Challenging Your Customers

the challenger sale - Challenging Your CustomersOne book I find useful for understanding sales and marketing as a process is “The Challenger Sale” by Dixon and Adamson. I find myself intrigued and agreeing with much of what they present in their findings. The book was written in 2011 and reacts to the chaos from the great recession. While those events are fading, there remain many relevant takeaways which seem timeless.

From what I infer, the primary target audience for “The Challenger Sale” is Sales Executives and Managers in enterprise businesses. This differs from my intended audience; CEOs, Owners, and Founders. While the target readership is different, there is considerable similarity to our perspectives.

My Key Relevant Takeaways

 

Sales approaches can be classified.

Based on a study of 6,000 participants, Dixon and Adamson note their researchers were able to identify five distinct profiles for sales reps:

 

 

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Five distinct profiles defined in “The Challenger Sale”.

A Plurality of Top Performers Are Challengers

According to the statistics presented by Dixon and Adamson, 39% of the top-performing sales reps in the study came from the Challenger profile.

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Challenger profiles are 23% of the total but 39% of the top performers. Relationship Builders are 26% of the profiles but only 7% of the top performers.

Note the least probable way for you to develop a top performing sales rep is to focus on relationship building.

It can be argued that there is merit to the “Lone Wolf” profile as this is the other profile where there is a disproportionately higher number of top performers. The issue with the Lone Wolf profile is that, by definition, this profile is not an approach which can be easily replicated and scaled.

In small companies, the Lone Wolf might be created simply by circumstances. The sales team might be small, might be acting without skilled leadership, and might have little or no direction about value propositions or business models. To succeed, salespeople figure it out by themselves.

Why Are Top Performers Valued?

While this varies by company, top performers produce 1.5 to 4.0 times as much as the average performers. As the complexity of the sale increases, the difference is greater. Dixon and Adamson cite the example of one company with 100 salespeople where 80% of the sales were the result of the efforts of just two people.

Clearly, there is a case to be made to put an effort into finding and developing top performers.

Creating a top-performing sales team might also be a critical element to the success, maybe survival of your company. If you wrestle with keeping the cost of customer acquisition low enough to have a scalable or sustainable business model, having top-performers on your team can reduce the cost of customer acquisition.

It should also have an effect on the revenue per customer. Arguably, top performers should have more customer retention and the ability to win bigger customers.

Bill’s Story

Challengers teach their customers about their own businesses. They bring value to the customer because they can advise on choices a customer can make and the implications of various choices.

Early in my career, I was in a B2B business and had the opportunity to travel with “Bill”. In retrospect, I see Bill as a Challenger. I witnessed Bill walking into a customer’s business at which point literally everything else that was happening was paused. “Bill was there” and he was the advisor and mentor to the business. At a glance, I could see Bill was a very trusted advisor.

Bill told me about a situation with another customer. He observed his customer for several months and was concerned because it was apparent the customer was not making money. After some reflection, Bill went into the business one day and told the owner his accountant was an embezzler.

Bill did not have access to the financial statements. He came to his conclusion based on his intuition about the situation.

The owner asked Bill to leave the business and never come back. The accountant was a close personal friend to the owner and godfather to the owner’s children.

Six months later Bill got a letter of apology. While they were angry about the accusations, the owner did some investigation.

They found money in 33 different banks.

Was Bill a top performer? Yes, salesperson of the year for my company.

The Implications for Your Marketing Efforts

While top performers can come from any of the profiles, what the authors are suggesting is an effort to support challenger selling increases your odds of creating top performers more than 5x an effort to support relationship building.

LinkedIn agrees but says it a different way. While encouraging their members to “engage with insight” LinkedIn says “nearly 64% of B2B buyers report they appreciate hearing from a salesperson who provides information or insight about their business.”

The content in your blogs, emails, and newsletters should primarily teach your customers about their businesses. If you are interacting with your customers you see patterns which lead to success and growth that might not be seen if all a customer knows is about their own business.

Or, you could see a creative business practice one customer is doing to solve an issue that another customer could also adopt.

Considering the previous discussion about the importance of “customer experience”, a content strategy which focuses on teaching can become part of your customer experience.

As I’ve mentioned before, your content speaks to many different audiences. Content which teaches will be valuable not just to your customers. Consider also the impact to new people in your organization.

The Golden Rule for Sales

Early in my career I served in a role as Product Engineering Manager for a manufacturing company. The responsibility of my organization was to provide the operations and manufacturing engineering organizations designs and specifications. In the world of engineering, this was done with “prints” and “bills of material”.

If a print was “silent” on an issue, that meant there was no limitation to what they factory could use. Maybe the print said “Cold Rolled Steel” but nothing else, for example.

At the next level of control, the print would list specific suppliers, whose products were qualified through our quality evaluation processes.

At the highest level of control, when we were convinced that specific features were important, we would specify a specific product from a specific supplier.

In any event, my organization was sometimes highly influential in the process for supplier selection, particularly when a specification was precise.

golden rule of selling 420x280 - Challenging Your CustomersAs I reflect on this today, the sales representatives who were the most valuable to me in the deliberations surrounding specifically-engineered products were the ones who could show me the best way to incorporate their products. Usually these were trained factory representatives; in other words, challengers.

In contrast, companies represented by independent sales representative organizations were the most frustrating. They could seldom advise or make a decision. They couldn’t answer my technical questions. They usually had to “call the factory”. But they were always good for buying you lunch.

Which sales approach was the most successful? It’s easy for me to understand the value of a challenger salesperson when I envision the concept from the perspective of a customer interested in creating a top performing product or service.

Many CEOs worry about people in their organizations who make purchasing decisions based on the perks they get from relationship-building salespeople. For most, it is common sense that buying decisions should be based on what is a good business decision, not personal benefit.

I worked for one company, however, that became very proactive and made it a written policy to limit “gifts” from suppliers to incidental amounts. Lunch or dinner might be ok, but not vacations, cars, or other large gifts.

In one of my other assignments, the company where I worked was spending about $50 million on a factory expansion. Soon after all the contracts for construction were awarded, the lead facilities engineer for the project showed up driving the Lincoln Continental previously owned by the General Contractor. Even if this was an innocent, arms-length transaction, the perceptions created should have been enough to nix the deal.

As the leader in your business, how do you want people in your company to make decisions? And how do you think your customer counterpart wants their employees to make decisions?

Challenger Content is Neutral

Maybe you don’t agree with a focus on building a challenger sales organization. If you have a personal background from another selling profile or your organization is ingrained with another selling profile, you might find it difficult to change your approach.

It shouldn’t matter to your marketing content. All profiles can benefit from a customer teaching approach to your social media content. No one is hurt by this approach.


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About the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC (expeerious.com) in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: www.expeerious.com for additional blog posts.