It’s long been conventional wisdom that the key to sales success is building strong relationships with customers. But the results of a huge research study of sales reps in the wake of the 2008-09 recession upended that thinking and led to a new model for business-to-business, or B2B, sales.
During the recession, business dried up for most sales reps. Yet a handful succeeded in selling despite the downturn. Researchers with the business advisory firm CEB set out to learn these reps’ secrets to selling in bad times by surveying thousands of sales reps in companies around the world.
As it turned out, the reps’ success had nothing to do with the economy and everything to do the fact that they responded to customers’ needs in a new way: they pushed customers to think and act differently. In The Challenger Sale, authors Matthew Dixon and Brent Adamson of CEB’s research arm explain this new sales approach, how to replicate it in your sales force, and why sales success today—whether in a good or bad economy—depends on it.
Over the last several decades, more suppliers have begun selling complex “solutions,” or bundles of products and services, rather than just simple products.
Suppliers came up with solution selling as a way of differentiating themselves from the competition. Small differences in a company’s product versus a competitor’s product had become harder to sell—customers viewed products from different companies as essentially the same and so chose the ones with the lowest price. However, well-designed bundled offerings are customized and therefore difficult for competitors to duplicate. Bundling also saves suppliers money and allows them to justify premium pricing. Because of these benefits, solution selling has become the dominant sales strategy in virtually every industry.
But this more complex sales model has been difficult for many reps to execute. One reason is that reps need to develop a deep understanding of the customer’s business, which takes more time. Adding to the time, reps need to build consensus across the customer organization: decision-makers won’t agree to a costly, complicated deal without it. Customers are also more risk averse and more likely to demand customization and use third-party consultants to vet deals and try to get better terms.
CEB’s researchers found there are five types of sales reps:
Each type can be a high performer, but only one type—the Challenger—consistently excels in the complex solution selling environment.
In contrast, the type of rep most prized by sales executives—the Relationship Builder—is the least likely to succeed because this type fears that rocking the boat will damage the customer relationship.
The research found that in complex, “solution” sales, the performance gap between standout and average sales reps is much wider than in traditional sales—in complex or solution selling, star reps outperform average reps by almost 200% compared to 59% in traditional sales. Without help in navigating a world of more demanding, risk-averse customers, average reps are destined to keep falling behind until they can’t execute solution selling at all.
However, CEB researchers identified the unique skills and behaviors developed and practiced by Challenger reps, and they created a template all sales organizations and reps can follow.
Challenger skills drive sales success because they dovetail with what research has shown customers want most.
CEB research shows that the most important thing to customers is the sales experience—not the product, service, or price. Customers want to learn something in the sales interaction more than they want to buy something. They want insight into how to cut costs, make more money, and reduce risk.
Therefore, customers value reps most who:
Customers are saying to reps, “Tell me something new about my business”—which essentially defines the Challenger’s sales approach.
Nearly 40% of all high performers in the study were Challengers. Of 44 attributes analyzed, six defined a rep as a Challenger:
These attributes reflect three key abilities that define Challengers:
1) Teaching: With their unique perspective on the customer’s business and communication ability, Challengers can teach for differentiation (differentiate themselves from the competition) during the sales conversation.
2) Tailoring: Because they know the customer’s economic and value drivers, they’re able to tailor for resonance, delivering the right message to the right person.
3) Taking control: They can take control of the sale because they’re comfortable discussing money and pushing the customer.
These are the fundamental activities of the Challenger Selling Model.
In typical solutions sales training, reps are taught to be investigators: to question and learn from their customers what’s most important to them so they can offer solutions. However, the Challenger approach is to teach rather than investigate.
Effective teaching often means providing a key insight that challenges the customer’s assumptions. It shows a problem that the customer didn’t know they had, or highlights the shortcomings of other approaches. The reaction you’re going for is, “I never thought of it that way before”—”not I totally agree,” which signals agreement but not novel insight.
It’s important to connect the key insight to the strengths of your business. Namely, the problem that you highlight should be one that your company is uniquely suited to solve, above other competitors. Otherwise, the customer will take your insight and search for other suppliers, and you merely offered free consulting without generating sales.
An effective teaching conversation follows six steps:
The way to build the broad consensus necessary to win a deal is to tailor the teaching message so that it resonates and sticks with each stakeholder.
To tailor a message to a particular stakeholder, the rep needs to understand:
For instance, if a rep is talking with the head of marketing, he tailors his message to her priorities. He then changes his tailoring for the head of IT, who has a very different set of priorities.
Being assertive, or taking control, doesn’t mean being aggressive or irritating; it means the rep stands firm when the customer pushes back.
Challenger reps assert themselves in two ways:
Just as you can’t be an effective teacher without pushing your students, you can’t teach customers without pushing them to think and act differently. Reps take the lead with a specific end in mind.
In order for the Challenger Sale Model to succeed, reps need two kinds of organizational support:
1) Research and marketing expertise
A Challenger sales force needs support from the sales, marketing, research, finance, and human resources departments. These departments must assemble, analyze, frame, and package business intelligence, data, and marketing research into effective teaching pitches (new business insights) that reps can present to customers. The pitches must be compelling, replicable, and adjustable so they resonate with each customer stakeholder.
While taking control of the sales conversation is an individual skill, reps need the right information and tools from their organization to take control effectively.
2) Sales manager excellence
Frontline sales managers are the key to transforming an average sales force into a Challenger sales force. The most important capabilities in a Challenger manager are coaching skills and sales innovation.
As a company, you need to start now if you want to change the way your reps interact with customers before your competitors do. There’s no doubt about what customers want. As Challengers, your reps will get more time with the customer, more invitations to come back, and more promises of action. In contrast, your customers will tell competing reps: “We'll get back to you.”
The economic crisis of 2009 wasn’t a good time to be a sales representative. Business dried up for most sales reps—cash and credit were scarce and hardly anyone was buying anything. Yet a handful of gifted sales reps succeeded in selling despite the downturn. Researchers with the business advisory firm CEB set out to learn these reps’ secrets to selling in bad times—and came away with an entirely new sales model that can be replicated and bring success to any company.
As it turned out, the reps’ success had nothing to do with the health of the economy and everything to do with responding to customers’ needs in a new way: these reps pushed customers to think and act differently. In The Challenger Sale, authors Matthew Dixon and Brent Adamson of CEB’s research arm explain this approach and why sales success today, whether in a good or bad economy, depends on it.
Dixon and Adamson reveal three key insights from a massive research study for CEB’s Sales Executive Council that have since transformed business-to-business, or B2B, sales by changing the way sales executives think about selling.
1) There are five types of B2B sales reps—each characterized by certain skills and behaviors that define how a rep interacts with customers. (These five profiles are described in Chapter 2.)
2) One type of rep performs far better than the others and one lags far behind. And sales managers traditionally have relied on the type least likely to consistently deliver big results.
3) The sales methods used by those who fit the top-performing profile enable these reps to succeed not only in a poor economy, but regardless of the economic conditions. They succeed because they differentiate themselves from their competition by delivering value—they give the customer more than just a good price.
These reps fit the profile type referred to in the book as the “Challenger.”
Over the last several decades, more suppliers have begun selling complex “solutions,” or bundles of products and services, rather than just simple products. But they’ve stuck to traditional sales techniques, not realizing that winning a different kind of deal requires a different approach.
The standout reps who succeeded during the recession and thereafter excelled at “solution selling” because they naturally brought a different set of skills and behaviors to bear. To explain the importance of these skills, it’s necessary to first review the evolution of the sales model.
In the past, traditional selling focused on transactional sales of individual products like hammers based on price and quantity. In contrast, solution selling focuses on offering “bundles” of products and services.
Suppliers came up with solution selling as a way of differentiating themselves from the competition. Small differences in a company’s product versus a competitor’s product had become harder to sell—customers viewed products from different companies as essentially the same and so chose the ones with the lowest price.
