Challenger Sales Model

DOES THE CHALLENGER SELLING MODEL WORK?

• Challengers are made not just born
• It’s the combination of skills that matters
• Challenging is about organizational capability, not just rep skills
• Building the challenger sales force is a journey not and overnight trip

You should have learned ...

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• A sustainable and proven model that will increase your sales
• The steps and skills to encourage a Challenger environment in your organization

Applications of the

Challenger Model

outside of sales and marketing

Attributes of Challenger

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References

A rep was struggling to gain traction with a prospective customer. The customer had just built a new headquarters facility and one of their competitors had been selected to furnish the building. The company seemed to have been cut out of the business, but the rep - a brand-new hire - still felt there was an opportunity to gain a foothold in the new building before the company took delivery from their competitor. After some persistence, she landed a meeting with the company’s head of real estate and facilities. One of the key priorities for this company was to create collaborative spaces where employees could more effectively interact with one another.

In looking at the architect’s designs, she was able to tell him, “Well, we have robust data that indicates that collaboration doesn’t happen in groups of eights. It happens in twos and threes, and when you get to seven it stops being productive. You may be building the wrong size conference rooms.”

“That’s great to know,” responded the customer, “but the conference rooms have already been built. What can we do about that now?”

• Decide what information your group would need.
• What support structure your sales reps would require.
• Come up with a creative, cost effective solution for your reps that will impress a potential customer.

• Sales reps talk to more individuals at a company than ever before

• To tailor the message, focus on customer industry, company, stakeholder role, individual person

Worksheet and Discussion

We have a handout for you to look at. Take some time to consider which of these five types of sale representatives you would most likely be. Complete the short worksheet to see if you are right. Share your insights with a partner.

Five types of Sales People

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The Challenger Sales Model

Denise Jackson, Jade Johnson, Janay Johnson and Stacey Jones

Gonzaga University

COML 511

Prof. Desautel Johnston

February 24, 2013

Commercial Teaching: 4 Key Rules

1. Lead to your unique strengths.

2. Challenge customers’ assumptions.

3. Catalyze action.

4. Scale across customers.

Building a Conversation

The Warmer

The Reframe

Rational Drowning

Emotional Impact

New Way

Your Solution

Practice

Pair up with someone you haven't met before. Find a mundane item in front of you. Think about the item and its worth to your "client". Think about what you have learned about Challengers. Try to create a challenger sale with your mundane item. Discuss what did and didn't work. What do you need?

History of Challenger Sales Philosophy

• The Need for the Challenger Sale
• Journey to the Challenger Sale

Tailor

• Sales messaging tends to focus on products, not customer challenges

• Learn a sustainable and proven model that will increase sales

• Learn the steps and skills to encourage a Challenger environment

Objectives

You will ....

Take Control

Have clarity of direction.

&

Create value in the sales process.

Demonstrate value, and maintain momentum across the sales process.

Create a sense of urgency by teaching customers about a problem they didn’t previously realize they had.

Background

Discussion

Take some time to think about what skills do you need to become a Challenger? Where do you fall? What obstacles do you face? Take a few minutes and share your insights with three people seated next to you.

Organizational Transition

• Be sure to encourage your mid-managers to leverage the Challenger Coaching Guide for its insight and expertise
• Acknowledge, respect and share the checklist

•They’ll learn to build sales challenges on your team

•Understand their role as that of a coach

•Identify Challenger capabilities on their team

•Plan individual and group exercises and

•Prepare to bring a challenger approach to sales calls

The Challenger Sale

Compete and win in a customer-empowered world

Why Challenger?

Three questions sales leaders frequently ask prompted the research leading to Challenger:

1. What sets the best sales reps apart in a complex sales environment?
2. How do you replicate winning sales behaviors?
3. How do you create a differentiated sales experience? 

We studied thousands of customers and sales professionals around the world, spanning every major industry, geography and go-to-market model, and discovered that classic relationship building is a losing approach in today’s complex business-to-business sales.

