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A primer on Challenger/Insight selling based on the July/August 2012 issue of HBR and the Challenger Sale book by Matthew Dixon and Brent Adamson of the CEB.

A primer on Challenger/Insight selling based on the July/August 2012 issue of HBR and the Challenger Sale book by Matthew Dixon and Brent Adamson of the CEB.

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Insight selling and the Challenger Sale, a primer Insight selling and the Challenger Sale, a primer Presentation Transcript

  • INSIGHT SELLING and the CHALLENGER SALE A primer1 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Get a primer on insight selling and the characteristics of the challenger sale Saves you at least 3 days of hard work!2 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Executive summaryCustomers don’t need Over the last three decades, B2B selling has evolved from a transactional (product-price) approach, to a p. 5you the way they used relationship-based process, and to a solutions-based model. Today, this way of selling is being challenged byto. procurement-savvy teams that cut the grass under your best sales reps’ feet.Solutions selling has Solutions selling is largely driven by suppliers’ attempt to escape a dramatically increasing commoditization of p. 6been the holy grail for a their products and services.long time…… but it has increasingly Selling ever bigger, more complex, disruptive, and expensive solutions requires a lot of “discovery” time and p. 7become a burden to effort, from both sides. The result is a “solutions fatigue”: traditional, time-tested sales techniques haveboth customers and become a burden to both customers and suppliers, and an alarming number of half-completed deals remain onsuppliers the table. This has lead customers to react and engage with suppliers in a very different way.Can one type of sales Among different profiles of sales executives, the one that has a much higher chance of being successful today, p. 8rep make a difference? particularly in complex sales, is the “Challenger”. This is the one who uses a deep understanding of a customer’s business to serve them and to teach them, pushing their thinking, and providing different views on how to manage and compete.The characteristics of Insight Selling is about targeting customers that can act quickly and decisively, teaching them something new p. 9Insight Selling and provocative about how to compete in their market. Messages are tailored to the specific metrics and economics of the company and its key individuals. All along, the Challenger is in control of the sales, pressuring the decision making cycle.The Insight Selling The best sales conversation present the customer with a compelling story about their business first, teaches p. 10conversation in practice them a new perspective, connects this with their reality, and then leads to how it can be realized via unique differentiating capabilities.3 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Executive summaryThe advantages of By proactively proposing a solution tailored to specific customer needs and leveraging your unique p. 11Insight Selling capabilities, you are more in control. You are likely to gain faster widespread buy-in, to increase your chances to win the deal, while gaining the loyalty and respect of your customers.Think about the Insight selling gives you a “Blue Ocean” way of competing where you are in the lead of customer proposals p. 12possibilities and you play by your own rules.Winning at Insight Insight selling requires ad-hoc resources, processes, and tools in strategic planning, marketing (insight & ideas p. 13Selling requires specific generation), sales and HR. Only a handful of large, often international, players are capable of hosting thesecapabilities capabilities in-house, particularly in terms of insight generation and the relative ability to create innovative proposals underlined by a deep industry and customer knowledge.How can you build these Choosing the right build, buy, rent and partner model depends on the economics of your business, the breadth p. 14capabilities? of your target markets and your ability to enter an adjacent business in a sustainable way.Partnering Partnering with a management consulting firm could be the most effective shortcut to building insight-selling p. 15 capabilities.4 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • The problemCustomers don’t need you the way they used to.Over the last three decades, B2B selling has evolved from a transactional (product-price) approach, to a relationship-based process, and to a solutions-based model. Today, this way of selling is being challenged by procurement-savvy teamsthat cut the grass under your best sales reps’ feet.Our legacy The new realityB2B used to be about relationship, product, and Armed and skilled customers make you comesolution selling short in the sales cycle• Since the 1980’s, best practices in B2B selling and marketing • In the current economic environment, B2B customers have moved away from the traditional transactional and then learned to buy with greater care and reluctance than ever relationship-based approach to a more solutions-oriented one. before.• Sales reps have become experts at discovering customers’ needs • With increasingly sophisticated procurement teams and the help and at selling them “solutions” based on a relatively complex of procurement consultants, B2B customers can readily define combination of products and services. solutions for themselves.