Major Account Sales Strategy - Introduction
In Major Account Sales Strategy, Neil Rackham addresses tactical strategies rather than selling skills. It is an excellent book for those who sell in complex or major account sales environments. Despite the fact that it is fifteen years old, most of the information it contains is still relevant today.
Mr. Rackham also wrote SPIN Selling, which was a best-seller. This book contains less research-based material than SPIN Selling, but it is full of practical advice on strategies that can be used by a trustworthy, professional seller.
Although not frequently mentioned by the author, the level of buyer trust is the key to using many of the strategies outlined in this book, including:
- Uncovering buyer fears and concerns
- Understanding decision criteria
- Influencing decision criteria
- Identifying and overcoming buyer-perceived risks in the purchase decision
One note: The book will be less valuable for those in transactional or commodity-based selling.
Major Account Sales Strategy - Summary
In Major Account Sales Strategy, author Neil Rackham offers a comprehensive look at the process of initiating, cultivating, and successfully concluding a major account or high-value sale. The strategies that Rackham describes throughout the book assume a high level of trust between buyer and seller. Without such trust, his strategies will be much less effective since they depend on the seller’s ability to communicate honestly with the buyer and understand what is really motivating the buyer.
Resolution of Concerns
The author identifies several stages in the sales cycle:
- Recognition of needs
- Evaluation of options
- Resolution of concerns
- Decision
- Implementation
To see how trust is implicit in Rackham’s approach, let’s take a look at his resolution of concerns stage. According to Rackham, resolving concerns is the last step the buyer takes before making the buying decision.
Resolving concerns is important in a large or complex sale, Rackham notes, because such sales have the potential to affect the entire firm, as well as the decision-maker’s career. Many people are normally involved in the decision, raising political concerns. There is normally intense competition, and the selling cycle is long, so buyers have time to become aware of risks. In addition, implementation after the sale may be lengthy and complex, so the buyer has an ongoing relationship with the seller.
For all these reasons, as the decision approaches, the customer’s feeling of risk is likely to increase. Feelings or risk can be deep-seated and often are not discussed openly, particularly with the seller. Rackham calls such deep feelings of risk “consequence issues.” They include issues such as “Will our people accept the changes this sale will bring?” “What will happen to my career if this goes wrong?” and “Do I really want to do business with this vendor?” Rackham notes that these consequence issues may influence the sale without ever being openly raised.
For Rackham, the seller’s objectives at the resolution of concerns stage of the sales cycle are to:
- Find out whether concerns exist
- Uncover and clarify any consequence issues
- Help the customer resolve the consequence issues.
Look at that list again.
Does it seem likely that you, as a seller, could accomplish any of these objectives if you have not established a significant level of trust with your buyer?
Probably not.
This is especially important because Rackham defines the cost of a purchase as including both the actual purchase price and the intangible costs implied by consequence issues. Thus when the buyer is weighing costs and benefits, there may be costs the buyer is considering that have not surfaced in your discussions. Discussing price, says Rackham, is often the way that buyers tell you that the total cost — including intangibles — is too high, because price is easier to discuss than mistrust, politics, hassle, or risk.
Dealing with Consequence Issues
Rackham identifies some signs that consequence issues may exist. These include the resurfacing of previously resolved issues, raising unrealistic price concerns, and making unjustified postponements.
He then offers some basic principles for dealing with consequence issues:
- Don’t ignore them. They can influence the sales decision.
- Build your relationship with your buyers early. This increases the chance that the buyer will share consequence issues with you. Rackham notes that trust can’t be switched on instantly. Rather, the whole history of your interaction with the buyer throughout the sales relationship determines whether trust exists. Careful, professional relationship-building is essential.
Finally, Rackham notes that only the customer can resolve consequence issues. The seller can’t do it. Thus, when a buyer mentions a consequence issue to you, it is an opportunity to continue to build trust.
Trust-Destroying Mistakes
When dealing with consequence issues, says Rackham, it is extremely important that you avoid three trust-destroying mistakes. Do not:
- Minimize the buyer’s concerns. Consequence issues are extremely important to the buyer. Minimizing them will simply drive them underground. Worse, a buyer normally reveals lesser consequence issues first. Minimizing these means that you will never hear the more important ones.
