Ch 9: Implementation Lessons from Early Adopters

LESSONS FOR SALES LEADERS

Not Every High Performer Is a Challenger It’s easy for executives to slip into the trap of assuming that all their high performers are, by definition, Challengers. There are lots of things that all high performers do, but only some of them (roughly 40 percent, according to our data) get there by teaching, tailoring, and taking control. Part of the Challenger Selling Model is institutionalizing what your Challengers do naturally—studying the way they teach, tailor, and take control within your specific industry, with your specific customers, and sharing that knowledge with your entire sales force. To do this effectively, you need to be sure you aren’t mistakenly documenting the tactics and habits of a high- performing Relationship Builder or Lone Wolf. It’s absolutely critical that companies first correctly identify their Challengers before they can observe how their Challengers are selling to customers right now. Just asking managers to identify their Challengers won’t work, as they’re more likely to pick their high performers, regardless of actual selling style. Our Solutions group uses a diagnostic for our clients that is built off the original Challenger survey; it asks the same set of questions that we used to create the Challenger Selling Model. You can find a simplified version in appendix B to give you a sense of what that diagnostic looks like. Just as every high performer is not necessarily a Challenger, not every Challenger is a high performer. We’ve found some organizations with “inactive” Challengers—they have the right skills but aren’t aware of how to apply them. Once they are exposed to the framework of teaching, tailoring, and taking control, these skills become “activated” in a new and powerful way.

Beware the Call of the Lone Wolf Close observers of our research could make the argument that Lone Wolves actually have the highest probability of being high performers—and, technically, they would be correct. While Lone Wolves represent the smallest percentage of the overall sample of sales reps (at 18 percent), a full 25 percent of all high performers fall into the Lone Wolf profile—in other words, of all the profiles, the chances are greatest that a Lone Wolf pulled out of a crowd would actually be a high performer. But jumping from this observation to the conclusion that all reps should be Lone Wolves is a folly. An all–Lone Wolf sales force follows no pattern. By definition, Lone Wolves don’t follow any process or set of rules aside from their own. That makes it impossible to model and replicate their behaviors across the sales organization. The top performers in this kind of environment may do well, but there’s no way to bring your core performers up to their level in the same manner. Lone Wolves also struggle in the collaborative, team-based environments required to bring more complex solutions to customers. As a VP of sales from a high-tech company recently told us, “In our organization, we are moving rapidly to having to sell as a team instead of selling individually. Lone Wolves are a cancer in an environment like this.” While individual Lone Wolves can be effective on their own, a team of them is a team that doesn’t sell anything. We have also found that sales rep profiles are in part a function of their environment. Reps will generally pursue the approach that will make them the most money—whatever their company rewards and celebrates. If Lone Wolves dominate a sales organization, this is most likely because those reps are being told, explicitly or implicitly, to try to figure out what works on their own. In this kind of environment, the company loses all credibility and is seen by reps not as an authority on what customers value—a source of intelligent guidance and counsel—but as a roadblock to a rep’s success. The company, in the Lone Wolf sales force, is an entity to be avoided because it adds no value to a salesperson. The things the company has developed, like training, sales process, CRM, tools, and many more, are of little value to the Lone Wolf. While reps may hit quota in an organization like this, it is in spite of, not because of, the support and guidance provided by management.

