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Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
Bhc mycelia report (parts 1 & 2)
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Bhc mycelia report (parts 1 & 2)

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  • 1. Management Consulting • Training • Research THE MYCELIA PROJECTREPORT ON AN ANALYSIS OF SALES TRAINING BARKER HOFFMANNBHC House, 40 Church Hill Road, East Barnet Herts EN4 8TA ENGLAND +442084404085 www.barkerhoffmann.com
  • 2. Paper 05: The Mycelia ReportCONTENTS Part 1 BACKGROUND TO THE RESEARCH PROJECT 3 THE MYCELIA PROJECT 5 THE BUYERS PSYCHOLOGICAL STAGES DURING A COMPLEX SALE 7 FACE-TO-FACE SELLING SKILLS 11 THE PROBLEMS WITH THE APPLICATION OF RACKHAMS MODEL 17 THE DESIGN OF A PRACTITIONERS MODEL 20 Part 2 PLANNING STRATEGY FOR A COMPLEX SALE 24 Annexes to The Mycelia Project Report 36 ANNEX A 37 ANNEX B 38 ANNEX C 39 ANNEX D 40 ANNEX E 41 ANNEX F 42 © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 1|P a g e www.barkerhoffmann.com
  • 3. Paper 05: The Mycelia Report PART 1 REPORT ON AN ANALYSIS OF SALES TRAINING CONDUCTED BY BHC RESEARCHBackground to the research projectA United Kingdom multi-national company commissioned BHC Research, a divisionof Barker Hoffmann Consulting, to conduct a research project, into what skills andknowledge items were required, by those involved in selling within its constituentbusiness units. The brief called for a review of all sales training undertaken by thevarious business units, and then to design appropriate programmes to meet theneeds of the various individual business units.The multi-national, which has 45,000 personnel in 12 business units, covered theselling of both products and services, costing a few pounds to many millions ofpounds sterling. As a result of the 1987 business downturn, the organization wentthrough major restructuring, and its consequent planning placed high priority onimproving the performance of each business unit. In the short term, the aim was toincrease market share, rather than to increase total turnover. The market wascontracting, rather than expanding at the time. In the long term, the aim was toincrease turnover as the economic climate turned around and the general businesslevel increased.The multi-national company had determined, that success hinged on theperformance of sales people and commercial negotiators, as well as on pricingpolicies. A deficiency that came through in all the business unit analyses was that ofgaining business - of selling products and services in the market place. Thisweakness had been commented on long before 1987. Sales managers had beenbriefed constantly on the need to improve sales productivity. Representatives hadbeen sent on internal and external sales conferences and shown more and moresales training videos. Those new to selling, sales managers had sent on publicprogrammes run by the most prestigious international providers. Managers hadencouraged their sales people to call on both prospects and clients more often, inorder to develop closer relationships which were seen as being the key to gainingmore business.There had been very little change in results. Indeed, the general trend was down,rather than up. Entertainment expenses had risen but sales had remained at theiroriginal levels. The only consolation, was that none of the competitors was doingparticularly well either.It was at this point, that the Group National Training Manager became involved in theexercise, through his input at the corporate strategic planning session. As a result ofthe Board setting a strategic goal, ‘To improve profitability’, and the subsequentbusiness unit financial objectives stemming from this goal, the Group NationalTraining Manager took on the role of selecting the most appropriate sales training to © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 2|P a g e www.barkerhoffmann.com
  • 4. Paper 05: The Mycelia Reportachieve improved performance. His own internal review discovered a plethora ofprogrammes and methods being used throughout the organization. Feedback on theeffectiveness of the programmes varied, depending on who was asked. Therefore,he decided to undertake more objective research on what was available in themarket place. BHC Research was engaged to review all sales training conducted bythe group and to recommend a strategy for the group to follow.This first report covers the research findings relating to the skills needed for use in aface-to-face situation with clients. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 3|P a g e www.barkerhoffmann.com
  • 5. Paper 05: The Mycelia Report THE MYCELIA PROJECTThe project was given the name “The Mycelia Project” to reflect the complexity andthe pervading nature of selling within an organization. For those of you reading thisreport and who have an inquisitive nature, Mycelia are the microscopic threadlikevegetative parts that spread the fungus.Given the extent and complexity of the selling process, the findings have beenseparated into what we consider to be the constituent parts of the sales process.Based on an investigation of the literature, the main parts were identified upon asbeing: Stage One: Planning strategy. Stage Two: Prospecting for new clients. Stage Three: Face-to-Face selling skills. Stage Four: Writing proposals. Stage Five: Giving verbal presentations. Stage Six: Commercial negotiations. Stage Seven: Effective implementation strategies. Stage Eight: Account maintenance.Each of the stages was subject to a report and recommendations to the client.In looking at the various business units, it was further decided to separate the sellingsituations encountered by sales people into 2 categories, Simple and ComplexSales.Simple Sales meet the criteria that:  Products or services are low priced compared to the budget available.  The commitment by the client to purchase is done by one person, without reference to others in the organization.  The time from ‘contact to contract’ is short, often one meeting.  Sales to clients are often ‘one off’.  Clients often know what they want before the sales person appears.  The product or service is simple in nature. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 4|P a g e www.barkerhoffmann.com
  • 6. Paper 05: The Mycelia ReportWhereas, a Complex Sale satisfies one or more of the following criteria:  Success in gaining business depends on the relationship that is developed between the sales person, their organization and the client.  The time between ‘contact and contract’ is often long.  A series of meetings are needed, before a decision to proceed is made.  The client is often unaware or unwilling to admit that they have a problem which needs the product or service of the sales person.  The decision making process of the client involves numerous people across and up and down the organizational hierarchy.  Compared to other purchases made by the client organization, the cost of the solution being offered seems expensive.  In some cases, the product or service in question is preventative rather than profit generating, and the client never sees the true value, other than that nothing goes wrong.For each of the business units, it was necessary to determine into which of these 2categories their selling situation fell.This report deals with an investigation of Face-to-Face selling skills in a ComplexSales situation. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 5|P a g e www.barkerhoffmann.com
  • 7. Paper 05: The Mycelia Report The Buyer’s Psychological Stages During A Complex SaleWhen the research team looked at sales training programmes which were aimed atmeeting the needs of those involved in making sales, that met the criteria laid downfor a complex sale, they were confronted with numerous techniques and behavioursthat were put forward as methods to use on customers, in order to ensure that theybought. The focus of the majority of programmes was one of ‘manipulation’ ratherthan influence, when dealing with inter-personal skills, and what the sales personhad to do to identify prospects, rather than deal with them face-to-face.Three of the 7 programmes reviewed, dealt almost exclusively with the planningphase. There was a great deal of commonality between the programmes, and all 3were considered to be useful and effective by those who had participated in them.This area of prospecting and planning skills is the subject of a separate report.The major programmes used by the multi-national company, and reviewed by theproject were:  Learning International, Professional Selling Skills (PSS) & Account Management (now Global Achieve).  Esprit, Relationship Selling.  Mandev, FAB Selling.  Wilson Learning, Consultative Selling.  Tratec (McGraw-Hill Training Systems) Selling Financial Services.  Mercuri, Face to Face Skills and The Knowledge & Skills to Implement the Marketing Plan.  Huthwaite, SPIN® & Managing the Complex Sale.Wilson Learning material went a considerable way to understanding the personalityof the customer, and having the sales person adapt their behaviour to better matchthis personality. This research into the attitudes of sales people who attended thisprogramme, showed that they enjoyed the programme and could see real value inbeing able to do this, if they had time. The comment made, was that when you meeta customer for the first time, you don’t have time to assess personality type. It’s onlywhen you have the customer and are meeting them on an ongoing basis that such atechnique might be used to best effect. It seemed to the research team, that theemphasis should be on understanding what the customer was seeking during theprocess and helping them through that process, rather than trying to manipulate thecustomer. Study of the literature on the decision making process, and knowledge ofthe way in which members of the research team made decisions when making majorpurchases, revealed the following psychological sequence. A model representingthis sequence is at Annex A to this report.SPIN® is the registered trademark of Huthwaite, Inc (now no longer under the original designer Dr Neil Rackham) © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 6|P a g e www.barkerhoffmann.com