Instead, challenging customer thinking and teaching customers new insights are key.  Download Gartner's latest research to learn how Challenger has evolved.

The sales environment is complex

The traditional approach to selling doesn’t work today. Deals are increasingly complex, and customers have access to more information earlier in the sale. As a result, customers are buying in new ways, delaying initial contact with suppliers and requiring greater consensus to move forward.

Today’s customers don’t need sales reps in the same way as in the past — customers now wait until they are 57% through the purchase process before contacting a rep. Buyers do independent research and set their own purchase criteria, all before the first seller interaction.

For the first time, our customers know more about us than we know about them.

Vice President, Sales, Healthcare Industry

It’s not what you sell, it’s how you sell

Due to this more complicated sales environment, it’s no longer just about what you sell, but rather how you sell.

Our research revealed that 53% of customer loyalty is driven by the sales experience — more so than by the brand, product, service and price combined. A customer's interaction with a rep largely dictates this experience. 

Sellers fall into one of five profiles

Our research revealed that every sales professional in the world falls into one of five distinct profiles:

Hard Worker: Goes the extra mile, doesn’t give up easily, is self-motivated, likes feedback and development 

Challenger: Has different view of the world, understands the customer’s business, loves to debate, pushes the customer 

Relationship Builder: Builds strong customer advocates, is generous with time to help others, gets along with everyone 

Lone Wolf: Follows own instincts, is self-assured, is independent 

Problem Solver: Responds reliably, ensures all problems are solved, is detail-oriented

Challenger reps are most likely to win

Challenger reps outperform all other profiles. In fact, more than 50% of all star performers in complex sales environments are Challengers.

Challenger rep behaviors build constructive tension

Challengers teach, offering a unique perspective and maintaining two-way communication.

They tailor their approach according to customer value drivers and economic drivers.

And they take control of the money discussion with the customer.

Challengers lead with insight

The Challenger selling approach relies on delivering insight about an unknown problem or opportunity in the customer’s business that the supplier is uniquely positioned to solve.

Challengers capture the customer’s current belief or assumption, expose the flaws or misinformation in that thinking and present a better course of action. The better course of action helps customers learn something new about their business, usually how to save money, make money or mitigate risk.

Keys to a successful Challenger rollout

Companies who achieve the largest commercial impact from Challenger focus on building sustainable capabilities by taking a methodical approach to change management and sustaining momentum over time.

Generate buy-in

Prepare the organization

Align sales and marketing

Equip managers to coach and lead change

Build commercial insights

Design and deliver training

Embed into account planning, opportunity pursuit & CRM

Reinforce the change

Stay ahead of changing customer dynamics

Challengers win and Relationship Builders lose

Selling Is Not About Relationships

Ask any sales leader how selling has changed in the past decade, and you’ll hear a lot of answers but only one recurring theme: It’s a lot harder. Yet even in these difficult times, every sales organization has a few stellar performers. Who are these people? How can we bottle their magic?

To understand what sets apart this special group of sales reps, the Sales Executive Council launched a global study of sales rep productivity three years ago involving more than 6,000 reps across nearly 100 companies in multiple industries.

We now have an answer, which we’ve captured in the following three insights:

1. Every sales professional falls into one of five distinct profiles.

Quantitatively speaking, just about every B2B sales rep in the world is one of the following types, characterized by a specific set of skills and behaviors that defines the rep’s primary mode of interacting with customers:

• Relationship Builders focus on developing strong personal and professional relationships and advocates across the customer organization. They are generous with their time, strive to meet customers’ every need, and work hard to resolve tensions in the commercial relationship.
• Hard Workers show up early, stay late, and always go the extra mile. They’ll make more calls in an hour and conduct more visits in a week than just about anyone else on the team.
• Lone Wolves are the deeply self-confident, the rule-breaking cowboys of the sales force who do things their way or not at all.
• Reactive Problem Solvers are, from the customers’ standpoint, highly reliable and detail-oriented. They focus on post-sales follow-up, ensuring that service issues related to implementation and execution are addressed quickly and thoroughly.
• Challengers use their deep understanding of their customers’ business to push their thinking and take control of the sales conversation. They’re not afraid to share even potentially controversial views and are assertive — with both their customers and bosses.

