Every once in a while it can help to go back and look at the classics, and for modern B2B sales one of those classics is Neil Rackham’s SPIN Selling. Originally published in 1988, SPIN Selling was one of the first sales books to be based on empirical research and to target the ‘Complex Sale.’
By ‘Complex Sale’ Rackham means any B2B sales that requires multiple sales calls and involves multiple decision makers. Research at Rackham’s company Huthwaite found that in the complex sale the most important place to spend time was in (i) uncovering the problem that a customer has and then (ii) drawing out the implications of the problem for the customer. Once the sales person and the buyer have drawn out the implications of the problem they work together to understand the Need and Payoff. The SPIN acronym is Situation, Problem, Implication, Need-Payoff.
While rereading this book it was interesting to look at the comments and ratings on Amazon.com. The book still gets a lot of comments, and these tend to be divided between those who love the book and others who believe that Rackham is not a real sales person and that his ideas are not relevant to real sales people. A closer parsing out of the reviews suggests that most of the people who do not like the book are people engaged mostly in relationship selling, where the most important element in the sale is the friendship and trust between the buyer and seller, or people who are fans of the hard close.
One distinction that Rackham makes in SPIN Selling is between Benefits and Advantages. He uses these words differently from the way they are used in value-based selling, and by calling out the difference we can get a feeling for how selling is changing in today’s tight economy where competition is intense and procurement has a big impact on sales’ success. An Advantage (also known as a Type A Benefit) is “how a product or service can be used or can help the customer.” A Benefit (Type B Benefit) “shows how a product or service meets an Explicit Need expressed by the customer.” In value-based selling and the platforms that support it we tend to use the terms Benefit for what Rackham calls an Advantage and Value Driver for what he calls a Benefit. In value-based selling it is critical to go on from identifying value drivers to actually quantifying them with the customer. See Figure
How well has SPIN Selling stood the test of time? Judging by an informal poll of sales executives that we work with it is still well regarded but is not, by itself, enough to deal with today’s hyper competitive environment. There seem to be three points of stress:
- Today’s buyers know that they have alternatives and aggressively identify and compare them. Sales people need to be able to identify the three-or-four ways in which their solution in quantitatively better than the alternatives.
- Procurement plays an important and unavoidable role in B2B sales. Procurement tends to drive towards commoditized solutions and to negotiate on price. Sales needs to provide the business buyer with compelling, value-based messages for that can be used with procurement.
- Negotiating price is a critical part of B2B sales, where the list price is often the no more than the starting point. Successful price negotiation requires an understanding of the differentiation value, mere statements about benefits and advantages no longer cut it.
SPIN Selling remains relevant, but it can be made more powerful by blending it with value-based selling. Value-based selling gives sales the information and structure it needs to (i) make sure that competitive situation is fully factored in to selling and (ii) that the Benefits (or as we say Value Drivers) are quantified and can be used in price negotiation. The best way to do this is through a conversation around value.