PERSONAL SELLING – MKT

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Chapter 05 : Strategic Selling

SPIN SELLING
Faculty: Faheem
Vohra
 SPIN SELLING
An international bestseller book by Neil Rackham, published in 1988

INTRODUCTION
 IT IS A TECHNIQUE INTRODUCED BY NEIL RACKHAM IN HIS BOOK
PUBLISHED IN 1988.
 THEY HAVE RESEARCHED MORE THAN 35,000 SALES CALLS TO
OBSERVE WHAT SUCCESSFUL SALES PROFESSIONALS DO THE BEST.
 IN THE PROCESS THEY DISPROVED A NUMBER OF POPULAR MYTHS
ABOUT THE SELLING PROCESS, AND THEY DEVELOPED A SALES
MODEL OF THEIR OWN, WHICH THEY CALLED SPIN SELLING
 TODAY SALES PROFESSIONALS AROUND THE WORLD
INCORPORATE THE SPIN SELLING MODEL INTO THEIR SALES
PROCESS WITH GREAT SUCCESS AND IF YOU LEARN A FEW SIMPLE
 For high consequences sales, SPIN Selling is a proven &
researched based technique that will give the confidence to the
customers & will make them feel secure that this is the right
decision for themselves adding value to the business conditions.
 To make it work, you will have to ask right set of questions to
the buyers & let them do the most of the talking by giving your
full attention.
 SPIN is an acronym for four set of questions to be asked by a
sales professional to the buyer:


PRINCIPLES, YOU CAN TOO.

FOR LITTLE OR NO CONSEQUENCE SALES, THE CUSTOMER MIGHT

S for Situational Question
NOT TAKE TOO MUCH TIME TO THINK ABOUT BUYING IT FOR
EXAMPLE, A PAIR OF NEW SHOES FROM A STORE FOR A CHANGE OR
P for Problem Questions
SOME BISCUITS FOR SNACKING IN THE EVENING. I for Implication Questions
N
 FOR HIGH CONSEQUENCES SALES, ESPECIALLY IN B2B MARKET,
THE CUSTOMER HAVE TO TAKE CORRECT BUYING DECISIONS OR IT for Need Payoff
MIGHT EFFECT THEIR BUSINESS CONDITIONS.
Questions
 1. SITUATION QUESTIONS
Understand the facts about buyer’s current situation

WHY SITUATION QUESTIONS? EXAMPLE

 TO BREAK THE ICE & PROVIDE A STARTING PLACE FOR  For instance, you are selling website development solution
UNDERSTANDING THE CUSTOMER’S NEEDS.
& you are meeting a client, as medical store that wants to
 TO BUILD INSTANT CONNECTION OF A SALESPERSON go online to sell their medical products, following are the
WITH THE CUSTOMER AT THE BEGINNING OF THE set of questions you may ask:
CONVERSATION.
 SITUATION QUESTIONS ARE FOR THE INTEREST OF 1. What are the range of products in your store’s portfolio?
THE SALESPERSON & NOT THE CUSTOMER.
2. What is your current sales in value?
 TOO MANY SITUATION QUESTIONS, MAY RISK IN
3. What is your target customer demographics?
BORING CUSTOMER AND DAMAGING THE
SALESPERSON’S CREDIBILITY. 4. Which hospitals are nearby your medical store?
• A SALESPERSON MUST RESEARCH BEFORE THE SALES 5. Do you currently have a website? If Yes, who is your
CALL AND SHOULD FIND OUT MOST OF THE BASIC current service provider?
INFORMATION ABOUT YOUR CUSTOMER’S CURRENT
SITUATION BEFORE YOUR MEETING.

• SO, THE SITUATION QUESTIONS ASKED BY THE

SALESPERSON MUST BE ONLY THE ONES THAT WILL
PROVIDE INFORMATION WHICH HE OR SHE WAS
UNABLE TO TRACK DOWN FROM ELSEWHERE.
 2. PROBLEM QUESTIONS
Identify the critical problems that customer is facing currently from facts

WHY PROBLEM QUESTIONS? EXAMPLE (Web development for a Medical Store)

 TO FIND PROBLEMS THAT ARE PAINFUL
ENOUGH FOR THE CUSTOMER.
 TO MAKE CUSTOMER REALIZE THAT THESE
PROBLEMS ARE CRITICAL IF THEY REMAIN
UNSOLVED.
1. Is your medical store’s sales in going down every month?
2. Are you facing competition from other stores that are
providing online medical products?
3. Does your customers asked you to offer online order
services?
4. Is your current website not working smoothly?
 3. IMPLICATION QUESTIONS
Uncover the effects & consequences of the problems that customer is currently
facing
WHY IMPLICATION QUESTIONS? EXAMPLE (Web development for a Medical Store)
 TO MAKE CUSTOMER FEEL THE URGENCY TO 1. In case, if you do not go online to compete the other
CHANGE & INCREASE A CUSTOMER’S medical store, do you think your sales will further go
MOTIVATION TO SEEK CHANGE. down?

