Ch 3: The Challenger (Part 2) - Exporting the Model
Thomson Reuters—to implement within their own sales organizations. It’s premised on the notion that with the right training, coaching, and sales tools, most reps—even ardent Relationship Builders—can learn to take control of the customer conversation like a Challenger. The Challenger Selling Model is simple in theory, but complex in practice, and early adopters will attest to that. The rest of this book is dedicated to sharing proven best practices, tools, and lessons learned to help companies, commercial leaders, managers, and reps implement the Challenger Selling Model. Before we begin this journey, it makes sense to discuss some of the fundamental principles that underlie the model and that will become themes throughout the course of this book.
Principle #1: Challengers Are Made, Not Just Born One of the questions we often hear is whether being a Challenger is a question of nature or nurture for sales reps. In other words, are Challengers born or made? There are a few ways to answer this question. One of the things we know from our research is that every rep in our study had traces of the Challenger “gene,” it just wasn’t the thing they “majored” in. But because we focused our work specifically on skills, attitudes, behaviors, and knowledge, that tell us that with the right tools, training, coaching, and reward and recognition system, you can likely equip many of your reps who minor in challenging (and maybe even those who just took a few credits in it) to act more like Challengers when they’re in front of the customer. While there may be reps who won’t make the transition, there are many, many more who will if you invest the time and energy to get them there. Furthermore, the idea that Challengers are born and not made is somewhat irrelevant. While we might not be able to rewrite their DNA, if we are able to modify non–Challenger rep behavior even temporarily as they face off with customers (to “flex,” as one member put it), that effort is likely time well spent. After all, we aren’t aware of any sales leader who is ready to let go of all but a handful of his reps and rehire an entirely new sales force—that is, no head of sales who wants to keep his job. Our operating principle with members has been to focus on arming them with the tools and training they need to improve their existing sales force right now. This is a worthy goal and one that the best organizations have shown great success in pursuing. There is ample evidence to suggest that Challengers can be made. We’ve seen this firsthand: Our own SEC Solutions group (the consulting arm of SEC) has had tremendous success helping our members to build Challengers within their own organizations. If you are a sales rep, regardless of whether or not you are a natural Challenger, this discussion of the Challenger Sales Model contains insights that will help boost your personal effectiveness as a salesperson. While your current approach may differ from the Challenger model, don’t think of these differences as insurmountable or somehow carved in stone. Understanding that these gaps
exist and, more important, that you have it in your power to close them, is a critical part of the journey.
Principle #2: It’s the Combination of Skills That Matters One of the key lessons from our work is that it’s the combination of the Challenger attributes—the ability to teach, tailor, take control, and do it all while leveraging constructive tension—that sets Challengers apart. If you teach without tailoring, you come off as irrelevant. If you tailor but don’t teach, you risk sounding like every other supplier. If you take control but offer no value, you risk being simply annoying. Thus the Venn diagram you see in figure 3.1. This is a graphical snapshot of what “good” looks like when it comes to rep performance. Think of this as a single snapshot of the “new high performer.” Because these skills are most effective when used in combination, we strongly urge our members to avoid the temptation to “cherry-pick” when it comes to rolling out the model. But just as nature abhors a vacuum, companies abhor duplicative investment. For this reason, we often hear commercial leaders talk about skipping elements of the model given recent initiatives. For instance, some companies wish to focus only on tailoring and taking control because they recently poured money into designing new sales collateral. While we can’t dictate what companies do with the model, we are upfront with our feedback around such partial rollouts: Individual elements of the model, when invested in, can deliver performance improvements over the status quo, but for the model to really work, all elements must be invested in and developed. There are no shortcuts to fully realizing the potential performance gains that the model offers.
