Last month, I had a unique opportunity - I was able to sit down with two guys who had done high end sales in the past, and have now since moved on to running their own companies.
I met them separately about two weeks apart. One used to sell high end audio equipment, the other raised money from accredited investors for some kind of fund.
Sales is one of those things that's crucial to everyone's lives, but rather hard to nail down. There's lots of literature available on it, but much of it is outdated - or was never even correct in the first place.
I asked both guys their favorite books on sales. Both of them replied, right away, with "SPIN Selling by Neil Rackham" - they each had separate other recommendations, but when the first book recommended on a topic by two people who have succeeded at a really high level in unrelated parts of the same field... well, you're probably on to something.
I got a copy, read it, and I'm blown away. I'm also kicking myself - Judd Weiss gave me a copy a few years ago and recommended it to me then, but my reading list was too long and I didn't get to it. Man, reading this earlier would have saved me a lot of trouble.
Rackham's good because he's not a salesman - he's a researcher, and a pretty thorough one. His sales research/training organization, Huthwaite, would be brought in to identify the what top salespeople in companies were doing and generalize it so the company's performance would increase.
Throughout the book, he mentions when his statistical controls are adequate or poor, and he's very aware of causation/correlation and very skeptical of his own results. It's very different from anything else I've read on selling which tend to be more "war stories" oriented about landing a huge account by doing something crazy. Which is good, but the statistical/research rigorousness of SPIN Selling makes it a very different kind of book.
A few of my biggest takeaways -
1. Most of the research and literature on sales was done on relatively small dollar sales. That means the person you're selling to probably has buying authority immediately (as opposed to needing to consult and get approval from other people at their company), and the cost of getting an item that's not great for you is relatively small. This means that most of the sales literature that's useful for small dollar sales can be irrelevant or even counterproductive for larger sales.
2. He demystifies closing right away - and amazingly, found that repeatedly and persistently trying to close on high dollar sales leads to lower performance. A fantastic insight - if you've gone through any sales literature, you've probably heard, "Close! Close! Close!" You've probably gotten a variety of tactical closing advice. A lot of that has always seemed off to me - if you're writing a proposal for a $100,000 contract over 12 months, "Should we start on Wednesday or should we start on Thursday?" seems like a rather ineffective way of trying to get the sale. Indeed, that's what Rackham and Huthwaite found in their research - frequently closing leads to higher sales on low dollar items, but lower sales with sophisticated buyers on high dollar sales.
3. Rackham is clear to differentiate between his research and speculation as to why. He speculates that aggressive closing is an activity that puts pressure/stress on the potential buyer. If you're selling a $15 item that the person is 50/50 about wanting, just buying it is an easy relatively low risk way of dissipating the pressure. On higher dollar sales, it makes whoever you're talking to not want to talk to you any more.
4. The most effective closing technique that Rackham found for high dollar sales? He found most "closing tactics" counterproductive, including, surprisingly, even asking for the order. The most effective one was suggesting what was to happen next.
5. In higher dollar sales, the person you're selling to then has to sell their organization. Therefore, it's more important to help them get a concrete repeatable understanding of what benefits their organization is getting. If you say it and it's impressive, but they can't remember the details later, then you're in trouble when their boss asks why they're in favor of your product.
6. On the topic of benefits, what most people think of as benefits aren't very effective. After a lot of research and investigation, Rackham divided benefits into two rough categories - the first category is explaining what the product helps the person do. "The printer system runs at high speeds, so you spend less time waiting for your copies and brochures." Many people think of that as a benefit. Rackham found that those are slightly better than just features ("this printer runs at 200 pages per minute" without explaining why that helps), but not all that effective. The most effective way for benefits is to emphasize how it helps meet a explicitly stated revealed need. So the person has explicitly stated, "Our last printer would break down and screw up our operations," and you emphasize "Our printers come with a reliability guarantee, and service within 6 hours of any emergency call - so your printer is never broken down and screwing up your operations."