• Part of the deal is to find and nurture an “anchor” within the • According to a recent study*, nearly 60% of a typical purchasing customer organization who can help navigate the company and decision – researching solutions, ranking options, setting drive the deal to completion. requirements, benchmarking pricing, etc. - is completed before even having a conversation with your sales teams.• The whole process is focused on attaching your company’s solution to a customer problem, on justifying why it is better • To win a deal, you have to get ahead of the RFP. But even if you than the competition, and on providing “evidence and can, it is increasingly no longer sufficient. It is very likely that you reference” to the expected benefits. will not get away of the RFP process and that you will have to play by rules set by your customers, or its procurement consultants. • Relationships continue to be key, but good relationships are more the result and not the cause of successful sales.5 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/ (*) CEB research, 2012 – Panel of 1,400 companies
  • The problemSolutions selling has been the holy grail for a long time…Solutions selling is largely driven by suppliers’ attempt to escape a dramatically increasing commoditization of theirproducts and services.The product-solutions selling continuum Most companies have the ambition to be positioned as solutions providers Advice & Needs-Based Customer Fully Silo-Based Product Service Wrap- Product Process Integrated Product Sales Bundling Around Customization Enhancement Partnership Product Solutions Selling SellingNature of Supplier reacts to purchase orders Supplier viewed as a trusted advisorrelationshipSelling Strong knowledge of product portfolio Boardroom-level engagement with customerskillsCustomer Quality product / service at good price Strategic insight on the customer’s businessexpectationsA shift to solution selling results in customers’ expecting you to actually “solve” a real problem and not just to supply a reliable product.This implies that you not only understand the customer’s underlying problems or challenges as well if not better than they do themselves, but alsothat you can identify new and better means of addressing those challenges, articulate clear benefits form using limited resources, and determinethe right metrics to measure success.6 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/ Straligence, Adapted from CEB research, 2012
  • The problem… but it has increasingly become a burden to both customers and suppliersSelling ever bigger, more complex, disruptive, and expensive solutions requires a lot of “discovery” time and effort, fromboth sides. The result is a “solutions fatigue”: traditional, time-tested sales techniques have become a burden to bothcustomers and suppliers, and an alarming number of half-completed deals remain on the table. This has lead customers toreact and engage with suppliers in a very different way.Solutions Fatigue Customer buying trendsThe solutions-based discovering process Customers have been taking initiatives and four major trends arehas become a burden emerging• What is keeping you up at night? What are your 1 Consensus-based sales 2 Increased risk aversion competing challenges? • The payoff of complex solution is • The uncertainty of a pay-off in large• The problem with providing an answer to these uncertain and C-level executives and complex deals pushes questions is that it can often take the feel of a increasingly require the widespread executives to ask for a shared-risk protracted ping-pong match between the supplier support of their teams in a large and reward agreement. Here the and the customer. purchase decision. This leads to lead KPI is the performance of a even longer selling efforts to align customer’s business, not the one of• The customer explains their needs, the rep the interests of all involved parties. the supplier’s product or service. summarizes their understanding, the customer confirms whether or not the rep got it right; a 3 Greater demand for customization 4 The rise of third party consultants proposal is made, the customer reviews and amends it, and on and on. • A solution approach implies that • Customers increasingly rely to a customers look for an offer that is neutral third-party to “extract• This requires a huge amount of customer tailored to their needs. They see maximum value” from the purchase involvement at an early stage… before they see any customization as part of the decision, i.e. help them reduce the value. solution, and do not intend to pay a risks, costs and complexity linked to premium for it. To the sell-side, this the solution. Needless to say, this implies longer times and higher adds pressure to the sales rep and efforts and costs. can extend the sales cycle.7 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/ Straligence, Adapted from CEB research, 2012