  • 8. Paper 05: The Mycelia ReportThe stages and the skills to be used by a sales person in each of these stages are: Stage 1: Customer identifies that they have a need and that they want to do something about it. Sales person’s skills:  Assist the customer to identify problems and needs that they were not aware of.  Assist the customer to understand the true problems that they are experiencing, and the extent or outcome of those problems should they not be addressed.  Assist the customer by identifying opportunities that have not been taken up.  Assist the customer to identify alternative solutions to meet their needs.  Develop confidence in the customer, that their business and objectives are understood. Stage 2: The customer evaluates all the options available to them to meet their needs. Sales person’s skills:  Identify the criteria that the customer will use in order to select both a provider and the solution.  Assist the customer to understand the criteria that should be applied to their selection process.  Highlight their own strengths and influence the customer to regard them as important criteria in their selection process.  Identify, who within the organization, will be involved in the decision making process, and what their individual decision criteria and personal foci are. Stage 3: Prior to making a decision, a customer has concerns about making the right decision. They have concerns about what they have been told and what they haven’t been told. They procrastinate and change their mind for reasons that often can’t be explained. Sales person’s skills  Identify possible concern areas during Stages 1 & 2 and deal with them, so they don’t arise this late in the selling cycle.  Identify areas where competitors at this stage, might raise concerns in the mind of the client, and ensure that the customer has all the information to reject these concerns during stages 1 & 2.  Identify that concerns have arisen, and assist the customer to resolve these concerns. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 7|P a g e www.barkerhoffmann.com
  • 9. Paper 05: The Mycelia Report Stage 4: The customer arrives at the decision point and has to decide on a provider of product or service. Sales person’s skills  Make presentations.  Rehearse internal presenters.  Write proposals.  Negotiate commercial contracts. Stage 5: The customer evaluates the effectiveness of the chosen solution, against the criteria that they set and the promises made by the successful provider. Sales person’s skills  Planning implementation.  Planning for problems in implementation.  Determining customer expectations and matching them to reality in preparation for disappointment.  Giving implementation support.  Providing on-going service. Stage 6: Over a period of time, circumstances change both internally and externally. The customer begins to feel that all is not as it should be, because of environmental, economic, financial, structural, political , technological and other changes. Sales person’s skills  Determining organizational change influences.  Monitoring competitor activities.  Setting customer criteria for future decisions.  Building key relationships.  Identifying customer performance improvement areas.© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 8|P a g e www.barkerhoffmann.com
  • 10. Paper 05: The Mycelia ReportThese were seen as the key stages in a complex sale situation. The skills identifiedagainst each stage, plus the planning and prospecting skills not dealt with here, wereseen as being critical to the success of a sales person.In this report, the Stage 1 skills offered by the 7 major international providers arereviewed, and the conclusions and recommendations arrived at for the multi-nationalcompany, are presented as alternatives for other organizations to act upon.It should be emphasized, that all 7 international providers were considered to giveskills that were relevant to the total process. However, users felt that insufficientadvice had been available, as to the total skills profile needed by a competent salesperson, and that providers often supplied skills to sales people which wereinappropriate, considering their development stage.The research showed that responsibility often lay with sales managers who had notresearched the skills content of programmes, and who were themselves, unaware ofthe competencies (skills, knowledge, attitudes and beliefs) required of a salesperson.BHC Research has used its findings within the multi-national company and manyother major national and international firms throughout the USA, UK, Europe andAustralasia. The research and development of programmes based on this researchcontinues. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 9|P a g e www.barkerhoffmann.com
  • 11. Paper 05: The Mycelia Report Face-to-Face Selling SkillsIn questioning sales managers, there was a strong recognition that most salespeople failed to use a structured approach when talking with prospects and clients.Managers criticized the ability of their sales people to find out what was needed. Itwas a significant criticism, that most sales people missed opportunities because theywere too busy talking and were not listening to the client.As part of the field research, visits were made with sales people to observe theirverbal behaviours when dealing with customers. In one sample of 145 sales peoplewho were selling shipping services, the following ratios were obtained:Ratio of Telling to Seeking Behaviours Percentage Speaking Time (Statements : Questions) (Seller : Buyer) 18 : 1 70 : 30Depending on the industry area in which sales people were operating, these ratiosvaried between 25:1 and 8:1 for the ratio of telling to seeking behaviours, and 90:1 to55:45 for percentage speaking time seller to buyer. During the preliminaryinvestigation phase, some 282 calls were analyzed to determine the actualbehaviours of sales personnel. The majority of these sales personnel hadundertaken sales training that was considered ‘good training’ by sales managers, yetthey were dissatisfied with their sales people’s performance after that training.In all, of the 12 business units of the multi-national, 10 were in situations where theywere required to use complex selling skills. Within these 10 business units, 7international sales training providers had been used, along with dozens of local andinternational providers offering motivational seminars.As part of the research, sales managers were asked to specify the criteria of a ‘good’sales training programme. The list was extensive, but came down to key criteriaupon which the sample of just over a 100 sales managers agreed. The criteria were: 1. Achieves behavioural change in the field. 2. Matches the sales environment in which the sales person operates. 3. Easy to learn and understand. Minimum of jargon, yet specific enough that both a sales person and sales manager can speak the same language when analyzing calls. 4. Provides the opportunity for coaching on the job. 5. Relates specifically to the products or services being sold. 6. Time taken in classroom learning environment a minimum. No more than 2 days seen as being desirable. 7. Opportunity for reinforcement at a later date. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 10 | P a g e www.barkerhoffmann.com
  • 12. Paper 05: The Mycelia ReportIt was agreed by sales managers, that behavioural change did occur after most ofthe major sales programmes. However, there was a strong feeling that the changewas not sustained, because sales people did not achieve the success that wasexpected. Furthermore, sales managers agreed reluctantly - that part of the problemwas their own inability to provide field coaching in the skills being practiced by theirsales people. It was the issues of ‘appropriateness of sellers behaviours’ and ‘abilityto coach, that concerned sales managers the most’.The training programmes areas of weakness identified by sales managers, werethat:  They did not reflect the selling situation in which their sales people operated.  They were unclear as to what a sales person had to do, to move a client or prospect from expressing a problem or opportunity area, through to getting the client to express a need. Outcomes were specified, but methods to achieve these outcomes were not explained.  There was no clear model that explained the psychological process gone through by the client, in coming to a decision to purchase in a complex selling situation. Five of the 6 major programmes had models or processes that explained what the sales person had to do, but in every case, the process failed to account for the prospect or client who acted independently and didn’t follow ‘the script’.  There was no common language that could be used in analyzing a call. The self-perception of a sales person’s performance was considerably different from that of the sales manager, which meant that it was difficult to be objective when giving feedback.Based on the feedback sheets completed, all the programmes had received supportfrom those attending, as being good value and useful in their jobs.In the survey of sales managers, only PSS, Esprit and SPIN® were considered toaddress the needs of sales people who were looking to improve their face-to-faceselling skills – their communication skills. Only these 3 programmes gave sufficienttime and practice to understanding and using questioning to uncover a clientsneeds. The Mandev and Tratec programmes were considered too simplistic for acomplex selling situation. Their approach was one where the client was expected toreact to a sales person’s ‘prompts’ in a prescribed way. Sales managers consideredthis approach manipulative and not reflective of what happened in complex sales.The skills taught were considered more appropriate to simple sales situations.Wilson Learning’s, Consultative Selling, was considered very interesting and nice toknow, but failed to deliver skills that were of use in developing communication skillsthat uncovered the needs of clients or prospects. Sales managers felt thatConsultative Selling was a programme that could be attended by sales people, oncethey had the required communication skills, which placed it in the ‘advanced skills’category dealing with human personality factors. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 11 | P a g e www.barkerhoffmann.com
