PDF Summary:The Challenger Sale, by Matthew Dixon and Brent Adamson
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The Challenger Sale upends the conventional wisdom that building relationships with customers is the key to sales success. Instead, they contend, the best salespeople take control of the sale by challenging customers’ thinking with new insights and pushing back instead of giving in to customer demands. While there are five distinct types of sales reps, it's these so-called Challengers who consistently excel in selling the complex business-to-business solutions required in today’s business world. Based on a massive study of thousands of sales reps worldwide, the authors uncover the skills and behaviors that drive Challengers’ performance and explain how to replicate them in any sales force.
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- Is comfortable discussing money
- Can push the customer
These attributes reflect three key abilities that define Challengers:
1) Teaching: With their unique perspective on the customer’s business and communication ability, Challengers can teach for differentiation (differentiate themselves from the competition) during the sales conversation.
2) Tailoring: Because they know the customer’s economic and value drivers, they’re able to tailor for resonance, delivering the right message to the right person.
3) Taking control: They can take control of the sale because they’re comfortable discussing money and pushing the customer.
These are the fundamental activities of the Challenger Selling Model.
Teaching
In typical solutions sales training, reps are taught to be investigators: to question and learn from their customers what’s most important to them so they can offer solutions. However, the Challenger approach is to teach rather than investigate.
Effective teaching often means providing a key insight that challenges the customer’s assumptions. It shows a problem that the customer didn’t know they had, or highlights the shortcomings of other approaches. The reaction you’re going for is, “I never thought of it that way before”—”not I totally agree,” which signals agreement but not novel insight.
It’s important to connect the key insight to the strengths of your business. Namely, the problem that you highlight should be one that your company is uniquely suited to solve, above other competitors. Otherwise, the customer will take your insight and search for other suppliers, and you merely offered free consulting without generating sales.
An effective teaching conversation follows six steps:
- The warm-up: Present your assessment of the key issues facing the customer based on what you’ve seen at similar companies and get the customer’s reaction.
- Reframing: Offer a new insight that connects the issues to a bigger problem or opportunity. Don’t go into detail—just give the headline to pique the customer’s curiosity.
- ‘Rational drowning’: Present your data to build the business case for why the reframe deserves the customer’s consideration. Subject the customer to “rational drowning”—that is, present the rationale for a new approach in a way that makes her uncomfortable with her current approach and therefore open to the new approach.
- Emotional impact: Ensure that the customer connects emotionally with the issue. Tell a story about another company that thought the same way as the customer, failed to take action, and suffered.
- A new way: Review the capabilities the customer needs in order to solve the problem. Show the customer how much better her life would be if she acted differently. She has to accept the solution before buying your solution
- Your solution: Demonstrate that your company’s solution is the answer. Explain specifically how your company is best positioned to deliver the solution they've agreed to.
Tailoring
The way to build the broad consensus necessary to win a deal is to tailor the teaching message so that it resonates and sticks with each stakeholder.
To tailor a message to a particular stakeholder, the rep needs to understand:
- The stakeholder’s specific business priorities
- The outcomes the person cares most about
- The results they have to deliver (how their performance is measured)
- The economic drivers affecting those outcomes
For instance, if a rep is talking with the head of marketing, he tailors his message to her priorities. He then changes his tailoring for the head of IT, who has a very different set of priorities.
Taking Control
Being assertive, or taking control, doesn’t mean being aggressive or irritating; it means the rep stands firm when the customer pushes back.
Challenger reps assert themselves in two ways:
- They control the discussion of pricing and money in general. The rep doesn’t give in to the request for a 10% discount, but instead refocuses the conversation on the value of the supplier’s offering, rather than price.
- They challenge the customer’s thinking and pressure the customer to reach a decision more quickly in order to counter the inertia that can stall decisions indefinitely. To handle reluctance (risk aversion), the Challenger moves customers out of their comfort zone by presenting things from a different perspective.
Just as you can’t be an effective teacher without pushing your students, you can’t teach customers without pushing them to think and act differently. Reps take the lead with a specific end in mind.