Start Recruiting for Challengers Yesterday We believe strongly that Challengers can be built. As we roll out our Challenger training, we’re finding that reps are excited to play this role with their customers, and once the model is unlocked for them, they can start challenging their customers right away. However, it also makes sense for companies to start recruiting Challengers to replace any reps who naturally turn over within the organization or to fill new positions made available as the organization grows. Hiring for Challengers requires a different approach to interviewing and screening. We provide a Challenger Hiring Guide to help with the process (you can find it in appendix C). The guide is organized around the key competencies of the Challenger rep. It offers sample questions an interviewer might ask, stipulates what the evaluation standard should be for each competency, and then offers some red flags to look out for. For instance, one of the competencies of the Challenger is the ability to offer a unique perspective to the customer. An interviewer can probe for this by asking questions like, “How do you usually open a sales conversation with a customer?” or “Can you describe a time when you got a customer to think of their problem or need differently?” The interviewee’s pitches should highlight customer benefits before supplier strengths and, ideally, offer unique insights that prompt the customer to think differently about their world. The key red flags to watch out for are feature- and benefit-focused pitches. This tool has been successfully adopted by many of our members. One of the companies we work with in the beverage industry reports that their new reps, recruited using the Challenger guide, are “running circles around the existing sales team.” While we’ve also heard some success stories from members using commercially available prehire screening tools to identify Challengers, this has come mainly from retrofitting existing tools to “search for” Challengers out in the labor market. While there are many prehire assessment tools available for sales, none have been built specifically to identify Challengers. Until somebody offers a fix for this problem, we recommend that sales leaders use caution when leveraging existing prehire assessment tools to screen for a profile they weren’t actually designed to identify.

Individual Skill and Organizational Ability Are Best Developed in Parallel While it’s clear that companies must invest in both organizational capabilities and individual skills to get the full benefit of the Challenger Selling Model, it’s less clear whether there is a proper sequencing of those investments. Should companies first build organizational capabilities or develop rep skills? This is a question we hear often from our members. Our answer is that the best organizations will invest in both elements of the model concurrently. We have heard from companies that attempted to develop Commercial Teaching messages without also boosting sales rep awareness and skills that their reps rejected the new teaching messages, preferring to go back to what they’re comfortable and familiar with. Similarly, companies that invested in rep skills but not in organizational capabilities left reps feeling that they lacked the tools to truly execute on the model as it was intended to be employed. By contrast, organizations that pursue both tracks simultaneously are primed for effective, dynamic collaboration. Reps, seeing the power of the Challenger approach, create pull-through demand for teaching messages from marketing, while marketing, having similarly bought into the vision of the Challenger approach, enlists sales as a powerful source of insight raw materials (i.e., messages being delivered by high-performing Challengers right now).

Don’t Just Change the Training, Change What Happens Before and After Outside of compensation, sales training represents one of the biggest discretionary spending areas for a sales organization. It also represents one of the biggest time and money sinks. Research by Neil Rackham has shown that 87 percent of sales training content is forgotten by reps within thirty days. The Challenger Selling Model requires large-scale behavior change from reps, putting heightened pressure on sales L&D (learning and development) functions to deliver change and sustain it over time. Coaching is a principal lever for boosting training stickiness. But there are other important considerations as well. In a recent Sales Executive Council study, we found that some of the biggest opportunities for improving sales training content retention have little to do with improving the training itself. Instead, it’s what companies can do before and after training that really makes a difference. Leading companies are doing three things to significantly boost the ROI of their training investments: First, they are boosting rep demand for change and generating training buzz before it is rolled out; second, they are engineering high-quality experiential learning that gives reps a sense of “safe practice” focused on real accounts; and third, they are creating sustained behavioral certification programs to reinforce learning over time. This is one of the big differences in the way our Solutions group has designed our Challenger Development Program. While the content of the training is obviously unique since it is built around the Challenger behaviors, it’s also about helping member companies generate the sort of “social demand” they need in order to avoid the perception that the training is just another top-down mandate. In addition, we focus heavily on the concept of “safe practice,” delivering experiential learning in the classroom that’s led by former sales leaders from companies like DuPont, Merck, Nike, IBM, Bank of New York Mellon, and Procter and Gamble. And it’s important that we get beyond the usual “did you learn anything?” assessments that most companies focus on as a way to gauge whether training “stuck” at all with reps, and instead focus on a structured approach to reinforcing the training on an ongoing basis (spending a lot of time with managers, who will drive this change through ongoing coaching) so that we can certify that reps are actually practicing the new behaviors they learned in the

classroom and achieving the intended sales results. These principles are smart to adhere to. We advise all of our members to think hard about the “before and after” of their training so that they can make sure there’s demand for it among reps and so that they know they’re getting a return on this important investment.

