People don’t buy products — they buy solutions to their problems. The SPIN selling framework can help you discover your clients’ problems so you can provide your customers with solutions.
If you want to crush your sales quotas for your team, startup, or company this year then look no further than using the SPIN selling framework to gain more customers, build longer-lasting business relationships, and provide massive value-add to the services you provide.
SPIN stands for Situation, Problem, Implication, and Need-Payoff. The SPIN selling framework originates from the seminal 1988 book SPIN Selling by Neil Rackham. The book is now considered a classic in the sales industry, and has offered a framework and techniques that are now considered standard practices among top-performers in sales.
This article will provide an overview of Rackham’s SPIN framework so that you can begin to take action and take advantage of the framework as early as today.
Using the SPIN framework, there are five key steps to the sales process:
- Pre-planning Outreach
- Outreach Preliminaries
- Investigation
- Demonstrating Ability
- Obtaining Commitment
This article will detail each step of the sales process so you can start crushing your sales quotas for this year.
1. Pre-Plan Your Outreach
Before reaching out to an organization or individual to make a sale, determine what your overarching objectives are. Are you trying to sell a piece of real estate? Are you trying to secure funding for your startup? Are you selling your consulting service?
Write down all the objectives that you ultimately have when reaching out to a potential client. For each overarching objective, write down a few sub objectives that will help you reach your overarching objective.
For example, let’s say you’re running a startup and you’re looking for money. You would write your overall objective as “Secure funding for my startup”. The more specific the objective, the better. So you can modify that overall objective and say something like “Secure $20 million in funding for my startup by December 2019”
The importance of making your sales objectives as specific as possible cannot be understated. When you make your sales objectives specific, it holds you accountable to when you do not achieve those objectives. If you are unable to reach your sales objectives, then either your sales objectives are too ambitious or you’re not working hard enough.
Your sub objectives might be something such as “Email 10 different venture capital firms”, and “Reach out to my friend Cory who knows how to create a compelling pitch deck for investors and have him give me feedback on my pitch deck”. Again, each sub objective should positively impact your overall objectives.
My recommendation is to have ambitious overall objectives but to have small sub objectives for each overall objective, and focus on completing each sub objective. Your sub objectives should be very small in scope because it makes you overall objectives seem like less daunting of a task. Reaching out to a friend to help with your pitch deck is a more tractable goal than just “Get $20 million for my startup”.
Before reaching out to a prospect via email or phone, write down some potential problems that the prospect might have that your product or service would help with. Also, write down some potential complaints or issues that might come up during the sales process and how you will address them.
Also, gather data about the prospect you’re reaching out to. When reaching out to a prospect, you want to spend less time trying to discover basic info and more time investigating problems that the prospect has.
2. Outreach Preliminaries
Outreach preliminaries is what you do when you initially contact a prospect. Here I want to dismiss a common myth that some salespeople cling onto: the concept that you need to build strong relationships with your prospects before you can sell them. Guess what?
You don’t have to build relationships with your prospects
The common adage that is often said for sales — that sales is all about building relationships with your prospect — couldn’t be anything further from the truth.
I have relationships with many different people. I have spoken with book authors, CEOs, professors, tradesmen, and generally have good relationships with them. However, that doesn’t mean I’ll ever sell them anything.
What matters more in a sale than building friendly relationships are two things: Establishing expertise in a specific subject matter and establishing credibility to your prospect that you will help them.
When you’re hiring Joe the plumber to fix your toilet, for example, you probably don’t care about how Joe’s family and friends are doing. Nor do you care about Joe’s personal life story or being friends with him. You care about one thing and one thing only: can Joe fix your house pipes or not?
Here’s a more extreme example of this. You might know of some people who are unpleasant to work with, antisocial, or they’re generally disliked by coworkers. However, these people still have a job and in some cases they can make very good money. This is because, despite being disliked or not having good relationships with their coworkers, they are so good at their job that they can’t be removed.
I’m not saying that you should purposely antagonize your prospects. What I am saying is that you should follow Steve Martin’s advice — be so good they can’t ignore you.
This doesn’t just apply to salespeople, either. This applies to nearly every profession. We hear all the time about movie actors or directors who are considered “difficult to work with” or “tough to manage” and yet they still make millions of dollars. That’s because at the end of the day, the movie producer knows that the actor or director they hire is incredibly good at their job and will make an incredible movie.
When reaching out to your prospect, don’t try to build an incredible relationship with them. Just establish who you are, what organization you’re working with, and establish your credibility and expertise in the field that you’re in. Don’t dwell on non-business topics or subjects. You’re there to talk to the prospect about how you can improve their bottom line, not about how the prospect’s wife and kids are.
3. Investigation
The investigation portion of the sale is where you bring out the SPIN questions. SPIN will help you to identify an issue with the company and end up closing the sale. Here’s how it works.
Situation
Situational questions are essentially fact-gathering questions. These questions help you figure out what the situation is like at the organization. Situation questions include:
- How many employees work for the organization?
- How much monthly recurring revenue does the organization have?
- How many sales representatives at the organization hit quota?
You don’t want to focus too much on the situational questions, and preferably you should already have a strong idea about the situation that the organization is in before you give them a call.
Asking too many situational questions will KILL the deal. So use the questions sparingly, and use these questions to help identify the…
Problem
Every organization, whether they know it or not, has at least one problem that could be fixing. As a salesperson, it’s your job to discover what that problem is to see if you can offer them a solution. How would this work in practice?