Other Success Factors
In order for the Challenger Sale Model to succeed, reps need two kinds of organizational support:
1) Research and marketing expertise
A Challenger sales force needs support from the sales, marketing, research, finance, and human resources departments. These departments must assemble, analyze, frame, and package business intelligence, data, and marketing research into effective teaching pitches (new business insights) that reps can present to customers. The pitches must be compelling, replicable, and adjustable so they resonate with each customer stakeholder.
While taking control of the sales conversation is an individual skill, reps need the right information and tools from their organization to take control effectively.
2) Sales manager excellence
Frontline sales managers are the key to transforming an average sales force into a Challenger sales force. The most important capabilities in a Challenger manager are coaching skills and sales innovation.
- Coaching: Research shows that effective coaching significantly boosts the performance of average reps. Sales coaching is an ongoing series of interactions between a frontline sales manager and a rep, designed to diagnose, correct, and reinforce selling skills and behaviors. Coaching differs from training, which is for sharing knowledge. Coaching is for acting on knowledge.
- Sales innovation: Sales innovation is the key to fully realizing the potential of the Challenger Sales Model. It means finding new ways of solving problems standing in the way of deals and innovating new ways to position an offer. Sales innovation involves:
- Investigating: Managers work with the rep to understand the customer’s decision-making process and identify where a deal is bogged down and how to get it moving.
- Creating: Innovative managers create solutions (innovate at the deal level)—for instance, shifting risk from the customer to the supplier in exchange for a longer-term contract.
- Sharing: Innovative managers share best practices and pass on new ideas and solutions to the rest of the team.
Start Now
As a company, you need to start now if you want to change the way your reps interact with customers before your competitors do. There’s no doubt about what customers want. As Challengers, your reps will get more time with the customer, more invitations to come back, and more promises of action. In contrast, your customers will tell competing reps: “We'll get back to you.”
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PDF Summary Introduction
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2) One type of rep performs far better than the others and one lags far behind. And sales managers traditionally have relied on the type least likely to consistently deliver big results.
3) The sales methods used by those who fit the top-performing profile enable these reps to succeed not only in a poor economy, but regardless of the economic conditions. They succeed because they differentiate themselves from their competition by delivering value—they give the customer more than just a good price.
These reps fit the profile type referred to in the book as the “Challenger.”
PDF Summary Chapter 1: The Rise of Solution Selling
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The rep needs to develop an understanding of the customer’s issues and challenges, identify a better way to address them, explain the benefits of the proposed solution, and identify the metrics for measuring success.
To understand the customer’s issues, reps spend a lot of time asking questions like, “What’s keeping you up at night?” The back-and-forth questions and answers, presentations, proposals, and amendments take time. Also, developing solutions requires interacting with more people in the customer organization.
With multiple suppliers adopting the same approach, solutions selling has led to “solutions fatigue” on the part of the customer. In response to the increased complexity, customer buying behavior has changed in four ways:
1) Customers require consensus within their organization on the sale.
When deals are complicated and the payoff uncertain, corporate decision-makers, even at the senior level, aren’t comfortable agreeing to an expensive deal unless they know their teams support it. The sales rep has to spend time chasing approvals to build broad consensus in the company.
2) Customers are increasingly risk averse.
Customers are requiring that...
PDF Summary Chapter 2: The Challenger—Part 1: A New Model
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- Interested in feedback and development
- Follows the company’s sales process
The Relationship Builder
- Creates strong, often long-term relationships and allies throughout the customer organization
- Is generous in giving time to help others
- Works hard to meet customers’ needs
- Offers the customer accessibility and service
The Lone Wolf
- Supremely self-confident: follows her own instincts instead of rules
- The prima donna of the sales force; does things her way or not at all
- Drives sales leaders crazy by not following processes
- Does well despite flouting the system
The Reactive Problem-Solver
- “A customer service rep in sales rep clothing”—she has plans to generate new sales but gets sidetracked to fix customer problems instead of referring them to customer service people (at the expense of generating more business)
- Reliable
- Detail-oriented
- Ensures that all promises made as part of a sale are kept
- Follows up to ensure that service issues are addressed quickly and effectively
The Challenger
- Likes to debate
- Understands the customer’s business
- Isn’t afraid to share her views...
