Ch 5: Giving Benefits in Major Sales
[5] Giving Benefits in Major Sales
We’ve seen in Chapter 4 how the SPIN Model provides a strong probing framework for the Investigating stage of the call. In this chapter, I want to show you what Huthwaite’s research found about the Demonstrating Capability stage (Figure 5.1).
Figure 5.1. The Demonstrating Capability stage: Offering your solutions and capabilities to the customer.
Features and Benefits: The Classic Ways to Demonstrate Capability
Sales training and books on selling have given a lot of attention to methods for Demonstrating Capability. Since the 1920s it’s been recognized that some ways of presenting solutions to customers are more persuasive than others. Anybody who has been through a sales-training program in the last 60 years is likely to have been taught the terms Features and Benefits as the two ways that you can describe your products or services. We’re all so familiar with the concept that it scarcely seems necessary to explain that Features are facts about a product and are unpersuasive, whereas Benefits—which show how Features can help the customer—are a much more powerful way to describe your capabilities. If there was one area of selling where we expected our research merely to confirm the conventional wisdom, it was here with Features and Benefits.
But we were in for some surprises. Benefits, in the way you’ve probably been taught to use them, are ineffective in larger sales and are likely to create a negative response from the customer. And even something as simple as defining a Benefit is much harder than it seems. Before looking at our conclusions, let’s begin by reviewing some basics.
Features
Everybody knows what Features are. They are facts, data, or information about your products or services. Typical examples of Features include “This system has 512K buffer storage,” “There is a four-stage exposure control,” and “Our consultants have a background in educational psychology.” Features, as every writer has observed since the 1920s, are unpersuasive. Because they give neutral facts, they don’t much help your sales presentation. On the other hand, the consensus of writers is that they don’t harm you either.
What does our research show? From an analysis of the number of Features used in 18,000 sales calls, we found the following (Figure 5.2):
Figure 5.2. Features.
Overall, the level of Features is slightly higher in unsuccessful calls (which, you’ll remember, are those leading to Continuations and No-sales). But this difference is small enough for us to conclude that the conventional wisdom is right—Features are neutral. They don’t help the call, but they don’t harm it much either.
In small sales there’s a slight positive relationship between the use of Features and call success, so the calls higher in Features are slightly more likely to result in Orders or Advances. This relationship isn’t true in larger sales.
In larger sales, Features have a negative effect when used early in the call and a neutral effect when used later.
Users respond more positively to Features than do decision makers.
In the middle of very complex selling cycles of technical products, the customer sometimes develops a “Features appetite.” When this happens, the customer demands considerable product detail and may respond positively to Features. It’s at this stage of the selling cycle that technical experts, systems analysts, and other sales-support people often have a positive impact on a customer.
We also found some curious relationships between the use of Features and the type of response from customers, which we’ll explore more in the next chapter. But generally, our work on Features confirmed what writers have been saying for 50 years. Features are low-power statements that do little to help you sell. It’s better to use Benefits than Features.
What’s a Benefit?
Our problems started when we began to investigate Benefits. While everybody agrees on the definition of a Feature, no two writers on selling seem to have the same definition of a Benefit. Here are some of the many definitions that we uncovered from a miserable month spent reading every sales book and training program we could find:
A Benefit shows how a Feature can help a customer.
A Benefit must have a cost saving for the buyer. A Benefit is any statement that meets a need.
A Benefit has to appeal to the personal ego needs of the buyer, not to organizational or departmental needs.
A Benefit must be something which you can offer and which your competitors can’t.
A Benefit gives a buying motive.
There are more. Some definitions emphasize financial elements, and some concentrate on personal appeal. Others accept any elaboration of a Feature, such as explaining how it can be used. My personal favorite was from a sales manager in Honeywell who told me, “A Benefit is anything you say to a customer that’s smarter than a Feature.”
Which Definition Is Right? How can we tell which of these definitions is better than the others? There’s only one valid test: The best of these rival definitions is the one that has the most positive impact on customers. Is there one of these types of Benefits that occurs more often than others in successful calls? Our research team set out to test this by watching sales calls and counting how often the different types of Benefits were used in calls that succeeded and in calls that failed. After this initial testing of a half-dozen different definitions, we chose two for our major research test:
Type A Benefit. This type shows how a product or service can be used or can help the customer.
Type B Benefit. This type shows how a product or service meets an Explicit Need expressed by the customer.
We chose the Type A definition because it was the most common one used in the better sales-training programs. Most readers of this book will have been taught to use the Type A Benefit. In contrast, the Type B Benefit was our own definition. We chose it after watching hundreds of very effective salespeople in larger sales and analyzing the types of product statements they made to their customers.
At first sight, these two definitions of a Benefit seem very similar. However, their effect on customers is dramatically different, so it’s worth examining how the two differ. For example, suppose I’m selling you a computer system and I say, “I assume you want a 32-bit system like our Suprox machine because, if you ever use graphics, it will be significantly faster for you.” Have I made a Type A or a Type B statement? It can’t be Type B, for I’ve assumed that you want faster graphics; you haven’t actually expressed a need for graphics, let alone faster ones.
Take another example. You tell me that your present machine has a reliability problem. I reply, “Because our Suprox machine uses a new generation of high-reliability components, it could solve your present reliability problem.” What kind of statement is this? This time you’ve certainly expressed a need. You’ve told me that your present machine is unreliable. But have you expressed an Explicit Need? No; telling me that your present machine has a reliability problem is an Implied Need (a problem, difficulty, or dissatisfaction). So my statement meets an Implied Need, not an Explicit Need. Once again, we should classify it as a Type A Benefit, not a Type B.
How Important Is the Difference? In our research test we found that the Type A Benefit is quite strongly related to success in smaller sales but is only slightly related to success in larger sales. (We’ll see why later in this chapter.) In contrast, the Type B Benefit is very strongly related to success in all sizes of sales.