2. Challengers dramatically outperform the other profiles, particularly Relationship Builders.

When we look at average reps, we find a fairly even distribution across all five of these profiles. But while there may be five ways to be average, there’s only one way to be a star. We found that Challenger reps dominate the high-performer population, making up close to 40% of star reps in our study.

What makes the Challenger approach different?

The data tell us that these reps are defined by three key capabilities:

Challengers teach their customers. They focus the sales conversation not on features and benefits but on insight, bringing a unique (and typically provocative) perspective on the customer’s business. They come to the table with new ideas for their customers that can make money or save money — often opportunities the customer hadn’t realized even existed.

Challengers tailor their sales message to the customer They have a finely tuned sense of individual customer objectives and value drivers and use this knowledge to effectively position their sales pitch to different types of customer stakeholders within the organization.

Challengers take control of the sale. While not aggressive, they are certainly assertive. They are comfortable with tension and are unlikely to acquiesce to every customer demand. When necessary, they can press customers a bit — not just in terms of their thinking but around things like price.

We’ll discuss each of these capabilities in more depth in our upcoming posts, but just as surprising as it is that Challengers win, it’s almost more eye-opening who loses. In our study, Relationship Builders come in dead last, accounting for only 7% of all high performers.

Why is this? It’s certainly not because relationships no longer matter in B2B sales–that would be a naïve conclusion. Rather, what the data tell us is that it is the nature of the relationships that matter. Challengers win by pushing customers to think differently, using insight to create constructive tension in the sale. Relationship Builders, on the other hand, focus on relieving tension by giving in to the customer’s every demand. Where Challengers push customers outside their comfort zone, Relationship Builders are focused on being accepted into it. They focus on building strong personal relationships across the customer organization, being likable and generous with their time. The Relationship Builder adopts a service mentality. While the Challenger is focused on customer value, the Relationship Builder is more concerned with convenience. At the end of the day, a conversation with a Relationship Builder is probably professional, even enjoyable, but it isn’t as effective because it doesn’t ultimately help customers make progress against their goals.

This finding — that Challengers win and Relationship Builders lose — is one that sales leaders often find deeply troubling, because their organizations have placed by far their biggest bet on recruiting, developing, and rewarding Relationship Builders, the profile least likely to win.

Here’s how one of our members in the hospitality industry put it when he saw these results: “You know, this is really hard to look at. For the past 10 years, it’s been our explicit strategy to hire effective Relationship Builders. After all, we’re in the hospitality business. And, for a while, that approach worked well. But ever since the economy crashed, my Relationship Builders are completely lost. They can’t sell a thing. And as I look at this, now I know why.”

3. Challengers dominate the world of complex “solution-selling”

Given the first two findings, it might be reasonable to conclude that Challengers are the down-economy reps and that when things return to normal, Relationship Builders will once again prevail. But our data suggest that this is wishful thinking.

When we cut the data by complexity of sale — that is, separating out transactional, product-selling reps from complex, solution-selling reps — we find that Challengers absolutely dominate as selling gets more complex. Fully 54% of all star reps in a solution-selling environment are Challengers. At the same time, Relationship Builders fall off the map almost entirely, representing only 4% of high-performing reps in complex environments.

Put differently, Challengers win because they’ve mastered the complex sale, not because they’ve mastered a complex economy. Your very best sales reps — the ones who carried you through the downturn — aren’t just the top performers of today but the top performers of tomorrow, as they are far better able to drive sales and deliver customer value in any kind of economic environment. For any company on a journey from selling products to selling solutions — which is a migration that more than 75% of the companies I work with say they are pursuing — the Challenger selling approach represents a dramatically improved recipe for driving top-line growth.