However, bundled offerings are customized and, because of the complexity of having many moving parts, difficult for competitors to duplicate. Bundling also saves suppliers money and gives them a way to justify premium pricing. Because of these benefits, solution selling has become the dominant sales strategy in virtually every industry.
However, this more complex sales model has placed additional burdens on both the customer and sales rep to think and act differently, which has affected how the model has evolved.
Solution selling has changed customer expectations and behavior.
When reps claim to be selling a solution, customers expect them to solve problems, not just fulfill a purchase order for a product like a hammer. This has resulted in a protracted sales process, taking up more of the customer’s time and involving more people and levels of approval in the customer organization.
The rep needs to develop an understanding of the customer’s issues and challenges, identify a better way to address them, explain the benefits of the proposed solution, and identify the metrics for measuring success.
To understand the customer’s issues, reps spend a lot of time asking questions like, “What’s keeping you up at night?” The back-and-forth questions and answers, presentations, proposals, and amendments take time. Also, developing solutions requires interacting with more people in the customer organization.
With multiple suppliers adopting the same approach, solutions selling has led to “solutions fatigue” on the part of the customer. In response to the increased complexity, customer buying behavior has changed in four ways:
1) Customers require consensus within their organization on the sale.
When deals are complicated and the payoff uncertain, corporate decision-makers, even at the senior level, aren’t comfortable agreeing to an expensive deal unless they know their teams support it. The sales rep has to spend time chasing approvals to build broad consensus in the company.
2) Customers are increasingly risk averse.
Customers are requiring that suppliers share more in the risk that their solutions won’t deliver the promised results—for instance, by changing the way they measure business metrics. Some customers are measuring supplier success by the performance of the customer’s business, rather than of the supplier’s products. Consequently, suppliers need to build risk into their offers.
3) Customers want greater customization.
As complexity increases, more customers are asking for modifications to address their specific needs. To suppliers, customization is an expense, while to customers, it’s a logical part of the solutions sale and shouldn’t be an added cost. They think, “For the solution to solve my problem, it has to do certain things. If it doesn’t do them, it’s not a solution.” Everyone wants customization but no one wants to pay for it.
4) More customers are using third-party consultants.
In recent years, more customers have turned to third-party consultants to help them get the most value from the purchasing decisions. For example, starting in 2009, under increased pressure to cut costs, companies began hiring consultants to help them save money on employee health insurance coverage. Consultants may be aggressive middlemen looking for ways to squeeze suppliers on price and reopen past deals for renegotiation, or they may be simply trying to help customers navigate complexity. Either way, suppliers may end up with a customer’s business, but little of his money.
These four trends mean that while the economy has improved, selling hasn’t gotten easier.
These trends have made solution selling difficult for the average rep, and thus have significantly affected individual rep performance. A study comparing the impact of transactional selling versus solution selling on the performance of sales reps found:
As sales complexity increases, the gap between average and standout performers grows significantly.
This leads to three conclusions:
1) Organizations selling solutions must validate their stars—these reps are carrying the ball for the company. In fact, a side effect of solution selling has been the increased dependency of many companies on a few key people.
2) As sales complexity increases, the value to companies of narrowing the performance gap by increasing the performance of core reps increases significantly. In transactional selling, you get a 30% improvement by moving a rep halfway from average to excellent; in a solutions environment, you get 100% improvement.
3) Closing the performance gap pays off more than it used to; by the same token, not closing it costs more. Without help in navigating a world of more demanding, risk-averse customers, average reps will keep falling behind until they can’t execute solution selling at all.
However, CEB researchers have identified the unique skills and behaviors developed and practiced by standout performers, and they’ve created a template all sales organizations and reps can follow.
A traditional sales model focuses on transactional sales of individual products based on price and volume. However, many companies have shifted to solution selling, which focuses on broad-based consultative sales of “bundles” of products and services.
How would you describe your company’s sales method—is it closer to a transactional sales model of solution sales model? Why does the company use this method?
What are the strengths and weaknesses of this method?
What would make it more effective?
Managers often assume a sales performance gap is inevitable because some people are born with natural sales talent and some aren’t; talent isn’t something you can replicate. But the authors’ research shows that while some reps are more talented than others, companies can help most core reps perform at a much higher level.
Researchers studied the differences between average and top sales reps and identified the skills, behaviors, knowledge, and attitudes most critical to strong performance. The purpose wasn’t to determine why top performers excel, as much as to determine how to make the middle 60% of a sales force—the core—better.
They surveyed hundreds of sales managers in 90 companies around the world. Initially, they analyzed data on 700 reps, then increased the sample to more than 6,000 reps. The data produced a clear picture of what skills and behaviors are required for success in a solution selling environment. (The researchers didn't address personality types or personal strengths.)
There were three high-level findings, each contradicting conventional wisdom about sales success.
Researchers determined that sales reps fit one of five profiles, each dominated by distinct skills and behaviors:
Every rep in the study had at least a baseline level of the 44 attributes tested. But nearly every rep also had a specific cluster of attributes that defined their sales approach (akin to having a major in college but also completing a core curriculum).
Each type has strengths, but when you compare sales performance, the Challenger outdistances the rest and the Relationship Builder falls way behind. This goes against conventional wisdom—most sales leaders depend most heavily on the Relationship Builder, the profile least likely to be a top performer.
Core performers don’t share a dominant profile—they’re distributed fairly evenly across all five profiles. Thus, there are five ways to be average, or you could say that mediocrity has five flavors. However, it’s different with standout performers. There’s one dominant way to be a star—be a Challenger. Nearly 40% of all high performers in the study were Challengers.
| Sales Rep Profile | Percentage of Sales Reps | Percentage of High Performers |
| Challenger | 23% | 39% (over-represented) |
| Lone Wolf | 15% | 25% (over-represented) |
| Hard Worker | 22% | 17% (under-represented) |
| Reactive Problem-Solver | 14% | 12% (under-represented) |
| Relationship Builder | 26% | 7% (under-represented) |
Of the 44 attributes analyzed, six defined a rep as a Challenger:
The attributes reflect three key abilities that define Challengers:
These are the fundamentals of the Challenger Selling Model. The rest of the book provides a road map for building these capabilities in a sales force.
In contrast, the study found that the Relationship Builder was the weakest type of sales rep; they represented 26% of the population, but only 7% of top performers. This is a huge cautionary note for managers who try to increase sales by urging reps to just go out and build better relationships with customers.
This doesn’t mean that customer relationships aren’t important. In complex sales or solution selling, reps need to forge relationships with numerous people in the customer business. But the typical things that Relationship Builders do—responding to customer needs and demands, making check-in calls—don’t drive sales, and they eat up time that could be spent on building business by delivering greater value. Relationship Builders can’t help but fail in a complex sales environment.
Here are some key differences between the approaches of Challengers and Relationship Builders:
Researchers found that Challengers are very likely to succeed in complex sales, while Relationship Builders are the least likely to succeed. In complex sales, more than half of all top performers are Challengers, while almost none are Relationship Builders.
The reason Challengers do well in complex or solution selling is that it’s a disruptive sales model, requiring customers to think and act in a different way—for instance, to think of value as encompassing more than just price. A sales rep needs the ability to push or challenge customers to rethink how they run their business—a key Challenger skill.
(Note that while Challengers are critical to solution selling, they aren’t required in all aspects of sales operations. For instance, Hard Workers do well in transactional functions—for instance, as inside sales or telesales reps—where success depends on call volume rather than call quality. In these positions, it isn’t necessary to invest in Challenger reps.)
Sales managers who aren’t building or hiring Challenger reps will fall behind as deals get more complex.
Research shows that sales reps fit one of five profiles, depending on certain behaviors: Hard Worker, Lone Wolf, Relationship Builder, Reactive Problem-Solver, and Challenger.
Which of the profiles best describes you? What are its pluses and minuses?
Which Challenger characteristics are most difficult for you and why?
How might adopting these characteristics impact your performance?