Let’s say you work in the sales department for this year’s hottest new SaaS unicorn startup, Timely. Timely is able to identify when invoices haven’t been paid on time and reach out to clients to remind them to pay their invoices. It is also able to identify the top-paying clients of an organization, and it uses AI to better target the top-paying clients of an organization.
You call up an organization, and begin asking them situational questions. What’s their MRR? Who are their main customers? What are the organization’s different sources of revenue?
Let’s say that you ask them what their different sources of revenue are, and the person on the other line isn’t sure. Then they say, “You know, we have a lot of different sources of revenue and to be honest it’s difficult to keep track of all of them and how much each one contributes to our bottom line and which ones we should focus on more.”
That’s a problem you can fix.
Sometimes you’ll have to push a little bit in the interaction to help the organization discover the problem. Let’s say the person just says that their organization has 100s of clients.
So you say, “Wow, that’s great. But I bet it’s probably difficult to keep track of all of those clients, and how much each of those clients are paying every month and how much they contribute to your organization right?”
The person on the other line pauses for a second, then says, “You know, it does get a bit confusing after a while. Sometimes companies don’t pay our invoices on time and it just gets lost because it’s so difficult to keep track of.”
That’s a problem you can fix.
Once you’ve identified at least one problem that your product can reasonably fix, move onto the next step.
Again, it’s important to note that every organization has at least one problem. It’s a question of if they have a problem that your product/service can solve. If an organization’s only problem is that the boss hates the color of the office walls, and you’re a SaaS company, there’s not much you can do to solve that.
Implication
Now that you’ve identified a problem with an organization, your next step is to make sure that the organization understands the implication of that problem. How will the problem affect the organization?
Let’s say a company’s problem is that they have difficulty keeping track of all their clients, how much each contributes in terms of revenue, and the organization is unsure which clients they should provide more attention to.
What are the implications of these facts? Well, chances are that the company is losing out on revenue every month because they can’t properly figure out the customers that pay the most per work. If they could figure that out, they could focus on that customer and get more money. So let’s say you’re on the phone with the boss for that company. You say:
“How much do you think your company is losing out in monthly revenue because you don’t know which of your clients are paying the most for the same amount of work?”
“God, I don’t know,” the boss says.
“Well, how much do you think you lose out on in monthly revenue because your organization has difficulty keeping track of when invoices get paid and which clients pay their invoices on time?”
“Hmm… I’d say on any given month there’s at least $1,000 in invoices that haven’t been paid and if we could identify our top-performing client and target them properly we could get at least $10,000 more from them yearly.”
So now you’ve established the implication of the problem. As a result of invoices that the company is not properly keeping track of, as well as the company not being able to properly identify and target their top-spending client, the company is losing out on at least $22,000 a year!
Need-Payoff
Now that you’ve established what the organization’s problem, and made the decision-maker realize the implication of that problem, you can now offer them a solution to that problem: Timely.
The boss of the company admitted that the company loses out on at least $12,000 a year as a result of unpaid invoices. Which means as long as you can provide a solution to that problem that is less than $12,000, you are providing a value-add to the organization.
4. Demonstrating Ability
You’ve now discovered that providing a solution to the company’s problems would add at least $12,000 in value for the company per year. Your product, Timely, can help the company with its problems. You could probably sell the service to the company for $5,400/year.
Why $5,400 in particular? The truth is, it’s a number that I picked from random. But there’s some logic to it. It’s less than half of the value-add you’d be providing to the company, which makes it a reasonably good deal for the company. $5,400/year is $450/month. Once you break it down in those terms, that seems like a good deal to the company.
You’ve now priced the product. Now, you need to demonstrate that your product/service will actually do what you claim it can do. Depending on what you are selling, there are a variety of ways that you can do this.
Credible testimonials are one way that you can demonstrate the product’s ability. Testimonials from clients who have really benefited from your product are great for demonstrating a product’s ability and its credibility that it will fix the company’s problem.
Demos are another solid way to demonstrate a product’s ability. You have the decision-maker come in for a demo so you can show them exactly how the product works.
There are, of course, a variety of different ways to communicate the ability of a product/service to a prospect. As you continue to sell, you will figure out your own unique methods for product/service feature demonstrations.
5. Obtaining Commitment
This is the last, and most important step, in the sales process.
After figuring out a company’s problems, showing them the implications of those problems, providing them with a solution, and demonstrating your product’s abilities to fix that problem, you now need to obtain commitment from the prospect that they will buy your product.
This is the most important step in the sales process because none of the previous steps matter if you are not able to successfully obtain commitment from the prospect.
Obtaining commitment from the prospect is often known as “closing the sale”. A wide variety of books, videos, and articles offer different closing techniques to obtain commitment from the prospect. However, I think most of these techniques are unnecessary except in special circumstances.
If you have properly done the first four steps, then obtaining commitment from the prospect should be simple. You just ask if they’re interested in buying the product.
You should have evidence that prospect has committed, preferably in writing. When obtaining commitment, try to make the commitment as specific and detailed as possible so it is more difficult for the prospect to back out of the deal at a later time. Furthermore, a detailed commitment in writing allows you to clearly define the needs to fulfill for the prospect so both you and the prospect are satisfied.
Conclusion
If you properly follow the five steps in the article, you will start crushing your sales quotas for this year. These are steps that have been developed over several decades by expert salesmen.
Feel free to reach out to me at my email in my Medium bio if you have any questions or would like to work with me. I’m want to offer advice to businesses and startups that want to improve their sales process and take their organization to the next level.