Your customers may be few or many. But you never want to let one leave without making the best sale you can. So you need to learn the art of the upsell. And, for that matter, of the cross-sell and the down-sell.
All of them take place after your customer has made their first decision to buy. So, you have done the hard work. Now you can use upselling and cross-selling to increase your revenue. And, if your customer changes their mind, there’s always the down-sell.
If you want to optimise every sales opportunity, you need to know how to apply the ideas of the upsell, cross-sell, and down-sell.
The secret to selling is creating an environment where people want to buy. And that’s the insight at the heart of Neil Rackham’s scientific approach to sales. He called it SPIN Selling, from the acronym that will guide you through the process.
SPIN Selling is one of the most widely known sales methodologies. It’s a best-selling book, and is promoted worldwide to companies of all sizes, by Rackham’s company, Huthwaite International.
But we’re not here to help with that promotion, but to assess what managers can learn from Rackham’s big idea.
John Grinder and Richard Bandler are credited as the co-founders of NLP. This is a basket of behavioural, therapeutic, and influencing techniques that comes in and out of fashion in the organisational world.
However, in the self-help world, its ups and downs are less pronounced – it has continually received accolades and steadily grown its influence.
So here then is the central dilemma of NLP for managers and professionals: how important is it? And therefore, how seriously do we need to take Bandler, Grinder, and their ideas of NLP?
John Grinder was born in 1940, and studied psychology at the University of San Francisco. After graduating with a BA, he joined the US Army as a Captain in a special forces unit. He then joined a US intelligence agency, before studying for a PhD in linguistics at The University of California, San Diego.
Grinder completed his PhD in 1971, and after a short time in George Miller’s lab at Rockefeller University, he joined UC Santa Cruz as an Assistant Professor in Linguistics. His research interest was the then very new and fashionable transformational grammar pioneered by Noam Chomsky.
In 1972, a psychology student called Richard Bandler came knocking, looking for help with a research project in which he was transcribing hours of Gestalt Therapy sessions. Bandler wanted help in analysing Fritz Perls’ language.
This was the start of a collaboration that led to the founding of Neuro-Linguistic Programming. The story of their collaboration, and of the other people involved – it was far from a two-person endeavour – is well documented elsewhere. So too is the acrimonious breakdown of their working relationship, and the court actions over ownership of the NLP name and ‘brand’.
The upshot of this, by the way, is the court’s decision that NLP is a generic term and no one can own it. This meant that, after the split, Grinder could continue to develop his own new ideas, which he came to call ‘New Code’ NLP in contrast to the earlier work he did with Bandler, which he refers to as ‘Old Code’.
Grinder has authored many books with Bandler and others, and continues to teach NLP, through his own business (Quantum Leap) with his wife, and for other NLP schools.
Richard Bandler was born in 1950. His first few years were spent in New Jersey, before moving to California. He studied Philosophy and Psychology at US Santa Cruz, where he graduated in 1973.
There, Bandler met John Grinder and other early collaborators in developing what became NLP.
Bandler and Grinder became close colleagues studying and teaching the communication patterns of a number of therapists, like Fritz Perls, Virginia Satir, and Milton Erikson. They gathered a number of other interested researchers and teachers around them.
Inevitably, as what they were teaching became more popular – and therefore more commercial – tensions arose. Like Grinder, Bandler formed his own business and continued to teach and develop new ideas. He too still teaches NLP, along with hypnotherapy, around the world.
Bandler and Grinder were co-authors of a number of the seminal books in the emerging subject of NLP. None are aimed at ‘lay’ readers. They are written for aspiring and experienced practitioners and, even having studied NLP and received Practitioner and Master Practitioner certificates, I find them barely readable.
There are many more modern books aimed at introducing NLP to interested readers. Browse your favourite book site and take your pick.
Neuro-Linguistic Programming: NLP
So, what is NLP? It stands for Neuro-linguistic Programming (yeah, I know), and it is fundamentally an assorted bag of methods and models designed to help understand communication and behaviours and elicit behavioural change.
At the root – and this is something Grinder constantly emphasises – is the idea of modelling. Whatever you want to be able to do, find an example of someone who does it to a level of excellence. Document everything they do, say, and think when they are doing it. Then try out being exactly like they are. Start to strip away elements, to find out what parts make no difference and which parts, when lost, become significant.
You’ll end up with a core of beliefs, behaviours, and communication patterns that materially affect your outcomes. Fritz Perls, Virginia Satir, and Milton Erikson were the first people extensively studied in that way.
