The Psychology of Selling – Brian Tracy (Techniques)

July 5, 2012

Devon Sampson Business, Human Psychology , , , , , , Leave a comment

“Your job as a salesperson today is that of an advisor, and that of a counsellor, and that of a consultant.”

“[Prospects] don’t need someone to try to sell them something, they need someone to teach them how what the product can do for them.”

Maslow’s hierarchy of needs is a useful framework to have in the back of your mind when performing need analysis.

Before you start selling something, ask yourself:
-What are the top 5-10 features of my product?
-What customer needs do these satisfy?
-Why buy it from our company?

 

Approaching the Prospect

 
When prospects say no, it’s usually because they were preoccupied. But we are always preoccupied with SOMETHING; break the preoccupation or you will never get attention.

“Your opening question should answer the question: ‘Why should I listen to you?’ It should then generate the question: ‘What is it?’“

If they don’t ask, “What is it?” then your opening question isn’t good enough to get your prospect’s attention and break their preoccupations.

A major prospect concern is that you’ll use high-pressure tactics like all of the other mediocre salespeople they’ve encountered; you must convince them that you won’t.

The most important thing to do in an opening call is to get a solid appointment.

Call to confirm a few days before to inoculate against flakes and make a new solid appointment if something has come up for them.

Never sell your product on the phone – the best thing you have going is CURIOSITY.

If you’re asked to send something, say that you’ll deliver it personally and ask if they’ll be there on that day.
 

Way of Being

 
Interacting with people that are too different from ourselves moves us out of our comfort zone.

We stand upright and have attentive body language so we represent our product/business well but also because our prospect is likely to mirror these behaviors.

“The essence of selling is personal vitality.” (so always get a good sleep)

“Smile into the phone.”

Never knock the competition.

One aspect of being a good listener is pausing 3-5 seconds before replying, then ensuring that your reply sounds calm and contemplative.

Great question to elicit further detail: “How do you mean?”

Telling is not selling.
 

Handling Objections

 
Interpret objections as questions (ie: “I can’t afford it” = “Show me how I can afford it”)

Be prepared for the common objections to your product.

In sales, the term “condition” is used to refer to an unbreakable barrier to purchase, for example: someone with no legs is going to be difficult to sell shoes to.

“Many people, when they voice an objection, think it’s a condition. Your job is to find out whether or not it’s [truly] a condition.”

Hear out every objection, even the one’s you’ve heard 1000 times before.

Compliment people on their objections (ie: “That’s a very good QUESTION…”)

“Did I explain myself clearly?”

Always be impressed with how knowledgable people are on your subject.

Customers will sometimes hold on to objections until late because once those objections are obliterated, they know they’ll have to buy.

Response to non-verbal hesitancy late in the game: “Mr. [Prospect], there seems to be some question in your mind that’s causing you to hesitate about going ahead right now, do you mind if I ask what it is; is it the money?” [price is the most common objection, but prospects are often shy about admitting it; adding "is it the money?" makes it more acceptable for the prospect to admit it]

When asked about the price, state your answer to include all of the benefits – so that in the prospect’s mind, the price is never divorced from the value it represents. For example: “This system, with x, y, and z, and including a, costs…”

“Yes, ours is more expensive than our competitors, would you like to know why?”

Use “if” and “what if” responses to state creative solutions to objections. For example:

Prospect: “Our budget is used up”
You: “Well I’ll tell you what, if you take it now we won’t bill you until your next budget period.”
 
Eliciting hidden objections, then using them to help you close:
-“…and in addition to that, is there any issue keeping you from going ahead right now?”
-“Just suppose that wasn’t an issue, is there any other reason we can’t go ahead?”
-“If (x condition was satisfied) would you take it right now?”
 

Closing

 
Let them give you the closing condition.

“Any noticeable change in attitude, posture, or demeanor can indicate that a buying decision is near.”

You have to transition smoothly into the close, don’t take a breather or hesitate for too long.

When you close you should be happy and enthusiastic.

“The only pressure you use in a professional selling presentation is the pressure of the silence after the closing question.”
 

A man convinced against his will is of the same opinion still.

 

The Psychology of Selling – Brian Tracy (Principles)

June 29, 2012

Devon Sampson Business , , , , Leave a comment

While my number one book recommendation for sales is “SPIN Selling” by Neil Rackham, “The Psychology of Selling” remains a classic book in this field. This is part one of my notes on “The Psychology of Selling”, part two will cover the specific tactics and techniques he advocates using for sales calls.
 
 
Proof of fear of rejection: if you had a list of prospects that would be guaranteed to buy from you today, you would start calling as soon as possible. Yet most salesmen only start calling at 11:00 in the morning.

It’s difficult to get people to buy from you unless they’re confident that you are their friend and that you’re acting in their best interest.

Tracy claims that 51% or more of closing ability comes down to enthusiasm.

The top 3% of salespeople all consider themselves self-employed. They take full responsibility for their results.

You can never make your customer believe in your product more than you do.

If you’re into concrete things, you won’t have the same amount of passion for intangibles; if you’re into intangibles like psychology, philosophy, and metaphysics then you’ll be better off selling intangibles rather than concretes.

