The SPIN Selling system is based on the systematic observations of more than 35,000 sales calls for large and complex products. A team of 30 researchers traveled to more than 20 countries over 12 years to answer the question: what’s the difference between the most successful sales people and everyone else?
When they analyzed the differences between the calls that ultimately led to a sale and those that did not, they found that the most successful sales people not only asked more questions, they also asked certain types of questions more frequently. Researchers ultimately classified the questions into four types – Situation, Problem, Implication, and Need-Payoff. The first group – Situation questions—was by far the most common, and also the least effective.
Situation questions concern simple matters of fact, such as “How is your legal department organized,” or “How many patents did your company apply for last year?” Everyone must ask some situation questions, but most people ask a lot more than they realize, or than they should. And the higher the percentage of situation questions, the less likely a sales call was to succeed.
As one buyer put it (The SPIN Selling Fieldbook, p. 11): “When a salesperson wants to take up my time with discussions about hobbies, or wants me to teach them basic facts about our business, I get irritated. In today’s world, I’m too busy for that.”
To avoid asking too many situation questions, successful sales people learn as much about the client as they can before the call. That way, they can move more quickly to Problem questions that get at the pain that prospects feel, their dissatisfactions and difficulties. Examples for lawyers would include “What’s the biggest problem you face in your business,” or “Do you think the bills from your current law firm are accurate, fair and reasonable?” or “Do you worry about how well your patents protect you from competitors?” Problem questions are harder to come up with, but they are more interesting to the buyer, and more valuable to the selling process. As sales people gain experience, they ask more problem questions, and they ask them earlier in the call.
Implication questions are the next step up in selling sophistication. They take the dialog
one step further, to probe beneath the surface of problems, to understand their full business implications and consequences. In the legal profession, the implications are sometimes painfully obvious. Someone accused of a white collar crime understands the importance of getting the best defense, and a party to a billion dollar litigation understands the economic importance of having the best possible lawyer.
In The Essential Little Book of Great Lawyering, Ropes & Gray CMO Jim Durham calls this type of case bet-the-company work, and estimates that it represents about 5% of all legal work. For this type of work, reputation and track record are everything. At the other extreme, Durham says, about 25-30% of all legal work is commodity work, where price is the only important selection criterion. By definition, the only way to get more of that work is to lower your price.
That leaves the vast majority of legal work – 65-70% - in the middle category which Durham calls important work. It is here that I believe the SPIN Selling model is likely to be most useful to lawyers.
Durham explains: “When you are doing important legal work your expertise and competence must be sufficient (but need not be exceptional), and the billing rates or projected costs for the work must be within the range of client expectations (but not necessarily the lowest). Beyond that… your success will be determined by the actual experience a client has working with you.” (p. 18)
Implication questions may even change client perceptions of how important the work is, by helping a client to think through the business significance of a particular matter
For example, many companies consider their intellectual property work in the commodity category, and shop for the lowest price. Implication questions can help the client dig deeper into the importance of each patent, to consider where taking a strategic approach for the long term could be more valuable than getting the lowest price.
In this example, implication questions could include: Do you think a well written patent could reduce the cost and risk of future litigation? Could it strengthen your competitive position? If your company is acquired, could it simplify the process of due diligence?
This type of question represents a high degree of sophistication. In The SPIN Selling Fieldbook Rackham says that “thousands of experienced but less successful sellers didn’t ask [implication] questions at all… top salespeople tended to introduce solutions, products, or services very late in the discussion. In contrast, their less successful colleagues couldn’t wait to begin talking about what they could offer.” (p. 16).
Next week, I’ll talk about Rackham’s the fourth category, which is even more rare and more valuable: need-payoff questions.