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Learn more about our summaries →PDF Summary Chapter 3: The Challenger—Part 2: Implementing the Model
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While taking control of the sales conversation is an individual skill, reps need the right information and tools from their organization to take control effectively.
Principle 4: Building a Challenger sales force takes time.
The training and transition to the Challenger Selling Model take time to do effectively. Pushing the program through quickly might boost rep productivity somewhat, but the gain will be much smaller than what could have been achieved by implementing the program properly. Also, without due diligence, reps are likely to treat the initiative as just the flavor of the month and soon forget it.
Full adoption may take years, rather than weeks or months. It’s not simply a ”bolt-on” software update—it’s a new operating system for the whole company. However, when a company makes the full investment, the Challenger Selling Model offers a way out of the solution selling quagmire.
This section explores what the Challenger Sales Model looks like in practice, based on the experiences of companies that applied it. Remember, the three pillars of the model are: teaching for differentiation, tailoring for resonance, and taking control of the sales conversation. (A full...
PDF Summary Chapter 4: Teaching—Part 1: The Importance of Insight
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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.
The next section looks deeper into the sales experience.
The Value of Insight
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...
PDF Summary Chapter 5: Teaching—Part 2: Conducting Insight-Led Conversations
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If the response is immediate agreement, then you’re saying something the customer has already thought of rather than offering new insight. You’ve failed to provide value and lost the opportunity to lead the customer to your solution.
So don’t be afraid to surprise the customer with something provocative. Once you've presented a different way to think about the customer’s problem, the next step is showing why it matters.
Step 3: ‘Rational Drowning’
In this step, you make the business case for why the reframe deserves the customer’s consideration. Quantify the cost or opportunity with data and charts. You’re subjecting the customer to “rational drowning”—that is, presenting the rationale for a new approach in a way that makes her uncomfortable.
The customer should react along the lines of “Wow, I never realized we were wasting so much money … we’ve got to address this.”
If you’re using an ROI calculator, it should calculate the ROI on solving the problem you've identified, not the ROI of your solution. You're trying to show that the problem is worth solving.
Step 4: Emotional Impact
In this step, your goal is ensuring the customer sees herself in the story...
PDF Summary Chapter 6: Tailoring for Resonance
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To build support with stakeholders, 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.
Tailoring the Message
The requirement of consensus-building means reps have to talk to many more people than they did in the past to close a deal. In addition, they have to tailor their sales message to many different stakeholders so that it resonates with each.
Tailoring a message involves four levels, starting with the customer’s industry, followed by company, role, and individual.
To start with, a supplier’s marketing experts can add significant value by helping to tailor the sales message to the industry and company levels. Numerous sources of information are available, many of them free. Marketing can determine:
- What’s going on in the industry, including trends and current events?
- Has there been a merger or has a major player recently failed?
- Is the customer’s market share growing or shrinking?
- Are any regulatory changes impacting the industry?
- What do the company’s press releases and earnings statements indicate about...
PDF Summary Chapter 7: Taking Control of the Sale
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- The foregone conclusion: A company may assign a junior employee to meet with the rep, not to learn anything new, but to confirm a decision that’s already been made to go with another supplier. The point is just to make sure they're getting the best deal. This happens nearly 20% of the time. Challengers recognize the ploy and use it to push for access to more stakeholders or decision-makers in exchange for continued dialogue. If they don’t get it, they move on to better prospects. In contrast, average reps don’t want to walk away, so they waste time on a lost cause.
- Free consultation: A customer may invite the rep in to analyze a problem and generate creative solutions—then the customer searches out the cheapest supplier. Challengers either avoid this customer or they confront the customer upfront about the effort required to analyze the problem and get everyone on board; then they request assurance that the customer will invest in the supplier in return.