I don’t know about you, but personally I find it hard to remember which is which whenever anything is labeled A or B. I wasn’t the only one who found it confusing to refer to Type A and Type B Benefits, so we soon decided that it would be better to avoid further difficulties by putting more descriptive names in place of A and B. We called the Type A Benefit an “Advantage.” And for the Type B Benefit, because it was so strongly related to success, we kept the name “Benefit.”
Thus, what emerged from our research are three kinds of statements (or behaviors) that you can use to demonstrate capability, as shown in Figure 5.3. It’s important to remember that if you’ve been through sales training in the last 20 years, you’ve probably been taught to use a lot of Type A Benefits—or Advantages. But as you can see in Figures 5.3 and 5.4, Advantages are more powerful in simpler sales than they are in the larger sales that are the subject of this book.
Figure 5.3. Features, Advantages, and Benefits.
Figure 5.4. Advantages (Type A Benefits).
Almost certainly, you’ll experience some confusion between the definition of Benefit that we’re using here and the definitions you’ve learned in the past. Most salespeople I’ve worked with hate quibbling about definitions, and I don’t blame them. But in this case, definitions are vitally important. For example, the Motorola Canada productivity study described in Appendix A shows that salespeople who used Benefits rather than Advantages increased their dollar volume of sales by 27 percent. That’s more than a quibble. When the definition is derived from choosing the statements that have the highest impact on customers, then we’re not just playing with words. Because the differences between Features, Advantages, and Benefits are so important, I’d like to give you a chance to test your understanding of them by working through the following short transcript. See if you can pick out which of the 10 product statements offer Features, Advantages, or Benefits. Then check your answers against the ones given at the end of this chapter.
Types of Product Statements
Now that you’re familiar with the rather special way we use the terms Advantages and Benefits, let’s examine the research evidence in more detail.
The Relative Impacts of Features, Advantages, and Benefits
I’ve said that Advantages—statements showing how your product can be used or can help the customer—have a much more positive impact on small sales than on larger ones. Why? It seems odd that the impact should be so much less in the large sale. The most probable answer goes back to the points I made about simple sales in Chapter 4. Remember that we showed how you could be very successful in smaller sales by using Situation and Problem Questions to uncover Implied Needs and then offering solutions.
What would these solutions be in terms of Features, Advantages, and Benefits? They can’t be Benefits because, as we’ve seen, you can only make a Benefit if you address an Explicit Need that the customer has expressed. In this case the solutions are offered to Implied Needs, so they must be either Features or Advantages. We’ve seen that offering solutions to Implied Needs isn’t effective in larger sales. So this use of Features and Advantages, which can work perfectly well in a small sale, is likely to be ineffective as the sale grows larger (Figure 5.5).
Figure 5.5. A recipe for success in the smaller sale, but for disaster in larger sales.
This explains why our research found that Benefits are so much more powerful in larger sales. To make a Benefit, you must have an Explicit Need (Figure 5.6). But in order to get the Explicit Need, you normally must first develop it from an Implied Need by using Implication and Need-payoff Questions. Using Benefits, as we define them, can’t be divorced from the way you develop needs. When my colleagues and I at Huthwaite run training programs, we are often asked for advice on how to use more Benefits. Our reply is simple: “Do a good job of developing Explicit Needs and the Benefits almost look after themselves.” If you can get your customers to say, “I want it,” it’s not difficult to make a Benefit by replying, “We can give it to you.”
Figure 5.6. Benefits (Type B Benefits).
Benefits and Call Success
One of our early studies that confirmed the power of Benefits was carried out in a number of high-technology companies across Europe and North America. We compared the level of Benefits in 5000 calls with the outcome of each call (Figure 5.7). We found that Benefits (and remember that our definition of a Benefit is a statement that shows how you can meet an expressed Explicit Need) were significantly higher in calls leading to Orders and Advances. In contrast, the level of Advantages (showing how your product can help or be used—what many of us have been taught to call “Benefits”) was not significantly different in successful and unsuccessful calls.
Figure 5.7. Relationship of Benefits to outcome in 5000 high-technology calls: Chart shows relationship of Benefits to sales.
Features, Advantages, and Benefits in the Longer Selling Cycle
One of the curious findings from our research was that the impacts of Features, Advantages, and Benefits on the customer are not similar throughout the selling cycle (Figure 5.8).
Figure 5.8. Features, Advantages, and Benefits across the selling cycle.
We were working with one of the world’s leading business-machines companies, and part of our investigation involved measuring the effects of sales behaviors at different points in the selling cycle. The average selling cycle in this organization was 7.8 calls long. Company researchers, working with Huthwaite, accompanied salespeople into calls at different points in the cycle. They observed the frequency with which each seller used Features, Advantages, and Benefits and then compared this data with the outcome of each call. To be technical for a moment, the vertical axis of the graph in Figure 5.8 actually shows the significance level of each behavior measured by a battery of nonparametric tests. In simpler terms, the higher a behavior comes on the vertical axis, the more it’s likely to help you sell.
As you can see in Figure 5.8, Features had a low impact on the customer throughout the selling cycle. Benefits, at the other extreme, had a high impact whenever they were used. Advantages had an unusual behavior. We found that early in the cycle, particularly during the first call, Advantages had a moderately good statistical relationship to call success. This is another way of saying that Advantages had a positive impact on the customer during the first call—sellers who used a lot of Advantages were likely to get an Advance rather than a Continuation or No-sale. However, as the cycle progressed, Advantages had a decreasing effect on the customer until, as the end of the cycle approached, they were no more powerful than Features.
Why Do Advantages Run Out of Steam?
