History of sales
The history of sales has been one of steady progress interrupted by a few real breakthroughs. First breakthrough was split in sales roles into hunter-farmer model. In insurance companies’ people that sold insurance were also the ones collecting payments, until those two roles didn’t split. Second breakthrough happened in July 1925, when E. K. Strong published The Psychology of Selling. Book introduced the idea of sales techniques, such as features and benefits, objection handling, closing and open and closed questioning. The third great breakthrough came in the 1970s when sales skills and techniques evolved to cover more complex sales processes.
There has been a breakthrough development on the other side of the selling interaction. Purchasing has gone through a major revolution. So next breakthrough in sales can be a response to revolution in purchasing.
We can put salespeople into five buckets:
- The Hard Worker
- The Challenger
- The Relationship Builder
- The Lone Wolf
- The Reactive Problem Solver
The relationship and the purchasing decision have become decoupled. A customer relationship is the result and not the cause of successful selling. If you help customer think differently and bring them new ideas – which is what the Challenger rep does – then you earn the right to a relationship.
It’s one thing to sell to reluctant, even nervous customers. It’s another thing altogether to sell to no one at all. And that’s where we were in early 2009. Reps are winning because they’ve mastered the complex sale, not because they’ve mastered complex economy. Reps that are able to succeed in a complex sales model are good at solution selling or solutions approach. Solution selling comes in many flavors, but generally describes the migration from a focus on transactional sales of individual products (usually based on price or volume) to a focus on broad-based consultative sales of “bundles” of products and services.
Shift from product selling to solution selling is burden with two challenges. One that it places on customer and second on the rep. a shift to solution selling results in customers’ expecting you to actually “solve” a real problem and not just supply a reliable product. Burden on customer is time and timing. Customers should trust that they will get something in return for their troubles. This has led to “solutions fatigue”.
Four trends of customer buying behavior evolution:
- The rise of the consensus-based sale
- Increased risk aversion
- Greater demand for customization
- Rise of third-party consultants
In transactional selling environment, the performance gap between average and star performer is 59 percent. In solution selling companies that gap is almost 200 percent.
The Challenger research
Variables testes can be divided into:
- Attitudes
- Desire to seek issue resolution
- Willingness to risk disapproval
- Accessibility
- Goal motivation
- Extent of outcome focus
- Attachment to the company
- Curiosity
- Discretionary effort
- Skills/behaviors
- Business acumen
- Customer-need assessment
- Communication
- Use of internal resources
- Negotiation
- Relationship management
- Solution selling
- Teamwork
- Activities
- Sales process adherence
- Evaluation of opportunities
- Preparation
- Lead generation
- Administration
- Knowledge
- Industry knowledge
- Product knowledge
Five profiles:
- Hard worker
- Always willing to go extra mile
- Self-motivated
- Interested in feedback and development
- The reactive problem solver
- Reliably respond to internal and external stakeholders
- Ensures that all problems are solved
- Detail-oriented
- The relationship builder
- Builds strong advocates in customer organization
- Generous in giving time to help others
- Get along with everyone
- The lone wolf
- Follows own instructions
- Self-assured
- Difficult to control
- The challenger
- Always have a different view of the world
- Understand the customer’s business
- Loves to debate
- Pushes the customer
Hard worker believes that doing the right things the right way will inevitably get you result. Relationship builder is about building relationships. The lone wolfs are the “primadonas” of the sales force. The problem solvers are customer service reps in sales reps clothing. Challengers are the debaters on the team. They’ve got a deep understanding of the customer’s business and use that understanding to push customer’s thinking and teach them something new about how their company can compete more effectively.
The challengers are the most successful. Six attributes are important for the challengers:
- Offers the customer unique perspective
- Has strong two-way communication skills
- Knows the individual customer’s value drivers
- Can identify economic drivers of the customer’s business
- Is comfortable discussing money
- Can pressure the customer
A Challenger is really defined by the ability to do three things: teach, tailor and take control.
- With their unique perspective on the customer’s business, challengers are able to teach for differentiation during the sales interaction.
- Possess a superior sense of a customer’s economic and value drivers, they are able to tailor for resonance, delivering the right message to the right person within the customer organization.