7. Rackham says that it's one of those things that might seem obvious or like splitting hairs, but the majority of salespeople don't do it. You shouldn't push benefits heavily until finding out what they are, and importantly, having the person who is going to buy explicitly state it - Rackham advises against making logical inferences that a person would benefit from something until they explicitly state what their need is.
There's more to it than that - he has a system of questions of getting people to explicitly draw out their needs and identify how they'll benefit from a solution - that way, they're more likely to be excited individually but also more likely to remember the details so they can sell people inside their organization later.
I'd highly recommend Spin Selling. I'm going to re-read it again in a week or so to get more of a grasp on the nuances of it.
Darn, I was just there and one of the seminars I lead is a condensed, focused version of the Columbia Business School's Entrepreneurial Sales course. The course is amazing -- what you'd expect from a top business school course taught by a practitioner, not an academic.
From the catalog: "This course teaches participants state-of-the-art selling skills that can be used with prospective clients, venture capitalists, potential partners, investors and candidates for employment. The course is highly interactive and skill based and uses videotaped role-playing exercises to enhance skill acquisition. Subjects include relationship building, analyzing the client’s situation, making effective sales presentations, resolving objections, gaining commitment and precall planning. Skills developed are applicable worldwide, and both cultural similarities and differences with respect to the sales process are discussed throughout the course. Whether you need start-up capital, senior management to back your ideas, or customers to hire your firm or buy its products, selling skills are crucial. You will develop them in Entrepreneurial Selling. This course is particularly relevant for students interested becoming entrepreneurs and for those seeking careers in consulting and financial services."
Let me know if you want to cover it next time.
SPIN is great, a bit of a tough read. I am sure there would be some great notes/courses based around it.
One of my friends who is a killer sales person says "Sell people their dreams and they will buy every time".
A technique to find out, ask them what they want to achieve, ask them why that's important, ask again why that answer is important and then ultimately to achieve what? (digging deeper to what they really desire, often more time with family or they want a boat to take their friends out on etc).
Then you keep bringing them back to how buying from you will get them that (if it truly will). e.g. if your selling websites. They aren't buying a website from you, they are buying a lead generation system that will make them enough money to buy the boat they want.
As far as I've just finished reading "How I raised myself from failure to success in selling" by Frank Bettger and it's phenomenal. You should definitely check out the reviews and judge for yourself! You seldom see so many good reviews for a book. I know its name sounds cheesy but it really is the deal.
I'm gonna get myself a copy of spin as well :)
SPIN is great as a questioning technique and sales meeting process. If you are doing large ticket selling or B2B, Strategic Selling by Miller & Heiman is fantastic as well.
Thanks for the article; I've gotten a copy of the book and I'm reading it now.
I'm curious about what the other books on their respective lists were. Would you mind sharing them with us?
Question from a reader --
"Hello, you don't know me of course, but I've been reading your posts for a while and it kinda makes me do greater things than I usually do (well mostly it makes me "wanna" do greater things but there has been noticeable improvement). But let me cut to the chase. I'm a relatively decent economics student from Croatia, but my problem is the college isn't really teaching me anything practical so when I leave the said institution in two years I'll be left with no definitive skill with real application in the current economic state, or any economic state I'm afraid. With this as my base http://sebastianmarshall.com/my-best-guess-as-to-what-an-aspiring-artist-should-do (as I'm also a photographer), and my usual voracious reading appetite, is there anything more you can recommend to someone who would like to one day start his own business, like books ,specific areas and skill sets to develop? The stuff I'm already working on is programming, social skills and developing a hard-working mindset (or maybe its smart-working) that my current social group/peers/family lack. Thanks, M"
Seems like you're on the right track with the learning. Here's two recommendations --
1. Accounting2. Sales
First, accounting is the most useful course to take at university if you want to run your own company.
Question from a reader --
However, I'd say this -- Why are you cold calling, anyways?