Source: Sales Executive Council research. Figure 3.1. Key Skills Within the Challenger Selling Model
Principle #3: Challenging Is About Organizational Capability, Not Just Rep Skills Many organizations assume that the migration to the Challenger Selling Model is a question only of improving individual rep skills. For the model to really work, that is emphatically not the case. This journey is actually just as much about building organizational capabilities as it is about developing individual skills. Building a teaching capability, which we will discuss in much more detail in the following chapters, is not something that you just want your individual reps out there figuring out on their own. While it is true that some of your existing Challengers can do this effectively, an organization that leaves the teaching content up to its individual reps will be pulled in many different directions as reps promise customers solutions to myriad business issues—including many your company is not equipped to solve. The act of delivering a teaching pitch is a skill, to be sure, but the content of a teaching pitch—the business issues you teach customers to value, the idea around which you reframe how the customer thinks about their business—must be scalable and repeatable, and as such, must be created by the organization (in most organizations, this is the job of marketing). The same can be said for parts of tailoring. While there is a clear role for the individual rep on the tailoring front, namely, recognizing how to modify the teaching message for different individuals across the customer organization, the organization has an important responsibility when it comes to tailoring as well. First, organizations can leverage business intelligence and research assets to help developing Challengers better tailor their messages to each customer’s industry and company context. The organization also bears the responsibility for identifying which teaching messages will resonate with which stakeholders. A one-size-fits-all teaching message is unlikely to be tenable for most suppliers, aside from those who sell in a single line of business to a highly homogeneous set of customers. Yet individual customer stakeholder segmentation at this level, again, is just as much an organizational capability as it is an individual skill. If tailoring is half individual/half organizational, the only component of the
Challenger model that can truly be called a largely individual skill is taking control. Here is where rep upskilling will pay significant dividends, and in chapter 7 we will explain the best way to drive this behavior into the front line. However, it is worth noting that even here, the organization has a role to play. Namely, Challenger reps armed with powerful teaching messages produced by their organizations will be in a much better position to take control of the customer conversation. As well, recent SEC research shows that the organization plays an important role in equipping reps to identify and properly engage with the right stakeholders on the customer side—an important part of taking control of the sale.
Principle #4: Building the Challenger Sales Force Is a Journey, Not an Overnight Trip A big mistake we see organizations make in their Challenger efforts is assuming that change will happen instantly. Moving to a Challenger model is a commercial transformation, one that early adopters tell us takes time to get right. Precisely because the Challenger model demands changes both to organizational capabilities and to individual rep behaviors and skills, it is hard work. Ramming through Challenger training for reps without also carefully constructing robust teaching pitches for them to deliver or arming frontline managers to reinforce the right behaviors and skills might yield a small bump in rep productivity, but two outcomes are practically guaranteed: The performance boost attained will fall well short of what it could have delivered if done properly, and more likely than not it will be perceived as the training “flavor of the month,” soon to be forgotten or rejected by most reps. Early adopters attest to the fact that moving to the Challenger Selling Model is a journey. Those who’ve been down this path peg the time to full adoption in terms of years, not weeks or months. Indeed, much of the upfront effort will be spent getting your own leadership team on board with the new model. The Challenger model, in other words, isn’t a bolt-on software update—it’s a new operating system for the commercial organization. Those looking for a quick win would be well advised to look elsewhere. If you’re ready to take your organization on this transformation journey, however, read on. The advantages that are accruing to first movers are enormous. The Challenger model offers a new and powerful way out of the solution selling morass that has had sales organizations across industries and around the world in a vise grip for years.
DOES THE CHALLENGER SELLING MODEL WORK? Soon after we began sharing the findings from our research, we began hearing stories back from our members about how their reps were employing the principles of the Challenger Selling Model with customers—often to outstanding effect. Let’s look at each of the pillars of the model in turn to give a sense of what it looks like when done well.