The Challenger Selling Model grew out of the CEB’s research. It’s focused on training reps in the Challenger skills of teaching, tailoring, and taking control. The rest of the book focuses on best practices, tools, and lessons learned by early adopters (companies that tested the methodology) in implementing the model.
The Challenger Selling Model rests on several basic principles:
Principle 1: Challenger skills can be learned.
Rather than committing the time and expense to replace an entire sales force with “natural” Challengers, companies are better off training current reps in new skills and behaviors. Every rep in the study employed Challenger behaviors to a degree; reps can learn to fully implement them. The experience of the test companies proved that Challengers can be created. If you’re a sales rep, you can close the gap between your current skill level and the Challenger model.
Principle 2: The skills must be applied in combination.
While companies may be tempted to skip components of the model, the Challenger skills—teaching, tailoring, and taking control of the conversation—are most effective when used in combination. Implementing the full model is the only way to realize the tremendous performance gains it offers.
Reps who teach without tailoring their message to the recipient will sound irrelevant. Those who tailor without teaching will sound no different from their competitors. Those who take control without teaching something of value will irritate the customer.
Principle 3: The Challenger model requires organizational support.
Companies can’t sustain a Challenger sales force without organizational support from the sales, marketing, research, finance, and human resources departments. These departments must assemble, analyze, frame, and package business intelligence, data, and marketing research into effective teaching pitches (new business insights) that reps can present to customers. The pitches must be compelling, replicable, and adjustable so they resonate with each customer stakeholder.
While taking control of the sales conversation is an individual skill, reps need the right information and tools from their organization to take control effectively.
Principle 4: Building a Challenger sales force takes time.
The training and transition to the Challenger Selling Model take time to do effectively. Pushing the program through quickly might boost rep productivity somewhat, but the gain will be much smaller than what could have been achieved by implementing the program properly. Also, without due diligence, reps are likely to treat the initiative as just the flavor of the month and soon forget it.
Full adoption may take years, rather than weeks or months. It’s not simply a ”bolt-on” software update—it’s a new operating system for the whole company. However, when a company makes the full investment, the Challenger Selling Model offers a way out of the solution selling quagmire.
This section explores what the Challenger Sales Model looks like in practice, based on the experiences of companies that applied it. Remember, the three pillars of the model are: teaching for differentiation, tailoring for resonance, and taking control of the sales conversation. (A full chapter is devoted to each principle later in the book).
Challengers distinguish themselves from competitors by their ability to teach customers something new about their business. Research on customer loyalty (discussed in Chapter 4) shows that teaching new insights creates loyal customers.
Here’s how a rep selling office furniture applied this kind of teaching in a conversation with a company that was moving into a new office building. The company had already contracted with a competitor for office design and furniture, so the conversation would seem to be a lost cause; however, the rep did three things:
1) She started from an insight and taught the customer about a problem he didn’t know he had. The rep had learned that one of the company’s priorities in moving was to provide collaborative spaces for employees to work on group projects. She knew from her research that collaboration works best in small groups of three or four people. However, she noticed that the collaborative workspaces in the architect’s plan were designed for large groups. She shared her insight and the problem with the customer.
2) She developed interest: The customer was intrigued by the research findings and drawn into a discussion about possible solutions, complicated by the fact that the project was already well underway.
3) She changed the direction of the account: The rep suggested the large rooms could be reconfigured with movable dividers. Then she introduced dividers and other relevant products from her company that could help the customer facilitate collaboration among employees.
The rep’s teaching pitch was linked directly to her company’s products, yet it was based on a unique insight her competitor had not offered the customer.
The second pillar of Challenger selling is the ability to tailor the teaching message to different types of customers and to different people within an organization. Tailoring makes the teaching pitch grab and stick with the customer.
(Shortform note: Different people within a company who need to be on board for a sales deal to be approved are referred to in the book as stakeholders. They could be in finance, marketing, operations, or any other company department.)
To tailor a message to a particular stakeholder, the rep needs to understand:
Here’s an example of how message tailoring can work: While preparing to present an outsourcing solution to a company, a rep learned two things about the CEO: he was a tech junkie and he was concerned about the company’s poor customer service. So the rep focused her presentation on how her proposed solution would improve complaint response time and customer satisfaction by using new technology her company had recently developed.
The final pillar of the Challenger Selling Model is taking control of the sale. Being assertive, or taking control, doesn’t mean being aggressive or irritating; it means standing firm when the customer pushes back.
Challenger reps assert themselves in two ways:
Just as you can’t be an effective teacher without pushing your students, you can’t teach customers without pushing them to think and act differently. Reps (and teachers) take the lead with a specific end in mind.
Here’s an example of taking control of a discussion about price:
A sales rep needed to inform a longtime customer of a price increase. None of the customer’s other suppliers were increasing their prices, but the rep’s company needed to cover the increasing costs of its raw materials.
Meanwhile, the customer had a special deal with the rep’s company to receive its items in non-standard packaging. Over time, the cost of this packaging had significantly reduced the supplier’s profitability on the sale.
While discussing the price increase, the rep asked the customer to rank various elements of the supplier’s offering in importance. The custom packaging didn’t rank in the top three, so the rep agreed to cut the price increase and switch to standard packaging. The packaging change actually raised the supplier’s profit more than the price increase did.
By getting the customer to rank the features it received from the supplier, the rep helped him see the supplier’s offerings in a different light.
The three pillars of the Challenger Selling Model are: teaching for differentiation, tailoring for resonance, and taking control of the sales conversation.
Teaching for differentiation means differentiating yourself from competitors by offering the customer a unique and valuable insight. Think of a current or prospective customer. What new insight could you offer the customer about his business? What could the customer improve about what he or she is doing? What would make them say, “Wow, I never thought of that before?”
What makes this insight unique and valuable?
How can you link the insight to your company's unique solution?
In typical solutions sales training, reps are taught to be investigators: to question and learn from their customers what’s most important to them so they can offer solutions. For instance, they’re taught to ask the customer, “What's keeping you up at night?”
However, as previously noted, having to answer a lot of probing questions, especially from multiple salespeople, has led to solutions fatigue. Further, customers don’t always know what they need. The Challenger approach is to teach rather than investigate. Challengers win sales by knowing their customers’ business better than they do and teaching them something they need to know.
Presuming to teach customers may seem arrogant at first glance, yet research shows that’s what customers want most from a supplier.
CEB surveyed companies to learn what customers were looking for in a business-to-business (B2B) supplier. Specifically, researchers asked companies why they might choose one supplier over another, or what made them loyal to a supplier. The most important thing was the sales experience—not the product and service or price.
It’s not what you sell but how you sell it that counts the most.
The study found that only 38% of customer loyalty stems from brand and service. Typically, these factors keep a supplier in the game, but they don’t build sales or loyalty. Customers often don’t see much difference between competitors’ products, yet reps often spend time highlighting small differences.
Price isn’t a significant factor in customer loyalty either. Only 9% of customer loyalty is attributable to offering the best price. Discounting alone won’t get customers to buy more or continue buying from a company.
In contrast, 53% of customer loyalty is attributable to outperforming the competition in the sales experience itself. A customer’s loyalty is won during the sales call.
In surveys, customers saw huge differences between suppliers in the conversations they had with reps. They saw some reps as wasting their time by talking about small product differences; in contrast, others provided interesting, unique, and valuable information.
The next section looks deeper into the sales experience.
In surveying customers, researchers identified seven attributes or qualities in sales reps that were most important in generating loyalty. A majority related to providing insight.
Customers were most loyal to reps that:
The bottom two factors underscore that customers need consensus on purchasing and they want a smooth transaction. However, the top five attributes show that customers want to learn something more than they want to buy something. They want insight into how to cut costs, make more money, and reduce risk. Customers are saying to reps: Don't waste my time; tell me something new about my business.
However, reps must teach in a way that both changes the customer’s thinking and drives action. If the insight doesn’t lead to action, it doesn’t have any value.