- Prescribe a solution to a consequence issue. This is a mistake because consequence issues are not tangible — they are fears that exist in the buyer’s mind. Since these issues are in the buyer’s mind and not part of the real world, only the buyer can resolve them.
- Pressure the buyer for information or decisions. This is a mistake because when consequence issues arise, positives and negatives are usually very closely balanced. Thus, launching into a closing technique won’t work because all it does is put pressure on a person who is worried about making the decision.
According to Rackham, the most effective approach to consequence issues is to discuss them from a position of trust. You can only be in that position if you have conducted yourself in a professional, trustworthy manner throughout your relationship with the customer.
Recognition of Needs
Rackham covers the early phases of the buy/sell relationship in the early chapters of his book. Although he does not discuss trust directly in these chapters, he recommends strategies that will be ineffective in the absence of a trusting relationship.
For example, in the recognition of needs phase one key tactic is asking “Implication questions.” These are questions that go beyond the identification of requirements. By asking them, the seller seeks to understand why the requirements are important to the customer. For this approach to work, the buyer must trust the seller enough to give honest answers to the seller’s probing questions.
Another example arises because in complex sales you may not be able to get in front of every decision-maker. Therefore, you may need sponsors within the firm who will represent the value of your product to other decision makers. Rackham recommends that you “rehearse” your sponsors by asking “Need-payoff questions.” These are questions designed to help your sponsor to formulate in his or her mind the way your product will solve a specific problem and the usefulness of solving that problem. Having done that, your sponsor is more likely to represent your product well. Once again, a professional and trusting relationship is necessary for such exchanges to be effective.
These types of questions are part of the structure that Rackham developed in his earlier book, SPIN Selling. The acronym “SPIN” is based on Rackham’s four types of questions:
- Situation questions
- Problem questions
- Implication questions
- Need-payoff questions
Rackham covers the basics of these four types of questions in Major Account Sales Strategy. For a comprehensive discussion, you will have to refer to SPIN Selling.
Evaluation of Options
After the customer recognizes needs, the next stage in Rackham’s sale cycle is evaluation of options.
Evaluation of options depends on the buyer’s decision criteria. After discussing how to recognize that the buyer is in the process of evaluating options, Rackham describes how to uncover and influence decision criteria. Then he discusses how to maximize your product’s perceived fit with the buyer’s decision criteria. There are four techniques he recommends:
- Develop decision criteria from needs uncovered during the recognition of needs phase
- Reinforce the crucial decision criteria you can meet
- Build up less important criteria in areas where you are strong
- Reduce the importance of criteria you can’t meet
In his discussion, Rackham does not list trust as a decision criterion. It appears that this is because the existence of trust between buyer and seller is a given in Rackham’s approach. Without trust, the seller will not be in a position to pursue the strategies Rackham recommends. For this reason, trust can be seen as the most important differentiator of all — the one that determines whether or not the seller will even be in the game.
Additional Topics
In addition to the topics discussed in this review, Major Account Sales Strategy covers a wide range of other material, including:
- How customers make decisions
- How to get in the door of a major account
- How to deal with areas where your product is weak
- Negotiating the sale
- Implementation and account maintenance
In the final chapter, Rackham walks the reader through a case study of a major account sale that brings together all the important issues he has discussed in earlier chapters.
Major Account Sales Strategy - Conclusion
Major Account Sales Strategy should be on every seller’s bookshelf. Read it on a regular basis. Each time you return to it, you will learn something new about the buy/sell environment.
But if you are not willing to approach your buyers in a professional, trustworthy manner, the strategies spelled out in this book will not work for you.
If you found this sales book review beneficial, I've created an e-book with thirteen, extensive reviews similar to this one for Major Account Sales Strategy. Click the following link to review information on the Sales Book Summaries for Trusted Sellers e-book.
Best,
Rob Reed
Terrakon Sales and Internet Marketing Consulting
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