- They are comfortable discussing money and can, when needed, press the customer a bit and take control of the sale.
Relationship builder only represent 7% of high performers compared that to 39% of challengers. The challenger is focused on pushing the customer out of their comfort zone, the relationship builder is focused on being accepted into it. In complex sale difference is even bigger, with challenger dominating it with more than 50 %. In transactional parts of business hard workers are probably the best.
The Challenger Selling Model
The Challenger Selling Model is an approach to sales that is based on what challengers do. It is simple in theory but complex in practice.
Principle 1: Challengers are made, not just born. We should focus on skills, attitudes, behaviors and knowledge and provide tools, training, coaching and reward and recognition system.
Principle 2: It’s the combination of skills that matters. 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 simply being annoying.
Principle 3: Challenging is about organizational capability, not just rep skills. For the mode to really work, this journey is actually just as much about building organizational capabilities as it is about developing individual skills. Organizations can leverage business intelligence and research assets to help developing challengers better tailor messages to each customer’s industry and company context.
Principle 4: Building the challenger sales force is a journey, not an overnight trip. Because the challenger model demands changes to both organizational capabilities and to individual rep behaviors and skills, it is hard work.
Teaching
The shortest path to sales success is a deep understanding of customers’ needs. Improving reps’ ability to ask good questions proves colossally difficult, because this approach is based on a deeply flawed assumption: that customers actually know what they need in the first place. Challengers are not so much world-class investigators as they are world-class teachers.
We pour millions of dollars into brand, product and service seeking growth and really only get status quo. Our customers are more satisfied, but they’re not necessarily and more loyal. All those activities, building brand, product development and improved customer service is only the first step to winning customer loyalty. Customers is won in the field, during sales calls.
There are seven attributes with positive impact on customer loyalty:
- Rep offers unique and valuable perspective on the market.
- Rep helps me navigate alternatives.
- Rep provides ongoing advice or consultation.
- Rep helps me avoid potential land mines.
- Rep educates me on new issues and outcomes.
- Supplier is easy to buy from.
- Supplier has widespread support across my organization.
Reps should know customers’ needs better than customers know them. In order to do that, asking questions is not enough, reps need to have great insights. insight is all about teaching customers new ways of thinking, pushing them to rethink their current perspectives and approaches.
It’s one thing to challenge customers with new ideas and another thing to ensure you get paid for it. Commercial teaching has four key rules:
- Lead to your unique strengths.
- Challenge customers’ assumptions.
- Catalyze action.
- Scale across customers.
The sweet spot of customer loyalty is outperforming your competitors on those things you’ve taught your customers are important. You’ve taught your customer not just to want help but to want your help. There are two important caveats. First, you’ve got to make sure that you actually can help. Second, you actually have to know what your unique strengths are.
If reps are constantly reverting back to price, then they can’t articulate the unique value of their solution.
If the first rule of Commercial Teaching is all about the connection between insight and supplier, the second is about the connection between insight and customer.
But you need to build reframe, not only rapport. This is where relationship builders have an issue. Just because reps helped customers see things differently doesn’t mean they persuaded them to do things differently.
The common denominator for insight isn’t geography, or size, or industry. It’s a common set of needs. Needs analysis is not something you can afford to leave in the hands of your individual reps.
A world-class teaching conversation – or teaching “pitch” – moves through six discrete steps, each building directly to the next. This isn’t so much about delivering a formal presentation as it’s about telling a compelling story. If your story fails to engage both sides of the brain simultaneously – the rational and the emotional – it’s too easy for your customer to make no decision. Disruptive change is as much about following your gut as it is about following your head.
Six steps move through customer excitement (positive, neutral and negative) and through customer states (intrigued, drowning, involved and relieved):
- Warmer: building credibility by reading their mind, demonstrating empathy.
- Reframe: first reframe of unrecognized problem, need or assumption.
- Rational drowning: gradual intensification of the problem, both in degree and closeness to the customer.
- Emotional impact: psychological features of the problem or presence of the individual’s workflow, humanizing the problem.
- Value proposition – the new way: a new framework for addressing the problem – implicitly tied to the supplier value proposition.
- Your solution and implementation map: map of supplier services or solutions linked back to key teaching points: highlighted path to implementation.