From them, Bandler and Grinder extracted two of the biggest and most influential models within the NLP corpus: The Meta Model (from Satir and Perls) and The Milton Model (from Erikson).
The Meta Model
The Meta Model documents language patterns that allow the therapist, coach, salesperson (choose your role) to spot patterns of thinking in the other person. A long list of linguistic patters betray distorted perceptions, generalisations, and subconscious deletions of possibly relevant information. By challenging these, coaches and therapists can open up new possibilities to the person they are helping, and salespeople can breakdown objections to buying.
Bandler and Grinder’s primary books that originally documented this were The Structure of Magic, volumes 1 and 2.
The Milton Model
Milton Erikson was a masterful user of hypnosis in his therapy. Indeed, his style is sometimes called Eriksonian Hypnosis. Once again, Bandler and Grinder documented his language patterns. They found a similarity to the meta model, but that Erikson was being deliberately vague, to elicit gaps in thinking, through which he could insert therapeutic suggestions. The Milton model can help move a listener into a more receptive state. Again, this is useful to therapists, coaches and salespeople.
Bandler and Grinder’s primary books that originally documented this were Patterns of the Hypnotic Techniques of Milton H. Erickson, M.D. volumes 1 and 2.
Evaluation of NLP
NLP is like Marmite: it evokes love and hate reactions in broadly equal measure. And its popularity goes through peaks and troughs – big ones for business, smaller troughs for the self-help industry. It is currently a multi-million dollar industry world-wide.
Three factors are perhaps responsible for the extreme views:
NLP is presented with a lot of complex and intimidating jargon. Indeed, the name Neuro Linguistic Programming suggests a level of mind-control which can intimidate or seduce. Some wonder if the jargon is merely designed to create a quasi-academic glamour the discipline does not deserve.
Some practitioners make extravagant claims for what NLP can achieve. Everything from magical sales efficacy to curing phobias, to curing serious mental and physical illnesses.
There is a limited research base. A lot of the evidence for the efficacy of NLP techniques is anecdotal, and many serous academic therapists have offered detailed critiques.
On the other hand, there are also three good reasons to learn more about NLP:
Many people find that much of it really does work. The ideas are taken from observations of effective behaviour. You can apply the modelling process to find out how to replicate the results of your best performers
NLP is respectful of our potential. It encourages personal responsibility and asserts that we can all access the resources we need to make the changes we want
The criticism that much of NLP is ‘just common sense’ can also be seen as a strength. By codifying common sense, we make it more accessible.
You can find much in NLP that is of value to you; and much that is not. If you are prepared to be selective and evaluate each tool on its merits, NLP is a powerful resource.
Here’s a video I did for another business that will echo much of what’s here.
Robert Miller is one of the people who revolutionised ideas around selling, with his Strategic Selling and Conceptual Selling ideas. But of far more relevance to most managers is his second big idea, which he worked on with Gary Miller.
If you want to sell your message, they found, you need to tailor the way you deliver it to the way others make decisions. And knowing how to do that is not useful only to salespeople.
Robert B Miller
Robert Miller got his BA and MA from Stanford University, focusing on education, and his whole career has focused on adult education and training. Following service in the US Navy during the war with Korea, Miller worked his way to become a Vice President at consulting and training company, Kepner-Tregoe. He remained there from 1965 to 1974.
While there, he developed his thinking about the sales process that was to lead to a series of books, and the formation of a new sales training business, which he co-founded with his Kepner-Tregoe colleague, Stephen Heiman. Miller Heiman Group became and remains one of the leading sales training organisations. The thinking that Miller and Heiman developed is massively influential in much sales training today.
However, Miller left the business in 1984, although he has had two extended periods of acting as a consultant and advisor to the business. As well as founding Value Sourcing Group in 1996, Miller also collaborated with Gary Williams to create a customer research consultancy, Miller-Williams Inc. There, they conducted the research we’ll be looking at.
Gary A Williams
Gary Williams studied biology at the University of Alabama, and started his career in the late 1980s, in the software industry. He held a number of positions in both small entrepreneurial and large firms, including Glaxo and IBM. In the mid-1990’s, he was a Vice President of The Sentry Group, a consulting firm that was acquired by The Meta Group.
In 1998, Gary co-founded Miller-Williams Inc. with Robert Miller. This was a research firm dedicated to measuring how consumer behaviour affects market movements. Williams developed the analytical research method (for which he holds a US Patent).
In 2004, Miller left the business and Williams morphed it into its present-day incarnation, wRatings, which ranks business performance according to how well they serve their customers.
