision in a smaller sale is, well…smaller.

Broadly speaking, Huthwaite says that as the sale becomes larger:

  • Needs take longer to develop.
  • Needs are likely to involve elements, inlfuences, and inputs from several people, not just the wishes of a single individual.
  • Needs are more likey to be expressed on a rational basis, and even if the customer’s underying motivation is emotional or irrational, the need will usually require a rational justification.
  • A purchasing decision that doesn’t adequately meet needs is likely to have more serious consequences for the decision maker.

Huthwaite’s research suggests that these differences are substantial. Enough so that they require a different set of questioning skills.

For research purposes, Huthwaite defines a NEED as:

Any statement made by the buyer which expresses a want or concern that can be satisfied by the seller.

For these purposes there is no distinction between the needs and wants of a buyer.

How Needs Develop

The first sign of a need is a slight discontent or dissatisfaction.

Needs normally:

  • Start with minor imperfections.
  • Evolve into clear problems, difficulties, or dissatisfactions.
  • Finally become wants, desires, or intentions to act.

In small sales these stages can be almost imstantaneous. In larger sales the process may take months or even years.

Implied and Explicit Needs

Huthwaite looked for a simple way to express this series of stages. They decided to divide needs up into two types:

Implied Needs. Statements by the customer of problems.

Explicit Needs. Specific customer statements of wants or desires.

In larger sales, one of the principle differences between very successful and less successful salespeople is this:

  • Less successful people don’t differentiate between Implied and Explicit Needsm, so they threat them exactly the same way.
  • Very successful people, often without realizing they’re doing so, treat Implied Needs in a very different way than Explicit Needs.

Huthwaite’s research showed that, in simple sales, the more Implied Needs you can uncover, the better your chance of getting the business.

What matters in the larger sale isn’t the number of Implied Needs you uncover, but what you do with them after you’ve uncovered them.

Why Implied Needs Don’t Predict Success in Larger Sales

Anyone making a decision to purchase must balance two opposing factors:

  • The seriousness of the problems that the purchase would solve.
  • The cost of the solution.

In many small sales, because the cost is so low, it is easy for relatively superficial needs to tip the balance in favor of purchase.

The Value Equation

The Value Equation is the relationship between the size of needs and the cost of a solution.

If a customer perceives…

  • the problem to be larger than the cost of solving it = sale
  • the problem to be small and the cost to be high = no sale

This explains why, in smaller sales, you can sell just by uncovering problems. In major sales, you must develop the need further so that it beocmes larger, more serious, and more acute in order to justify the additional cost of your solution. Remember the pyschological aspects of a major sale? These usually add to the cost side of the equation. (example: entering a relationship due to length of sale, risk of bad decision costing job)

Explicit Needs and Success

Huthwaite did research to show that, in larger sales, Implied Needs were not significantly higher in successful calls, but Explicit Needs were twice as high.

So, in larger sales, Implied Needs don’t predict success, but Explicit Needs do. In smaller sales, both may predict success. A probing strategy for the larger sale must uncover Implied Needs then convert by questions into Explicit Needs.

Buying Signals in the Major Sale

Implied Needs are accurate buying signals for small sales. Explicit Needs are the buying signals that predict success in larger sales. Less experienced people put too much weight on Implied Needs.

The purpose of questions in the larger sale is to uncover Implied Needs and to develop them into Explicit Needs.

In the next chapter, Rackham shows how this can be done using the SPIN questions.

Remember- The work you’ve just read is Neil Rackham’s. I have simply outlined his book. Most of the words above are his own. At times I paraphrased.

Until next time…

Keith Porterfield

a Student of Sales

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s