One of the good sales approaches is Hypothesis-Based Selling. Rather than leading with open-ended questions about customers’ needs, you lead with hypothesis of customers’ needs, informed by your own experience and research.
Reframe is the central moment of a Commercial Teaching pitch. You are introducing new perspective that connects customer expressed challenges to even bigger problems, they never realize they have. You should not aim for agreement about your views in this phase.
Rational Drowning is the number-driven rationale for why your customer should think differently about their business.
Emotional impact is about connecting with customers, about getting them out of “I’m different” zone.
Supplier first get into conversation very late. At the very end of stage 6.
The best sales conversations present the customer with a compelling story about their business first, tech them something new; and then lead to their differentiators.
To put it shortly: providing customers with game-changing insight, specifying and personalizing the potential impact of that insight and introducing your capabilities as the best possible means of acting on that insight.
Organizations can support their reps with:
- Identifying unique benefits
- Segmenting customer by need
- Generating compelling customer insight
- Developing teaching-based collateral
Commercial teaching is as much a team sport as an individual one. You’ll need to align sales and marketing around the core capabilities implicit in the Commercial Teaching choreography.
SAFE-BOLD Framework developed by Neil Rackham and KPMG. Good sales pitch should be:
- Big
- Innovative
- Risky
- Difficult
SAFE-BOLD Framework should serve as estimation machine, with good pitches being close to BOLD part of framework. BOLD comes from Big, Out-perform (riskiness perspective), Leading-edge (innovation) and Difficult (to implement). SAFE comes from small, achievable, follower and easy to implement.
The single biggest incremental opportunity to drive growth isn’t in the products and services you sell, but in the quality of the insight your deliver as part of the sale itself.
Tailoring
Tailoring is connected to consensus buying (the need to have the broader organization on board before moving ahead with a purchase). Decision makers, influencers and end users. Make sure you cover them all.
Decision makers care about widespread support for the supplier across their organization and ease of doing business with supplier. Influencers care about who is selling to them and end users buy from people and not organizations. End users and influencers care about reps professionalism and reps providing unique valuable perceptions. Decision makers want reps to help them avoid potential land mines. Influencers and users want help with value definition. But all of them want to receive valuable perspective on the market from suppliers.
In selling you should avoid only information extraction, but focus on knowledge transfer.
A good way to think about how to tailor a message is to start at the broadest level – the customer’s industry – and to work your way down, to the person’s company, the person’s role and finally to that individual person.
Customer outcomes are what an individual at the customer organization is trying to achieve – how they would define success as part of their job. These outcomes encompass the actual activity or responsibility in need of improvements, the metric used to measure that task and the direction and magnitude of the desired change.
First, customer outcomes are predictable. Second, those outcomes typically remain stable across time and people. Third, for any give role, they’re finite. And lastly, the approach is scalable.
Functional bias cards are tool for helping define those outcomes. They consist of:
- High-level decision criteria (or business outcomes) – what he cares about?
- Stakeholder’s focus – what he measures?
- Stakeholder’s key concerns – what he is doing day-to-day?
- Stakeholder’s potential value areas – what he can do to improve performance?
When you are setting up tailoring move from defining functional needs/desired outcome to company capabilities and values.
Address each customer stakeholder as if he or she actually was the customer. Because in today’s world of consensus-based selling, that’s exactly who stakeholders are.
Taking control of the sale
The ability to taking control comes from two things: ability to talk about money and ability to push the customer. Challengers have ability to demonstrate and hold firm on value and the ability to maintain momentum across the sales process.
You have created momentum because you’ve created urgency around a previously unknown. As human beings, our natural inclination is to seek closure, not postpone it, to reduce tension, not increase it.
Three main misconceptions about taking control:
- Taking control is synonymous with negotiation
- Reps only take control regrading matters of money
- Reps will become too aggressive if we tell them to “take control”.
Reps should be able to create urgency with problems, if they don’t customer will not feel the need to solve it. Problem with pushing is, that we have created customer-centric environment. Which can actually lead to bad business results. One potential consequence are discounts, second is assuming order-taking posture.
Taking control is about creating constructive tension.
DuPont provides reps with a simple template for prenegotiation planning based on BayGroup International’s Situational Sales Negotiation (SSN) methodology.