Teaching doesn't mean free consulting. Reps must ensure their teaching leads to more business for their company, not for a competitor. To do so, they must engage in Commercial Teaching, defined as teaching customers something new about their business that leads to business for the supplier.
There are four Commercial Teaching requirements:
Commercial Teaching must connect insights to the areas in which your company outperforms the competition.
You want the conversation to go like this: you share an important insight that requires action; the customer asks, “How can I make that happen?”; you respond, “Here’s how we can help you do that better than anyone else.” Teach the customer not only to want help, but to want your help.
Doing this well requires two things:
1) You must actually be able to help. You’ll frustrate customers, or drive them to the competition, if you teach them about a problem without offering a solution.
2) You need to know what your company’s unique strengths are. While this sounds straightforward, many companies struggle to pinpoint what they do well, let alone what they do best.
In a recent survey of B2B customers, CEB found that only 35% could verify they were truly preferred over the competition. And of the preferred companies’ purported unique benefits, customers saw only half of them as relevant to their needs. In other words, only 14% of a company’s unique benefits were seen as such by the customer.
Agreeing on your company’s unique strengths is often the hardest part of implementing Commercial Teaching. Most companies cite being innovative, customer-focused, solutions-oriented, and so on. But those aren’t unique qualities because most companies cite them.
If you can't connect the insights you teach to your company’s strengths, you’re providing your customers with free consulting.
Your insights must not only connect directly to your company’s strengths, but they must also resonate with the customer by being directly relevant to his world.
To resonate, the insight you present has to challenge the customer’s assumptions. It must reframe how he thinks about his business, operates his business, or competes. In contrast, validating what the customer already knows doesn’t give him any value.
This may sound like a high bar. However, most suppliers really do know a customer’s business better than the customer does when it comes to the supplier’s capability or area of expertise. For instance, a company selling printers to a hospital knows more than the hospital about information management in a hospital setting (although not more about health care). A company that sells packaged foods knows more about how consumers buy groceries than most retailers know.
If you’ve successfully reframed your customer’s thinking, the reaction will be equivalent to, “I never thought of it that way before.” If you haven’t changed the customer’s thinking, but only validated it, the reaction will be something like, ”That’s it exactly—I totally agree.” When they get the latter response, Relationship Builders often feel good about making a connection. But agreement doesn’t win the customer’s business.
Challenger reps want the customer to stop and think about what an insight means to his business or wonder what else he’s missing. That’s the point where you’ve given the customer something of value. It's the turning point of an effective Commercial Teaching conversation.
It's not enough to change the customer’s thinking—you have to get the customer to act.
Most reps try to make the case for action by focusing on how the customer can save money with the supplier’s solution over time (the ROI). However, in Commercial Teaching, the initial focus of the conversation is on the customer’s business, not the supplier’s solution. The rep must show why the insight shared with the customer requires action in the first place, especially when it runs counter to conventional wisdom.
The way to use numbers to prompt action in Commercial Teaching is to help the customer calculate the cost of failing to act on the insight you’ve taught—either the money they’re wasting or the money or benefit they’re missing out on.
Commercial Teaching is a great business strategy, but to apply it effectively and efficiently, sales reps need expert market research and analysis from their organization. To deliver unique, relevant insights to individual customers about their business, reps need data and analysis that are widely applicable. This is where organizational support is crucial.
Marketing departments should research customer segments and generate insights linked to solutions and applicable to specific segments. Reps can then approach customers with a handful of scripted insights and diagnostic questions that help them present the right insight for the customer.
However, generating insights useful for Commercial Teaching requires marketing professionals to think differently about segmentation. (Shortform note: Market segmentation is dividing a target market into smaller groups of customers that share common characteristics.)
Segmenting customers by common needs is more useful than traditional segmentation by, for instance, geography or industry. Reps can apply the same insights to customers across various industries by focusing on needs they have in common, for instance, improving cash flow, reducing employee turnover, or improving workplace safety. In each case, reps can help the customer think about the need or problem differently (reframe), explain the costs of inaction, and propose action linked to the supplier’s solution.
In Commercial Teaching as a sales rep, you must connect the unique insights you’re giving the customer to the things your company does better than any other (your solutions). Yet many companies have trouble naming their unique benefits.
Identify your company’s unique benefits by answering the question, “Why should our customers buy from us over anyone else?”
Ask a coworker the same question and compare lists. Where do you agree and disagree?
Think about the words you used to describe the unique benefits. If you used common buzzwords like “industry leader, solutions-oriented, innovative, top, and unique,” then you’re not describing unique benefits. What more specific words could you use to differentiate your company?
Once you've agreed on your company’s unique benefits and you've created a set of insights to teach customers, the next step is organizing your material into an effective teaching pitch.
An effective teaching pitch follows a formula, but it also has an emotional component. Your pitch must tell a compelling story incorporating suspense and a few surprises. It’s like an amusement park ride that takes customers through a dark tunnel before showing them the light at the end: your solution.
An effective pitch must engage both the rational and emotional parts of the customer’s brain in order to get a decision. It speaks to logic but also triggers the customer’s dismay at the money being wasted or the risk they’re exposed to.
Rather than asking, “What’s keeping you up at night?” present your assessment of the key issues facing the customer, based on what you’ve seen at similar companies. Then get the customer’s reaction.
The authors call this hypothesis-based selling. Rather than asking open-ended questions about the customer’s needs, you offer a hypothesis based on your experience and research. Customers with solutions fatigue feel like they’re getting rather than giving information.
In the warm-up, you come across as efficient and respectful of the customer—your introduction shows you did your homework and value the customer’s time. You also establish your credibility.
In traditional selling, you’d present your value proposition next, shifting the focus from the customer's business to your business. However, in a teaching pitch, you must give the customer a reason to care about your business (your solution) by reframing.
This is the conversation’s turning point. Based on the issues identified in step 1, you offer a new insight that connects them to a bigger problem or a bigger opportunity. You don’t go into detail at this point—you just give the headline to surprise the customer or make her curious.
If the response is immediate agreement, then you’re saying something the customer has already thought of rather than offering new insight. You’ve failed to provide value and lost the opportunity to lead the customer to your solution.
So don’t be afraid to surprise the customer with something provocative. Once you've presented a different way to think about the customer’s problem, the next step is showing why it matters.
In this step, you make the business case for why the reframe deserves the customer’s consideration. Quantify the cost or opportunity with data and charts. You’re subjecting the customer to “rational drowning”—that is, presenting the rationale for a new approach in a way that makes her uncomfortable.
The customer should react along the lines of “Wow, I never realized we were wasting so much money … we’ve got to address this.”
If you’re using an ROI calculator, it should calculate the ROI on solving the problem you've identified, not the ROI of your solution. You're trying to show that the problem is worth solving.
In this step, your goal is ensuring the customer sees herself in the story you’re telling. You don't want your customer to respond that while your argument probably makes sense for other customers, it doesn’t apply to her company.
In this situation, a core rep probably would present yet more charts and numbers. But the problem isn’t that you haven’t presented enough numbers—it’s that you haven’t made an emotional connection.
To effectively counter the “we’re different” response, storytelling must come into play. Describe how other companies suffered from doing what the customer is doing. You might say, “I realize you're a bit different, but here’s how we've seen this play out.” Your description should have a familiar ring to the customer. Her response should be something like, “We do that here all the time,” followed by a head shake.
If you’re successful, you’ve connected the problem in your story with the problem in the customer’s organization. Once she identifies with the problem, she’ll want a solution.
Review step-by-step the capabilities the customer would have to have in order to solve the problem—the capabilities to quit wasting money, seize the opportunity, or avoid a risk.
Don’t launch into how you can help. Resist telling the customer how much better her life would be if she bought your product (which is what most reps talk about). At this point, just show the customer how much better her life would be if she acted differently.
The customer has to accept the solution before buying your solution. You want her to respond by saying something like, “That makes total sense.” Then she’ll be ready for your solution.