To be honest, I’m not sure why Advantages are more effective early in the cycle than late. It’s one of those findings which the Huthwaite research team still argues about whenever we get together. Possibly it’s because, at a first meeting, the customer expects to hear about the product rather than to discuss needs. I’m sure you’ve often made first visits to customers who start off the call by saying “Now tell me all about this product of yours.” I’ve certainly had customers who don’t want to discuss needs until they know more about what I’ve got to offer.
Another possibility is that many of the sellers who jump in early with Advantages do so because they are genuinely enthusiastic about their products. They can’t wait to start talking solutions. In the short term, their enthusiasm carries them along, at least to the point where the customer agrees to proceed to a further step in the selling cycle. However, if they continue a product-centered approach as the cycle progresses, they aren’t responsive to customer needs and therefore become less effective.
A third possibility is that Advantages, as we’ve seen earlier, are very quickly forgotten after the call; Consequently, their effect is temporary. In contrast, Benefits continue to have an impact between calls because their link to Explicit Needs helps customers remember them.
Whatever the reason, I’m sure you’ve seen cases in your own company of this phenomenon in action. A typical example is the pushy, aggressive individual who’s much more interested in selling the product than in meeting the customer’s needs. This kind of person will frequently be very successful in the early stages of the sale. I’m sure you’ve listened, as I have, to the stories these people tell about how they’ve just had a first meeting with a new customer and impressed this customer mightily by the way they put the product across and showed how it could solve all the customer’s problems. But how many of these promising beginnings turn into orders? Fewer than you’d expect. And a very likely reason is that the seller’s high-Advantage style has helped early in the cycle but run out of steam as the sale progressed. But whatever the explanations, the research is giving us a simple but important message. Advantages are less powerful than Benefits all through the selling cycle. It never pays to offer an Advantage if you can go that bit further and offer a Benefit.
Selling New Products
There’s one area of Demonstrating Capability that is generally handled badly, even by experienced salespeople. It happens to be an area vital to most organizations’ success and it’s a source of perennial frustration and disappointment to senior management. The area I’m talking about is the new-product launch. Over and over again, my Huthwaite colleagues and I are asked by top management to help explain why a new product has failed to meet its initial sales target.
“What’s wrong?” they ask. “We were sure our projections were realistic. Yet now, 6 months into the launch, we’re less than 50 percent of plan. Is it the product? Is it the sales force? What’s going wrong?”
From the many product launches we’ve studied, one constant fact emerges. The biggest single cause of poor results early in a product’s life can be explained in terms of Features, Advantages, and Benefits.
The Bells-and-Whistles Approach
When a product is new, how does product marketing generally communicate it to the sales force? The marketing people call the sellers together and tell them about what an exciting new product is coming. They explain all the Features and Advantages—all the bells and whistles. And what do the salespeople then do? They become excited about the product and go out to sell it. And when they are in front of customers, how do they behave? They communicate the product in exactly the same way it was communicated to them. Instead of asking questions to develop needs, they jump in with all the exciting Features and Advantages that the new product possesses.
Figure 5.9 shows the composite data from a number of product launches. As you can see, the average number of Features and Advantages given when selling new products is more than 3 times the level given by the same salespeople when selling existing products. The evidence suggests that the sellers’ attention is much more on the product than on their customers. To be frank, I’ve done it myself—you’ve probably done the same thing too. Whenever Huthwaite launches a new product, we all get excited and enthusiastic, and we can’t wait to tell our clients all about it. And like so many other companies, we wonder why—despite our enthusiasm—we’re not making sales. We now understand that it’s precisely because of our enthusiasm that we have a problem. Our enthusiasm has led us to become product-centered and to give Features and Advantages. As we’ve seen in this chapter, that’s not an effective strategy for the major sale.
Figure 5.9. When selling new products, the tendency is toward promoting the product, not on customer needs.
The Problem-Solving Approach
We had an interesting opportunity to test whether something as simple as excessive Features and Advantages could really account for the slow growth of new-product sales. A major company in a medical market invited us to carry out an experiment with the launch of one of its new products.
The product was a sophisticated, and expensive, piece of diagnostic equipment. It was clearly in the category of the larger sale. The machine was launched to most of the sales force in the conventional way—a high-key presentation of its Features and Advantages by the product marketing team. But we were allowed to launch it differently with a small experimental group of salespeople. Instead of showing them the product and describing its Features and Advantages, we didn’t even let them see what they would be selling. “It’s not important,” we explained. “What is important is that this machine is designed to solve problems for the doctors who use it.” We then listed the problems the machine solved and the needs it met. Finally, we had our group make a list of accounts where these problems could exist, together with the Problem, Implication, and Need-payoff Questions they would ask when they visited those accounts. By launching the product in terms of the problems it solved and how to probe for them, we were able to shift our small group’s attention away from the product and back to customer needs. The proof that this was an effective strategy is in the sales results. Our group averaged a 54 percent higher level of sales than the rest of the sales force during the product’s first year.
This research on new products also gave me an explanation for something that had puzzled me for many years. Some of the people with the best records for selling new products are the most cynical about product launches. I remember going to a product launch in Acapulco some years ago. The event was splendiferous. Big names from the entertainment world had been hired at unbelievable cost, and the place swarmed with public relations people, media specialists, communications consultants, and a variety of similarly expensive people. The salespeople, eagerly awaiting the great event, filed into the main hall to hear one of the most spectacular and costly Feature dumps of the decade. I was depressed at the enormous expense my client had gone to in order to make the sales force communicate the new product ineffectively, so I decided to wait outside until all the fuss and spectacle subsided. As I sat by the pool, I noticed two other people who had slipped out of the same presentation. Talking with them, I found that they were both very experienced high performers. “It’s just another product,” said one. “When the fuss dies down, I’ll go back in and figure out which customers need it.” Clearly he wasn’t going to fall into the trap of neglecting needs in favor of Features and Advantages.