Teaching for Differentiation The thing that really sets Challenger reps apart is their ability to teach customers something new and valuable about how to compete in their market. Our research on customer loyalty, which we’ll discuss in depth in the next chapter, shows that this is the exact behavior that wins customers for the long term. Teaching is all about offering customers unique perspectives on their business and communicating those perspectives with passion and precision in a way that draws the customer into the conversation. These new perspectives apply not to your products and solutions, but to how the customer can compete more effectively in their market. It’s insight they can use to free up operating expenses, penetrate new markets, or reduce risk. To see how this teaching approach works in practice, we’ll give you a few examples. The first is from one of our members at an office furniture manufacturer. A senior member of the company’s sales leadership team told us the story of a rep who 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?” Leveraging her product knowledge, the rep explained how they could put up a movable wall down the middle of the conference rooms, creating two rooms that would fit smaller groups of three and four. Then she talked about a product the
company offers that could help facilitate collaboration for them. She started from an insight, taught the customer about a problem they didn’t know they had, developed interest, and changed the whole direction of the account. Another good example comes from a global pharmaceutical company. Anybody who knows pharma knows about the arms race that the industry’s big players have been locked in for years—too many reps fighting to get face time with too few doctors. In this tough sales environment, this particular company was looking to break through and become the supplier that physicians prefer to spend time with. However, customer survey data clearly indicated that in the eyes of customers, suppliers were indistinguishable from one another. To cut through the noise, the company in question worked to arm its reps to teach physicians new insights—not about their products, but about how to improve their own effectiveness as medical practitioners. Relying on the company’s wealth of knowledge on disease management, their marketing team built a series of “patient journeys” that reps could share with doctors. These journeys looked at the entire cycle of an illness, from the time symptoms appear to treatment and, finally, follow-up. For a doctor, seeing the full life cycle of an illness can be pretty eye-opening. For example, the company knows that patients with a certain illness have an average of 2.5 exacerbations—frequently requiring a visit to the emergency room—a year. However, the family physician for these patients might never know that these emergencies occur between visits. As a consequence, they are treating the patients for a much less severe medical condition than the patients actually have. Once they learn this new information, they can change the patient’s treatment to avoid or substantially reduce these exacerbations, which really improves the quality of patient care the physician can deliver. This is insight physicians value, and it’s helped this particular supplier gain access to physicians in a way they never enjoyed before. One last example. In sales these days, there’s a lot of discussion about how reps can “get ahead of the RFP.” This story illustrates how teaching can be used effectively not just to get ahead of an RFP, but to actually reshape an RFP in a given supplier’s favor. The story comes from a supplier of employee benefit management services who was recently informed by a longtime customer that the company had decided to put the contract for the business out to bid in an attempt to save money. Frustrated that this longtime customer was trying to pull them into a price war, the supplier told them that they weren’t interested in that kind of partnership with a client, i.e., one based on price. So they told the customer that they would respectfully decline to submit a bid in response to the forthcoming
RFP. But not before they made a rather unique gesture. They told the customer that since they weren’t going to be participating in the bidding process, but valued the long-term working relationship they had, they would be happy to help them think through the construction of their RFP to ensure that they were requesting the right things out of their next supplier. Appreciative of the free consulting the supplier was offering, the customer invited them down for the day, where they spent a few hours outlining what should be in the bid. The discussions included advice along the lines of, “If any supplier tells you the following three things, they’re wrong. And here’s why.” “If they say you need these four things, you actually don’t, and here’s why.” “No matter what, make sure that your bid includes the following two things, and here’s why.” “If any company tells you those two things aren’t necessary, tell them they’re wrong. And here’s why. They’re just trying to get you to buy what they want to sell, but here’s why you need to insist on these two key things.” The customer found the advice to be hugely valuable, as these were points they wouldn’t have thought to consider on their own. Once the RFP was built, the supplier’s account team looked at it and said, “Okay, well, if that is the bid you’re going to put out there, then we’d like to participate since it describes exactly the kind of partnership we’d like to have with you.” This last example in particular illustrates why this teaching approach works so well. The content of the rep’s teaching pitch is carefully linked to the supplier’s unique capabilities. The ability of a sales rep to deliver this kind of unique insight is arguably the most powerful weapon in the Challenger’s arsenal and actually the biggest driver of B2B customer loyalty. We’ll focus on building this kind of teaching capability in chapters 4 and 5.
