IILM-Term III PGDM

Selling Skills Module

Learning Objectives• The Selling Process• The Art of Cross-Selling & Up-Selling• Spin-Selling Concept

The Selling Cycle

Selling is a Process• Selling is a process rather than an action.

• It consists of a number of Steps.

• All steps need planning and preparation.

Preparation Makes The Difference Three questions you should always ask yourself• What do I know? • What do I need to know?• How am I going to find out?

What Are the Basic Selling Skills?

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Active Listening. Effective Questioning. Differentiating between product Features – Advantage – Benefits Handling customer objections. Buying Signals Closing the deal

Cross-Selling Up-selling

• Cross-selling and Up-selling are established methods of improving your sales and increasing customer loyalty.

• Up-selling is the practice of offering customers a product in addition to the product they are currently purchasing.

• Cross-selling refers to selling items that are related or can be integrated with the item being sold.

• Cross- and Up-selling: Increasing the margin once a customer is expressing interest in buying your products or services.

In many markets such as the market for entry-level notebook PCs, the net margin on the initial deal is often negative. Vendors are willing to accept a loss on some of their products as long as they attract new customers. Examples are loss-leaders in a supermarket, i.e. an article that is sold for less than the supermarket’s purchase price mobile phones: the telecommunication provider expects to make sufficient profits on the subscription and will therefore accept a very low price on the device

Laser printers: the manufacturer expects to make a decent profit by selling toner cartridges and other consumables

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The Personal Selling Process

Why Plan the Sales Call?"Failing to plan is planning to fail"

• An old saying with a lot of truth in itTop professional sales representatives thoroughly plan all their sales calls to ensure success by

1. Establishing Sales Call FocusGenerate sales — sell particular products to target customers on designated sales calls.Develop the market — lay the groundwork for generating new business by educating customers and gaining visibility with prospective buyers.Protect the market — learn competitors’ strategies and tactics and protect relationships with current customers.

– Improving Effectiveness and Efficiency – Preparing for Customer Reaction – Enhancing Self-Confidence and Professionalism– Determining Which Selling Strategies to Use – Avoiding Errors

There are at least six general steps that ought to be considered in preparing for a sales call

1. Prepare the prospect for the initial sales call • "Seeding"

– prospect-focused activities carried out several weeks or months before a sales call

2. Sell the Sales Call Appointment by pre-notification• cold call

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• e-mail• fax • mail• telephone

3. Gather and analyze all relevant information about the prospect• Gathering Information About Consumer Prospects• Consumer credit bureaus• Market research• Library sources• Gathering Information About Organizational Prospects• In-house purchasing agents• Electronic directories and databases• Library sources

4. Identify the prospect's problems and needs• Organizational Problems and Needs• SPIN approach

– S ituation– P roblem– I mplication– N eeds Payoff

5. Choose the Best Sales Presentation Strategy6. Rehearse Your Approach

SPIN Selling:• Neil Rackham's book SPIN Selling, is a precisely defined sequence of four

question types that enables • the salesperson to move the conversation logically from exploring the

customers' needs to designing solutions, or • Rackham's terms, to uncover Implied Needs and develop them into Explicit

Needs that you, the sales professional , can resolve • The research firm headed by Neil Rackham, the Behavioural psychologist,

distilled the SPIN personal interview method from its large empirical study during the 1970's and early 1980's.

• Most effective for complex, large sales processes at key accounts. • The method encourages the customer to define the wider, organizational

problem and state a desire for a solution during the investigation phase of a consultative sales process

Research Shows…• In the 1970's, Huthwaite Inc. studied the practice of successful selling and sales

effectiveness on behalf of a many multinationals, such as IBM and XEROX. Over twelve years, Neil Rackham led a team of 30 researchers who studied over 35,000 sales interviews in 20+ countries and assessed 100+ factors that could improve sales performance.

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• They concluded that the “key’ to successful selling was the behavioral differentiators of top sales people and not sale closing techniques.