Have you ever noticed how, just when the new product is proving to be a disappointment and the sales force is losing its enthusiasm, sales suddenly start to improve? I recall exactly that happening when I was involved in the launch of a large new copying machine. At the time I thought it was curious that sales were terrible until the sales force stopped being excited by the new product. Then, at the point where everybody was beginning to say, “This new machine isn’t anything special,” results took a dramatic turn for the better. I couldn’t explain it because it seemed so much the opposite of common sense. You’d think that the machine would be most successful when it was new—with maximum sales-force enthusiasm and maximum competitive lead time. Now I know what was happening. As they became disillusioned, the attention of the salespeople turned away from the product and back to the customer.
There’s a lesson here for anybody concerned with successful product launches. Several of our large multinational clients, on the basis of Huthwaite’s research, now handle launches in a new way. Instead of giving Features and Advantages when they announce new products to the sales force, they concentrate on explaining the problems the product solves and on thinking up the questions that will uncover and develop these problems. It’s proved a very successful method for speeding the growth curve of new-product sales.
Demonstrating Capability Effectively
What are the central messages in this chapter that will help you demonstrate your capability more effectively in larger sales? I would pick out three main practical points:
1. Don’t demonstrate capabilities too early in the call. In smaller sales you can uncover a problem and jump straight in with Advantages about how you can solve it, but this doesn’t work well in larger sales. It’s important in larger sales to develop Explicit Needs—by using Implication and Need-payoff Questions—before you offer solutions. Presenting capabilities too soon is one of the most common mistakes in large accounts. It’s made worse because many customers will encourage you to present solutions in the absence of any information about needs. “Just come and make a presentation about your product,” they tell you, “and we’ll decide whether it fits our needs.” If you’re forced to make presentations of Features and Advantages early in the selling cycle, always try to have a minimum of one premeeting with a key person in the account to uncover needs, so that your presentation includes at least some Benefits.
2. Beware Advantages. Most sales training, because it’s based on models appropriate to smaller sales, encourages you to give Advantage statements when you sell. And to complicate the issue, the term they use for such statements is “Benefits.” Don’t let previous training mislead you. Remember that, in larger sales, the powerful statements are those which show that you can meet Explicit Needs. Don’t fool yourself into thinking you’re giving a lot of Benefits if you’re not uncovering and meeting those Explicit Needs.
3. Be careful with new products. Most of us give far too many Features and Advantages when we’re selling new products. Don’t let this happen to you. Instead, the first thing to ask yourself about any new product is “What problems does it solve?” When you understand the problems it solves, you can plan SPIN questions to develop Explicit Needs. Try it. You’ll be much more effective.
ANSWERS: Types of Product Statements
1. Feature. Balanced voltage stabilization is a fact about the system. The statement doesn’t explain how stabilization can be used or can help the customer.
2. Advantage. This statement shows how the Feature in statement I can be used or can help the customer. It’s not a Benefit because the customer hasn’t expressed an Explicit Need for stabilization.
3. Advantage. The statement shows how backup memory can be used or can help the customer, so it’s more than just a Feature. But because there’s no evidence that the customer has expressed an Explicit Need for backup memory, we can’t call it a Benefit.
4. Feature. Statements of cost (like this one) are facts or data about the product, so we classify them as Features.
5. Benefit. In the previous statement the customer has expressed an Explicit Need: “I need to be able to read source data straight into memory.” In this statement the seller shows how the product meets that Explicit Need.
6. Benefit. Again, the buyer has stated an Explicit Need (an error rate less than 1 in 100,000). The seller shows that his product can easily meet the need.
7. Advantage. The seller shows another way in which having a low error rate can be used or can help the customer. However, as the next customer statement shows, this doesn’t meet a need.
8. Feature. A piece of data about the product.
9. Feature. Further product facts.
10. Advantage. The seller shows how the Feature of time-based coding can be used to help the customer.
[6] Preventing Objections
During a visit to the training center of a leading multinational company, I was invited to watch some sales training in progress. Instead of choosing the Advanced Systems Selling class, as my hosts had perhaps expected, I asked instead if I could sit in on a typical basic-skills program for new salespeople. Entering quietly at the back of the room, I looked around. The students all had that unnatural attentive cleanliness that goes with being new to sales. Their instructor, recently promoted from the field, was launching with great vigor into his favorite topic—objection handling. You couldn’t have imagined a more typical scene. It could have been Day 2 of any basic sales-training program in any large corporation.
“The professional salesperson,” the instructor began, “welcomes objections because they are a sign of customer interest. In fact, the more objections you get, the easier it will be for you to sell.” The class, duly impressed, wrote this down. Meanwhile I groaned behind my mandatory visitor’s smile. Here was yet another new generation of salespeople at the receiving end of one of the most misleading myths in selling. Still, as a visitor it would have been improper for me to comment, so I continued to smile through an hour of objection-handling techniques until the coffee break.
During the break, I talked with the instructor. “Did you believe what you were saying in there,” I asked, “that stuff about the more objections, the easier to sell?”
“Yes,” he replied. “If I didn’t believe it, I wouldn’t be teaching it.”
I hesitated. Clearly the instructor and I had opposite views about objection handling. It would have been easier to drop the subject, but he’d been kind enough to let me into his class, so I felt I owed him something in return. I asked, “You’ve been a successful sales performer for several years, haven’t you?”
“Yes,” he replied with some pride. “I’ve been with the company five years and I’ve made President’s Club for the last three.”
“Look back at your own sales experience,” I urged him. “Five years ago, when you were new, did you receive more or fewer objections from your customers than you’re getting now?”
He thought for a moment. “More, I guess.” Then, as he remembered back, he added, “You know, in the two years when I was new, I seemed to get objections all the time.”
“So in those first two years when you were facing all those objections, did you have good sales figures?”
