Sales Performance ImprovementPosted: May 4, 2012 Filed under: Competency Building and Organizational Development | Tags: Neil Rackham, sales process, selling process, SPIN Selling, top salespeople Leave a comment
An earlier post, Who Cares about Job Titles?, observed that the job title that is declining in use most rapidly over the past four years is “sales associate.” Another post, How Good are You at Selling?, made the case that even if the glamour of the job title “sales” is waning, the skills required to “sell,” whether it is an idea, a product, or yourself in a job interview, have perhaps never been more important.
Sales and the selling process have not been the subject of much study, analysis, or systematic observation as compared to their business brethren — strategy, finance, HR, operations. Here are a few books, however, that I think get at important aspects of sales and the process of selling.
SPIN Selling: Arguably this is one of the foundational books of the genre. Written by Neil Rackham in 1988, it has sold in large quantities over the years and I myself took a course by Neil when I was first hired by McKinsey in 1988. SPIN stands for Situation, Problem, Implication and Need and was distilled after Rackham and his team analyzed the pattern and effectiveness of over 35,000 sales calls. Among their findings:
- The first students trained in the “SPIN” model showed an average of 17% improvement in sales results;
- The more Situation Questions asked in a sales call the less likely it was to succeed;
- Successful sellers ask fewer Situation questions because they do their homework — good selling = good planning. To quote “SPIN Selling” “…effective planning takes you more than half way to effective execution”;
- Top salespeople tended to introduce solutions, products or services very late in the discussion. They held back and discussed the effects of the problem before talking about solutions;
- Problem questions require planning; SPIN Selling suggests working backwards from the problems your products solves for a buyer to generate these questions;
- In their work with Xerox Corporation, they observed that in the absence of follow-up coaching and reinforcement, 87% of the skills change brought about by even the best sales training is lost, hence the need to invest in sales coaching;
- Implication questions are the most powerful sales questions and the skill in using them doesn’t automatically improve with experience;
- Opening benefit statements work in smaller sales but much less so than in bigger sales. SPIN Selling strategy would contend that the purpose of the opening is to gain the buyers agreement to ask questions, to establish a buyer-centered purpose and communicate who you are and why you are there;
- In larger, complex sales the key is to obtain the right commitment. They define success versus failure by evaluating the level of commitment. An action that moves you closer to a sale, is termed an Advance and constitutes a successful outcome. A buyer’s request for a proposal is not an Advance unless the buyer also agrees to take some action. The outcome of a call that does not reach agreement on action that moves the sale forward is termed a Continuation and considered unsuccessful;
- Top sellers reach their goals by consistently planning and conducting calls that move the sale forward in steps. “SPIN Selling” rationale suggests that you start by brainstorming to identify the widest variety of Advances that would move you towards a sale. Really skilled sellers then select those ingenious small actions that the buyer is likely to agree to. They also generate alternative actions to propose as needed for the actual sales visit;
- SPIN Selling” suggests you develop a questioning mindset stating it’s “more important to understand than to persuade”. This is similar to the 5th habit from “The Seven Habits of Highly Successful People” (by Steven Covey) which says “Seek first to understand then to be understood”;
- Rackham contends there are four stages to a sale :
- Demonstrating Capability
- Obtaining Commitment
- Their research shows that the Investigating stage is the most crucial in large, complex sales.
- The book also proposes in Demonstrating Capability to emphasize Benefits rather than Features and Advantages. In the SPIN model a Benefit shows how a product or service meets an Explicit Need expressed by the buyer. Moreover, the author contends that If you try to sell using Advantages it leads to objections which slow down the sales process.
Two more recent books look at sales and the process of selling from either a left brain or right brain perspective. A review in The Economist (April 2012) found that each book “finally give(s) the field some proper attention, long overdue”:
Without sales companies would not exist. So it is curious that departments such as strategy or marketing are endlessly analysed by theorists whereas the front-line of business is often ignored. Marc Benioff, founder of salesforce.com, a provider of online services to salespeople, complains that sales are largely ignored by business schools and hardly even considered a management subject. Two new books, both of which cite Mr Benioff’s thoughts on sales, are now trying to put that right.
The rise of the internet means that sales are changing. Customers bone up about prices online and are less likely to fall for a seductive pitch. There are still often huge differences in the performance of sales forces both within and between companies. Many Western corporate bosses are trying to turn sales from an art into more of a science. Entrepreneurial salesmen, doing whatever it takes to reach their numbers, can now be tracked and controlled. “Sales Growth: Five Proven Strategies from the World’s Sales Leaders”, by three McKinsey consultants, belongs in the selling-as-science school.
The book argues that data, process management and outsourcing can do as much for sales departments as for other areas of the corporation. Firms should not hesitate to re-engineer their peddlers. They should create sales “factories” where sales teams are ministered to by support people from other disciplines, and equip them with computing devices rather than briefcases. Companies still have plenty of Willy Lomans not selling much. They should seek to standardise performance by finding out what the best salespeople do and making sure everyone applies the same techniques (which sounds obvious, but not many people do it).
In emerging markets, on the other hand, selling is still personal—and old-fashioned. So companies that are trying to bring more science to sales at home will still need to master what some call the “steak-and-a-show” method when entering new markets. Industrial sales in China, especially, depend on long, close relationships between salespeople and customers.
Philip Delves Broughton is a British Harvard Business School graduate and author of “The Art of the Sale”, a descriptive account of the selling business rather than a call to science. One of the characters he writes about is Robert McMurry, an industrial psychologist who wrote an influential study of salesmanship in 1961. It said that the prime drivers of salesmen are greed, hostility and immaturity.
Like Mr McMurry, the author is a believer in human skill of selling. He recounts how Seddik Belyamani, the Moroccan-born former head of airline sales for Boeing, nicknamed “the $30 billion man”, once woke up the firm’s chief executive, Alan Mulally, in the dead of night to impress a customer who was backing off a purchase. The McKinsey consultants’ book offers good advice about tightening up the selling science, but as Mr Delves Broughton likes to point out, today the field is dominated not by the likes of McKinsey but by selling gurus such as Jeffrey Gitomer.
Being a salesman in the internet age is getting harder. Sales forces are being cut and replaced with technology, and the job is losing its appeal. The popularity of the title “sales associate” on LinkedIn, an online network, has fallen dramatically in the past four years. BMW’s boss in America, Ludwig Willisch, admitted to the authors of the McKinsey book that it is hard to persuade people to go into sales these days. As Frank Pacetta, a former Xerox salesman described by Mr Delves Broughton, said, “when you’re in sales…it’s lonely and it’s a war.”
As with so many other things in both life and business, I don’t see sales or selling as the domain of just an “art” or just a “science” but rather a blend of the two. What I do believe is that generally, salespeople and the sales function has, for all of its importance, been left far too long under the radar of serious study of what techniques, behaviors, processes, and tools — representing both the left and right brain aspects — would create breakthrough performance in sales generation. More to the point, is your organization investing more time and energy driving continuous improvement through better skills, techniques and processes in operations than in sales? If so, then perhaps it is time to redress that imbalance.