• IMPLICATION QUESTIONS UNCOVER THE 2. Do you think your current website which is ineffective
gives negative perception to your customers?
EFFECTS OR CONSEQUENCES OF A
CUSTOMER’S PROBLEMS 3. Without opening up the online orders, you are also losing
potential customers?
• THESE QUESTIONS ARE ESPECIALLY
EFFECTIVE WHEN YOUR PROSPECT IS A
DECISION MAKER WHOSE SUCCESS DEPENDS
ON UNDERSTANDING THE UNDERLYING
CAUSES OF A PROBLEM AND ITS POTENTIAL
LONG-
 NEED PAYOFF QUESTIONS
Discover the way out to resolve those customer’s problems

N FOR NEED PAYOFF QUESTIONS

EXAMPLE (Web development for a Medical Store)
• TO DISCOVER A WAY OUT BY ASKING HOW 1. Do you need a professional website to get business from
HIS PROBLEM COULD BE RESOLVED. online sources?
• A SALES PROFESSIONAL NEED TO ASK THE 2. Do you want to revamp your current website to make it
CUSTOMER THE RIGHT NEED-PAYOFF look more professional?
QUESTIONS, AND THE CUSTOMER WILL 3. Do you need an Android & Apple application for
TELL HOW THESE SOLUTIONS CAN HELP receiving & delivering orders of medical products?
THEM. 4. How much is the urgency to make the new website & the
application?
• NOW THE SALES PERSON WON’T EVEN NEED
TO SPEND MUCH TIME TALKING ABOUT
YOUR PRODUCT’S BENEFITS BECAUSE THE
CUSTOMER HAVE ALREADY CONVINCED
THEMSELVES THAT THE SOLUTIONS
PROVIDED BY THE SALES PROFESSIONAL
WILL BE VALUABLE TO THEM.
VALUE SELLING
 VALUE CREATION
Book: The Personal MBA – Josh Kaufman

People usually buy something because of these two reasons:

1. CONVENIENCE
 QUICK
 EASY
 RELIABLE &
FLEXIBLE

2. HIGH FIDELITY
 Attractive look
 Emotional Attachment
 High Social Status

IPhone 13 Pro max

 VALUE BASED SELLING
Profitable Sales
 “THE MORE YOU FOCUS ON VALUE
OF THE PRODUCT, THE LESS
IMPORTANT PRICE BECOME” – BRIAN
TRACY.
 “IF YOUR CUSTOMERS TELLS YOU
THAT THE PRODUCT IS TOO
EXPENSIVE, YOU ARE TALKING TO
THE WRONG CUSTOMER” – ERIC
GUSEVIC.
 “WHEN YOU START TALKING ABOUT
THE PRICE, YOU ARE NOT AN
ENTREPRENEUR ANYMORE” - ERIC
GUSEVIC
• Discounting is the easiest selling approach by
decreasing the value in terms of price, while
profitable selling is to communicate the value of
the product to the customer without giving
additional discounts.
• To achieve this, businesses & companies must
revisiting the value proposition they are offering
to the customer.
• The Value-Selling approach allows Companies
to pursue & capture margins according to the
end to end value provided to the customer or
consumer as opposed to the traditional cost-
plus method.
 CASE STUDY
Quality Caterers & Engro Foods
Quality Caterers is one of the oldest customer of Engro Foods, Food Services division, a catering service to pharmaceuticals like Novartis
& Archoroma Pakistan. Their annual business turnover from each pharmaceutical is around Rs.90M. The Pharmaceutical companies are
usually very conscious & concerned about the hygiene level of their kitchen & quality of food that has been consumed by their
employees. Quality Caterers is currently purchasing Olpers milk at Rs. 130 per Litre, giving annual business of Rupees 8.6 Million to
Engro Foods i.e. the manufacturing company of Olpers Milk.
Olpers Milk has been one of the premium category brands in packaged milk category with the market share of 42% in House hold
consumption. It also has good reputation in Food Services (B2B market) in terms of quality & yield per litre in making different dishes
from Milk. From March 1st 2021, the company decided to increase the selling price of milk in market & for Quality Caterers, they will be
increasing Rs.10 on current rate, reaching up to Rs.140 per Litre for this customer.
The competition Fauji Foods Limited took advantage of the scenario & went up to Mr. Abdullah, the owner of Quality Caterers and
proposed a plan of giving Nurpur Milk at Rs.130 per Litre. Nurpur’s reputation in Food Services Market is good due to its lower pricing
& effective route to market, keeping the product readily available to the customers. In household, the market share has fallen down after a
ban that was imposed by Sindh Government back in 2018, naming Nurpur as unsafe for Human consumption but later the ban was lifting
within a 6 months. The company is still working to increase their market share which had reached up to 5% as ever-highest in December
2017.
Mr. Abdullah, the owner of “Quality Caterers” was in conversation with the Territory Sales Manager of Engro Foods. The owner argued
that, if he shifts to Nurpur, he can save Rs.10 per litre & as per their total consumption of 4800 litres of Milk per month, they can save up
to Rs.48,000 & Rs.576,000 Annually.