Misconception 2: Reps Should Only Take Control When the Topic Is Money
Challengers take control not only on price, but also on ideas—they push the customer in how they think about their business...
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PDF Summary Chapter 8: The Manager and Challenger Sales Model
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2) Coaching (28% of Manager Effectiveness)
Coaching is a key aspect of manager effectiveness and a key driver of rep performance. Coaching entails working side by side with reps to share knowledge, insight, and to correct rep behaviors that get in the way of successful sales performance.
The key manager attributes for effective coaching mirrored the requirements for Challenger sales reps: guiding reps to tailor their message effectively, showing reps how and when to take control, and helping reps through complex negotiations.
3) Owning (45% of Manager Effectiveness)
In addition to hands-on sales and coaching skills, manager excellence entails providing leadership, direction, guidance, and demonstrating ownership of the business (running their territory as if it were their own business).
Owning breaks down into two skill subcategories: resource allocation and sales innovation. Resource allocation is the least important part of the job (accounting for 16% of manager effectiveness). It involves such things as ensuring sales process compliance, taking corrective action, and managing resources efficiently.
**Sales innovation is the ability most important to...
PDF Summary Chapter 9: Implementation Lessons
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Take steps to make training stick: Research shows that 87% of sales training content is forgotten by reps within a month. Coaching is a key way to boost retention. Other studies show that you can improve retention by what you do before and after training. Successful companies do three things:
1) Boost rep demand for change and generate buzz before training is rolled out
2) Create “safe practice” opportunities based on real accounts
3) Create ongoing behavioral certification programs to reinforce learning over time
Lessons for Marketing Leaders
Stop trying to be customer-centric: Being customer-centric can hurt your business in two ways: 1) it leads to offering discounts and other favorable terms that undermine profitability for little long-term gain and 2) it focuses reps on taking customer orders rather than longer-term goals. Instead, be an insight-centric organization that teaches customers to think differently.
Know your company’s unique benefits: You have to know your unique capabilities so you can teach your customers insights that link back to those capabilities.
Don’t use buzzwords in your pitch: If you use the terminology everyone else...
PDF Summary Afterword: A Challenging Culture
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To build respect and credibility so that your views are taken seriously, you need to show that you understand your colleagues’ needs in the same way that reps seek to understand their customers’ businesses.
Earning a Voice
To earn a voice in decisions, corporate staff need to deliver compelling insights. For example, to ensure they were making a valuable contribution, one marketing department came up with specific criteria for offering insight (similar to the SAFE-BOLD framework for designing a teaching pitch, described in Chapter 5):
- The project aligns with an issue important to management
- The department’s research is likely to uncover significant insights
- It’s within the group’s expertise
- There’s a high probability of resolution
- Resource requirements are minimal
These criteria helped the marketing research staff deliver compelling insights in presentations to the management team.
While it’s difficult to predict every skill companies will need in five or ten years, it’s clear that internal customers, like outside customers, will continue to be hungry for new insight and will appreciate partners who can provide it.
PDF Summary Appendices: Challenger Sale Bonus Materials
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- Examples: What are your next steps? What's the customer’s buying process?
Post-call debriefing questions: These questions assess the extent to which the rep controlled the conversation.
- Examples: How did this conversation move the sale forward? Where did tension occur and how did you react?
Appendix B: Selling Style Self-Assessment
Questions such as the following can help you identify your selling style. Indicate how strongly you agree or disagree on a scale of 1-5 (1=strongly disagree; 5=strongly agree). The higher your total score, the closer you are to a Challenger Selling Model.
- I often create positive, long-term relationships with customers.
- I offer customers unique insights linked to my company’s products/services.
- I’m an expert on the products and services I sell; my knowledge exceeds that of even the most expert purchaser.
- I often risk disapproval to express what’s right for the customer.
- I tailor my message based on a stakeholder’s value drivers.
- I can identify key drivers of my customer’s business and adapt my message accordingly.
- When a customer has a request, I fulfill it myself.
- In a difficult conversation,...