Tracy states that 90% of all sales books are sold to less than 10% of salespeople.

Tracy urges people to constantly read and listen to tapes; he even goes as far as to say that if you’re listening to your car radio instead of tapes, you’re not taking your profession seriously enough.

A psychological habit that stifles most people’s productivity is that they think about their lives in terms of days or hours; so if they accomplish a lot in a short amount of time, they’ll just write the rest of the day or the hour off. Instead of falling into this trap, think about your life in terms of MINUTES.
 

The basic law of all of human destiny is the law of sowing and reaping: you will always reap exactly what you sow, but you must do the sowing first.

-Brian Tracy

The Personal MBA – Josh Kaufman (Sales)

April 29, 2012

Devon Sampson Business , , , , , , , 2 Comments

 

People don’t like to be sold, but they love to buy.

-Jeffrey Gitomer, author of The Sales Bible

 
“Sales are the only point in the business cycle where resources flow into the business, which makes completing transactions critically important.” (107)

“When you’re starting a new business, the object is to get to the point where you make your first profitable transaction as quickly as you possibly can, because that’s the point where (your work) transitions from being a project to being a business.”
 

The Four Pricing Methods

 
1.) Replacement Cost – “How much would it cost to replace?”
2.) Market Comparison – “How much are other things like this selling for?”
3.) Discounted Cash Flow/Net Present Value – “How much is it worth if it can bring in money over time?”
4.) Value Comparison – “Who is this particularly valuable to, and by how much more?”
 
“(Out of these four methods,) value comparison is typically the optimal way to price your offer, since the value of an offer to a specific group can be quite high, resulting in a much better price. Use the other methods as a baseline, but focus on discovering how much your offer is worth to the party you hope to sell it to, then set your price appropriately.” (113)

“Value-based selling is the process of understanding and reinforcing the reasons why your offer is valuable to the purchaser.” (114)

“Value-based selling is not about talking – it’s about listening.”

“Asking good questions is the best way to identify what your offer is worth to your prospect…Instead of barging in with a premature, boilerplate hard sell, successful salespeople focus on asking detailed questions to get to the root of what the prospect really wants.” (114-115)

“By encouraging your prospects to tell you more about what they need, you reap two major benefits. First, you increase the prospect’s confidence in your understanding of the situation, increasing their confidence in your ability to deliver a solution. Second, you’ll discover information that will help you emphasize just how valuable your offer is, which helps you in framing the price of your offer versus the value it will provide.” (115)

Concept Page on PersonalMBA.com – Value-Based Selling
 

There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

-Sam Walton, founder of Wal-Mart

 

“Understanding the other party’s next best alternative gives you a major sales advantage: you can structure your agreement so it’s better than their next best option.” (117)

A buffer is a third party you hire to negotiate on your behalf. They help you negotiate the best deal without compromising your relationship with the other party.

“As a social force, reciprocation is one of the primary psychological tendencies that underlie human cooperation…Here’s the tricky part: the desire to reciprocate is not necessarily in proportion to the original benefit provided.” (124)

An example of this given by Robert Cialdini in his bestseller Influence: The Psychology of Persuasion is how certain car salesmen offer a gift up front. “Can I get you a coffee? Would you like a soda? Some water? Cookies? Is there anything I can do to make you more comfortable?” It seems like a small gift, but studies have shown that this gets people to spend thousands of dollars more on average.

“Being generous is one of the best things you can do to improve your results as a salesperson. By giving away value and helping others as much as you can, they’ll respect you; it will build your reputation, but it will also increase the probability that they will be interested enough when you do present your call-to-action.” (125)
 

We confess our little faults to persuade people that we have no large ones.

-Francois de la Rouchefoucald, 17th-century poet

 
Making a damaging admission improves trust. As an example, Josh Kaufman mentions a time when he was looking to buy a car: one dealership made sure to photograph every detail of the car – including a small chip in the paint on the left side. This minor flaw wasn’t an issue for Kaufman, but the fact that the dealership was completely open about it got him to trust that the dealership wasn’t covering anything else up and he bought the car.

“Instead of making them wonder (what the catch is), tell them yourself. By being up front with your prospects regarding drawbacks and trade-offs, you’ll enhance your trustworthiness and close more sales.” (126)

“Your primary job as a salesperson is to identify and eliminate barriers standing in the way of completing the transaction. Eliminate your prospect’s objections and barriers, and you’ll close the deal.”

Key Concept – Common Barriers to Purchase

Risk Reversal is a strategy that transfers some (or all) of the risk of a transaction from the buyer to the seller, eliminating another major barrier to purchase.

SPIN Selling – Neil Rackham (Guest poster: Sebastian Cass)

February 27, 2012

Devon Sampson Business , , , , , , Leave a comment

Sebastian Cass has been a good friend of mine for many years.

Recently, we’ve been enjoying the work of best-selling author and Forbes columnist Michael Ellsberg. In one of Ellsberg’s most famous public appearances, a speech he gave at the Google headquarters, he recommended the book SPIN Selling by Neil Rackham. Since this was the second time it had been endorsed by someone I respected (the other person being Josh Kaufman, author of the The Personal MBA: Master the Art of Business), I decided that I should check it out for myself sometime in the near future.