TASK: To convince Mr. Abdullah to continue with Olpers Milk with the increase in Pricing by using Value-Based Selling.
 VALUE SELLING
Article reading & implementation on Quality Caterers Case Study
Article: Getting Customers to say, the Price is Right – McKinsey & Company –
Published in 2011 by Gaurav Batra & Olivia Nottebohm
Case Solving:
There are four components to a Value Selling Approach
At first, Mr. Abdullah from Quality Caters was not
considering the value of Olpers Milk as the premium
1. Uncovering Customer Purchasing Criteria
brand. But during the conversation with territory
manager, he acknowledged on the following factors:
Top sales people know exactly what matters to the
customer.
1. The good reputation of Engro Foods in Market as
compare to other competitors in UHT Milk
At Company level, McKinsey’s research has found that
Category.
customers drive value from the following elements.
2. There have been no product quality complaints in
a. The Reputation of the Provider
Olpers Milk because of various quality checks it
b. Strong development & technical support capabilities
goes through.
c. Supply chain & Manufacturing capabilities
d. Developer tools & well established code libraries
3. There is constant availability of the product in
market as Engro Foods has their own milk
A company must identify the real value of its product to its
collection facility.
customers.
 VALUE SELLING
Article reading & implementation on Quality Caterers Case Study
Article: Getting Customers to say, the Price is Right – McKinsey & Company –
Published in 2011 by Gaurav Batra & Olivia Nottebohm
Case Solving:
2. Communicating Quantifiable value to your customers
Keeping in view of his 90M business of catering service
with one pharmaceutical client, and the sensitivity of
Once the company understands real value of its products to
Pharmaceutical companies in food hygiene at their
customers, it must develop easy to use tools to guide the sales
cafeteria, Mr. Abdullah was conveyed the message that
team in its work.
there might be hidden cost of switching to competitor
keeping in view the market reputation & trend of quality
The tools are mechanisms for quantifying relevant value
complaints in past 6 month.
drivers and simplifying any calculations the sales team must
make.
Following factors might hurt his business:
1. Change in taste of his recipes.
The tools purpose is a simple & visible demonstration of power
of the value selling approach based on the drivers that are most
2. Quality checking from the Pharmaceutical company
important and therefore worth the most to the customer relative
officials & Sindh Food Authority.
to competition offering.
3. No strong reasons to change the Milk Brand.
The salesperson thus deliver to the customer a transformed
value proposition, The message becomes, “I am buying a
4. Losing business of worth Rs. 90M in case of any
product worth two to three times its price,” rather I am getting
quality complaint that might occur in competitor’s
a product Rs.1000 cheaper than the current purchase.”
product as per its history in last 3 years
 Case Study – Quantifying Value

Questions:
 
1. Identify the critical elements that
are the points of concerned for Dr.
Bennett.

2. Help Mike to close the deal with Dr.

Bennet by making sales pitch to
quantify the value for the sale to the
customer. (Role-Play format)
 
 Case Study – Quantifying Value

What’s the Lesson?

 Our challenge as salespeople is to convince our customers that our products are worth buying. We not
only have to show that the customer’s problem is worth solving, but that our solution, when compared to
our competitors, is a better solution. 

 It’s not that our customers won’t buy a more expensive solution. It’s just that they want to make sure
there is justification for any investment they may make. So Quantification of Value is critical. The Value
Equation is our not-so-secret weapon in this effort. It helps us tell and sell our story to our customers.

 In our laser hair removal case, we had a knowledgeable doctor, someone who knew the value of a new
patient and the value of happier staff. However, not everyone you speak with is going to have the ability
– or even perhaps the willingness – to quantify all of the Costs or Benefits associated with your solution,
whether Abstract or Concrete. You will need to collect that information throughout the process, as you
meet with key players in your prospect’s organization.
 VALUE SELLING
Article reading & implementation on Quality Caterers Case Study
Article: Getting Customers to say, the Price is Right – McKinsey & Company – Published in 2011
by Gaurav Batra & Olivia Nottebohm

3. Building Value Selling Capabilities in Salesforce 4. Locking the Change by tracking performance

The Value selling approach represents a new way for the
field sales force to relate to its customers.
There are three critical success factors:
a. Leaders & Salesforce must co-create the solutions.
b. Leadership must visibly model the new approach. The
head of sales must participate in the effort and
personally emphasize the need for value selling.
What gets measured, gets done.
Most efficient companies, after organizing workshops on
value selling, keep the track of its Salesforce to view the
impact of these workshops on revenue.
This allows companies to share their best practices and
celebrate success.

c. Salesperson must practice in the Value Selling

Approach keeping in mind the shortcomings of existing
cost-plus selling approach.