Tailoring for Resonance While teaching is above all others the defining attribute of being a Challenger, the ability to tailor the teaching message to different types of customers—as well as to different individuals within the customer organization—is what makes the teaching pitch resonate and stick with the customer. Tailoring relies on the rep’s knowledge of the specific business priorities of whomever he or she is talking to—the specific outcomes that particular person values most, the results they’re on the hook to deliver for their company, and the various economic drivers most likely to affect those outcomes. If a Challenger rep is sitting across the table from a head of marketing, he understands how to craft his message to resonate with her specific priorities. And if he’s meeting with someone in operations, he knows how to modify the message accordingly. But this isn’t just a measure of business acumen, it’s a measure of agility—the rep’s ability to tailor the story to the individual stakeholder’s business environment. What specifically do they care about? How is their performance measured? How do they fit into the overall customer organization? An example that demonstrates the power of effective tailoring comes from our member at a business services provider. Two of their reps had been jointly working one account for approximately six months, building rapport with the business leaders across the organization, all the while preparing for a big proposal presentation to the company’s CEO and management team. After multiple meetings and presentations, the reps homed in on what they thought was most needed by the customer—an outsourcing solution that would deliver cost savings to the business. But just a week before they were about to present to the CEO and his team, the reps attended their own company’s annual sales meeting, which had focused on building Challenger skills across the sales organization. At the session on tailoring, the reps realized that they hadn’t fully investigated the personal motivations and business objectives of the customer’s CEO and were potentially unprepared to make their best pitch at the upcoming meeting. They called a last-minute meeting with some of the key stakeholders in the
customer organization to better understand the personal goals and objectives of the CEO—all in an attempt to see if there was some insight they could bring to the table that would personally appeal to him. What they learned in this meeting proved invaluable. They found out that the CEO was extremely focused on the poor customer satisfaction scores the company had recently received. And they learned that the CEO was himself a technology junkie. Instead of going into the meeting with the cost savings–focused pitch they had already prepared, they switched gears and focused the conversation on ways in which the solution they were proposing not only would cut costs but could at the same time improve customer satisfaction and issue resolution response time by leveraging new technologies the supplier had recently developed. What’s more, the technology would allow everyone from the CEO down to line managers to get real-time visibility into customer service issues and issue resolution response times. The CEO immediately sat up and listened with rapt attention to the sales pitch. What was to be a standard review of a supplier proposal turned into a surprising discussion of one of the CEO’s hot-button issues. At the end of the presentation, the CEO thanked the reps for shedding new light on a persistent business problem and demonstrating capabilities that he didn’t realize the supplier had. While the competitors stuck to their standard proposals, this supplier won the business by tailoring their message to what the CEO cared about most. In a time when consensus is more important than ever to get the deal done, it’s no surprise that the rep who wins in this environment is the one who can effectively tailor the message to a wide range of customer stakeholders in order to build that consensus. This is a topic we’re going to explore in a lot more depth in chapter 6.
Taking Control of the Sale The final characteristic that sets Challenger reps apart is their ability to assert and maintain control over the sale. Now, before we go any further, it’s important to note that being assertive does not mean being aggressive or, worse still, annoying or abusive. This is all about the reps’ willingness and ability to stand their ground when the customer pushes back. A Challenger’s assertiveness takes two forms. First, Challengers are able to assert control over the discussion of pricing and money more generally. The Challenger rep doesn’t give in to the request for a 10 percent discount, but brings the conversation back to the overall solution—pushing for agreement on value, rather than price. Second, Challengers are also able to challenge customers’ thinking and pressure the customer’s decision-making cycle—both to reach a decision more quickly as well as to overcome that “indecision inertia” that can cause deals to stall indefinitely. In fact, if you think about it, if a key to a Challenger rep’s success is teaching —or reframing how that customer sees their world—then the rep is going to have to be willing to get a little scuffed up in the process. Just as you can’t be an effective teacher if you’re not going to push your students, you can’t be an effective Challenger if you’re not going to push your customers. This approach is so important today with customer risk aversion as high as it is. It’s funny, sales leaders often lament that core-performing reps fall into their comfort zone when selling, but arguably the bigger problem is that customers often fall into their comfort zone when it comes to buying. And that’s what the Challenger rep does—she moves customers out of their comfort zone by showing them their world in a different light. The key, of course, is to do this with control, diplomacy, and empathy. As one of our longtime members, the former CSO of one of the world’s largest chemical manufacturers, explains, “In practice, asserting control can take many forms. In essence, it means that the sales professional takes the lead in the customer discussion with a specific end in mind.” While the entire toolkit for taking control is both large and complex, there are many simple tools that can be applied with power.
