Top TEN #10 – Be the Challenger
If you’ve not read The Challenger Sale by Dixon and Adamson, I highly recommend it. Not since Neil Rackham’s SPIN Selling have I come across a better sales book. Given that its origins are from the previous financial crisis, it’s more relevant today than in 2011 when published.
Why I like it:
- Science: Like SPIN, the principles outlined in The Challenger Sale are based on surveys of hundreds of frontline sales managers. In the book’s foreword, written by Rackham, he writes: “The logic… leads to the inescapable conclusion that this is very different thinking, and it works.” He sees the Challenger approach as the fourth breakthrough in sales. Considering that the second breakthrough was ninety-five years ago, this is significant.
- Control: The Challenger approach puts sales teams in the driver’s seat. BUT, before we can get there, it compels us to know more about the prospect than they know about themselves. A deep dive into our market, customer data, and customer experiences, is the pre-requisite to gaining this control.
- Method: It’s not about what we’re selling but how we’re selling. The Challenger approach is solution selling, but in a much different way, through what they call “commercial teaching.”
- Insights: Which of the following sales types do you think is the LEAST effective? Read on for the answer but write it down first! 1. Hard Worker; 2. Challenger; 3. Relationship Builder; 4. Lone Wolf; or 5. Reactive Problem Solver.
- Good times and bad: The Challenger salesperson is successful in good economies and bad economies. Think COVID crusher. In highly complex sales, the Challenger is three times more productive than the average performer.
- Being recognized: Differentiating our solution is not a matter of increasing customer satisfaction or building a better brand. Our competitors are doing the same. Instead, we need to challenge our clients with insights and solutions that had not been considered previously. To get to this point, we need to think deeply and differently about the solution we’re providing. For starters, we should remove meaningless jabber like “word class service” and “passionate team” and other buzz-terms from our websites and presentations. They bore and say nothing that differentiates us from competitors.
Teach, tailor, take control and make waves
We all place a lot of emphasis on the value of our solutions. The Challenger model teaches us that this is no longer good enough. We must “teach, tailor, and take control” in an atmosphere of “constructive tension.”
The story starts in early 2009 during one of the worse economic periods in modern times. While most salespeople struggled to make a small sale, a few were doing as much business as ever. How could this be? This was the question that the authors and their research team set out to answer. Their research sample of 700 reps eventually grew to 6,000 and included ninety companies around the world. After analyzing their data, three key insights emerged:
- Just about every B2B sales rep falls into one of five distinct profiles.
- When they compared profiles to performance, there were “very clear winners” and “very clear losers.”
- The most successful profile (the Challenger) performs well in good economies and bad. Not because they’re masters of complex economies but because they’re masters of complex sales.
As solutions become increasingly complex, so does the burden placed on the customer. The authors call this “solution fatigue.” To combat it, they recommend a new approach: Commercial Teaching.
Commercial Teaching is not as easy as it sounds, and it’s not something that should be performed uniquely by each salesperson. It should be a team effort with the involvement of market and product experts. According to the authors, Commercial Teaching should: 1. Lead to your unique strengths. 2. Challenge customer assumptions. 3. Catalyze action, and 4. Scale.
Case Studies… the aha moment
After a lot of slicing and dicing of data, graphs, charts, and associated background information, the Challenger story comes together on page 83, with the W.W. Grainger case study.
Grainger is a large industrial parts supplier based in Lake Forest, Illinois, US. They reasoned that if the company was going to establish itself as a reliable solutions provider in the minds of its customers, it had to change the way those customers thought about Grainger. “Why should our customers buy from us over anyone else,” is the question they raised? It’s one we should all be asking.
Grainger took a deep look at their customer data, and competitors, and learned that a lot of money was being lost to inefficient purchasing practices. Often, the price of an item was only a fraction of its total cost. This problem played to Grainger’s strength because of their size and massive stocks. From their findings, Grainger came up with a Challenger approach called “The Power of Planning the Unplanned.”
“It’s a move from leading with your unique strengths to one where carefully constructed teaching interactions very deliberately lead the customer to your unique strengths. Your solution isn’t the subject of your teaching but the natural outgrowth of your teaching.”
ADP Dealer Services
Building on the Grainger case study is another by ADP Dealer Services, a provider of enterprise software to vehicle dealerships. They too did a deep dive on their data, customers, and competitors, and formulated a new approach called “Total Dealer Spend.” They focused on “the surprisingly costly but hidden impact of inefficient IT systems on overall dealership profitability.” Previously, ADP concentrated on the depth and robustness of their software. They pushed that thinking aside and thought about the customer experience – seen and hidden. Now, they had something new to talk about. Prospects were interested in meeting to learn about “Total Dealer Spend.”
Not only is our sales pitch stronger applying the Challenger approach, but it also helps to attract prospects.
Tailoring our approach, message, and pitch is a key aspect of the Challenger sale. The Solae use case (page 113) shows how this is done. Solae LLC is an international soy ingredients supplier that decided to launch “an aggressive strategy to sell bigger, more complex solutions.” Working with the prospective buyer, “Solae documents the specific outcome that the proposed solution addresses for that individual.” The best performers have the stakeholder sign off on the plan. “As a result, when it comes time for this person to decide whether or not they’re going to support the deal they’re not making their decision based on some vague notion of ‘good for the company.’”
There is a lot to learn from The Challenger Sale. Frankly, I’m still absorbing it and thinking about how best to bring this paradigm to tech firms and startups in Hungary. While individual reps may use the Challenger approach, it must be taken on-board by marketing and sales teams to be effective and scale.
We all know we need to differentiate our solution from competitors, if not we become a seller of commodities where the profits are the worst. The Challenger Sale provides a new framework for identifying our value and purpose and finding business in markets in good times and bad.
ANSWER: The low performer is the Relationship Builder. This makes clear that the approach successfully used 20 years ago is dead today. Challenge or be damned.