I came across an older article on Jill Konrath's blog, Selling to Big Companies. In her post, Why I hate Closing Techniques, Ms. Konrath talks about her experience with a vice president of sales who felt his reps needed to get better at closing. Her article inspired me to post an article about a study conducted on sales closing techniques and their impact on trust I had written more than a year ago for my website. As usual, this thought process triggered a new post on closing:
A quote from Neil Rackham, who studied over 35,000 sales calls and authored several top-selling sales books:
I look back on my enthusiasm for closing with real embarrassment. From what I now know about success in the larger sale, I see closing techniques as both ineffective and dangerous. I've evidence that they lose much more business than they gain. What made me turn against methods that seemed so important to my own success? The rest of this chapter describes the series of studies that finally convinced me that traditional closing techniques have no place in larger sales.
Source: Neil Rackham, SPIN Selling, page 23
If you haven't read SPIN Selling, I highly recommend you buy a copy and read it two or three times. Although the studies and book are from the late 1980s, it is amazing how many sales "experts" and managers have it all wrong when it comes to using closing techniques. Earlier I wrote a sales book summary on Spin Selling.
For those of you not familiar with Neil Rackham, he is a sales researcher. Mr. Rackham and his team studied over 35,000 sales calls to identify why some sales people succeed and others fail. Who can successfully argue against someone who has studied 35,000 sales calls?
Here's another "no closing" nugget from Mr. Rackham:
If the writers on closing were correct, we should expect to find that calls with a lot of closes would be more successful than those where the sellers didn't close so often. We went out and watched a total of 190 calls. From these we took the 30 where the sellers had closed most often and compared their success with the 30 calls where the sellers had closed the least.
Only 11 [36%] of the high-close calls resulted in a sale, while 21 [70%] of the low-close calls did so.
So, can you win sales using closing techniques? Sure. Sometimes, customers will buy from sellers despite not liking the seller. Although not covered in Mr. Rackham's studies, I would suggest that the disparity between high-close and low-close calls would be even greater when selling services (this study was conducted with products).
And for those of you who considering your own or paying an "expert" for sales closing training:
An ideal opportunity for further research on closing came when a high technology company asked us to evaluate some intensive training in closing it was designing...We went out on 86 calls with a group of 47 sellers before the training took place. We wanted to find their existing levels of closing.
After the training, we went out with the sellers again, this time to find out whether their use of closing had increased and what effect this had on the results of their calls. Once again, closing turned out to be negatively related to success. After the training, the sellers used more closing techniques - so in one sense the training was effective. However, because fewer of the calls succeeded, the overall effect of the [closing] training was a decrease in sales.
The studies I've highlighted above only addressed larger and more complex sales. At the time of the study, Mr. Rackham classified "larger" as anything over $100. His studies did find that if you sell low-cost items (e.g. electronics, food, clothing) closing techniques can be effective. However, sellers of larger and more complex service sales, which are normally accompanied by more risk, should not use closing techniques.
One other study by Mr. Rackham's group looked at post-sale customer satisfaction:
Between 3 and 5 days after the purchase, he and his team followed up with 145 customers and asked them to rate, on a 10-point scale:
- Their satisfaction with the goods they had purchased.
- The probability, if they were to make similar purchases in the future, that they would buy from the same store
...the sellers who had been trained in closing had lower satisfaction ratings on both questions:
'Closers" "No-Closers"
Satisfaction with goods: 5.8/10 7.7/10
Likelihood of future purchase: 5.2/10 7.9/10
Still think closing techniques should be used when selling?
I'm selling a 10 to 15.000 USD service to CEOs of SME. If I didn't use the closing technique at the end of sales meetings I would be very poor.
BUT the sales process has to be great before that. You have to build relationship, uncover needs and problems, present your solution ...
But you just can't end the meeting with customer telling you "I'll think about it". This is death for any sale when you are talking to a decision maker.
Posted by: Robert Rolih | January 08, 2007 at 07:14 AM
Robert,
If you aren't convinced by an expert (Rackham) who has studied more sales calls than most anyone else in the field of selling, then I doubt I could say anything to convince you otherwise.
If you really think "CEOs" are buying from you rather than competitors because you're using closing techniques on the CEOs and you'd be "poor" without using the techniques - then keep on closing.
Not using closing techniques does not mean letting them say "I'll thing about it" and doing nothing else in the sales process. If you know the characteristics of your ideal customer; utilize effective marketing to reach them; and truly have a good sales process that builds trust, there's no need for closing techniques.
My blog audience is professionals who don't like and/or believe in the traditional sales methods used for the past several decades. I help professionals and sales forces who want to develop long-term, trusted relationships. According to a number of studies, the use of closing techniques prevents those types of relationships from developing.
Rob Reed
Posted by: Rob Reed | January 08, 2007 at 04:04 PM