Building Customer Loyalty With Challenger Sales

This article is an excerpt from the Shortform summary of "The Challenger Sale" by Matthew Dixon and Brent Adamson. Shortform has the world's best summaries of books you should be reading.

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How does the Challenger Sale Model help with building customer loyalty? What strategies can you use?

Building customer loyalty has traditionally been done through careful relationship building. But researcher found that the Challenge Sale Model is even more successful in building customer loyalty. Keep reading to see why.

Building Customer Loyalty

Building customer loyalty takes time and trust. How can Challenger Sellers build loyalty? The answer lies in your pitch. With an effective teaching pitch, you can create loyal customers.

Teaching for Differentiation

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 will build customer loyalty.

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 moveable 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.

Teaching Builds Customer Loyalty

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. This is an important finding in building customer loyalty.

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 a loyal customer base. 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, and were able to build loyalty.

The Value of Insight

Building customer loyalty can be done through insights. 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:

  • Offered useful perspectives on their market
  • Helped them explore options
  • Provided advice
  • Helped them avoid potential problems
  • Educated them on new issues and outcomes
  • Were easy to buy from
  • Had widespread support across the customer’s organization

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.

Building Consensus

Since stakeholders play a strong role, it’s useful to look at the data on what drives their loyalty toward suppliers, and builds a loyal customer base. Knowing this is key to enlisting their support.

Research shows that stakeholders look for the following in a sales rep:

  • Someone who’s professional
  • Someone they can believe and trust to deliver
  • A rep who will offer useful perspectives and educate the customer.

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, and build loyalty, 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.

Building customer loyalty comes naturally when you use the teaching principle of The Challenger Sale. When you teach the customer something about the business, they see you as credible and trustworthy, and you work on building customer loyalty together.

Building Customer Loyalty With Challenger Sales

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  • Why the best salespeople take control of the sale and challenge the customer's thinking
  • How to package your company with a key insight to spark an "a-ha" moment
  • How to get the organizational support you need to maintain your sales edge

Carrie Cabral

Carrie has been reading and writing for as long as she can remember, and has always been open to reading anything put in front of her. She wrote her first short story at the age of six, about a lost dog who meets animal friends on his journey home. Surprisingly, it was never picked up by any major publishers, but did spark her passion for books. Carrie worked in book publishing for several years before getting an MFA in Creative Writing. She especially loves literary fiction, historical fiction, and social, cultural, and historical nonfiction that gets into the weeds of daily life.

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