“Discussions over price—price increases or requests for price decreases—are very high-value areas for the sales professional to take control of,” he says. “When the topic of price comes up, a powerful technique is for the sales professional to shift the discussion from price to value. The value of the current offering is a great place to start this dialogue. During the course of such a discussion, it is useful to get the customer to rank the elements of the offering in order of importance. This sometimes enables the customer to see the offering in a different light; these new insights are very useful to both the sales professional and the customer as they think about value.” He told us the story of one of his sales reps, who was in a situation where he had to let a longtime customer know about a price increase—one that was not only substantial, but also out of sync with the economy. None of the customer’s other suppliers were raising prices, but the raw material for the supplier’s product had gone up so much that it dictated the need. At the same time, years before, that same customer had requested that the product be shipped in an expensive, nonstandard package. Over time, the cost of this package had substantially reduced the profitability of the business for the supplier. During the discussion of the price increase, the sales professional asked the customer to rank the various features of the supplier’s offering. The expensive custom packaging didn’t rank in the top three. As a consequence, the supplier and the sales professional agreed to a lower price increase and a shift to standard packaging. The change in packaging improved profitability more than the price increase itself. “This was a great outcome,” he said, “using a relatively simple device to assert control in a price discussion to deliver a win for both parties.”
A ROAD MAP FOR THE REST OF THIS BOOK What’s the best path to building Challenger reps? Here is how we’ll tackle this question in the following chapters: • In chapters 4 and 5, we’ll look at the notion of teaching. We’ll address the questions of why teaching works and what your reps should be teaching in the first place—as well as what the content of their “teaching pitch” should look like. Much of this chapter will center on the critical role that the organization—in most companies, marketing—plays in identifying “customer-worthy insights” that lead to a supplier’s unique capabilities. • In chapter 6, we’ll look at tailoring. We’ll take a deep dive into why tailoring is an effective approach in today’s sales environment and look at what the best sales organizations do to equip their reps to tailor—in other words, get them to adapt their sales approach and message to specific individuals across the customer organization. A critical part of the tailoring story is the shift we discussed in chapter 1 toward consensus buying within customer organizations. We’ll spend some time unpacking this trend in more detail in chapter 6. • In chapter 7, we’ll dig deep into the area of taking control and discuss techniques for getting reps to increase their assertiveness without becoming aggressive. As mentioned before, taking control is an easily misunderstood element of the Challenger Selling Model. Poorly applied, it will do more harm than good, but correctly applied, it can be the difference between a decision and “no decision.” In a world where the customer’s status quo is really your worst enemy, and customers are so increasingly risk-averse, the ability to take control can be a game- changer for your sales reps. • In chapter 8, we will look at the critical role of the frontline sales manager in building Challengers across the sales force. Specifically, we’ll look at the issue of coaching—something most sales organizations continue to neglect. This is an area of deep expertise for the Sales Executive Council and one where we have some counterintuitive data and powerful best practices to share with you. The story doesn’t end with coaching,
however. In some recent work we’ve completed, we’ve found that high- performing sales managers also possess a unique ability to innovate at the deal level with their reps. If coaching is about imparting skills known to drive sales success, sales innovation is about moving individual deals forward in a purposeful manner. They’re different skills, but both are hugely important in an organization seeking to make a shift to the Challenger model. • In chapter 9, we’ll offer some additional words of guidance to leaders who are seeking to transform their commercial organizations into Challenger organizations. If you’re going to embark on this journey of building Challengers, how do you design the change effort so that it leads to real, long-term change and not just the next “flavor of the month” upskilling effort? • Lastly, in the afterword, we’ll look at the notion of challenging beyond the world of sales. The Challenger model is one that, we believe, is a business concept, not just a sales concept, and is one that we’ve seen effectively employed in a variety of corporate settings—from IT to HR to finance, legal, and strategy—and we’ll discuss this in more detail in this closing section of the book.
4 TEACHING FOR DIFFERENTIATION (PART 1): WHY INSIGHT MATTERS OVER THE LAST fifteen years, most sales training has centered on a core principle: The shortest path to sales success is a deep understanding of customers’ needs. If you’re going to sell “solutions,” the thinking goes, you’ve got to first “discover” your customers’ most pressing points of pain and then build a tight connection between what’s keeping them up at night and what