From The Challenger Sale: Taking Control of the Customer Conversation by Matthew Dixon and Brent Adamson (Nov 10, 2011)

Why Your Sales Reps Can’t Close

Think your team has a “closing” problem? Think again.

How often have you heard leaders say, “My salespeople can’t close”? If you’re a sales manager, you’ve probably even said it. But failing to close is never the real problem. Never. That’s just the symptom. The problem is that sales reps neglect important activities during early stages of the sales process.

Unless you address the broken links in your prospecting system, your sales reps will continue to struggle. It’s like back pain. You can stretch and put heat on an aching back, but unless you treat the source of the pain—a pulled muscle or degenerating disc—your back will continue to hurt.

Put Your Finger on the Real Problem

When you start analyzing what really went wrong with missed sales opportunities, you’ll typically discover that your sales reps didn’t make time to prepare for their meetings. They didn’t plan agendas, do their research, tailor their pitches, or even check the clients’ LinkedIn profiles to identify shared interests, connections, and similarities.

Other common prospecting problems:

• The initial prospects were unqualified. They had no idea why they were meeting with the salesperson or why they should be interested.
• The salesperson didn’t ask enough discovery questions.
• The salesperson left without getting agreement on next steps or scheduling the next call.
• Follow-up consisted of a series of emails that promoted products, didn’t address the client’s unique concerns, and had no calls to action.
• The salesperson was clueless as to why his emails were greeted with radio silence.

This is not how you wow prospects, build relationships with them, and convert them into clients.

One of my clients was on the way to a high-profile meeting. If his team wowed the client, they had an opportunity to close a million-dollar deal. I asked my client how the sales reps prepared. His answer: “Oh, we talk about it in the car on the way to the meeting.” Was their sales manager clueless, or what?

Start at the Source

If your team has trouble closing, go back to the beginning—qualifying prospects—and examine your entire sales process for missing links and broken tactics.

Ask these pointed questions:

• How are sales reps getting leads?
• How are these leads qualified?
• Are salespeople asking the right questions to identify prospects’ problems and propose thoughtful solutions?
• Do sales reps demonstrate product features, or do they talk ROI?
• What is the marketing plan for following up?

Don’t even think about training your sales team on closing techniques. Save your money. Instead, give them a sales process that works.

The ROI of Referrals

More often than not, the problem is with a team’s prospecting methods. If your reps are chasing cold leads, they’re pretty much set up to fail. There’s only one kind of lead that should be in your pipeline. Only one kind of lead with a 50-percent conversion rate. Only one kind of lead that sales managers should care about.

That’s hot leads—the kind you source through referrals from trusted allies.

Every sales professional agrees that referral selling is, hands down, their most effective prospecting strategy. When you prospect through referrals:

• You bypass the gatekeeper and score meetings with decision-makers every time.
• Your prospects are pre-sold on your ability to deliver results.
• You’ve already earned trust and credibility with your prospects.
• You convert prospects into clients at least 50 percent of the time (usually more than 70 percent).
• You land clients who become ideal referral sources for new business.
• You score more new clients from fewer leads (because all of your leads are qualified).
• You get the inside track on your prospects and ace out your competition.

Ditch the Canned Pitch—Ask the Right Questions

If your team is getting in front of the right prospects and still can’t seal the deal, they’re not engaging in insightful discussion or asking compelling questions.

Thoughtful and provocative questioning has a huge impact on close rates and sales revenues. When sales reps ask smart, probing questions to understand what their clients really need—not just what the clients think they need—the scale of projects increases, creating win/wins for everyone. Your company gets bigger deals. Clients get solutions that actually solve their problems and create measurable business results. And they are happy to offer referrals to their networks.

Bravo! You’ve addressed the problem, not the symptom. Your client looks good, your team is prepared, and deals are yours to win. You are now a true sales manager.

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