LESSONS FOR MARKETING LEADERS

Stop Telling the World How “Customer-centric” You Are More than ever before, suppliers are emphasizing how they put “the customer first.” The assumption is that if you want to grow coming out of the recent downturn, you’re going to have to ensure that everything you do delivers maximum customer value. But there are several ways to be “customer-centric” that are actually bad for business. Two examples of this that we hear frequently from SEC members are (1) discounts and other terms and conditions that undermine profitability in exchange for little long-term gain, and (2) assuming an order-taker posture with the customer (i.e., taking short-term orders when the customer is pushing for them, instead of getting them to think about longer-term business). We have heard the term “customer-centricity” so overused that it has been completely watered down. Just because you involve customers in your R&D process, for example, does not mean your average sales rep understands, as one of our members put it, “what your key customer does and struggles with for ten hours a day in their office.” That is customer-centricity in the sales world—and it’s very rare that reps have this. The bottom line is very simple: If you truly want to build a “customer-centric” organization, then you’re actually going to have to build an insight-centric organization—a commercial enterprise specifically designed to generate new-to- the world insights that teach customers to think differently not about your products and solutions, but about their business.

There Is No Sidestepping the “Deb Oler Question” “Why should your customers buy from you instead of your competitors?” If you can’t answer this question, you don’t have a Challenger Selling Model. The Challenger approach is about reframing the customer’s worldview, giving them a new way to think about how to save or make money. There are lots of ideas for saving and making money that your customers might value, but most of these aren’t going to link back to capabilities where you outperform the competition. If you can’t say what differentiates you—why your customers should buy from you instead of a competitor—you can’t teach them to value what makes you different. Every company has some unique differentiator, otherwise they probably wouldn’t exist. That said, when it comes to the insights that lead to those unique benefits, there’s no need to start from scratch. Savvy marketing organizations understand that they have Challengers out in the field right now teaching customers new insights that can jump-start their own efforts to build more scalable—and sustainable—Commercial Teaching capabilities.

Never Put These Ten Words in Your Pitch Deck Take a close look at your standard pitch deck, the “about us” section on your corporate home page, or your PR material. Highlight every instance of the words “leading,” “unique,” “solution,” or “innovative.” In particular, go find all instances of the phrase “We work to understand our customers’ unique needs and then build custom solutions to meet those needs.” Then hit the delete key. Because every time you use one of those buzzwords, you are telling your customers, “We are exactly the same as everyone else.” Ironically, the more we try to play up our differences, the more things sound the same. Public relations expert Adam Sherk recently analyzed the terms used in company communications, and the results are devastating. Here are the top ten:

By definition, there can be only one leader in any industry—and 161,000 companies each think they’re it. More than 75,000 companies think they’re the “best” or the “top”; 30,400 think they’re “unique.” “Solution” also makes an appearance at number seven—so if you think that calling your offering a “solution” differentiates you, think again. If everyone’s saying they offer the “leading solution,” what’s the customer to think? We can tell you what their

response will be: “Great—give me 10 percent off.” We don’t mean to be unsympathetic here. You’ll find it’s hard to avoid these terms—heck, we call our own consulting arm “SEC Solutions”! In all of our time at the Council, we have never once met a member who doesn’t think her company’s value proposition beats the socks off the competitors’. And it’s understandable. After all, why would we want to work for a company whose product is second-rate—especially when our job is to sell that product? But what the utter sameness of language here tells us is that, ironically, a strategy of more precisely describing our products’ advantages over the competition’s is destined to have the exact opposite effect—we simply end up sounding like everyone else. Our members’ customers told us the same thing: As great as your products are, they’re not that much different from the competition. No matter how much you tell customers, “We’re here to create quantifiable business value,” keep in mind that the next sales rep through the door is saying the exact same thing. We once spoke to a procurement executive at a food company who told us, “Every time I hear the word ‘value,’ my defenses go up, because that’s when I know they’re trying to sell me something.” Just as a parent can tell twins apart in a way no one else can, you can see our products’ nuances and their uniqueness— but your customers probably can’t. That said, it is possible to differentiate yourself from the competition. The trick is not to describe your differences, but to make customers value them. And to do that, remember these two things: First, be memorable, not agreeable. It’s nice to have a business conversation about profits and capabilities, or a relationship conversation around sports and kids, but unless you frame your conversation around an edgy or unique insight, the customer will forget everything you said as soon as you walk out the door. Being different sounds risky, but it’s better than being forgettable. Second, build a pitch that leads to your solution, not with it. Before even talking about your capabilities, teach customers about a problem they didn’t even know they had—one that you can solve better than your competitors. Only then should you lead into the details of your specific solution.