  • 13. Paper 05: The Mycelia ReportOf the 3 preferred programmes, PSS, Esprit and SPIN®, the Esprit programmereviewed consisted of a mixture of classroom and video based training. There were 9videos to sit through, and participant comment on the feedback sheets, showed thatthis was the least preferred method of instruction. In addition, the time taken tocomplete the programme was 3.5 days which was considered by both theparticipants and sales managers, too long to be away from the job.Of the total of just over 1500 sales people surveyed, 43% had attended PSS at sometime in their career, and stated that it formed a good foundation from which to startselling. However, of those who had attended both PSS and SPIN® programmes,there was an agreement that the SPIN® programme gave a better understanding ofthe verbal behaviours needed to deal with a complex sale selling situation. Salesmanagers who had attended both PSS and SPIN® programmes, were strongly ofthe opinion, that SPIN® focused more than PSS, on what the sales person had to doto satisfy the client, rather than what the sales person had to do to make the clientbuy. They were also strongly of the opinion, that the behaviours identified in theSPIN® model were easier to analyze by both the sales person and the salesmanager.We are sure that most readers of this report will have heard of, or possibly attended,a PSS programme. However, it is unlikely that many people will have seen theSPIN® approach. For that reason, a comparison will be made of the 2 approachesand then comment made on each specifically.Learning International (PSS)Learning International is the successor of Xerox Learning. Its PSS series ofprogrammes has been on the market for many years and is highly regarded in themarket place. Learning International is a US based organization based in Stamford,Connecticut with total sales in excess of US$ 60 million. It has representativesaround the world and operates primarily as a franchise organization. PSS is basedon research from 500 calls made by sales people on 24 different organizations. Theresearch base covered both products and services in simple and complex sellingsituations. PSS is sold as a generic programme, but can also be obtained in industryspecific programmes. For the larger corporation with a huge sales force, theprogramme can be customized - at a price. PSS has been the core selling skillsprogramme around the world. It has a sound and easily understood methodology.Its key concepts are: Opportunities A customer problem or dissatisfaction that can be addressed by your product or service. Needs A customer want or desire that can be satisfied by your product or service. Feature A characteristic of your product or service. Benefit The value of a feature to a customer. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 12 | P a g e www.barkerhoffmann.com
  • 14. Paper 05: The Mycelia ReportThe selling skills taught are: Probing To gather information and uncover customer needs by using open and closed probes. Supporting To satisfy customer needs with benefits by making support statements. Closing To gain customer commitment by summarizing the benefits and formulating an action plan. Recognizing Identifying and responding to customer: Customer * Acceptance. Attitudes * Scepticism * Indifference * ObjectionThe programme reviewed, used generic product and service examples to teach theskills through each session. The role play technique, although sound, meant thatparticipants had to understand the features and benefits of products and serviceswith which they were not familiar. Participants comments showed that they wereuncomfortable with having to learn both the new behaviours and the product andservice information. There were a great number of comments from the variousdivisions personnel, about there not being any examples from their industry(container shipping, broking, commercial property, cleaning services, cateringservices, industrial plant sales) in the video vignette examples or the role plays.Despite the criticism, the overall assessment of participants was that the role playsdid allow them to gain the skills being taught, although there was difficulty inagreeing on the assessment made by the observer.Huthwaite (SPIN®)In the early 1970s, Neil Rackham founder of the Huthwaite Research Group in theUK, was commissioned by Xerox Corporation to conduct a research project intoselling business equipment. Neil has written an authoritative and interesting book onthe project., ‘Making Major Sales’ published by Gower. He was the first to researchthe selling process, since E K Strong looked at the skills and knowledge required tomake small sales back in the 1920s.Rackham looked at the market of the 70s and identified the process and skills, as itrelated to the sale of business equipment at that time. His foundation work, usingbehaviour analysis as the method of data collection, had not been improved upon,despite assertions by other organizations as to their methodologies. Rackham’sbackground as a psychologist, his work with Sheffield University as a ResearchFellow , assisted by Valerie Stewart, and his pioneering work in the field of behaviouranalysis, gave sales training a respectability that it had lacked up to that time.Since those early days, Rackham has moved to the USA where he now heads upHuthwaite, Inc based just outside Washington, DC. The UK firm of Huthwaite Ltd isno longer part of Rackham’s bailiwick, as it was sold to the UK directors. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 13 | P a g e www.barkerhoffmann.com
  • 15. Paper 05: The Mycelia ReportBehaviour analysis works this way: 1. A hypothesis is set, where certain behaviours are identified as being indicative of successful performance. These behaviours can be determined by interview, by literature research, by brain storming or by pure conjecture. The important thing is to write down the behaviours that are thought to cause success. 2. Determine the indicators of success for the specific products or services being sold. Success is counted as being any movement by the client towards making the final decision to purchase. Different products and services will have different indicators, although there are likely to be generic indicators. 3. Observe calls made by sales people and identify the behaviours that are used against the list compiled at stage 1. Determine the outcome as a success or not against the indicators in stage 2. 4. Using the frequency of behaviours in the successful and unsuccessful calls, identify which behaviours are related to success and which are not.Behaviour analysis will identify the successful behaviours to use, but it won’tdetermine the sequence or way in which those behaviours should be used to besteffect. Models of behaviour patterns are formed by training designers and tested inthe field to determine practicality and effectiveness.In the initial research project conducted within Xerox Corporation in the UK andEurope, over 5000 calls were analyzed using behaviour analysis. Each of these callswould be considered as a complex sale using the current criteria identified by salesmanagers during this research project. The research continued over the years tolook specifically at sales involving over £50,000, and over 35,000 calls wereanalyzed world-wide to arrive at his perception of a model of behaviour that wassuited to the complex selling situation.Rackhams SPIN® model representing the face-to face skills needed, is shown atAnnex B to this report. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 14 | P a g e www.barkerhoffmann.com
  • 16. Paper 05: The Mycelia ReportThe key concepts used are: Implied Needs Statements by the customer of problems, dissatisfactions and difficulties. Explicit Needs Specific customer statements of wants or desires. Features Describe facts, data, product or service characteristics. Advantages Show how products or services or their features can be used or can help the customer. Benefits Show how products or services meet explicit needs expressed by the customer.The selling skills taught are the verbal skills of asking: S ituation Questions Finding out facts about the customer’s existing situation. P roblem Questions Finding out about a customer’s problems, difficulties or dissatisfactions. I mplication Questions Developing the customer’s perception of the severity of their existing problems. N eed Pay-off Questions Emphasizing the value or usefulness of a proposed solution.The model also concentrates on: Preventing Objections by uncovering areas of concern early in the call and treating them as problems or, analyzing the objection and using an appropriate method to handle the objection. Obtaining Commitment by closing the call to achieve an appropriate commitment for the stage of the sale.Outwardly, there appears to be very little difference between the PSS and SPIN®concepts. However, it was the analysis and formation of a model to explain what washappening in the process that creates the difference, together with the introduction ofthe concept of an Advantage Statement.Rackhams work was undoubtedly the most comprehensive analysis undertaken,and its historical value should not be over looked. For those who have read his book- and we recommend that everybody should- or who have attended a programme,its probably appropriate to move to the next section which deals with the practicalproblems encountered by sales people with Rackham’s model. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 15 | P a g e www.barkerhoffmann.com