Things to consider for both parties in negotiation are: power factors, targets, information’s, difficult questions from customers, needs, concessions to be offered or given.
Potential approaches are:
- Acknowledge and defer – promise closure but move on another subject, by getting permission.
- Deepen and broaden – expand customer’s view of the things that are important to them.
- Explore and compare
- Concede according to plan – timing to give concessions are critical.
Managers and the Challenger selling model
If you don’t get frontline managers on board, the initiative will fail.
Tested variables for sales managers:
- Management fundamentals:
- Maintain integrity
- Display reliability
- Recognize direct reports
- Build cohesive teams
- Practices two-way communication
- Listen to and understands rep’s point of view
- Selling:
- Teaches customers new insights
- Tailor offers
- Discusses pricing and money with customers
- Maintain productive customer relationships
- Is skilled at negotiation
- Coaching:
- Customizes coaching approach
- Prepared for coaching interactions
- Communicates expectations
- Shares product or industry knowledge
- Follow through on development activities
- Sales leadership
- Maximize territory potential
- Analyzes pipeline data
- Delegates projects
- Drives the sales culture
- Shared best practices
- Innovates new ways to position offers
Managers fundamentals are the essential base of sales manager success. Integrity, reliability and listening.
Commander’s Intent is just that: a clear, concise statement of the specific goal a commander is looking to achieve.
Attributes of manager excellence fall into three categories: selling, coaching and owning (resource allocation and sales innovation). It turns out sales leadership is more about how innovative sales managers are and not so much about just resource allocation. Sales innovations factor tells us that good sales managers have an uncanny ability to unstick stuck deals and get them closed.
Sales innovation is the missing link in terms of fully realizing the benefits of the Challenger sales model.
Coaching is about know behaviors. Coaching is ongoing, coaching is customized, coaching is behavioral. Training is good for sharing knowledge. Coaching is about action upon it. Formalized coaching represents a huge performance improvement opportunity in a complex sales environment. Done well, coaching is about behaviors, not outcomes. One of the key components of Manager Development Program from authors is Hypothesis-Based coaching. It uses PAUSE framework:
- Preparation for coaching conversation
- Affirm the relationship
- Understand expected (observed) behavior
- Specify behavior change
- Embed new behavior
Key sales innovation activities and nine attributes:
- Investigate
- Identify obstacles in a deal
- Gather feedback about what’s not working
- Identify how to resolve customer pain
- Create
- Innovate around new way to position your offer
- Identify the ideal outcome
- Explore new solutions and offers
- Share
- Share tactics and best practices
- Develop and sustain cross-functional relationship
- Filter new and information downwards
Narrowing thinking is all about looking at a complex problem, weighing existing options and producing a single solution. It’s incredibly valuable in a world where managers must make tough, rapid decisions on things like allocating scare resources. The alternative is “opening thinking”. It is characterized by the generation and vetting of as many alternative options as possible. Opening thinking is better for deal innovation.
A number of human biases that commonly hinder opening thinking:
- Practicality bias: Ideas that seem unrealistic should be discarded.
- Confirmation bias: Unexplainable customers behavior can be ignored.
- Exportability bias: If it didn’t work here, it won’t work anywhere.
- Legacy bias: The way we’ve always done it must be best.
- First conclusion bias: The first explanation offered is usually the best or only choice.
- Personal bias: If I wouldn’t buy it, the customer won’t either.
Prompting questions are forcing mechanism to expand your thinking. Deepen understanding, broaden perspectives and expand ideas.
SCAMMPERR framework for price issue handling:
- Substitute
- Combine
- Adapt
- Magnify
- Modify
- Put to another use
- Eliminate
- Rearrange
- Reverse
Lessons learned
Not every high performer is a challenger. While individual Lone wolves can be effective on their own, a team of them is a team that doesn’t sell anything.
Don’t push too much with customer-centricity. Be memorable not agreeable. Build a pitch that leads to your solution, not with it.
We’re not asking reps to change who they are, just how they sell. When deciding to adopt a toll, reps are either early adopters, majority, laggards or naysayers.
Similar approaches as challenger sales can be used in IT, HR and other areas of business.