In the final step, demonstrate that your solution is the answer. This is the step most reps are most comfortable with. Explain specifically how your company is best positioned to deliver the solution they've agreed to.
If you've followed the conversational flow created by the template, you’ve taught the customer something new about her business in the form of challenges and solutions and led her to choose your solution as a natural outgrowth of your teaching. Instead of starting with your solution, you’ve led the conversation to it.
The insight you provided, rather than the product, is what lent value to the sales interaction.
To choreograph your own Commercial Teaching message, begin with your solution (step 6)—you need to know what you're building to.
Clarify the unique benefits your company offers customers. As you pin them down, focus in particular on the benefits your customers undervalue. To teach customers something new, it’s useful to offer a new way for them to think about how you can help.
The next step to building a teaching pitch is step 2: reframing. Identify the critical insight—the “ah-ha” moment—that will get the customer to respond, “I never thought of that before.”
To get there, start with the unique benefits you identified for step 6 and ask why customers don’t value them already. To change that view, you need to provide an alternative view (the reframe).
Then explain how pursuing the alternative view could save or make them more money than they realized (step 3). After that, build out the rest of the story so it flows through the steps.
Put together, you've answered the question of what problem is costing your customers more money than they realized, that only you can help them fix. This is the core of your pitch.
You need Challenger reps to deliver your teaching message. But the rest of the organization must construct the teaching conversation—including the company’s unique benefits, the surprising insights, and the choreography.
Here are the key organizational tasks:
The company must build the foundation for success long before the rep gets in front of the customer. The company's researchers and analysts build the customer insights that create the most value for customers in the sales interaction. This shifts the rep’s role from discovering the customer’s needs to guiding the conversation, the parameters of which have been created in advance.
As a result, well-packaged Commercial Teaching is actually easier for reps than typical solution selling. Success in Commercial Teaching doesn’t depend on the rep’s ability to customize a pitch on the fly.
With a Commercial Teaching framework:
Meanwhile, the company’s message and collateral must evolve to stay current with the customer’s business environment. Commercial Teaching isn’t a one-time exercise but an ongoing capability in which the entire organization is invested.
Commercial Teaching pitches are often strong in the early versions, but then get watered down as more people weigh in on them. This undermines the point of the Challenger approach, which is to be disruptive.
To ensure against teaching message erosion, use the SAFE-BOLD scale. It’s a tool for evaluating the strength of a Commercial Teaching pitch, based on the degree to which the pitch encompasses risk, innovation, and difficulty.
A successful teaching pitch must be:
The best ideas will be closer to the BOLD end of the spectrum; they will be big, cutting-edge, and hard to implement. In contrast, ideas at the SAFE end will feel small, be “follower” ideas as opposed to innovative, and be easy to implement.
W.W. Grainger Inc. is a distributor of maintenance, repair, and operations (MRO) equipment in the U.S. and Canada. It stocks several hundred thousand products like tools, pumps, and electrical equipment that companies need to keep their plants operating smoothly.
Its customers typically bought individual items reactively, based on past purchase patterns and need. Grainger wanted to establish itself as a solutions provider or strategic partner rather than a transactional supplier. To do so, it needed to change the way customers thought of the company and about their own operations.
Grainger needed a story about how the company could help customers save millions by properly managing MRO spending. In tracking customer purchasing, Grainger learned that customers were handling purchases inefficiently. This provided an opportunity to teach customers something new about their business—they could save a lot of money by thinking strategically about MRO spending.
To ensure that this insight would lead customers to buy from Grainger rather than other suppliers, the company analyzed its unique benefits and found that Grainger’s combination of capabilities—for instance, its efficient delivery system and wide range of items always in stock—made it unique.
The company built these insights into a teaching pitch: “The power of planning the unplanned.” Rather than starting with Grainger’s capabilities, it started with changing the way the customer thinks about MRO spending. The opening slide laid out the presentation:
Here’s how Grainger’s pitch applied the rules of Commercial Teaching:
In previous exercises, you've identified your company’s unique benefits and created insights to teach customers. Now you need to organize your material into a teaching pitch that follows a series of choreographed steps.
Steps 1-2: The Warm-Up—Give your assessment of an issue facing the customer and get his reaction. Offer an insight or different way of looking at the problem that will make the customer say, “Wow, I’ve never thought of that before.”
Step 3: Rational Drowning—Present the rationale for your different approach in a way that makes the customer uncomfortable (show him he's losing money or missing an opportunity).
Step 4: Emotional Impact—To help the customer emotionally with the issue, tell a story about another company that thought the same way, failed to take action, and suffered.
Step 5: A New Way—Review what the customer needs to do to solve the problem. He has to accept the solution before buying your solution.
Step 6: Your Solution: Explain how your company is best positioned to deliver the solution the customer has agreed to. This should connect clearly to the insight you delivered earlier.
The trend of complex sales or solutions selling has been accompanied by an increase in consensus buying—a company’s desire for consensus throughout its organization before going ahead with a purchase.
As a result, being able to tailor your message (the second pillar of Challenger sales) to each stakeholder in order to build consensus is a necessary skill for reps. It’s a skill that “natural” Challengers understand and excel at.
CEB researchers found that widespread internal support for a supplier was the top thing decision-makers (senior executives and procurers) cared about when it came to the sales experience. They didn’t want reps making pitches to them without first having established consensus—they saw that as wasting their time. Price and customization were significantly less important.
This runs counter to traditional sales training that says reps should connect directly with the senior decision-maker (believing that person is key to closing the deal). Instead, research shows that reps need to earn the decision-maker’s support by building stakeholder support first.
Since stakeholders play a strong role, it's useful to look at the data on what drives their loyalty toward suppliers. Knowing this is key to enlisting their support.
Research shows that stakeholders look for the following in a sales rep:
This means that the way to build consensus across an organization for your solution is to teach individual stakeholders something new and valuable. Yet many reps traditionally have done the opposite—rather than offering insights, they’ve sought to extract information or insight from stakeholders to help them persuade higher-level decision-makers to adopt their solution.
To build support with stakeholders, reps need to focus on giving rather than getting info. And they need to have something compelling to share. In essence, this involves a Challenger Sale with each individual stakeholder.
The requirement of consensus-building means reps have to talk to many more people than they did in the past to close a deal. In addition, they have to tailor their sales message to many different stakeholders so that it resonates with each.
Tailoring a message involves four levels, starting with the customer’s industry, followed by company, role, and individual.
To start with, a supplier’s marketing experts can add significant value by helping to tailor the sales message to the industry and company levels. Numerous sources of information are available, many of them free. Marketing can determine:
The outer two layers (industry and company) of messaging are easiest to develop; when sales organizations tailor their messages, it’s usually at these levels. Messaging targeted to organizational role and individual (personal goals and objectives) is rarer.
It can be challenging for reps to tailor their messages for many different stakeholders in multiple organizations, but marketing and sales departments can help them.
The good news is that customer outcomes—what stakeholders are trying to achieve in their jobs—are fairly consistent across organizations, so focusing on a handful of common outcomes can reduce the number of different sales pitches needed. For instance, a key outcome might be to decrease the number of clicks it takes for customers to find an answer on the company’s website.
Marketing departments can research typical outcomes for various positions and provide them to reps as a tailoring tool.
This is easier to do than it might seem. From a marketing standpoint:
Solae, a maker of soy-based food ingredients, was transitioning to selling complex solutions. In the past, reps began sales conversations by presenting product information and specs. To change this, the company’s marketing experts created a series of information cards to help reps tailor their messages.
The cards explained what each stakeholder was trying to accomplish in their business—their “functional bias,” which is a combination of personal value drivers (things they might do to improve performance) and economic context. For instance, a “functional bias” card for a stakeholder in manufacturing included: decision criteria important to the person (like minimizing costs), their job focus, things they monitor to achieve outcomes, and their key concerns.
With this information, reps could build credibility by addressing concerns and frame the solution in terms of impact on the stakeholder’s areas of focus. The company also provided specifics to reps on how to position the company's solutions to different people across the customer organization—that is, who they should pitch which solution to and how.