Paths to Persuasion
Miller and Williams surveyed 1,684 executives for their study. This is a reasonable sample size, but we must note a potential for cultural bias: 97% of the respondents were from the United States.
From their results, they divided the executives into five decision-making styles:
Note that Miller and Williams defined styles of decision-making. These are not the same as personality traits and they did no work on relating the two.
Whether you are trying to sell, negotiate, or just persuade to your point of view, you need to adapt to the other person’s decision-making style. You need to identify what it is, and then tailor your approach to fit. This gives Miller and Williams’ five paths to persuasion.
Followers like to make decisions based on what has worked before; either for them, or for other trusted colleagues. They are risk-adverse, but are prepared to take responsibility for their decisions when they make them.
They tend to be cautious and therefore like established ‘safe’ brands, but are also bargain-conscious. They like to feel innovative, but in reality prefer safety, with a slight edge of novelty. They trust expertise, track record, and in depth case studies.
To persuade these decision-makers, refer to proven methods and real results. Use references, case studies and testimonials to support your case. They need to feel certain they are making the right decision, so do what you can to reassure them that their choice is the safe one.
Charismatics love a new idea or proposal but will base their final decision on the evidence. Hook them with novelty, but expect a wholly rational analysis of the risks and rewards to drive their decision-making. When they take their decision, they will be prepared to accept risk and responsibility if the potential rewards are right.
Charismatics are enthusiastic, talkative, and dominant. They are results-oriented and able to focus hard for long periods.
So persuade them with a calm discussion of risks and potential results. Use simple and straightforward language, rather than trying to blind them with science. They often like visual aids like diagrams, maps, and graphs.
Sceptics tend to be suspicious of evidence, particularly if it conflicts with their established point of view. They can be aggressive and combative, and like to take charge. They are prepared to take risks, but will often try to shed responsibility if things don’t work out.
Ultimately, sceptics don’t trust data, they trust people. So you need to establish as much credibility as possible. A good way to do this is by gaining an endorsement from someone the sceptic trusts.
Thinkers are hard to persuade. They need rigorous arguments that are supported by solid data. They dislike risk and take their time to make as certain a decision as possible. Once they trust their analysis, they will commit to it. But they are also willing to re-evaluate it, if new data emerges.
Thinkers, as their label suggests, are cerebral, intelligent, and logical. They read widely, and are comfortable with numbers, processes, and proofs.
To persuade them, start with lots of data; the more the better. Include market research, customer surveys, and rigorous cost-benefit analysis. Case studies can help. But they need to be in depth, with highly pertinent details and a significant statistical base. If not, the Thinker will brand it as merely anecdotal.
Controllers are mercifully rare. They hate uncertainty and try to cast things in black and white polarities. Therefore, they like pure facts. They are also insecure, hiding behind an unemotional exterior, until they need someone to blame. They don’t like risk and don’t want to take responsibility.
Controllers are fairly logical, unemotional and detail oriented, but they also value action. Not surprisingly, from their label, Controllers like to be in charge.
Persuade them with care. They don’t like to feel manipulated, and they hate ambiguity. So you must demonstrate credibility and structure your evidence carefully. Never advocate too strongly for your proposal. It’s better to give the Controller the information, let them convince themselves.
This simple model belies the complexity of real people.
It can be hard to diagnose a decision-maker’s style. Many would mis-assess themselves. In their book, Miller and Williams give clues to help spot the decision style.
Additionally, many people have more than one decision style. They either blend aspects of two or more, or switch style, depending on the context. Finding their dominant style is not easy.
This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.
“The best sales people have a 4:1 listen-to-talk ratio”
Neil Rackham of the Xerox Corporation discovered this astonishing statistic and, if you want to influence people to get more of what you want, you’ll do well to apply this knowledge.
Rackham is best known for the concept of SPIN Selling and the book of the same name. Here’s a quick run down of how it works.
S for Situation
Start by asking searching questions of your potential buyer – what are their needs? Use the funnel approach we looked at in the earlier blog, Questions, Questions, Questions, to establish the wider context, and then zoom in.
P for Problem
Listen very carefully to your potential buyer’s response and encourage information flow. People buy to meet a need. What difficulties are they having? What are they not satisfied with? You want to identify what their problem is so you can …
I for Implied need
Demonstrate your understanding of their needs and problems – show them you know what their pain is, so that you can …
N for Need-payoff
Show your potential buyer how you can meet their need, solve their problem and take away their pain.