“No,” he said uncomfortably. “In fact, my sales weren’t too good until my third year with the company.”
Pressing the point, I asked him, “Then you did a lot better in that third year?”
“Yes, that was the year I first made President’s Club.”
“And how about objections? It sounds as if you had more objections in your unsuccessful years. How does that tie in with what you said in class about the more objections, the more successful the call will be?”
He considered the point for a while and said, “You’re right. When I look back, I faced many more objections when I was unsuccessful. Perhaps I’m teaching the wrong message.”
I had to admire him. Most people—given the astonishing human capacity for dismissing unwanted evidence—would have dodged the issue and held to their initial position. But the class was reconvening and I had to finish my tour of the facility, so I didn’t have time to talk more with the instructor about objection handling. If we’d had more time, I would have told him:
Objection handling is a much less important skill than most training makes it out to be.
Objections, contrary to common belief, are more often created by the seller than the customer.
In the average sales team, there’s usually one salesperson who receives 10 times as many objections per selling hour as another person in the same team.
Skilled people receive fewer objections because they have learned objection prevention, not objection handling.
To explain these findings, I’ll have to go back to the discussion of Features, Advantages, and Benefits in Chapter 5. You’ll remember the definitions of these three behaviors and their links to success in sales of different sizes (Figure 6.1). One of my colleagues, Linda Marsh, carried out some correlation studies to check whether there are statistically significant links between each of these behaviors and the most probable responses they produce from customers. For example, when sellers use a lot of Features in calls, do customers respond in a different way than in calls where fewer Features are used? She discovered that Features, Advantages, and Benefits each produce a different behavioral response from customers (Figure 6.2).
Figure 6.1. Features, Advantages, and Benefits.
Figure 6.2. Most probable effects of Features, Advantages, and Benefits on customers.
Features and Price Concerns
Customers are most likely to raise price concerns in calls where the seller gives lots of Features. Why is this? It seems that the effect of Features is to increase the customer’s sensitivity to price. This isn’t necessarily a bad thing if you happen to be selling low-cost products that are relatively rich in Features.
Consider the psychology of the advertisement shown in Figure 6.3. This features-rich product is being sold in a way that works well with cheaper goods. You can imagine a television commercial: “We give you multiplication, division, subtraction...and what do you think that’s worth? Well, don’t answer yet because you also get mark-up and markdown percentages—which is something you don’t usually find on watches 10 times the price. And we also give you...” Throughout history, using Features this way has helped sell lower-priced goods. Why? Because Features increase price sensitivity. By listing all the Features, the customer comes to expect a higher price. When the product turns out to be much cheaper than its competition, the increased price sensitivity causes the buyer to feel extra positive about the lower price tag.
Figure 6.3. A low-cost product rich in features.
I chose a watch example, rather than an industrial product, because there’s something unique about watches. In no other market that I can think of is there such an enormous price difference between competitors.
Now consider the advertisement shown in Figure 6.4. This watch is almost 100 times as expensive as the one in Figure 6.3. Do you think you’d be more likely to buy this expensive watch if there was a list of Features down the side of the advertisement to help persuade you? Not on your life! With top-of-the-market products, the price concern created by Features will make people less likely to buy. A list of Features would probably make you ask yourself questions about whether the expensive watch was worth it.
Figure 6.4. A high-cost product. Listing features is a negative.
Too Many Features: A Case Study
The relationship between Features and price concerns isn’t just a theoretical point that applies only to advertisers. It has clear implications for sales strategy. A major U.S.-based multinational corporation once called us in to help it with a problem. The corporation had been facing tough Japanese competition in its primary marketplace, particularly at the lower end of its product range. The Japanese products were richly featured and, as you might expect, somewhat less expensive than its own machines. As market share began to erode, the corporation looked for alternatives to price cutting. One attractive possibility was to introduce a new product with more Features that could compete directly with the Japanese machines. Such a machine would still be a little more expensive, but because of its added Features, it would provide a much stronger marketplace offering.
But who would sell this new product? The corporation decided to recruit part of the sales force from the competition. After all, nobody knew as much about how to sell these richly featured machines as the people who’d been successful sellers for the Japanese competitor. It seemed, on the face of it, a plausible strategy—recruiting experienced sellers while simultaneously weakening the competition by raiding its best people. The corporation’s agents approached those salespeople who’d been very successful selling the cheaper Japanese machines and succeeded in recruiting some of the competitor’s top people.
Unfortunately, these new people’s sales results were deeply disappointing. The competition’s superstars performed no better than the existing sales force. While trying to discover what was going wrong, I talked with several of the people recruited from the competition and found them puzzled and dejected at their sudden fall from success. “It’s price,” they explained. “The product’s too expensive; we get price objections all the time.” And they were right. When we traveled with them on calls, we found that the number of price objections they received from customers was 30 percent higher than for the rest of the sales force who were selling the same product. Why? We couldn’t write it off as pure coincidence when two sections of a sales force selling an identical product received different levels of price objections from their customers.
The answer lay in their use of Features. While selling for the cheaper competitor, these salespeople had developed a selling style very high in Features. This was very successful because, as we’ve seen, Features increase customers’ price concerns. But because their product was cheaper, the price concern worked to their advantage. Now that they were selling for a more expensive competitor, the high level of Features they were giving worked against them. Their Features increased price concern and, because their product was more expensive, this turned customers toward the cheaper competitor. I presented our findings to the V.P. of Sales for the division. As he wryly remarked, “Right now, they seem to be doing a better job of selling for our competition than when our competition employed them.” How could we help? Not, I suggested, by teaching them how to handle price objections. That was just a symptom. It would be more effective to treat the cause and help these new people adopt a selling style more appropriate to a top-of-the-market product. So we retrained them in SPIN questioning techniques so that they could use a high-Benefits style. As a result, their sales increased, price objections dropped, and the price issues were soon forgotten.