  • 17. Paper 05: The Mycelia Report The Problems with the Application of Rackhams ModelFor those of you who have decided to read on, you should find Annex C, whichdeals with the Implied/Explicit Need continuum, and refer to it as you continuereading.The concept of selling using a client’s Needs was not new when Rackham and histeam conducted their research. It was a common cry in the text books, to have theclient state a Need and then give them a Benefit that would meet that Need. WhatRackham did was delve deeper into the relationship between Needs and Benefits.He looked first at the development of Needs in the mind of client, and discoveredthat there were degrees of appreciation as to the strength of the Need. That is, notall expressions of Need made by the client had the same weight. There weredifferent degrees of commitment. He represented that commitment as a continuumand identified Weak Needs, where the customer was expressing problems,difficulties and dissatisfactions as Implied Needs, and Stronger Needs, where thecustomer actually expressed a desire for change, as Explicit Needs.The research identified, that the most effective questions to use when the customerwas operating in the first part of the continuum were the first 3 in his series,Situation, Problem and Implication Questions. The strongest of these wereImplication Questions which increased the customers perception of the problemsthat they were experiencing. As a matter of interest, the research showed thateventual success was not influenced by whether questions were open or closed informat.Once the customer had expressed an Explicit Need, Rackham’s research showedthat the most effective question type was what he calls a Need Pay-off Question,which is used to develop the customer’s perception of the value of a solution.Rackham’s research clearly demonstrated, that providing a solution (Benefit) tooearly in the sequence of events, was often counter-productive and caused thecustomer to raise objections that they would otherwise not have raised.In the research, it was discovered that there were commonly 2 forms of BenefitStatement made by sales people in response to the things categorized as NeedStatements. Rackham calls them Type A and Type B. Type A Benefits wereexpressed by a sales person, in order to show a customer how the products orservices they were offering might help them. These were often expressed when thecustomer was operating in the Implied Need psychological phase. It was Type ABenefits that gave rise to objections. On the other hand, Type B Benefits, that weremade after the customer had expressed an Explicit Need, were more likely to gainthe approval of the customer. Type A became Advantages, and Type B, Benefits.In our discussions with participants of the SPIN® programmes, there was clearagreement, that the process was easily understood and the question types relativelyeasy to identify and use, once sufficient practice had been given. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 16 | P a g e www.barkerhoffmann.com
  • 18. Paper 05: The Mycelia ReportParticipants and sales managers saw the strength of the programme as being thatthey used the knowledge they had about their products and services in the marketplace in which they operated, to overlay onto the model. They only had to worryabout the model and its associated behaviours. This was seen as a more effectiveway to ensure learning, as they only had the one unknown to cope with. Salesmanagers were able to take the skills taught on the programme, and complete fieldanalyses on their sales people using the verbal classifications taught. There wasconsidered to be a high level of understanding between sales people and managers,when going through the process of feedback.Feedback on the problems associated with the SPIN® model, came from both thesales people and the sales managers. The initial problems expressed, related to thejargon used to illustrate the verbal behaviours. Participants felt that clarity ofmeaning had been sacrificed for the sake of the Acronym. The main concern was theterm Need Pay-off Question. When Dr Rackham was interviewed, and asked why hehad selected this descriptor rather than Value Question, which describes perfectlywhat the question is aiming to show, he replied that ‘an acronym of SPIV’ hadconnotations in the United Kingdom which didn’t match the complex selling skillsmarket place to which his programmes were directed. We understand his point!In follow-up meetings with participants who had undertaken the SPIN® programme12 or more months earlier, criticisms and concerns appeared about 2 major areas.The first concerned the perception of sales people as to how the Implied/ExplicitNeed continuum worked in practice The findings showed, that there was not a singlecontinuum, but something else. Sales people had found that uncovering a problemand developing that problem with the use of Implication Questions, did not mean thatthe customer’s Need was developing at the same time. There was a strong feeling,that an emphasis on negatives was not always appropriate with clients who had notgot, or did not see that they had, a problem in the first place. Missed opportunities(on the customers part) were often not appreciated as being ‘bad’ in the firstinstance, so that a concentration on negatives by the sales person, often resulted inan adverse attitude from the customer, if this was emphasized.The second problem pointed out by experienced sales people, was that the modelwas too sequential when compared to what actually happens with a customer. It wasdescribed by many people, as an academics model, rather than a practitionersmodel. Even though the programme had explained that they had to adapt theirbehaviour to match the customers psychological state on the Implied/Explicit Needscontinuum, they found it difficult to get the sequential process shown on the modelout of their minds, and often ended up losing their way. A strong demand was madefor a more practical model to follow.When challenged on this point, Dr Rackham pointed out, that it was very difficult togo back and change the findings of the research and design a new model, once youhad published numerous books and articles espousing the ‘efficacy’ of a particularsolution.Notwithstanding these problems, the findings of the research clearly showed thatRackham’s research, and subsequent models to describe both the psychology of thecustomer and the actions of the sales person, gave a far greater understanding of © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 17 | P a g e www.barkerhoffmann.com
  • 19. Paper 05: The Mycelia Reporthow to approach and conduct the face-to-face interviews associated with a complexsale, than any of the other programmes that had been used by the multi-national.What remained, was to create this Practitioners model that was being demandedby the sales people and sales managers. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 18 | P a g e www.barkerhoffmann.com
  • 20. Paper 05: The Mycelia Report The Design of a Practitioners ModelThe first aim of BHC Research was to understand the decision making process ofcustomers in a complex selling situation. If Rackham’s Implied/Explicit Needcontinuum did not reflect the way in which customers made decisions on their needs,then this had to be resolved first.Based on the feedback from 156 experienced participants of the SPIN®programmes, the hypothesis was made, that there were at least 2 distinct phases ina buyers decision making process. A structured questionnaire was designed to testthe hypothesis. Over a period of 6 months, 150 ‘buyers’ from organizations involvedin complex buying decisions were interviewed, and asked to respond to aquestionnaire designed to uncover their decision making process. The findingsindicated, that there were 3 possible start points from which a ‘buyer’ went throughthe decision making process when approached by a sales person. Start Point 1: No problems were being encountered by the organization that could be addressed by the products or services that were being offered. Start Point 2: Problems exist, but they are not perceived as great and there is no perceived requirement for a product or service to overcome these problems. Start Point 3: Problems exist , and there is an awareness that doing something to solve these problems might be advantageous. Start Point 4: No problems exist, or are perceived to exist, but it can be seen that performance will be enhanced if a new product or service is used.A model representing the psychological process of a buyer in a complex sale,consisting of 3 continua was proposed and tested. The continua are shown at AnnexD to this report.It can be seen that the continua represent the buyers perception of the severity ofProblems that they have, their perception for the Need for Change, and a thirdcontinuum, that represents their perception of a Missed Opportunity. Problems andNeeds were the preferred terminology of the sales people surveyed.The model was tested by the researchers, for identification of buyer psychologicalposition on the continua according to the verbal responses made during a sales call.Although it was possible to identify buyer psychological positions, researchers, salesmanagers and sales people all agreed that the introduction of the third continuummade analysis unnecessarily complex. The sales managers and sales people statedthat once a Missed Opportunity could be established in the mind of a client, it couldbe treated in the same way as a perceived Problem. The important thing for a salesperson to remember, was that they had to ensure that they did not treatacknowledgement of a Missed Opportunity as an acknowledgement of a Need forChange and provide a solution at too early a stage. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 19 | P a g e www.barkerhoffmann.com
