The Challenger Sale: Chapter 4 (Part 2 of 4)

The Challenger Sale

Key argument is against “relationship selling” and towards “commercial teaching.”

Chapter 4: Teach for Differentiation (Part 1): Why Insight Matters

Over the last fifteen years, most sales training has centered on a core principle: The shortest path to sales success is a deep understanding of customers’ needs. … It sounds great on paper, but this approach suffers one major problem: It doesn’t work nearly as well today as it used to. … this approach is based on a deeply flawed assumption: that customers actually knowwhat they need in the first place.

But what if customers truly don’t know what they need? What if customers’ single greatest need – ironically – is to figure outexactly what they need.

If this were true, rather than asking customers what they need, the better sales technique might in fact be to tellcustomers what they need. And that’s exactly what Challengers do. When you get down to it, Challengers aren’t so much world-class investigators as they are world-class teachers. They win not by understanding their customers’’ word as well as the customers know it themselves, but by actually knowing their customers’ world betterthan their customers know it themselves, teaching them what they don’t know but should.

Selling a well-branded, highly differentiated product, supported by higher-than-industry-average service will undoubtedly get you more loyalty. If you’re way behind the competition in any of these three categories, that’s probably where you want to start. [an example company improved customer service dramatically, but saw no improvement in customer loyalty. This is because so did everyone else. The industry as a whole improved. Customer service was not a differentiator, it’s now the cost of admission]

So while we spend much of our time emphasizing subtle differences, customers tend to focus first on the general similarities.

That’s the real bombshell finding of this work. Loyalty isn’t won in the product development centers, in advertisements, or on toll-free help lines: Loyalty is won out in the field, in the trenches, during the sales call.  … 53 percent of customer loyalty is attributed to your ability to outperform the competition in the sales experience itself.

Seven attributes (out of 50) ranked the highest for importance of impact:

  • Rep offers unique and valuable perspectives 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

Each of these attributes speaks directly to an urgent need of the customer not to buysomething, but to learn something. They’re looking to suppliers to help them identify new opportunities to cut costs, increase revenue, penetrate new markets, and mitigate risk in ways they themselves have not yet recognized.

The best companies don’t win through the quality of the products they sell, but through the quality of the insight they deliver as part of the sale itself. … And the best reps win not by “discovering” what customers already know they need, but by teaching them a new way of thinking altogether.

Not just any teaching. Commercial teaching.

“What happens,” he asked, “if my rep goes out, teaches a customer something completely new and compelling about their business, gets them all excited to take action, and that customer then takes that insight, puts it out to bid, and my competitor wins the deal? In that case, it doesn’t feel like I’ve really won anything.” … and he’s right, you haven’t.

It’s one thing to challenge customers with new ideas, and another thing altogether to ensure you get paid for it.

Commercial Teaching must ultimately: teach customers something new and valuable about their business – which is what they want – in a way that reliably leads to commercial wins for us – which is what we want. Commercial teaching has four key rules:

  1. Lead to your unique strengths
  2. Challenge customers’ assumptions
  3. Catalyze action
  4. Scale across customers

Commercial Teaching Rule #1: Lead to Your Unique Strengths

If what you’re teaching inevitably leads back to what you do better than anyone else, then you’re in a much better position when it comes to winning the business.

 

You’ve only really succeeded when the customer asks, “Wow, how can I make that happen?” and you’re able to say, “Well, let me show you how we’re better able to help you make that happen than anyone else.” That’s the magical moment. You’ve shared new, relevant insight – which is what customers are looking for – but at the same time, you’ve tied that insight to your unique solution. You’ve taught your customer not just want help but to want your help.

There are two important caveats: you’ve got to make sure you actually canhelp. Second, you actually have to know what your unique strengths are.

How is a customer supposed to choose between two suppliers that are more or less undifferentiated? It’s actually rather simple: They choose the cheapest supplier.

Commercial Teaching Rule #2: Challenge Customers’ Assumptions

Whatever you teach your customers has to actually teach them something. It has to challenge their assumptions and speak directly to their world in ways they haven’t thought of or fully appreciated before. The word we like to use here is “reframe”.

If your customer reacts to your sales pitch with something like, “Yes, I totally agree! That’s exactlywhat’s keeping me up at night!” well, then you’ve actually failed. That may feel counterintuitive, but it’s true nonetheless. Sure, you’ve found an issue or insight that resonates, but it doesn’t reframe. You haven’t actually taught them anything. … you made a “connection” but rapport and reframe are not the same thing.

Rather than, “Yes, I totally agree!” they know they’re on the right track when they hear their customer say, “Huh, I never thought of it that way before.” … They’re clearly telling you they’re engaged, maybe even a little unsettled.

Still, just because we’ve helped them seethings differently doesn’t mean we’ve necessary persuaded them to dothings differently. That’s next and it’s just as important.

Commercial Teaching Rule #3: Catalyze Action

A well-executed teaching conversation isn’t about the supplier’s solution at all – at least not initially. It’s about the customer’s business, laying out an alternative means to either save money or make money they’d previously overlooked.

 

Commercial Teaching Rule #4: Scale Across Customers

Provide your sales reps with a manageably small set of well-scripted insights along with two or three easy-to-remember diagnostic questions design to map the right insight to the right customer.

We have seen Commercial Teaching work very effectively around a common need to free up cash, or reduce employee churn, or improve workplace safety. In each of these cases, the suppliers in question helped customers think about that need in new and surprising ways by reframing their thinking, convincingly laying out the fully loaded costs of inaction, and then providing a credible course of action that naturally led back to the supplier’s unique solution.