LESSONS FOR ALL SENIOR LEADERS

Tolerate (Limited) Rejection of the Model One of the questions we get frequently is about high performers who aren’t Challengers. Should organizations force reps who beat quota—but are more naturally disposed to a different, non-Challenger selling approach—to change how they engage with customers? Our answer is no, you shouldn’t, but there are some important caveats here. One of the lessons we’ve learned about any type of change in the sales organization is that companies shouldn’t shoot for 100 percent adoption. We’ve found that the best companies shoot for 80 percent adoption of any change— whether a new skill, tool, process, or system. The final 20 percent is always hugely painful to attain. Exemplars shoot for 80 percent and let the rest of the organization come along at their own pace, provided these reps are beating goal (and not being detrimental to the broader transformation effort). The same rule applies for driving the Challenger approach among sales reps. Some reps will simply buck the journey and point to their performance as evidence that they don’t need to change. This is fine, but only as long as they continue to beat goal. The way we think about it is this: When a new standard for sales excellence has been defined by the organization (in this case, the Challenger Selling Model), those who refuse to make the journey are effectively the new Lone Wolves. And as we discussed earlier in this book, the rule of thumb for managing a Lone Wolf is “live by the sword, die by the sword.” The minute their performance slips, they need to adopt the new approach or relinquish their seat in the organization to somebody else who will. High performers share a common code—they are always eager to understand how they can improve their own performance. Therefore, they are usually the first reps to want to try something new. Think of these reps as your elite athletes. Athletic high performers are always looking for that extra edge. If there is a new technology that helps, they adopt it. If there’s a new training approach they believe in, they incorporate it. If there is a new skill that’s been shown to yield better results, they want it. High-performing salespeople are no different. They are the ones who will read up on sales (many of them have probably beaten you to the punch in reading this book). They are always on the lookout for messaging, tools, and ways to position deals that have been tried successfully by

their peers. But like elite athletes, high-performing reps are highly discriminating. If they don’t see value in a new approach, they will reject it. Therefore, if companies can identify their high-performer Challengers (as well as high-performer managers who exhibit Challenger skills) and turn them into champions early on, the rest of the organization is likely to follow. Right now, the Challenger Selling Model is a novel approach, but soon it will become the standard. Those who refuse to adopt it will find it increasingly difficult to engage with customers when those very customers are being engaged by reps from other companies who are employing Challenger methods. The state of the art moves and evolves. Advantages accrue to the early adopters, to be sure, but eventually adoption isn’t an option anymore; it’s a requirement. For sales leaders struggling with that “final 20 percent” who refuse to make the journey now, it’s really just a matter of time. If these reps are beating quota, let them sell their way. But they’ll find that overper-formance harder to attain year after year, will get frustrated as others in the organization displace them on the President’s Club rankings, and they’ll give the new methods a shot too.

Expect Casualties Some of your reps—in our experience, between 20 and 30 percent—probably won’t make the transition to the Challenger model. Maybe they’re just too stuck in their ways, or maybe when they see the Challenger profile, their reaction is, “Whoa, that’s not what I signed up for.” This doesn’t mean they’re bad employees. But it also doesn’t mean you’d want them in a quota-carrying role, especially on your more complex accounts. Many of our members have found these individuals to be extremely well suited, for example, to a customer service role, or perhaps even more intriguing, for a marketing or product specialist role—places where they know the frontline business well, but aren’t on the hook to face off with customers in a challenging manner in the same way a sales rep will need to. Either way, keep in mind that if 20 to 30 percent of your sales force can’t make the transition, that means that 70 to 80 percent can. And that’s really good news for sales leaders. Remember, this isn’t about rewiring people’s DNA or changing who they are as a person. It’s about equipping them with the skills, tools, and coaching they need to act like a Challenger when they’re in front of the customer—and that’s something many reps not only are able to do, but also are excited to try. It offers them a whole new and much more concrete path to professional success than they’ve ever had in the past. We’re not asking reps to change who they are, just how they sell.