• Revealed that effective sales people discover customer needs using four types of questions that differ in function

A Popular Multiple-Question Approach Is the SPIN APPROACH

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Situation Questions

Problem Questions

Implication Questions

Need-payoff Questions

BENEFITS

Implied Needs

Explicit Needs

The roadmap …

What is the Goal of Questioning?• To uncover needs

– Implicit needs

– Explicit needs– Implicit need – a statement of a buyer’s problem, dissatisfaction or difficulty

with a current situation– Explicit need – a clear statement of a buyer’s want, desire or intention to act

In smaller sales, the more implied needs you can uncover, the better chances you have of closing the sale.

In larger sales, implied needs are simply a starting point. What matters here is not how many you uncover but what you do after you uncover them.

S-Situation questions• Gather background information and develop understanding of the context of the

sale.• In big sales, minimize the small talk and focus on finding background detail that

can be used to make sense of the buyer's business situation. • Context creates meaning. This is about understanding the wider context before

you zoom into the details. • IMPACT: Least powerful of the SPIN questions. Can be negative .

Most people ask too many.

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SO ELIMINATE UNNECESSARY QUESTIONS DO YOU HOMEWORK THOROUGHLY

• What equipment are you using now?• How long have you had it?• Is it purchased or leased?• How many people use it?

Every good seller begins the sales call by assessing the terrain, by asking questions to clarify the customer's current situation. So Situation Questions are essential, but here's the surprise. Huthwaite's research found that, as valuable as they are, Situation Questions also can be overused, and often are by inexperienced salespeople In fact, one characteristic of unsuccessful sales calls, they found, is that they contain a higher than average number of Situation Questions. Their advice: Do ask Situation Questions, but be sure they're necessary ones. Don't ask a question to elicit information that you easily could have obtained before beginning the call . And know that, when overused, these questions bore the customer.

PROBLEM QuestionsExplore customer problems, dissatisfactions, difficulties and concerns• Ask questions to uncover problems which your product can address. But the

tendency is..• If you are selling Tractors, ask about maintenance costs, breakdowns and so on…• If you are selling Life Insurance, ask about how many dependents the person

has…• A trap here is to dive straight into presenting the benefits of what you are selling.

You may know the problem, but they do not! Going straight to the sales pitch will just get you objections

• Are you satisfied with your present equipment?• What are the disadvantages of the way you’re doing it now?• How difficult is it to process orders with your present system?• What reliability problems does your equipment have now?

• How concerned are you about . . . ?”• “Does it worry you that . . . ?”• “How difficult do you find it to . . . ?”• “Is there a risk of . . . ?”• “What sort of problems do you get with . . . ?”• “How happy are you with . . . ?”• “Are you satisfied with the level of . . . ?”• “Is it hard to cope with . . . ?”

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• “How well are you able to cope with . . . ?”• “What sort of dissatisfaction do you have with . . . ?”• What prevents you from achieving that objective?

Implication questions• Instead of telling them the problem they have (which is also likely to raise

objections), the goal is now to get them to see (and feel!) the problem. By asking questions which draw out the implications of the problem, they get to feel the pain that will drive them towards your product.

• Link isolated problems by examining their effect on customer business and organization

• "if this problem is not solved, what are the undesirable consequences?". • The goal of implication questions is to help break down the problems of specific

customers in order to make implied needs explicit and to analyse the cost effectiveness of solving them.

For Example, The life insurance salesperson could carefully ask what would happen to the children if the target person died or became very ill.

More sample questions • Does your overtime expense increase when your equipment goes down?• Do bottlenecks result because you only have two people who can operate your

order processing system?• Are you experiencing high turnover and training costs because of the difficulty

that your employees are having in operating your equipment?

NEED-PAYOFF QuestionsHelp customers discover the value and benefits of the solution of an implied need by asking such questions as "how would e.g. reducing down-time help you?" Action-oriented, 'explicit needs' trigger purchase

• Having hurt the target person with your implications, you now give them a straw to grasp at by asking how their pain could be resolved. With careful questions, you can get them to the state where they are asking for your product (Need) even before you show it to them.