  • 21. Paper 05: The Mycelia ReportIn the final representation of the psychology of a buyer in a complex sale, at AnnexE, showing the Problem/Need continua, situations could exist where the buyer has: 1. An appreciation of problems, difficulties or dissatisfactions and no appreciation of the Need for Change. 2. An appreciation of problems, difficulties and dissatisfactions, plus an appreciation of the Need for Change. 3. A strong appreciation of problems and their consequences, but no Need for Change. 4. A strong appreciation of problems and their consequences, and an appreciation for the Need for Change. 5. A strong appreciation of problems and their consequences, and a strong desire for change. 6. No perception of problems, difficulties or dissatisfaction, but a desire for change that might fall anywhere along the Need continuum.It was felt that these were all the possible combinations that a sales person mightmeet, other than that of no Problems and no Need for Change, in which case thesales person should leave graciously to return another day.The only situation that caused any problem of understanding, was the last one. Thissituation can be best illustrated, by the person who is new into a position and whowishes to ensure that their presence is known within the organization. There are noproblems, but the introduction of change is seen as being the method by which theirpresence will be noticed or possibly reinforced.The next step was to look at the model of verbal behaviours and its appropriatenessto a real call situation. The criticism had been, that Rackham’s model was sequentialand it did not help a sales person to cope with out of sequence responses made bycustomers. The aim was to turn Problems into Needs by using the 4 questioningbehaviours identified as being appropriate. The concern expressed by sales people,was that a customer could change their psychological perspective of the Problemsthey were experiencing, or the Needs that they had expressed, in a matter of onequestion asked. What they needed to be able to do, was understand where in thesequence they had to go next in their questioning process.The model proposed and tested, is shown at Annex F to this report. In addition tochanging the model structure, the terminology was changed to meet the descriptorsof question types preferred by the sales people. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 20 | P a g e www.barkerhoffmann.com
  • 22. Paper 05: The Mycelia ReportThe concepts were now: Problems A problem exists when customers acknowledge that they are dissatisfied with their current situation or are aware of missed opportunities. Needs A need exists when the client has a problem, acknowledges it, and states or implies a desire to solve the problem. Features Characteristics of your firm, its products or services. Advantages Statements that show how a feature can be used by, or that might help a customer. Benefits Statements that address a customers stated need.The question types were renamed and redefined: Background Questions Questions that are worded to ask for data, information or facts about the customer and their business. Problem Questions Questions that are phrased in such a way, that the customer must confirm or deny that they have problems, difficulties or dissatisfactions with their current situation, or that they can see that they have missed an opportunity. Consequence Questions Questions which develop a customer’s perception of the seriousness of their problems and relate one problem area to another. Value Questions Questions that examine the issues surrounding the value of change and that focus the customer’s attention towards solutions. Managing Resistance Uncovering potential areas of resistance or and Objections- objections early in the call sequence and answering them as problem areas. Analyzing any objections to determine the cause and using verbal skills to handle them. Closing for a Using a close that will take the call to the next Development appropriate stage in the selling process. Outcome-With the new model defined, and the programme relating to Face-to-Face Selling inplace, pilot programmes were run in key business units to determine effectivenessand validity. These pilot programmes were linked to Sales Manager’s CoachingSkills programmes, to ensure that reinforcement of the skills occurred back on-the-job. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 21 | P a g e www.barkerhoffmann.com
  • 23. Paper 05: The Mycelia ReportValidity of behaviours was assessed using field observation by sales managers andfeedback from participants. Use of key behaviours relating to effectiveness,increased markedly in all test groups, whereas comparison groups behaviours’ hadno significant change.An illustration of the behaviour change achieved using a test group of 15 salesrepresentatives, who were selling commercial property, showed the followingchanges after 5 calls:Behaviour Before Training After Training (Average Behaviours per call of n=15)Background Questions 15.9 19.0Problem Questions 6.9 12.3Consequence Questions 1.5 7.2Value Questions 0.0 3.9Benefit Statements 0.0 2.4Feature Statements 9.2 4.7Advantage Statements 8.2 2.4Development Outcomes achieved by 3.0 9.015 sales peopleEffectiveness was determined by the increase in development outcomes and sales.Sales Managers assessed that the improved skills of the sales people hadcontributed significantly to increased profitability of the company. During 1993, themulti-national company produced its first increase in profit for 5 years. It isimpossible to state that the training was the cause of this turn-around. However, thecompany was good enough to publicly acknowledge the positive impact of thetraining as being a significant factor.BHC Research1 October 1993 © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 22 | P a g e www.barkerhoffmann.com
  • 24. Paper 05: The Mycelia Report PART 2 MATCHING SALES BEHAVIOURS TO THE PSYCHOLOGY OF THE BUYER PLANNING STRATEGY FOR A COMPLEX SALEIntroductionIn the first report issued by BHC Research on making sales in the complex salesarea, the issue of what skills are needed by a sales person was addressed.The Mycelia Project was commissioned by a UK multi-national to examine the salestraining programmes that were in use within their 12 divisions. Based on theresearch conducted within these 12 divisions, it was shown that the principal focushad to be on the discovery of a clients problems and needs, through a series ofreadily identifiable question types.The Mycelia Project looked at the most respected programmes on the UK market,and compared the strategies, terminology and effectiveness of the 2 best knownprogrammes, Learning Internationals PSS, and Huthwaites SPIN®. Theprogrammes were selected because of their acceptance in the market and toillustrate the difference between a programme with a model of behaviour(Huthwaites SPIN®), and one without a model of behaviour (PSS).At the end of the report, a practical model was introduced that explained the complexsales process in terms of the psychology of the buyer throughout the process. Thismodel is shown at Annex A to this report. A second model was introduced, thatenabled a seller to determine which verbal skills to use in the clients firstpsychological stage –Needs Identification - in order to determine where on the twocontinua, problem and need, a client was placed in their decision making processand on their readiness to accept a solution. The second model is at Annex F to thisreport.This report looks at the findings related to the clients psychological state in the first,second and third stages of the total buyers psychological model:  Development of the clients perception of problems and needs.  Evaluation of options available to satisfy the needs.  Resolving concerns about making a decision to purchase.  The clients decision making process.The findings of this report were determined by interviews with clients of the 12divisions of the multi-national, and by the application of known researchedpsychological concepts and principles related to the inter action of influencer andinfluenced (seller and buyer). © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 23 | P a g e www.barkerhoffmann.com