Treating Symptoms or Treating Causes?
Let me introduce a theme that I’ll come back to several times in this chapter. Curing a selling problem, just like curing a disease, rests on finding and treating the cause rather than the symptoms.
When I was 9 years old I lived in Borneo. A friend of my own age warned me that there was a typhoid epidemic in the village. All that either of us knew about typhoid was that it caused a burning fever. “But I won’t catch it,” he assured me; “I’m eating a lot of ice cream to keep cool.” I followed his example—and caught typhoid from infected ice cream. One of the few things I remember clearly about my month seriously ill in the hospital was my father explaining to me the differences between symptoms, such as a high temperature, and causes, such as the nasty little bacterium Salmonella typhosa that loves to lurk in ice cream.
Perhaps this episode made me unduly sensitive to treating symptoms when you should be watching out for causes. But just suppose we’d run a program to teach those salespeople clever answers to price objections. Would we have achieved anything? I think not. The customer’s price concern was just a symptom. The cause was giving too many Features. Teaching objection-handling skills would do no more to prevent price concerns than eating ice cream would prevent typhoid.
Advantages and Objections
Perhaps the most fascinating of the links that Linda Marsh found is the strong relationship between Advantages and objections. You’ll remember that Advantages are statements that show how products or their Features can be used or can help the customer—statements that many of us have been trained to call “Benefits.” Chapter 5 showed that Advantages have a positive effect on small sales but a much less positive effect when the sale grows larger, and Linda’s discovery offers a partial explanation of this. Advantages create objections—and this is one reason why they are poorly linked to success in the large sale.
To help understand the link between Advantages and objections, consider the following extract from an actual sales call. I’ve edited out references to the company and I’ve cut the length of some statements; otherwise, this exact sequence of behaviors happened in a call we recorded in Dallas in September 1981. The product being sold is a word processor.
[SELLER:] (Problem Question) Does all this retyping waste time?
[BUYER:] (Implied Need) Yeah, some. But there’s not so much of it here, not like in Fort Worth.
[SELLER:] (Advantage) Here’s where our word processors would be a real big help because they’d eliminate that retyping for you.
[BUYER:] (objection) Look, we retype stuff, sure. But you won’t get me paying for fancy $15,000 machines just to cut down on some retyping.
[SELLER:] (Advantage) I understand you, but the labor costs of retyping can climb out of sight. A big plus of word processors is that they save you money by making your people more efficient.
[BUYER:] (objection) We’re very efficient right now—and if I wanted to do better on efficiency I can think of 16 ways without new word processors. I’ve two xxx word processors there in the back office. Nobody much knows how to use them. They give trouble, just trouble.
[SELLER:] (Problem Question) Those xxx machines are hard for your people to use?
[BUYER:] (Implied Need) Yes, it’s quicker to type it out by hand—doing it the old way.
[SELLER:] (Advantage) We really can help you there. Our yyy machines use a screen, so people can see exactly what they’re doing. That’s a lot better than your old xxx’s where you’ve got to remember things like format codes—which we prompt automatically, so that our machine can be used much more easily.
[BUYER:] (objection) Know what? Some of the ladies working here get uptight about a typewriter with a correcting ribbon. Screen? It’d just confuse the hell out of them. I’d end up with more mistakes than I’m getting now.
[SELLER:] (Problem Question) You’re getting too many mistakes?
[BUYER:] (Implied Need) Some. Well, no more than most offices, but more than I like.
[SELLER:] (Advantage) Tests show that with the full-screen editing and error correction we offer, your error rates would drop by more than 20 percent if you used our machines.
[BUYER:] (objection) Yeah, but it’s not worth all that hassle just to get rid of a few typos.
What’s happened here? The first thing you’ll notice is that every Advantage is followed by an objection. Of course, I’ve chosen this extract to illustrate my point, for objections don’t always follow Advantages the way they do in the example I’ve picked here. Sometimes the seller will use an Advantage that brings a favorable response from the customer. But from our research, objections are a more likely response than any other buyer behavior (Figure 6.5).
Figure 6.5. Creating objections.
The next thing to notice about this example is the characteristic sequence of behaviors: Problem Questionllmplied Needlobjection. We found this sequence happening over and over again in unsuccessful calls. Let’s look more closely at what’s going on.
As you can see, the fundamental problem that’s causing the objection is that the seller offered a solution before building up the need. The buyer doesn’t feel that the problem has enough value to merit such an expensive solution. Consequently, when the seller gives the Advantage, the buyer raises an objection.
This explains why Advantages have a more positive effect in small sales. If the word processor had cost $15 instead of $15,000, the buyer would probably have reacted differently. It’s certainly worth $15 to eliminate retyping. But $15,000? That’s a different matter.
Back to Symptoms and Causes
How would you help the seller in our example? It’s tempting to suggest that because she is receiving so many objections, what she needs is better objection-handling skills. So, for example, we could teach her principles of objection handling—the classic techniques of acknowledging, rephrasing, and answering. Or we could give her specific help with the common objections that customers raise by showing her what to say when customers raise such typical objections as:
Your word processors are too expensive.
Word processors are hard to use.
My people would be resistant to word processors.
Word processors are more hassle than they’re worth.
Either of these options would help her handle future objections better. But are we treating the symptom or the cause? In each case in the example, the objection arose because the seller hadn’t built sufficient value before offering solutions. Teaching her how to handle objections treats the symptom, but it doesn’t alter the cause. The fundamental selling disease—jumping in too soon with solutions—remains malignant and untreated.
The Cure
If objection handling just treats a symptom, how would we set about a complete cure? This is where the SPIN Model comes in. By teaching her to probe in a way that builds value, we can prevent the objection from arising in the first place. Let me show you what I mean, using the final objection in the example. First let’s examine why the customer raised the objection in the first place.