• They probe the Explicit Needs• Reduce objections because they cause buyer to explain solution• Move discussion forward towards action and commitment

For example,

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The Tractor sales professional can ask how much better the tractor was like when it was new, or whether any of the farmer's neighbors have solved problems of old and problematic tractors. The Insurance Sales Professional could ask questions that build pictures of the target person's children being safe and secure whatever curve-balls the world might throw at the family

Like Problem Questions, which they naturally follow, Need-Payoff Questions are linked to success in more complex sales. They can be especially useful when you're talking to top decision makers (or those who will influence them), and they increase the likelihood that your solution, if accepted, will provide the payoff that answers the need. These questions focus the customer's attention on the solution rather than the problem, and they encourage him or her (with your assistance) to outline the benefits that your solution will provide his or her company. Thus a good Need-Payoff Question both pre-empts objections and enlists customer buy-in.

BE AN I.C.E. MAN (OR MAIDEN)!D eve lop m en t o f N eed -p ayo ff Q u es tion s

IDENT IFYHow useful w ould it be

to have afaster system ?

CLARIFYIs speed im portant to

be able to handlem ore clients?

EXT ENDCould a faster

system free your peopleup to do other things?

ST RENG T H OF YOUR PRODUCTe.g. faster

Ask these questions after developing the seriousnessof problem through Implication Questions but before

describing your solution.

Identifying• “Are you saying it would help if we could . . . ?”• “Am I right that it would help if . . . ?”• “Are you looking for a way of . . . ?”• “Would you be interested in X?”• “If I could show you a better way of dealing with X, would you be interested?”• “Would you like to be able to . . . ?”

Clarifying• “Why is X so important to you?”• “What sort of savings would X produce?”

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• “What do you regard as the main benefits of Y?”• “Do you think that would produce significant savings?”• “Would you see Y as a significant improvement?”• “How important is it for you to improve X?”

Extending• “How else could Y help you?”• “Are there any other ways in which Y could help?”• “Would Y also help you achieve X?”• How much business would you loose if your phone did not work for 24 hours?

Points to be kept in mind..• Four types of questions need to be addressed in sequence. The SPIN method is

not a rigid implementation formula. • The Situation and Problem question phases are often strenuous for customers

and need to be limited. • Desk research is required to draw up hypotheses of likely pain points and should

be tested during the interview. • The Greatest effort should be during the Implication phase when the customer

becomes aware of the problem's severity. • Those implied needs that are discovered to be relevant must be developed into

explicit needs during the Need-pay-off phase.

Top sales professionals incorporate a greater number of need-payoff questions into sales calls than less successful ones.

After using the SPIN interview framework to successfully conclude the investigation phase of the overall sales process, the sales person and customer are ready to move to the qualification phase in which the selling party must demonstrate its capabilities in effectively solving the customer's problem

Pros • SPIN's investigation phase helps the sales person and potential buyer focus on

dealing with the customer's wider organizational problems rather than only on the immediate benefits of a product or service.

• It helps avoid seller-imposed limitations and encourages the customer to define the problem and desire for a solution.

• The method has proven to be successful in more complex and large scale sales processes. It is a helpful tool during the investigative phase on a consultative sales process. Rackham claimed that sales success is more dependent on the proper use of investigation skills than on any other factor.

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• The questioning process helps build greater trust and rapport between sales personnel and customer.

• The method has been validated across industries and countries.

But beware successful adoption of SPIN requires practice by the sales professional. Its application occurs on the behavioral level. How to use SPIN Questions1. Write down at least three potential problems which the prospect may have and which your products might solve before making a sales call.

2. Write down some actual Problem Questions that you could ask to uncover each of the potential problems you’ve identified.

3. Ask yourself what difficulties might arise for each problem. Write down some actual Implication Questions that might get the prospect to see the problem as large and urgent to solve.

4. Write down three Need Questions for each implication.

Video links to enhance learning of the Module • http://www.mysellingskills.com/demo.aspx • http://in.youtube.com/watch?v=faidN1uxCiU • http://in.youtube.com/watch?v=PMRB6pYDA_Y&feature=related

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