Consider Piloting Before Broadly Launching W. W. Grainger, Inc., profiled in chapter 5, took a very careful, pilot-based approach to rolling out their new sales model and teaching collateral. Most companies pilot new tools to understand what modifications should be made before launching them to the entire organization, but Grainger goes one step further. They pilot tools to understand when and why adoption will plateau. They’re after four questions, specifically:

How big is the early adopter group for this tool (i.e., when is the adoption curve likely to plateau)?
Who are the early adopters, and how are they different from nonadopters?
What metrics can we track to more accurately predict the impact of this tool?
What can we learn from this experience to improve tool impact and push greater adoption among the majority who don’t adopt? By answering these questions, Grainger’s sales operations team can build a plan for how to break through adoption plateaus when they occur. Grainger finds that reps naturally cluster into one of the following time-based segments when deciding whether to adopt a tool: early adopters, majority, laggards, and naysayers. Pushing too early for adoption to a given segment before successfully winning over the previous segment can be a waste of organizational energy. For example, the majority population waits to observe early tool success, while the laggards need to see success from a peer closer to their segment before acceptance will occur. Targeting the correct population at the right time with the appropriate advocates and through the right channels is the key to driving adoption beyond the “chasm” that companies normally hit once the early adopters have all adopted—very similar to rolling out a new product to the market. One additional note about the Grainger adoption practice: Proximity matters. Something sales managers love to do is to tell their average performers to do what their high performers do. But modeling star-performing sales behavior as a way of “selling” change internally can actually lead to failure. In terms of prescribing the right actions, following high-performer behavior is the right play

—and this book goes into some detail about our perspective on a specific set of high-performer behaviors that you should replicate—but when it comes time to roll this change out, this approach of “do what the high performers are doing” can actually do more harm than good. Why? People don’t start using tools or practicing certain behaviors because star performers have success—they use them because people just like them are having success. To roll this new approach out to the broader sales force, you also need to look for and document examples of average performers in different markets or with different product portfolios who went from non-Challenger to Challenger and had success doing it. And that obviously can’t happen without the right type of pilot.

Terminology Matters We know that the term “Challenger” can rub people the wrong way. We’ve heard every manner of pushback here you can imagine. Some companies fear it will make their reps think it’s okay to be aggressive or brutish in the market. Others fear that drawing a contrast with the Relationship Builder will make reps think that relationships are no longer important to your business. Some of our members have asked us why we wouldn’t instead call the Challenger the “New Relationship Builder” if, in fact, we are saying that the Challenger actually builds stronger relationships with customers. The reason is simple: Nobody cares about “New Relationship Builders.” In case you don’t believe us, ask yourself this: Would you have bought this book if it was about how to build “New Relationship Builders”? The answer is almost certainly no. In order to get the organization to pay attention to the change you are driving, you must create cognitive dissonance. There must be a moment when reps understand, very clearly, to “do this, not that.” If the new model feels like a tweak on the old . . . well, why bother changing? Change, after all, is hard work. If reps see a clear A-to-B move (versus an A v1.0-to-A v2.0), they are far more likely to see this as different instead of a flavor of the week, or worse, more of the same. Don’t water down the message. Part of the power of this research (as confirmed by early adopters of the model itself) is the contrast it offers between the old way and the new, more effective way to sell. Aligning the message to the old way of selling means that reps may adjust behavior at the margins, but most will fail to see it for what it is and won’t do anything differently as a result. The best gauge of the power of your message to the organization is how many people disagree with you and want to debate—this is probably true of anything, but it’s especially true when you’re talking about driving change in the sales organization, whose inertia around legacy ways of doing things can be hard to break, to put it mildly. If you are a sales leader or a training professional, in other words, you need to be a Challenger yourself. Teach reps to value the change you are selling to them. Picking agreeable terms that don’t ruffle feathers might make everybody in the organization feel good, but rest assured, few will remember what you said and

you will be far less likely to compel change as a result. And, as we know, the same is true for reps presenting to customers—it is the Challengers’ desire to create constructive tension (often with specific language and data that reframe the customer’s view of things) that creates a differentiated sales experience, one that ultimately builds more loyal customers.