  • 25. Paper 05: The Mycelia ReportThe Simple SaleBefore we start the main research findings, it is appropriate to review the area inwhich the multi-nationals sales forces were operating, and clarify why it wasnecessary to examine the skills needed by the sales people.In reviewing the selling situations encountered by 10 of the 12 sales forces, certaincommon aspects emerged. The other 2 business divisions did not fit within theoverall pattern of the other 12. In the 2 cases that were different, the services beingoffered were ones where the decision maker was a person at receptionist oradministration supervisor level, where the client was assumed to want or need theservices by the sales person, and where the sales person cold called on the client.The interaction between the client and the sales person was taken to be a ‘one hit’effort. The sales person assumed that they had absolute influence over the decisionmaking of the client, who would be swayed by whatever they were told. In thismarket, it was discovered that the turnover of sales people was high. The averagelength of service was 9 months, with many leaving within the first 6 months, and fewstaying longer than 3 years.Training for these sales people revolved around a knowledge of the features of theproduct or service, and in countering price or application objections. Exit interviewswith the sales people, revealed that virtually all of them regarded the job as a step tobetter things, and that they had no real belief in the superiority of the product orservice that they were selling, over the performance of competitors products orservices. Business was won and lost on price, and clients changed suppliersdepending who was the last to visit them and offer a special deal.This type of selling revealed major call reluctance problems in the sales force. Thisaspect is covered in our briefing paper Call Reluctance : The Outcome of The Fearof Rejection.The Complex SaleThe research that was conducted into dealing with the complex selling situations metby the other 10 divisions, showed that a totally different set of circumstancesconfronts the person attempting to make a complex sale. A complex sale is one inwhich one or more of the following criteria may be encountered:  Success in gaining business from a client often depends on the relationship that has built up between the sales person, their organization and the client.  The time between making contact with the client and gaining the business is protracted, and is often months or years.  There will be many meetings involved, before a decision to proceed is taken by the client.  The client is often unaware or unwilling to admit that they have a problem that needs to be solved, even though it is obvious to the sales person.  The decision making process of the client may involve numerous people, each of whom needs to be convinced that action must be taken.  What is needed by the client is often an intangible solution that they find hard to understand, and/or find difficult to see the value of. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 24 | P a g e www.barkerhoffmann.com
  • 26. Paper 05: The Mycelia Report  Compared to many other services or products that they buy, what is offered seems expensive.  The client may never actually see the value of the service that has been rendered. It may be risk preventative, rather than profit generating.The Lengthy Decision Making ProcessWhen the specific selling situations of the sales people were examined, it wasdiscovered that a single meeting with a potential client did not result in a sale. Theresearch showed, that only on 10% of occasions did the client make a decision thatgave business to a sales person. In questioning the sales people, it was shown thatthey often set themselves unattainable objectives, the result of which was oftendisillusionment in themselves and their product or service. The focus of the salespeople was often short, rather than long term. They went on a call expecting to getthe client to agree to a purchase, and used selling techniques that reflected this aim.The client on the other hand, had often not identified that they had a need for theproduct or service and felt pressured by the sales person. Their natural reaction wasto resist and object, which only encouraged the sales person to use the skills thatthey had been taught would be successful.In only 5% of the meetings that were analyzed, did the sales person achieve asuccess. It is little wonder that sales people got depressed about their performance,and that clients resented being pressured by these unskilled sales people who usedincompatible techniques.In a study conducted within a major product division where 25 successful saleshistories were examined for sales in excess of £10,000, there was an average of 4.6meetings with the client before a decision to purchase was made. In a servicedivision, where the average cost of service was £3000, the average meetingfrequency was 3.2 for the 15 successful sales histories. In the first case, the averagetime between first contact and the agreement to purchase was 6 months, and in thesecond case 3.5 months. These figures were shown to be compatible with all otherareas within the organization.In an unrelated Australian study, that looked at time to convert professional servicesinto a firm business commitment by a client, it was shown that a time frame of 3 to 4years was often the norm, particularly when the service being offered was one whichcaused the client considerable internal change. A Big 6 accounting practice reporteda gestation period of 3 years for the winning of audits. This was the minimum periodconsidered necessary to convince a potential client to change, with time frames of 6years being common.Why does it take so long for business to eventuate in a complex selling situation? © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 25 | P a g e www.barkerhoffmann.com
  • 27. Paper 05: The Mycelia ReportIdentifying a Clients Problems, Opportunities and NeedsThe original research conducted into Needs identification was conducted by NeilRackham of the Huthwaite Research Group in the UK. Neil and his research team,which included Valerie Stewart the noted behavioural consultant, operated initiallyfrom Sheffield University where he was the Research Fellow. Neil continued theresearch when he set up the US firm Huthwaite, Inc. His findings of the late 1960sand early 1970s have been published in his books Making Major Sales andManaging the Complex Sale published by Gower in the UK and republished underdifferent titles by McGraw Hill in the USA. We understand that there is also aBelgium publisher who has republished the works in the EC under appropriate titles.Our research was built on Rackhams research of 20 years ago. Our first aim was torevisit his basic assumptions and prove or disprove his conclusions.Rackham had hypothesized that the development of the clients perception of a Needwas a continuous process. His model showed that an Implied Need developed intoan Explicit Need and that this was a linear process. The concept of a Need wasbasic to the process, and that a client developed their perception of the importanceof the need for change, from the moment that a problem was identified. Thishypothesis was translated into a model that showed that a sales persons verbalbehaviours should be sequential, in order to develop the clients small need (ImpliedNeed) into a large need (Explicit Need) in the process. Rackham has postulated thatthis was not his intention, but the practical application of his principles by salespeople after training, has shown that this is not how it is understood.Rackhams concept, so simple on reflection, was revolutionary at the time. In thepast, all statements made by the client as to their dissatisfaction with their situationwere treated in the same way. An indication of a problem, was jumped onimmediately by the sales person who was encouraged to trial close (provide asolution and see how the client reacted). One noted author, and supposed expert,had stated that, " If you havent made at least 5 trial closes then you havent doneyour job". Rackhams research, and our own replication of his research within the 10divisions in which we were working, showed that the more closes that were made,the less likely the sales person was to achieve a successful outcome. For thosesales people who used 5 trial closes in their dealings with clients, there was lesslikelihood to achieve a favorable outcome, than the person who did not close at all.Indeed, on 20% of occasions, the client closed the deal for the sales person,whereas in our findings, those sales people who used 5 or more trial closes,achieved less than a 12% success rate, a success being an opportunity to take thesales process further.Our UK multi-national client had expressed concern at the linear approach to sellingadvocated by Rackham.In the research conducted by BHC within the client organization, it was shown thatinstead of the linear and singular psychological process suggested by Rackham tobe present in the mind of the client in the development of a Need, there were two, ifnot three distinct psychological processes, and that one did not necessarily follow orwas not limited to the other. The entry point to our own hypothesis; © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 26 | P a g e www.barkerhoffmann.com
