Spin selling methodology

In the 1980s, behavioral psychologist Neil Rackham conducted research over 12 years and 35,000 sales calls, looking at what sellers and buyers actually did during those sales calls. He then correlated that research with sales success.

Rackham was hired by Xerox, Kodiak, Motorola, and others to use that research to help them develop their internal sales methodologies.

In 1988, he founded SPIN Selling, which stands for Situation, Problem, Implication, Need-payoff.

The approach is best suited for complex B2B selling situations and focuses on helping buyers draw their own conclusion that they need the product or service. This strategy emphasizes asking good questions in the right order, using active listening, and translating prospects' needs into features of your product. (Many of the SPIN principles work well with inbound sales).

SPIN Selling methodology

Questions are at the heart of SPIN Selling. Rackham and his team discovered that top-performing salespeople rarely, if ever, ask random, low-value questions. Not only does each question have a clear purpose, but the order in which the questions are asked is strategic.

SPIN stands for the four stages of the questioning sequence:

S: Situation

P: Problem

I: Implication

N: Need Payoff

Situations

Situational questions such as "What tools are you currently using?" serve as a way to gather information.

Problem

Problem questions, such as "Does this process ever fail?", are used to identify pain points and problems faced by potential customers.

Implication

Implication questions such as "What's the productivity cost when it does?" help the sales rep underscore why those pains need to be solved.

Need for Payoff

Need Payoff questions such as "Wouldn't it be simpler if...?" lead the potential customer to draw their own conclusions, rather than immediately leading them to jump in.

SPIN Questions

SPIN situational questions

Use situational questions to find out where your potential customers are at - from their processes and the problems they face, to your competitors' plans and performance. The specific questions will depend on your product; for example, if you offer leadership training for middle managers, you might ask: "How are you currently teaching first-time managers best practices and strategies?".

On the other hand, if you sell office supplies, you might ask: "How are you currently buying office supplies?".

SPIN problem questions

At this stage, company representatives identify potential areas of opportunity. In other words, what gap is not being filled? Where is the prospect dissatisfied? They may not be aware that they have a problem, so delve into common places where your solution adds value.

• How long does it take to do X?

• How expensive is X?

• How many people are required to achieve the necessary results?

• What happens if you’re not successful with X?

• Does this process ever fail?

Questions about the implications of SPIN

Once you've identified the problem, find out how serious it is. Implication questions reveal the depth and scale of a potential customer's problem - while giving you valuable information to tailor your message and instill a sense of urgency in the buyer.

According to Rackham, by the time you finish this part of the conversation, the potential customer should have a new appreciation for the problem.

• What’s the productivity cost of doing X that way?

• What could you accomplish with an extra [amount of time] each [week, month]?

• Would your customers be [more satisfied, engaged, loyal] if you didn’t experience [problem related to X]?

• If you didn’t experience [issue], would it be easier to achieve [primary objective]?

SPIN Need Payoff Questions

Need Payoff questions encourage the potential customer to explain the benefits of your product in their own words, which is much more compelling than listening to you describe those benefits.

Essentially, you ask questions that reveal the potential of your offering to help solve a basic need or problem. These questions focus on the value, importance or usefulness of the solution.

Examples of Need Payoff questions include:

• Would it help if … ?

• Would X make it simpler to achieve [positive event]?

• Would your team find value in … ?

• Do you think solving [problem] would significantly impact you in Y way?

The 4 stages of SPIN selling

When you start implementing SPIN questions in your conversations with prospects, think about the lifecycle of your conversation. Rackham says there are four basic stages to any sale:

1. Opening (also known as 'preliminaries')

2. Research

3. Demonstrating the opportunity

4. Gaining commitment

5. Opening

SPIN Selling and inbound sales use the same approach to the initial call or conversation. Representatives should not immediately go into the features and benefits of their product - such an overly aggressive strategy will not only discourage potential customers, but salespeople will also miss opportunities to gain valuable information.

The goal of the conversation is to grab the buyer's attention and start gaining their trust. Lead the conversation with a relevant insight or thought-provoking question.

Investigate

Investigation is the most important phase of SPIN Selling. It is the equivalent of an exploratory conversation: You determine how your product can help the buyer, identify their priorities and buying criteria, and gain credibility by asking relevant, targeted, strategic questions.

According to Rackham, a strong questioning strategy can improve your sales closing rate by 20%.

Demonstrating the opportunity

Once you've connected the dots between your solution and your potential customer's needs, you need to demonstrate that connection.

There are three basic ways to describe a product's capabilities, says Rackham:

1. Features

2. Advantages

3. Benefits

Objections

In any transaction, objections are inevitable. In fact, you should be more concerned if you're not getting them - it means your prospect has objections that they're not sharing with you. Your goal is to discover why the buyer hasn't yet decided to make that purchase, and then help them understand why their concerns aren't real roadblocks.

(Of course, if there's a legitimate reason why your product isn't right, you shouldn't have to convince them otherwise.)

Rackham argues that there are two types of objections:

1. Value: your potential customer is not convinced about the ROI of your product. He may say, "I like its features, but the cost is too high."

2. Opportunity: Your potential customer doubts that your product can meet their specific needs. This translates into comments like, "I'm not sure the product will be able to do X for us," "It seems like this process will take longer than you say," and "I think we need a more elaborate solution."

Opportunity objections can be further broken down:

1. Can't: Your solution cannot solve one of the buyer's top priorities

2. Can: Your solution can solve one of the buyer's top priorities, but they don't see it.

"SPIN Selling" was published over 30 years ago. Although the basic techniques and principles in it are still relevant, the typical buying journey has evolved. If you are going to use the SPIN model, you should update it.

1. Ask as few questions as possible about situations and problems.

Potential customers simply don't have the patience to do your homework for you. They don't want you to identify pain points they already know about - if they did, they would simply buy the solution themselves. You are valuable because you can find opportunities or pain points that your buyers don't yet know about.

With this in mind, use thought-provoking questions such as: "Has your organization ever considered [new strategy]?", "Are you aware of [surprising statistics]?" and "Would you like recommendations on how to prepare for [upcoming industry event]?"

2. Integrate social selling into your strategy.

When Rackham published his book Social Selling, LinkedIn didn't yet exist. Now you have far more insight into the prospects, priorities and personalities of your customers than salespeople in the late 1980s could have dreamed of. Don't let this valuable resource go to waste.

3. Lead their buying process.

As the average number of stakeholders involved in each B2B transaction increases and internal buying processes become more complex, your expertise becomes more valuable. Potential customers need you to help them buy your product in a way they've never done before. Come prepared with job titles - and potentially the names, if you can find them - of colleagues who need to be informed or consulted.