Once a deal started taking shape, Solae’s account team created a project proposal with an objective, outcome, and proposed solution for each role or stakeholder. Each stakeholder could sign off on it, which documented the consensus for presentation to the final decision-maker. The proposal also served as a summary of how Solae would deliver its solution to meet individual and company expectations.
Taking control of the sale is the third pillar of the Challenger Selling Method. Challenger reps are able to take control of the sale because they’re naturally good at two things that core reps struggle with: talking about money and pushing the customer. This chapter explains how to build these skills in average reps.
Challenger reps are comfortable discussing money because they’re confident in the value of the insight they’ve provided to the customer. For the same reason, they don’t hesitate to push back when a customer wants a discount, looser terms, or more without a price increase.
Challengers also create momentum, keeping the conversation moving toward the next step. Their goal is to sell a deal, not have a friendly meeting. In contrast, Relationship Builders don’t push toward next steps because they don’t want to undermine the relationship. They naturally want to reduce tension, not increase it by pushing.
Reps may be reluctant to take control or sales managers may hesitate to push their reps to control the sales conversation due to three misconceptions:
Many sales reps and managers think they should take control only at the end of the sales conversation, at the negotiation stage. However, Challengers take control of the entire sales process from the beginning. As a result, customers see the Challenger as a confident partner as opposed to an anxious rep hoping for a deal at the end.
Challengers realize that customers may be confused about how to execute a complex purchase, so they teach the customer how to buy the solution. Extrapolating from past sales, they explain the purchase process and coach the customer on who should be involved.
Challengers also take control immediately in two typical problem situations that usually stymie core reps:
Challengers take control not only on price, but also on ideas—they push the customer in how they think about their business and its challenges (this is required for reframing, the essence of Commercial Teaching).
In fact, pushing on ideas is necessary because the customer often will be skeptical about a new way of thinking and will push back by demanding data or by arguing that his company is different. The Challenger rep replies that other companies have unique aspects too, but this idea has helped them.
Pushing back is critical because the insights link back to the supplier’s solutions. If the rep can’t convince the customer the problem ought to be solved, he can't sell the solution.
Sales managers often fear that reps will be aggressive. But research shows that reps are more likely to go the other way toward passivity and wanting to resolve tension rather than maintain it.
Reps are often passive because they think the customer has the most power in the sales relationship. They give in to customer demands because they feel they have no choice. However, reps have more power than they think; many undervalue their contribution and overestimate the value of the customer’s objections. Taking control means you know the value of your expertise and company resources and you don’t give them away without a commitment from the customer to work with you.
Sales managers often inadvertently encourage rep passivity by urging them to be customer-centric, or to put the customer first. In response, reps tend to give discounts when they shouldn’t or become customer order-takers. Managers have to stop this if they want to build a Challenger sales force.
Challengers are assertive, not aggressive. On a rep behavior spectrum, with passive at one end and aggressive at the other, assertive falls in the middle and is characterized by:
The main difference between being assertive and aggressive is posture. Assertive reps use direct language and move the conversation forward purposefully, but they’re sensitive and responsive to the customer’s reactions. They make their value case and stick with it, building stakeholder support. In contrast, aggressive reps attack with antagonistic language. But again, reps are far more likely to be timid than aggressive. The real question is how to make them more assertive, not less assertive.
To help reps become more assertive, sales managers need to address the main barrier to taking control: the desire for closure.
Most reps are uncomfortable with loose ends and ambiguity. In contrast, Challengers welcome ambiguity, and even tension, because they realize it can be used to their advantage. They’re comfortable with silence in the sales conversation, as well as keeping points of contention open and on the table for a while.
While you can't transform people’s personalities, you can help make reps more aware of their tendencies and give them tools for making sure they don't give in when they shouldn’t during tough conversations. Chemicals company DuPont has developed some of these kinds of tools.
While Challengers should take control of the entire conversation, DuPont’s template for controlling the negotiation stage is a good example of how you can help reps learn to be assertive.
The key to DuPont’s approach is having an advance plan or strategy that gives reps confidence to not back down in a challenging conversation. The company provides reps with a template for pre-negotiation planning. The form requires listing the supplier’s strengths and weaknesses relative to the customer. This reminds the rep of the value her company offers and the confidence to seek a fair price.
Reps also have to think in advance about the information they need to get from the customer, as well as about what information the customer will want to know. They articulate the things the supplier is looking for in the deal and things they can negotiate on. They develop hypotheses on the customer’s needs. This kind of planning equips reps to challenge and push back as well as to think several steps ahead.
Besides the background preparation, there are other steps a company can take to help reps take control of the conversation. DuPont has created a four-step framework focused on mitigating reps’ tendency to give in too soon:
1) Defer: When a customer demands a discount, defer the discussion by saying something like, “Before we discuss price, I’d like to make sure I fully understand your needs so we can make this deal as valuable as possible for you. Is that OK?” In this step, the rep promises to address price but gets permission to proceed. It's important to get the customer’s consent to defer or he won’t listen. The rep also has created some tension.
2) Broaden: Press forward to uncover the customer’s needs (DuPont provides tactics to help). The goal is to expand the customer’s view of the things that are important to him. What else besides price matters—for instance, expedited shipping?
3) Explore: Compare and evaluate the additional needs identified during the conversation. After broadening the list as much as possible, come back to price, starting with an open-ended question: “What are you looking to achieve with a 20% reduction?” Often the reason is something that can be addressed another way—for instance, it may be driven by the desire for a specific business outcome like production cost reductions rather than economic need.
Now you’re negotiating not just on price, but on all the ways the supplier creates value and helps the customer address challenges. You’re also positioned to offer concessions other than price.
4) Concede: Determine what you’re willing to concede ahead of time and follow a strategy of trading other things first before defaulting to price.
How and when you concede matters: DuPont teaches reps to avoid starting with smaller concessions and proceeding to larger ones or putting a take-it-or-leave-it offer on the table because they can leave a customer feeling cheated. Instead, concede your negotiable items in a measured way that makes the customer feel he’s winning. For instance, start with a meaningful concession, and offer progressively smaller concessions as negotiations continue. This manages tension constructively.
Remember that it's important for reps to take control throughout the sales process, not just during negotiation. It has to happen throughout the conversation or it will feel contrived or off-putting at the end.
Teaching reps the importance of clear direction over quick closure and how to create value in the sales process can help them overcome passivity and be assertive.
Many sales reps, especially Relationship Builders, hesitate to challenge customers’ thinking or push back when they demand price concessions because they don’t want to seem aggressive or hurt the relationship. However, taking control is an essential Challenger behavior.
Think about a recent sales conversation in which you felt an uncomfortable tension. How did you respond? Why did you respond that way?
Who controlled the conversation from that point and what was the outcome?
Have you had a situation where you conceded more than you wanted to, and then felt bad about it afterward? What was the situation? Why did you concede in the moment?
How could you prepare differently for your next sales conversation so that you feel confident and in control?
Frontline sales managers are the link between strategy and execution—they determine whether change initiatives and sales transformations succeed. But research shows that most top company leaders lack confidence in their sales managers and they’re uncertain of what to do about it (63% say their managers don’t have the skills and competencies they need to implement their sales models).
However, once you understand the attributes of a successful Challenger manager, you can hire or create skilled sales managers capable of executing a Challenger Selling Model. This chapter focuses on the most important sales manager skills—coaching and sales innovation—and how to develop them.
To determine the skills, behaviors, and attitudes that matter most for sales management excellence, researchers surveyed 65 companies and collected data from reps on 2,500 frontline sales managers.
They found that management fundamentals (reliability, integrity, and listening skills) account for only 26% of sales manager success. These fundamentals seem to be inherent rather than learned, so they should be baseline requirements for hiring or promoting someone to be a manager.