[SELLER:] (Problem Question) You’re getting too many mistakes?
[BUYER:] (Implied Need) Some. Well, no more than most offices, but more than I like.
[SELLER:] (Advantage) Tests show that with the full-screen editing and error correction we offer, your error rates would drop by more than 20 percent if you used our machines.
[BUYER:] (objection) Yeah, but it’s not worth all that hassle just to get rid of a few typos.
The customer has raised the objection because he doesn’t perceive sufficient value from reducing the error rate. If you could draw a value-equation diagram to show what was going on in the customer’s mind, it would probably look like the one in Figure 6.6. The hassle greatly outweighs the value of eliminating a few mistakes, so the customer makes a negative judgment and raises an objection. Even the best objection-handling skills can’t alter the fact that the seller has offered a solution without first building value.
Figure 6.6. How the customer sees it.
Let’s look at how a more skilled person would handle the same situation:
[SELLER:] (Problem Question) You’re getting too many mistakes?
[BUYER:] (Implied Need) Some. Well, no more than most offices, but more than I like.
[SELLER:] (Implication Question) You say “more than you’d like. Does this mean that some of those mistakes are causing you difficulties in documents you send out to clients?
[BUYER:] Sometimes that’s happened, but not often, because I proofread all important documents carefully before I send them out.
[SELLER:] (Implication Question) Doesn’t that take up a lot of your time?
[BUYER:] Too much. But it’s better than letting a document go out with a mistake—particularly if it’s a mistake in the figures that go out to a client.
[SELLER:] (Implication Question) Why would that be? Are you saying that a mistake in the figures would lead to more serious consequences with clients than a mistake in the text would?
[BUYER:] Oh yes. We could lose a bid, or commit ourselves to an uneconomic contract—or even just come across to clients as sloppy. People judge you on things like that. That’s why it’s worth a couple of hours a day proofreading when there’s other things I should be doing.
[SELLER:] (Need-payoff Question) Suppose you didn’t have to spend that time proofreading. What could you do with the time you saved?
[BUYER:] Well, I could give some time to training my office people.
[SELLER:] (Need-payoff Question) And this training would lead to improved productivity?
[BUYER:] Oh, very much. At the moment, you see, people don’t know how to use some of the equipment here—that graph plotter for example—so they have to wait until I’m free to do it.
[SELLER:] (Implication Question) So the time you’re spending in proofing also forces you to become a bottleneck for other people’s work?
[BUYER:] Yes. I’m badly overloaded.
[SELLER:] (Need-payoff Question) Then anything that reduced the time you’re spending in proofing wouldn’t just help you, it would also help the productivity of others?
[BUYER:] Right.
[SELLER:] (Need-payoff Question) I can see how by reducing proofreading you could ease the present bottleneck. Is there any other way that having fewer mistakes in documents would help you?
[BUYER:] Sure. People here hate retyping. It might be a plus in terms of their motivation if fewer mistakes meant less time spent in retyping.
[SELLER:] (Need-payoff Question) And presumably less time in retyping would also bring cost savings?
[BUYER:] You’re right. And that’s something I need to do.
[SELLER:] (summarizing) So it seems that the present level of mistakes is leading to expensive retyping, which creates a motivation problem with your people. If mistakes, particularly in figures, get out to your clients, it can be very damaging. You’re trying to prevent that at the moment by spending 2 hours a day proofing all key documents. But that’s turning you into a bottleneck, reducing everyone’s productivity and preventing you from putting time into training your staff.
[BUYER:] When you put it that way, those mistakes in documents are really hurting us. We can’t just ignore the problem—I’ve got to do something about it.
[SELLER:] (Benefit) Then let me show you how our word processor would help you cut mistakes and reduce proofing...
If we were to reexamine the customer’s value equation now, it would probably look like the one in Figure 6.7.
Figure 6.7. The customer develops a new point of view.
Now the cost and hassle are more than counterbalanced by the value the seller has created through the use of Implication and Need-payoff Questions. It’s a much more effective piece of selling because we’ve attacked the cause of the objection. As a result, the objection doesn’t even arise. Objection prevention turns out to be a superior strategy to objection handling.
Objection Prevention: A Case Study
I can imagine people reading this and saying to themselves, “Yes, it all sounds very plausible when Rackham’s making up examples that suit his case, but I’m not sure it holds up in the real world.” As a further piece of evidence, then, I’d like to share with you one of the most fascinating little investigations I was ever involved with.
The company was a well-known high-tech corporation whose personnel research staff had been investigating sales behavior in one of its divisions based in the southern United States. We had encouraged the research staff to use the behavior-analysis method of counting how often key seller and customer behaviors occurred during sales calls, and they had come up with a curious finding. The average sales team in the division consisted of eight salespeople. Now purely in terms of statistical probabilities, you’d expect that these eight people, each selling the same product to the same size of customer and with the same competitors, would each face approximately the same number of objections per selling hour. Not so. There was an enormous difference in the number of objections faced by individual salespeople. In the average team they often found one salesperson having to face 10 times as many objections per selling hour as other people from the same team.
The research staff didn’t know about our work on the links between Advantages and objections. Naturally, they drew the obvious conclusion: The people who were receiving so many objections must need training in objection handling. They asked us for advice. One quick look at their data told us what we needed to know. We picked the behavior-analysis figures for 10 people who were each receiving very high numbers of objections and who were clearly candidates for objection-handling training. In all 10 cases, these people were higher than average in the number of Advantages they used in their calls.
I persuaded the company to try a bold experiment. “What I’d like to do,” I explained, “is to train these people in objection prevention. I think we can design a program which doesn’t even mention the word objection but which will do more for these people than the best objection-handling training ever could.” The company agreed. We chose eight salespeople who—from the behavior-analysis figures—had each received an unusually high level of objections from customers. As we’d promised, our training didn’t say anything at all about objections or objection handling. Instead, we taught the eight people to develop Explicit Needs with the SPIN Model and then to offer Benefits.