Beware the “Challenging Won’t Work Here” Trap A question we get from our members who operate global sales organizations is whether the Challenger Selling Model is appropriate for non-Western markets. The root of this question is typically based on the concern that in certain markets, namely in Asia-Pacific, “challenging” is sometimes seen as aggressive, arrogant, and potentially offensive to customers. We argue that one of the fundamental precepts of the Challenger model—that customers reward those organizations and those sales reps who bring insight to the table—is true regardless of where you sell or to whom you sell. This is corroborated not only by our own customer loyalty study, which included customers from around the world, but also by our members, many of whom have years of experience managing sales organizations in overseas markets. The desire for new ideas to help save money or make money is not limited to Western customers. However, some concepts likely need to be finessed so sales reps and managers in certain geographic markets like Asia-Pacific don’t reject them out of hand. We have found that some Asian sales organizations balk at the term “Challenger” and don’t like the notion of “teaching” customers. Both the problem and the solution are semantic in nature. While we would argue for not watering down the Challenger message by giving it a different name, it is relatively easy to shift terms like “teaching” to “sharing and delivering insights.” One of our members shared her experiences presenting the Challenger work to her sales teams in China. She was surprised at the unenthusiastic response to her first few presentations. After three such sessions with local sales teams, she pulled one of her longtime direct reports aside to ask why the sales managers and reps didn’t seem excited about the Challenger concept—after all, their peers in the United States and in Europe were really fired up about it. Her direct report explained that the sales teams did find the research interesting, but they were concerned about some of the language. He suggested a slight modification: Add the word “respectfully” before she said things like “teach,” “challenge,” or “take control.” In the next session, with this slight modification, she found the sales teams much more engaged throughout the discussion—asking questions and talking openly about how to “respectfully challenge” their customers’ thinking

by bringing new insights to the discussion. While challenging holds in non-Western markets, the way in which one challenges is probably a little different. The way that ideas are introduced to and discussed with the customer could vary based on cultural patterns of behavior, but this is no different from the way selling has always been done. While the basic principles are the same for every culture, the execution varies to meet local norms of behavior and dialogue. In other words, challenge but tailor accordingly!

Start Now We said it before, but we’ll say it again. If you are looking for a quick fix, look elsewhere. We have seen quick wins from rolling out the Challenger Selling Model—one company we helped implement the model reported 6 percent market share growth in twelve months, and another brought in their largest-ever deal within a quarter of rolling out Challenger training—but getting it fully “installed” won’t happen overnight. The Challenger Selling Model is a commercial transformation. Getting it right requires significant changes to the way sales and marketing interact, to the kind of tools you arm your reps with, the sort of reps you recruit, the kind of training you deliver to them, and the way managers interact with them. Getting this right —all of it—is hard. The majority of the companies profiled in this book would tell you that this transformation took not months, but years, and that their work continues to this day. As we said earlier in this book, the Challenger Selling Model is a new operating system for the commercial organization, not just another “bolt-on” application to the existing system. It’s not all bad news, however. Moving now means changing the way your reps interact with customers before your competitors do—and the data is very clear about what customers want. While the competition sends out Relationship Builders equipped to have only fact-, feature- and benefit-focused conversations, your Challenger reps are leading with insights, teaching customers about problems they didn’t even know they had. The competition’s reps will earn glances at the clock and disingenuous offers to “get back to them on their proposals.” Your reps will earn more time from the customer, open invitations to come back, and sincere promises to take action. While the competition focuses its energies on finding customers, you will be out there making customers.

AFTERWORD CHALLENGING BEYOND SALES THE OBSERVATION CAME up at a lunch break at one of our member meetings in late 2009. We’d just finished presenting the Challenger findings to the thirty members or so in attendance, and the head of sales from a high-tech company leaned over and said, “You know, I find this Challenger stuff really fascinating—not because of what it says about salespeople, which is interesting,