More importantly, companies should look to hire candidates who demonstrate the qualities known to drive success in sales outcomes: selling ability, coaching skills, and sales innovation. These attributes account for 73% of sales manager success.
For sales managers, selling skills still matter. Managers are often required to cover vacant sales territories and help close complex sales deals. More importantly, they must be able to model effective selling techniques and behaviors.
The survey found that the same skills that matter most for rep success also matter for manager success: offering customers a unique perspective, tailoring offers to customer needs and priorities, and being comfortable discussing money.
Coaching is a key aspect of manager effectiveness and a key driver of rep performance. Coaching entails working side by side with reps to share knowledge, insight, and to correct rep behaviors that get in the way of successful sales performance.
The key manager attributes for effective coaching mirrored the requirements for Challenger sales reps: guiding reps to tailor their message effectively, showing reps how and when to take control, and helping reps through complex negotiations.
In addition to hands-on sales and coaching skills, manager excellence entails providing leadership, direction, guidance, and demonstrating ownership of the business (running their territory as if it were their own business).
Owning breaks down into two skill subcategories: resource allocation and sales innovation. Resource allocation is the least important part of the job (accounting for 16% of manager effectiveness). It involves such things as ensuring sales process compliance, taking corrective action, and managing resources efficiently.
Sales innovation is the ability most important to outstanding sales manager performance (29% of manager effectiveness). Put another way, it's the most important aspect of sales leadership. Innovation means finding new ways of solving problems standing in the way of deals and innovating new ways to position an offer. It’s about overcoming unforeseen obstacles.
Sales innovation is the key to fully realizing the potential of the Challenger Sale Model.
An innovative manager can help keep deals from getting stuck and make stuck deals happen.
This competency is critical to selling complex solutions to increasingly reluctant customers.
Because coaching and sales innovation are so important to sales manager success—and rep performance—they’re the focus of the rest of this chapter.
Sales coaching is an ongoing series of interactions between a frontline sales manager and a rep, designed to diagnose, correct, and reinforce selling skills and behaviors.
Coaching differs from training, which is for sharing knowledge. Coaching is for acting on knowledge. Coaching is ongoing—it's not a one-time event or training series. It involves specific diagnosis and it’s customized and behavioral.
Coaching’s value lies in being tailored to the individual and applied as needed. It’s formal rather than informal, meaning it’s highly structured and regular. It also differs from managing: managers tell and do; coaches ask and guide.
Research shows that effective coaching can significantly boost the performance of average reps.
Specific research findings include:
This means effective coaching has the potential to greatly improve performance in a complex sales environment. Coaching can mean the difference between hitting or missing sales goals for the majority of your reps. The key is to focus the bulk of coaching efforts on the core performers rather than the lowest or highest performers.
Besides boosting sales performance, coaching is a big factor in employee retention and discretionary or extra effort. Good coaches make people want to stay; bad coaches (and bad managers) are demoralizing and drive people away. This applies regardless of the employee’s performance level.
To coach effectively, managers need a standard to coach to.
One company created a coaching guide or cheat sheet for managers that it integrated into the sales process. It provided questions for managers/coaches to ask reps at each stage of the sales process to help them achieve the objectives of that stage.
Typically, managers focus on outcomes rather than behaviors in coaching conversations.
For instance, a manager might say to a rep, “Your conversion rate is down. What’s the problem?” This is “spreadsheet coaching”—it focuses on business outcomes, not behavior. In addition, it’s a one-size-fits-all critique.
In contrast, good coaching focuses on behaviors (what the rep is doing), not outcomes. For instance, in the pre-call planning stage, a coach might ask the rep: “What business problem are you planning to focus on with this customer? How new will this insight be to him? Why hasn’t he already figured it out?”
Appendix A provides an excerpt of the authors’ coaching guide for Challenger selling. The full version is available as a free download here.
Here’s a model for coaching developed for CEB’s Manager Development Program. The components fit the acronym PAUSE:
P—Prepare for the coaching conversation: Review the customer account. Determine what stage of the sales process the rep is in and what behaviors are going to be important.
A—Affirm the relationship: If the rep isn't receptive to feedback, the coaching will be wasted. Separate performance management from coaching to create a safe environment for the rep to listen.
U—Understand what behaviors are important: Managers need to understand what they're seeing and know what behaviors to look for in observing their reps.
S—Specify behavior change: When you know what behaviors are needed and have an objective standard for judging them, you can provide objective feedback.
E—Embed new behaviors: Create an action plan for the rep to apply the feedback.
Using this framework in coaching helps keep it objective and provides continuity from one coaching conversation to the next.
Sales innovation is the manager attribute that matters most. Here’s a look at what managers need to do in order to innovate. There are three key sales innovation activities: investigate, create, and share.
1) Investigate: Determine what’s getting in the way of advancing a sale—who’s involved, what kind of financial concerns do they have, what factors are they weighing. The manager works with the rep to understand the customer’s decision-making process and identify where a deal is bogged down and how to get it moving.
Key steps:
Action steps: the rep gathers information; the manager enforces
2) Create: Innovative managers also create solutions (innovate at the deal level)—for instance, shifting risk from the customer to supplier in exchange for a longer-term contract. Most managers just monitor reps’ progress on deals, however, innovation involves co-creation, or collaborating to find better ways to advance a deal. Managers should focus their innovation efforts on deals where the payoff is greatest.
Key steps:
Action steps: The manager develops solutions; the rep provides input
3) Share: Finally, innovative managers share best practices and pass on new ideas and solutions to the rest of the team.
Key steps:
Action steps: The manager shares insights; the organization facilitates
In the sales manager’s world, the roles of resource allocation and sales innovation can conflict.
Resource allocation is efficiently managing limited resources through better territory management, deal qualification, and sales process compliance. While resource allocation focuses on efficiency, sales innovation focuses on effectiveness.
A manager focus on effectiveness has almost twice the impact of an efficiency approach.
Efficiency involves improving at what you’re already doing as a matter of routine. This works in an environment of traditional, straightforward product selling, where most deals are the same and customers behave predictably. Effectiveness involves innovating and collaborating to address the unexpected in a sales environment where there are many unknowns. Effectiveness takes precedence over efficiency.
However, in a recent survey of frontline managers, most managers said their current environment is dominated by an emphasis on efficient execution. Almost none agreed that “leadership empowers managers to set their own course.” But they cited empowerment or freedom to make decisions as the most important factors for them to be successful.
It takes time to change, but there are immediate things companies can do to equip sales managers to be more innovative at the deal level.
The way managers think every day is one of the biggest obstacles to innovation. They apply “narrowing thinking,” which involves looking at a complex problem, considering existing options, and producing a solution.
It works for tough, fast decisions about managing resources. But narrowing thinking restricts managers’ ability to develop creative sale solutions because it works by eliminating existing options rather than generating new ones for consideration.
The alternative is “opening” or expansive thinking—generating and considering as many different options or alternatives as possible.
To build innovative managers, companies need to equip them with tools and frameworks to think expansively. The first thing to do is raise their awareness of what's hindering expansive thinking. Research has identified a number of human biases that often get in the way. The most common are:
These biases help us sort large amounts of information and make decisions quickly. However, they keep our perspective narrow. For instance, they might keep a sales manager from uncovering an innovative solution to a stuck deal because he looks at it with these biases instead of putting himself in the customer’s shoes.
To help managers overcome these biases:
“Prompting questions” force you to expand your thinking and fully explore an issue before drawing conclusions. There are three types of prompting questions:
The SCAMMPERR framework, a prompting question tool, helps you work through ideas. The example below uses this question tool to reposition a sales offer instead of granting a discount.
S—Substitute: What could we do instead?
C—Combine: How could we combine approaches?
A—Adapt: What outside ideas could be adapted to this situation?
M—Magnify: How could we put more emphasis on value?
M—Modify: How can we change the offer to make it more relevant?
P—Put to another use: How might a different stakeholder value this?
E—Eliminate: What elements that the customer is unwilling to pay for can we eliminate?