When you have done this, they will want to buy. If you can quote a price that they can afford, you are ready to close the final sale. In the book, Rackham recounts that orginally, he wanted to use the term ‘value question’, but realised that this would make the acronym read: SPIV!
The Three 80-20 Rules of Selling
They say the world is governed by the 80-20 rule. There does indeed seem to be an 80-20 for nearly everything and sales is no exception. In fact, here are three that you ignore at your peril.
The 80-20 Rule for your First Meeting
This rule refers to how to spend your time, at the first meeting with a potential customer. Use your time with:
80% Information Gathering
20% Information Giving
So at the start of your meeting, establish how much time your prospect has, to ensure you can get the information you need. And since no rule is perfect, make sure you leave 10 minutes or so to close the sale if you can (always try) and agree next steps.
Note that this rule is another way of expressing Rackham’s rule, quoted at the top of this blog.
The 80-20 Rule for Junior Buyers
Junior and middle managers are intensely practical people. They have to be: their job is to get things done. So ensure you address their interests. When you gather information, listen for their concerns in this proportion. And when you give information, address their needs in the same ratio:
80% The “How” of it
20% The “Why” of it
All selling is about finding an itch and offering a scratch. Operational people’s itch is a process one. Not so their senior colleagues.
The 80-20 Rule for Senior Buyers
Senior Managers’ role is to think strategically. Reverse your pattern with them to focus on what they need:
80% The “Why” of it
20% The “How” of it
So how do you gather information? There is an art to it. Think funnel:
Start at the top with a wide open funnel, and ask wide open questions, like
“Tell me about …”
Listen for where their itch seems to be, then start to probe, with narrower questions like:
“Tell me some more about …”
Next, confirm your understanding by asking detailed questions like:
“So, what exactly …”
Finally, play back your diagnosis of the nature of their itch, to ensure you know what sort of scratch they need:
“From what I’ve understood, you …”
Don’t be afraid to ask for a Yes
In sales meetings, one of the hardest moments is when you have a strong rapport with your potential customer, you have offered a great solution, and you are convinced they want to buy from you. So how could you spoil this perfect moment? What if they reject you? Perhaps it’s best not to say anything more and wait for them to buy.
But what if they don’t? You know how it can be with that first kiss – maybe your potential buyer is waiting for you to make the first move. If you do have the rapport you think you have, asking respectfully if they are ready to buy is not only appropriate, it’s often the only way to close a sale. Here are five ways you can do it:
“We’ve discussed all the ways our product works for you – are you ready to place an order?”
“Is there anything else you need from me, before you discuss what booking you want to make?”
“If you are ready to order, shall we talk about delivery arrangements?”
“Would you like me to get some paperwork ready now?”
“Do you prefer to go for the XAKD model or the DXKA model?”
There is an awful lot that business people can learn from doctors, and I once sketched out a keynote talk: ‘What medical doctors can teach us about business’. If the UK Government gets its way with National Health Service reforms, I might dust it off, re-title it: ‘What medical practice can teach us about business’ and take it on the road to GP groups around the country.
Let’s look at pain
Doctors rarely have any problems convincing a patient to take their medicine or have their operation. Most people who do resist their doctor’s advice do so because they also have conflicting advice – often from another doctor.
Of course, the stakes can be very high at a doctor’s surgery: you may be in pain, concerned for your long-term health or even facing terminal illness. Your doctor can diagnose what is causing this and offer ways to remove or reduce the pain, enhance your long-term health prospects and even, perhaps, cure a life-threatening illness.
How does this relate to sales?
Nobody buys anything without a reason, and there are only four reasons why anybody does anything:
Duty – they feel they ‘must’
Curiosity – they need to ‘scratch an itch’
Pleasure – they want something that will ‘feel good’
Pain – they want to ‘stop the pain’
What doctors can do is offer the promise of stopping the pain. As a salesperson, this is a phenomenally effective way to sell. If you can identify what hurts for your customer, then you are on your way.
Selling like a doctor
Discover their pain
Make sure they are aware of it
Demonstrate that you understand what’s causing it
Suggest your product or service can heal it
Let the potential customer ask you questions
Provide evidence that your medicine works
Discuss the perfect prescription for them
So here’s the deal
Next time you are trying to sell, take some time to diagnose your potential customer’s discomfort. The more pain they have, the keener they will be for the right medicine. If they also believe that you have that medicine, they’ll bite off your hand to get a fix.
Some Management Pocketbooks you might like
Selling is an essential skill for anyone in business, so it’s a great time to polish up you skills and remind yourself of the basics.