  • 28. Paper 05: The Mycelia Report"That there are at least two distinct psychological stages in a clients decision making process in determining that they have a need for change"This hypothesis came from the basic interviews with sales people who were trying toapply Rackhams model. Their feedback was that "Just because a client had aproblem, it didnt mean that they wanted to change." They also stated that, "Clientsdo not always have problems, and to focus on the negative aspects, when none existin the mind of the client, is often counter-productive to achieving a successfuloutcome with that client."Our hypothesis was that there were at least two stages in the process. The first,having the client acknowledge that a problem existed which was sufficiently seriousthat it caused them real concern. Second, that they wished to address the problemand saw real value in having a solution. What came out of our findings was a thirdsituation, that required the client to acknowledge that, even though they had noproblems, they were missing out on an opportunity to be better in some way.In discussing these options with the sales people, it was agreed, that providing theclient saw that an opportunity was being missed, this could then be treated by themas a client problem. For simplicity of the model, it was decided to view thepsychological process gone through by the client, as being:Problem perception development and Value of Change perceptiondevelopment.In examining historical and live sales situations, a series was analyzed to see howthe model stood up in the field. The categories of situations that were discovered,based on analysis of sales records and recall by the sales people, showed that theycould be divided into the following categories:  No problem existed and it was inappropriate to suggest that any service or product was needed.  The client had no perception that they had a problem or need, but the evidence was there that a problem and need existed if they chose to see it. It was usually obvious to the sales person.  The client was not aware that they were missing out on doing something better.  There was an opportunity for improvement.  The client was aware that they had a problem with their present situation, but did not appreciate how much of a problem they had, nor did they consider that it was necessary to do something at that stage.  The client was aware that they had a problem, and although they did not appreciate the full depth of the problem, was also aware that something needed to be done, at some time in the future. No urgency was present.  The client knew that they had a major problem and that they needed to do something as quickly as possible. They appreciated both the severity of the problem and the value of change. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 27 | P a g e www.barkerhoffmann.com
  • 29. Paper 05: The Mycelia Report  The client wanted change for changes sake. Motives for wanting change were often linked to needs that were not organizational needs, but were psychologically internally driven by the person requesting change.This concept of a gradation of strength of both Problem and Need, although easilyunderstood once explained to sales people, was not one that they took into accountwhilst talking with clients. Observation of hundreds of sales calls showed that therewas a strong tendency for sales people to jump in with a solution, whatever the levelof readiness of the client. This tendency to do what is known as a trial close, gaverise to resistance or objections from the client, because they were mentallyunprepared to accept a solution.The Clients ChoiceIn complex sales, clients often call suppliers in after they have determined that theyhave a need. In these cases, the organization has been through the process ofworking out its problems and needs and is now looking for the best supplier to satisfytheir needs.Our observations showed that sales people failed to appreciate the stage at whichthe client was operating. Sales people attempted to sell when the client had alreadysold themselves. The client was not interested in reviewing their problems orrestating their needs, all they wanted to do was to determine how one suppliermatched up against another in terms of what they were offering. Where sales peopletried to revisit selling, the client became frustrated and often viewed the sales personunfavourably.As part of the research project, analysts visited the existing and potential clients ofthe multinational to interview buyers about the processes that they used. Whenasked if they adopted a formal process of supplier selection almost all said that theydid. When asked to explain how they did this, only 2 out of 20 were able to detail thesystematic process that they used. Only 2 talked about matching factors anddetermining the best fit.In each client visit the analysts introduced the concept of using Decision Criteria as ameans of selection and the remaining 18 clients all asserted that they applied theconcept unconsciously. Our findings in the laboratory show that people do giveweightings to criteria when confronted with a choice. However, unless they havethought about the criteria and the weightings in depth before the event, the criteriaare able to be changed by another person if their argument is logical and is seen tohave merit. Where the person has analyzed the importance of various criteria andhas a full understanding of all the criteria that apply, they are considerably less likelyto be moved from their perception of importance.When observing sales people operating in this stage of the sales process, it wasnoticed that very few (15%) investigated the criteria that would be used by the clientto select the successful supplier. Clients often stated their criteria without the salesperson asking. Even then, the sales people failed to discover the priority order of thecriteria and to assess how their own organizational and product/service strengthsmatched up against those criteria. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 28 | P a g e www.barkerhoffmann.com
  • 30. Paper 05: The Mycelia ReportSuccessful sales people were able to:  Determine the criteria used by the client to select a supplier.  Have the client prioritize the criteria.  Match the criteria used by the client to the strengths of their own organization and its products/services.  Introduce new criteria into the clients equation where those criteria gave their own organization, products/services and significant advantage.  Influence the thinking of the client as to the priority of their criteria so as to favour their own strengths.  Favourably differentiate themselves from competitors using the clients are- framed criteria.In several of the multi-nationals divisions, where the norm was to receive Requestsfor Proposals (RFPs) from organizations, the writing of proposals was seen as afruitless yet essential exercise. The business unit worked on the basis of winningonly 1 in 10 of the proposals that it submitted, and then only because they boughtthe business with a lower than economical price. Senior managers were not able tostate why they had won or lost specific proposals. It was common for the excuse ofthe tender being rigged to occur, or that the competition had bought the business.In the follow up, conducted by analysts within the clients of the divisions, clients wereasked on what basis the decisions had been made and whether they would haveentered into discussion about the needs and criteria expressed in the RFP. In everycase, the client expressed a willingness to discuss the contents of the RFP, either bytelephone, or by face to face meeting. When stating why they had awarded thecontract to the successful supplier, the common thread that ran through theresponses was that the successful tenderer had done a thorough investigation oftheir needs, and before the tender document had gone out. The successfultenderer had identified the key factor that they had regarded as important in thesupply of the products or services. That is, the supplier had identified the priorityorder of the decision criteria used by the client in making their decision.Another common factor came through in discussions with the clients. All too often,suppliers talked not with the decision makers, but with some third party within theorganization. It was pointed out that the decision making process was not a oneperson job, but that several levels were involved in deciding on a successful supplier.In most organizations the Decision Making Team (DMT) consisted of a combinationof:  The Authorizer(s) - usually the CEO or for large decisions the Board or a project team headed up by the CEO or a Director.  Technical Experts - people whose opinion on specific aspects of the proposed solution is sought to determine the appropriateness and technical feasibility of solutions.  Operational Users - people who are going to be effected by the introduction of the solution and whose opinion is sought to determine whether a proposed solution will meet operational requirements. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 29 | P a g e www.barkerhoffmann.com
  • 31. Paper 05: The Mycelia ReportWhen sales people, and in particular sales managers, were questioned as to howthey planned their approach to an organization to ensure that each of the needs andcriteria of the members of their clients DMT were met, the response was that theydidnt. On very few occasions did sales people bother with planning an in depthintervention into an organization. The tendency was to rely on information gatheredfrom one organizational member and to use that in the formulation of any proposal.The research showed that although there were common organizational decisioncriteria, each group had their own priority order for the criteria, based on what theyconsidered to be important. Each group judged the merit of a supplier against theway in which the supplier showed them that it met their decision criteria. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 30 | P a g e www.barkerhoffmann.com