After the training, the company’s researchers went out with the eight to count the number of objections they were now receiving in calls. The average number of objections per selling hour had fallen by 55 percent. I’d draw two conclusions from this little study:
It confirms that the best way to handle objections is through prevention. Treat the cause, not the symptom.
Notice that our training didn’t prevent objections completely.
There will always be objections that arise because the customer has needs your product can’t meet or because a competitor has a clear product superiority. These “true” objections are facts of life, and no objection-prevention technique can do anything to stop them from being raised. However, what we were able to show in this case was that objections can be cut by more than half by using the SPIN behaviors to build value.
The Sales-Training Approach to Objections
Traditional sales training actually teaches people to create objections, then teaches them techniques for handling the objections they’ve inadvertently created. This is because the selling-skills models in every major sales-training program we’ve reviewed have been based on the small sale. As we’ve seen, in small sales a high level of Advantages can be successful because there’s less need to build value before offering solutions—but in larger sales Advantages don’t have this positive impact. (It’s important to remember that we’re using the term Advantage to cover any statement that shows how your product or service can be used or can help the customer; in other words, what we’re calling an Advantage is what most sales training calls a Benefit.)
It’s my hope, as training designers begin to understand that larger sales need different skills, that we’ll see an end to the kind of training that encourages salespeople to give a lot of Advantages. The heavy use of Advantages—which is what most training recommends—is the cause of more than half of the objections that customers raise. But are objections necessarily bad? Some sales-training programs and many sales trainers, such as the instructor I described at the first of this chapter, teach that objections are positively linked to success and that the more you get, the better. If that’s true, then preventing objections could actually hurt your selling. What does the evidence tell us?
We carried out a study to find out whether objections were really “sales opportunities in disguise,” as one training program put it. We counted the number of objections raised by customers in a sample of 694 calls collected from an international sample in a large business-machines corporation. Figure 6.8 shows the results.
Figure 6.8. Objection levels and call success.
As you can see, the higher the percentage of objections in the customer’s behavior, the less likely that the call will succeed. If objections are sales opportunities in disguise, then this study suggests that their disguise must have been created by a master in camouflage. No, make no mistake about it, the more objections you get in a call, the less likely you are to be successful. It’s a comforting myth for trainers to tell inexperienced salespeople that professionals welcome objections as a sign of customer interest, but in reality an objection is a barrier between you and your customer. However skillfully you dismantle this barrier through objection handling, it would be smarter not to have created it in the first place.
Benefits and Support/Approval
The most positive relationship to emerge from Linda Marsh’s study of Features, Advantages, and Benefits is the strong link between giving Benefits and receiving expressions of approval or support from customers. She found that the more Benefits the sellers gave, the more approving statements their customers made. This isn’t a surprising finding. After all, Benefits—as we define them—involve showing how you can meet an Explicit Need that the customer has expressed. Unless the customer first says, “I want it,” you can’t give a Benefit. It’s no wonder that customers are most likely to express approval when you show you can give them something they want.
Objection Handling versus Objection Prevention
At its most basic, what I’ve suggested in this chapter is that the old objection-handling strategies, which encourage the seller to give Advantages, are much less successful in the larger sale than objection-prevention strategies, where the seller first develops value using Implication and Need-payoff Questions before offering capabilities (Figure 6.9).
Figure 6.9. Objection handling or objection prevention?
When I was new to selling I thought that, next to closing, objection-handling skills were the ones most crucial to sales success. Looking back, I can now see that my concern was motivated by the large number of objections I was facing from my customers. I didn’t ask myself what caused the objections—but just knew that there were lots of them, so I’d better improve my objection handling. I now understand that the majority of objections I faced were only a symptom caused by poor selling. By improving my probing skills, I’ve become more successful at objection prevention—and this has certainly helped me sell more successfully. I still get objections, of course, for in selling there will always be the potential for a genuine mismatch between customer needs and what a seller can offer. So objection-handling skills will always have a part to play in my calls. But the reason I sell better now isn’t better objection-handling skills, it’s that I’m less likely to create unnecessary objections.
Preventing Objections from Your Customers
If you’re receiving more objections from customers than you’d like, think about which is symptom and which is cause. Could it be that objections are just a symptom you’ve caused by offering your solutions too soon in the call? Try putting extra effort into effective needs development, using Implication and Need-payoff Questions. If you can build the value of your solutions, then you’re much less likely to face objections. As many hundreds of salespeople we’ve trained will testify, good questioning skills will do more to help you with objections than any objection-handling techniques ever could.
Of course, you’ll always get some objections, especially when your product doesn’t meet a customer’s needs. However, here are two sure signs that you’re getting unnecessary objections that can be prevented by better questioning:
1. Objections early in the call. Customers rarely object to questions—unless you’ve found a particularly offensive way to ask them. Most objections are to solutions that don’t fit needs. If you’re getting a lot of objections early in the call, it probably means that instead of asking questions, you’ve been prematurely offering solutions and capabilities. The cure is simple enough: Don’t talk about solutions until you’ve asked enough questions to develop strong needs.
2. Objections about value. If most of the objections you receive raise doubts about the value of what you offer, then there’s a good chance that you’re not developing needs strongly enough. Typical value objections would be “It’s too expensive,” “I don’t think it’s worth the trouble of changing from our existing supplier,” or “We’re happy with our existing system.” In cases like these, customer objections tell you that you haven’t succeeded in building a strong need. The solution lies in better needs development, not in objection handling. Particularly if you’re getting a lot of price objections, cut down on the use of Features and, instead, concentrate on asking Problem, Implication, and Need-payoff Questions.