Sebastian, on the other hand, was eager to read it right away since he has already worked in several sales jobs and possesses an utterly absurd amount of knowledge on the subject. Less than two days later, he had finished it.

So I’ve invited Sebastian to guest post about SPIN Selling and he’s agreed to share his notes and thoughts about the book with you guys today. In this post, you’ll learn about some of the most uncommon, unconventional wisdom behind sales and why the phrase, “high-integrity sales” is not a contradiction in terms. (D.S.)

 
SPIN Selling contains by far the best advice I’ve ever come across when it comes to selling. This short explanation is only meant to show you the specific things I took from it and why I think it’s a great tool for sales/marketing professionals looking to improve their results exponentially.

This book is based on a massive amount of research conducted by the Huthwaite group and by Rackham himself. The advice of the book is aimed at “large” ticketed items, items that will sometimes take longer than a single sales call to sell. The term “SPIN” is an acronym for the 4 kinds of questions that make the model, they break down as follows:

-Situation questions: A question in which the seller finds facts about the current state, short and long term plans, and overall condition of the buyer’s company
(Note: Research shows that they are not very critical in making a sale successful, and one should keep them short as a customer might become impatient.)

-Problem questions: These are the types of questions that most people should consider improving, they’re designed to find any dissatisfactions or hassles that the customer is having at the moment (these should be aimed at the kinds of problems the customer would no longer have if he owned your product).

-Implication questions: This is where conventional selling techniques verge off, most training would direct people to give solutions that their product could offer to solve the customers “needs” as explained by the customer in the previous phase, however, this model takes it a step further. Implication questions are meant to show the customer/buyer the implications and future hassles his current problems will lead him to (ie: fast turnover on workforce, training costs of new employees, time that could be spent more wisely). In short it makes his problems become EXPLICIT NEEDS; he is now aware that the problem is more severe and he is now looking for a solution.

-Need-payoff questions: This is the final step in which the seller posses a different set of questions. These are aimed to get the customer/buyer talking about how if he had a solution to his now-explicit needs (from the implication stage) and the other ways in which having such solution (seller’s product) could help him (customer/buyer) and his business.

 

The SPIN model however is only one part of the bigger 4 part breakdown of a sales call. The whole model looks like this:

Opening –> Investigating (SPIN model for questioning comes in here) –> Demonstrating Capability –> Obtaining Commitment.

Opening: the research shows that staying on point is key, conventional wisdom on opening may not work so well for bigger sales, specially “starting off with chit-chat” or “open by demonstrating advantages”; a good rule of thumb to follow will be to establish:
-who you are
-why you’re there (but not by giving away product details)
-your right to ask questions.

Investigating: I’ve explained above in the SPIN model.

Demonstrating capabilities: The main thing to learn from this is the difference between features, advantages (usually referred in sales training as benefits), and “true” benefits.

Features – have low impact over the long and short term, they don’t really relate to the customer. Over-featuring a product will always lead to price objections, which might either be a service or disservice to the product depending on whether the price is low or high respectively.

Advantages – these are the ways that a customer/buyer could benefit from using the product, but since it does not tie in to their Explicit Needs, they’re very easy to forget.

(True) Benefits – They tie in strongly to the customer/buyer’s explicit needs and are the answer to their Need-Payoff statements. Customers/buyers will remember them because they relate to their deepest needs.

Obtaining commitment: the main point here is to understand the four kinds of outcomes that can come from a sale.

  • No Sale
  • Continuation
  • Advance
  • Sale

Since immediate No Sale/Sale situations only make up 10% of sales calls for high price items, one should pay attention to Continuation and Advances instead.

Continuation is usually made up of flattery of the product: “that was a great presentation”, “we look forward to hearing more”, but no actual commitment to follow the relationship in any meaningful way. This is why they are considered unsuccessful.

Advances on the other hand offer a “next step” kind of mentality. The sale won’t be done right there, but both parties are taking steps forward and it is considered a success since it’s more likely to lead to an actual sale.

The book also covers how research suggests that the areas in which most sales training focus most of their energy (closing techniques, open-closed questions, objection handling) are far less effective for large sales. Instead there’s obtaining commitment, SPIN model for questioning, and objection prevention.

……

These are the main points I drew from this book; I’d recommend you read the book if you saw any information here you’d like to improve and/or learn more about. I’ve decided that I’m going to work in a position in sales that pays solely on commission for the next little while. The items I’m aiming to sell will be high-ticketed items (cars sales, real estate, corporate tech solutions).

I’m not doing this for the financial remuneration but rather to apply the skills and mindsets that this book has taught me. As with anything you read, I also recommend that once you finish SPIN Selling (either the actual book or just my notes) you should take action in the near future to practice the ideas that Rackham presents.

Entelechy – the becoming actual of what was potential.

This word is used towards the end of the book to emphasize the importance of actually integrating any skill one learns in order to make it truly ingrained. I included here as well to reiterate its importance.

Until the next time guys.

-Sebastian Cass