  • 32. Paper 05: The Mycelia ReportResolving Client ConcernsDuring the interviews with sales people, they expressed discomfort with dealing withclients who, after expressing satisfaction with a proposal, and who had indicated thatthey were going to go ahead with the proposal, then delayed and eventuallycancelled.Twelve sales situations that failed at the last moment, were analyzed to see if therewere some common indicators that showed that the client was having secondthoughts. In addition, interviews were arranged with 6 of these clients, to determinewhat factors caused them to have concerns that changed their minds.Analysis of the 12 situations, showed that client concerns were likely to occur when:  The commitment being made by the client was large in terms of financial or other resource allocation.  The Authorizer(s) were subject to high visibility within the organization because of the decision being made.  The client is selecting a product or service in a new area for them.  The solution being suggested is different from what the client is used to.  Your solution is significantly different from that of your competitors.  This is the first time that the client will have used you, and they have no firsthand knowledge of your performance.If the client is an existing client, concerns might arise if:  Your past performance has not been satisfactory.  Relationships between your organization and the client have been poor.  By using you, they leave themselves exposed if the solution goes wrong.  The client is shared with other major providers who are able to put pressure on the client to use them, or suffer in terms of the conditions that they place on other sales.If this is a new client, concerns might arise if:  The client is dealing with a major competitor who is able to place a financial penalty on the client if they award business to you.  There is a strong relationship between the clients existing supplier who is your competitor, and the organization.  You do not have the necessary intelligence about the organization and you have missed some of the important criteria of key people in the DMT.  You have no past history with the client.When clients were approached, they were asked what their thinking was at the timethat they changed their minds. The responses included:  If I make a mistake, am I likely to suffer as a result?  I am not sure whether I am about to choose the right provider. I have others to choose from and this new factor, which is not dealt with well by the previously preferred supplier, now seems appealing.  I am the only person involved in the decision making process, but others are looking at the outcome. If I do nothing, I will not be exposed.  What happens if it all goes wrong? © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 31 | P a g e www.barkerhoffmann.com
  • 33. Paper 05: The Mycelia Report  I have been thinking about this for a long time and other organizational factors have got a greater influence. My previous thinking did not take these factors into account.  Is the risk of doing something really worth it?  If I do nothing, will it really matter? Does anybody care?  My decision will impact on the whole organization. If it goes wrong, I carry the can. Do I want to take that chance?  Can they really do what they say they can? Will it work, and is it worth it?  Supplier B has pointed out that Supplier A made a mess of a previous contract. Will this happen to us?In reviewing the sales histories, a common set of indicators were apparent to showthat clients were in the concern phase. These indicators were:  The client went back on what they had previously said. They changed facts or conditions seemingly without reason.  Changes to criteria or needs could or would not be explained.  The rules for submission of tenders or proposals changed without explanation.  Price is brought up as a concern, after price had been agreed on.  Price is quoted as "Too high", when price is highly competitive.  Unaccountable delays are encountered, when there is no indication of problems.  Competitors are invited to speak with the client, after they have indicated that you are the preferred supplier.  New organizational personnel are invited in to the negotiation at the last minute.  The schedule is changed without you knowing why.  Something just doesnt seem right!When sales people were asked how they dealt with clients who had exhibitedconcerns, the researchers discovered that there were some common approachesadopted. They were:  To try to reassure the client that whatever the concern was, it was unimportant and they need not be worried about.  To appear to be an expert and make the decision for the client.  To try and force the client into making a decision by putting pressure on them.When asked if these approaches were successful, clients responded that they werelikely to have a negative, rather than a positive impact on their decision. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 32 | P a g e www.barkerhoffmann.com
  • 34. Paper 05: The Mycelia ReportThe Clients Decision Making ProcessDuring the analysis of the historical sales, it became apparent that proposals wereoften lost because the sales people were not able to meet with the final decisionmakers, the Authorizers. Access to the Authorizers depended on such things as:  Geographic separation of the Authorizers from the point of sales contact.  Seniority of the suppliers sales representative.  Protection of Authorizers by other organizational personnel.  Self-interest of the initial person contacted by the sales representative  Stated impartial stance of the Authorizers.For these reasons and others, the sales person was not able to influence theAuthorizers on a face to face basis, which made it difficult for them to demonstratetheir superiority over competitors, other than the written word or the sponsorship ofan internal organizational representative.Sales people expressed concern at having an internal organizational representativeput the case for their proposal. They found it difficult to ensure that the internalperson had the necessary knowledge of the products or services to make aconvincing case. Their perception was that internal sponsors, if questioned by theAuthorizers about areas that they knew little or nothing about, would more likely doharm than good, to their selection as supplier.What did become apparent, was that the more senior the suppliers representative,the more likely they would be to get close to the Authorizers. In addition, the moreinternal supporters the proposal had, the more likely it was the proposal would beaccepted. This reinforced the need to ensure that each of the DMT groups wereapproached and convinced prior to the actual meeting with the Authorizers. Ensuringthat Authorizers knew all the facts and understood how the products and servicesbeing offered met the organization’s corporate, operational and technical needs andcriteria, was the most critical step in the whole procedure. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 33 | P a g e www.barkerhoffmann.com
  • 35. Paper 05: The Mycelia ReportConclusionThis second report looks at the skills needed by a sales person involved in acomplex sale. It identifies the 4 psychological stages gone through by a clientorganization which is about to make a decision on engaging a supplier of products orservices. The report looks at the unique skills that are required by a sales person tohelp an individual and/or group of people who form part of the client organization’sDecision Making Team through the process, whilst remaining as the preferredsupplier.The research findings found that very few sales people appreciated the complexity ofthe process, or knew how to deal with each of the clients psychological stages. Theresearch gave a clear indication that successful sales people could:  Identify and develop the clients perception of their problems and need for change.  Identify a clients decision criteria, prioritize those criteria and then influence the client to regard their strengths as the clients preferred criteria.  Identify when a client has concerns about proceeding to contract finalizing and use techniques that assist the client through this phase.  Identify who within an organization is part of the Decision Making Team and then use all the skills required on each of these people.Dr Jack BrooksBHC ResearchEast Barnet, HertfordshireENGLAND1 March 1994 © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 34 | P a g e www.barkerhoffmann.com
  • 36. Paper 05: The Mycelia Report Annexes for the MYCELIA PROJECT REPORT on Sales Training conducted by BHC ResearchAnnex A: The Psychology of a Buyer in a Complex Selling Situation & the Domain Competency Areas Required by a Seller to Meet the Needs of the Buyer.Annex B: Rackhams SPIN® Model of Seller & Buyer Behaviours.Annex C: Rackhams Implied/Explicit Need Continuum.Annex D: Problems, Opportunities & Needs.Annex E: Problems & Needs.Annex F: The BHC Skills Centred Selling Model. © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 35 | P a g e www.barkerhoffmann.com
  • 37. Paper 05: The Mycelia Report Annex A to Mycelia Project Report The Psychology of a Buyer in a Complex Selling Situation & the Domain Competency Areas Required by a Seller to Meet the Needs of the Buyer© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 36 | P a g e www.barkerhoffmann.com
  • 38. Paper 05: The Mycelia Report Annex B to Mycelia Project Report Rackham’s SPIN® Model of Seller & Buyer Behaviours© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 37 | P a g e www.barkerhoffmann.com
  • 39. Paper 05: The Mycelia Report Annex C to Mycelia Project Report RACKHAM’S IMPLIED/EXPLICIT NEED CONTUNUUMAdapted from Making Major Sales, Neil Rackham, 1987 Published By Gower, Aldershot, Hants, England. Figure 4.2 Page 37 © Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 38 | P a g e www.barkerhoffmann.com
  • 40. Paper 05: The Mycelia Report Annex D to Mycelia Project Report© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 39 | P a g e www.barkerhoffmann.com
  • 41. Paper 05: The Mycelia Report Annex E to Mycelia Project Report PROBLEM/NEED CONTINUA© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 40 | P a g e www.barkerhoffmann.com
  • 42. Paper 05: The Mycelia Report Annex F to Mycelia Project Report The BHC Skills Centred Selling Model© Barker Hoffmann Consulting Ltd, BHC House, 40 Church Hill Road, East Barnet, Herts EN4 8TA ENGLAND 41 | P a g e www.barkerhoffmann.com

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