R—Rearrange: How can we change the order of things to make them more relevant?
R—Reverse: What if we do the exact opposite?
Here are some key lessons for sales leaders, marketing professionals, and senior leaders based on the experiences of companies that implemented the Challenger Sales Model.
Every high performer isn’t a Challenger: Part of the rationale behind the Challenger Selling Model is to replicate what Challengers do naturally across the rest of the sales force. But not all high-performers are Challengers. It's important to avoid mistakenly using high-performing Relationship Builders and Lone Wolves as teaching examples, since you’ll teach non-Challenger behaviors and tactics. Appendix B provides an assessment tool for identifying the high-performing Challengers you want everyone to emulate.
Don’t emulate the Lone Wolf: While Lone Wolves can be highly successful (25% of them are high performers), a sales force consisting entirely of Lone Wolves would be dysfunctional. Each does their own thing, so you can’t replicate their behavior across the organization and you couldn’t manage a sales force like this. Creating collaborative solutions for customers requires teamwork—however, Lone Wolves behave independently of rules and sales processes.
Start recruiting Challengers: While you can develop Challengers through training and coaching, it also saves time to recruit them when you have openings or new positions.
This requires a different interview process. You need to target different competencies, ask different questions, and apply different evaluation standards. Appendix C provides a Challenger Hiring Guide.
Develop rep skills and organizational capability at the same time: To get the full benefit from the Challenger Selling Model, companies need to improve both individual skills and organizational capabilities. Developing both at the same time speeds up the overall transition, since the capabilities are complementary. For instance, reps need presentation materials developed by marketing professionals, and marketing people need feedback and information from reps to create great materials.
Take steps to make training stick: Research shows that 87% of sales training content is forgotten by reps within a month. Coaching is a key way to boost retention. Other studies show that you can improve retention by what you do before and after training. Successful companies do three things:
1) Boost rep demand for change and generate buzz before training is rolled out
2) Create “safe practice” opportunities based on real accounts
3) Create ongoing behavioral certification programs to reinforce learning over time
Stop trying to be customer-centric: Being customer-centric can hurt your business in two ways: 1) it leads to offering discounts and other favorable terms that undermine profitability for little long-term gain and 2) it focuses reps on taking customer orders rather than longer-term goals. Instead, be an insight-centric organization that teaches customers to think differently.
Know your company’s unique benefits: You have to know your unique capabilities so you can teach your customers insights that link back to those capabilities.
Don’t use buzzwords in your pitch: If you use the terminology everyone else does, you’re telling customers that you’re just like everyone else. The top overused buzzwords are: leader, leading, best, top, unique, great, solution, largest, innovative/innovator. To truly differentiate your company:
1) Don't describe your differences; make customers value them
2) Build your conversation around an unexpected insight
3) Don’t lead with your solution, lead to it
Accept limited resistance: Aim for 80% adoption of the new model and let the rest climb on board at their own pace as long as they’re meeting their goals and not getting in the way of change. But if performance slips, they need to adopt the new approach or leave. Also, as more reps and companies adopt Challenger selling, it will become a requirement in order to compete, not an option.
Expect casualties: Some reps won’t be able to change, so consider shifting them to another role like customer service or product specialist. Meanwhile, remember that most reps (70-80%) can become Challengers.
Consider piloting the program: Most companies test-run new tools to learn what adjustments should be made. However, Grainger, the equipment supply company, went further by piloting the Challenger program to understand adopter behavior and to respond effectively to adoption plateaus.
Reps cluster into four groups—early adopters, majority, laggards, and naysayers—who get on board in that order. You have to win over one segment before you can push the next segment for adoption. For instance, the majority waits to see early success, while laggards want to see success from a peer close to their segment before they'll adopt. Targeting the right group at the right time is the key to driving adoption.
Terminology is important: Some people find the term Challenger off-putting. Companies worry that it will encourage reps to be aggressive or to decide relationships don’t matter. But it's important not to water down the message. The term underscores the need for big change by contrasting the new with old. People are more likely to see it as different. Your message is engaging people when they disagree or debate it.
Beware of the trap, “It won’t work here”: One question that comes up is whether the model is appropriate for Asia-Pacific markets, where challenging and teaching can be seen as aggressive or arrogant by customers. But research has shown that all customers want insight regardless of region. That said, in Asian markets, you may want to revise the terms without watering down the message—for instance, instead of “teaching,” you could refer to “sharing and delivering insights.” Also, it may help to add the word “respectfully” as a modifier.
Start now: You have to start now if you want to change the way your reps interact with customers before your competitors do. There’s no doubt about what customers want. As Challengers, your reps will get more time with the customer, more invitations to come back, and more promises of action. In contrast, your customers will tell competing reps, “We'll get back to you.”
Internal business customers, such as colleagues from other departments, want insight too—for instance, new ideas for saving and making money—so the Challenger model of teaching new ways of thinking applies within and across the organization.
For instance, researchers found that an HR recruiter’s ability to be a strategic advisor to the company accounted for 52% of effectiveness. Similarly, company leaders in other departments want IT departments to advise them on how to use technology to be more efficient or save money.
Like sales reps, marketing and communications professionals don’t want to be viewed as order-takers. They want to make a more valuable contribution by moving from managing the message to managing the strategy.
For instance, instead of jumping to fill a colleague’s request to issue a press release, a communications professional can help more if she knows the strategic reason for the request. It might be something like, “We want our competitors to know we've moved into this new area.” By knowing the reason behind the press release request, the communications staff can identify opportunities to deliver greater value.
One communications department used a five-step process for analyzing internal requests before acting on them. This improved its solutions and repositioned the department as a strategic partner in improving company results.
People with specific expertise in areas like HR or IT often have trouble communicating with colleagues in the company in language they understand.
One of the worst offenders when it comes to technical jargon is the legal department.
Attorneys are trained to write long technical briefs for judges but not to communicate effectively with business partners. Also, instead of offering options, attorneys tend to give “on the one hand/on the other hand” answers.
To build respect and credibility so that your views are taken seriously, you need to show that you understand your colleagues’ needs in the same way that reps seek to understand their customers’ businesses.
To earn a voice in decisions, corporate staff need to deliver compelling insights. For example, to ensure they were making a valuable contribution, one marketing department came up with specific criteria for offering insight (similar to the SAFE-BOLD framework for designing a teaching pitch, described in Chapter 5):
These criteria helped the marketing research staff deliver compelling insights in presentations to the management team.
While it’s difficult to predict every skill companies will need in five or ten years, it’s clear that internal customers, like outside customers, will continue to be hungry for new insight and will appreciate partners who can provide it.
The following is a summary of the authors’ coaching guide for Challenger selling. The full guide is available as a free download here.
1) Teach
Pre-call planning questions: These questions focus on determining whether the rep has a viable teaching pitch and filling any gaps.
Post-call debriefing questions: These questions focus on determining the effectiveness of the teaching pitch.
Coaching exercise: Ask the rep to select an account and answer questions about it, such as: what are the company’s strategic objectives; where does it beat their competition and where does it lag; how does the stakeholder contribute to achieving company objectives? Work with the rep to identify opportunities to link capabilities/solutions to customer needs.
2) Tailor
Pre-call planning questions: These questions focus on ensuring the message will resonate.
Post-call debriefing questions: These questions focus on how effective the tailoring was.
3) Take Control
Pre-call planning questions: These questions ensure that the rep has a clear plan for continuing to move the sales process forward.
Post-call debriefing questions: These questions assess the extent to which the rep controlled the conversation.
Questions such as the following can help you identify your selling style. Indicate how strongly you agree or disagree on a scale of 1-5 (1=strongly disagree; 5=strongly agree). The higher your total score, the closer you are to a Challenger Selling Model.
The following are key Challenger competencies along with several examples of questions to determine how well a sales rep candidate measures up.
Offers unique perspective
Drives two-way communications
Knows customer value drivers
Can identify economic drivers
Comfortable discussing money
Able to push the customer