  • Searching for a solutionCan one type of sales rep make a difference?Among different profiles of sales executives, the one that has a much higher chance of being successful today, particularlyin complex sales, is the “Challenger”. This is the one who uses a deep understanding of a customer’s business to servethem and to teach them, pushing their thinking, and providing different views on how to manage and compete. The Relationship The The The The Builder Problem Solver Hard Worker Lone Wolf Challenger • Builds & nurtures • Highly reliable in • Always willing to go • Tends to follow own • Always has a strong advocates in responding to the extra mile. instincts instead of different view. the customer internal and external • Doesn’t give up the rules. • Has a deep organization. stakeholders. easily. • Self-assured. understanding of the • Generous in giving • Detail oriented. • Self-motivated. • Difficult to control. customer’s business. Sales Profiles time to help others. • Ensures that all • Interested in • Loves to debate. • Gets along with problems are solved. feedback and • Pushes the customer. everyone. development. 7% 12% 17% 25% 39% Top performers The highest percentage of top sales performers is found under the Challenger profile High Low In complex environments, the Challenger is by far the profile that is most likely to succeed. The Relationship Complexity of Builder is highly unlikely to succeed in complex sales environments. sales In environments with low complexity, the most successful profiles are the Hard Worker and the Lone Wolf. INSIGHT SELLING8 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/ Straligence, Adapted from CEB research, 2012
  • Insight sellingThe Characteristics of Insight sellingInsight Selling is about targeting customers that can act quickly and decisively, teaching them something new andprovocative about how to compete in their market. Messages are tailored to the specific metrics and economics of thecompany and its key individuals. All along, the Challenger is in control of the sales, pressuring the decision making cycle.Insight vs Solution Selling • Targeting based on the potential for change, not to buy. Focus on customers that can act quickly andTraditional solution selling is based on finding a hook to a decisively, that are not paralyzed by structures or TARGETrecognized need. Insight selling challenges the customer relationships that hamper change.and makes it aware of unknown needs. • Firms where demand is emerging, pushed by organizational or market/industry drivers. Solution Selling Insight Selling • Delivering insight that reframes the way customersTarget Has a clear vision and Is agile, has emerging think about their business and their needs.customer established demands. demands, or is in a state of TEACH • Teaching customers something new, thought flux. provocative, and valuable about how to compete in their market.Info What need is the customer What unrecognized needrequirements seeking to address? does the customer have? • Communicate sales messages in the context of theEngagement After the customer has Before the customer has customer, focusing on customer value drivers,timing identified a problem that the pinpointed a problem. TAILOR economics and performance indicators. supplier can solve. • Messages are tailored to different types of functions and individuals within an organization.Focus of the Ask, understand the Offer provocative insightconversation customer’s need and find a about what the customer “hook” for your solution. should do. • Using control, diplomacy, and empathy, the Challenger pushes the customer out of its comfort zone, focusingFlow of Asking questions so that the Coach the customer about TAKE on the value added, not on price discounts.information customer can steer you how to buy, and support it CONTROL • Challengers pressure the customer’s decision making through the purchasing through the process. cycle to reach a decision more quickly and kill process. ‘indecision inertia”.9 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Insight sellingInsight selling in practiceThe best sales conversation present the customer with a compelling story about their business first, teaches them a newperspective, connects this with their reality, and then leads to how it can be realized via unique differentiatingcapabilities. The insight-based sales pitch Present what’s Why your solution Warm up Reframe Rationalize Bind emotionally needed is unique 1 2 3 4 5 6 Leverage Fear Make the Demonstrate Surprise with a Present the Build credibility: Uncertainty & customer see the how your new perspective, capabilities “I know your Doubt via data challenge solution is better making them required to seize world” based on value /opportunity as than anyone wanting more the opportunity drivers their own else’s • Present industry • Introduce a new • Lay out the • Paint a picture of • Point by point • Introduce the challenges perspective that business case why how other review of the capabilities that are experienced by connects challenges the new companies went specific capabilities truly unique to your similar companies. to either a bigger perspective is down the same the customer would organization and • Introduce your problem or a bigger worth considering. road by connecting need to grow, to that can help the assessment of the opportunity than • Leverage data that the pains in the save money, or to customer seize the customer’s key the one the directly connects to story to the pains in mitigate risks. opportunity and/or challenges. customer ever the customer’s the customer face the challenge. • Leverage realized. economic drivers, organization. benchmarking. i.e. present ROI in terms of solving the challenge, not on buying a solution.10 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Insight sellingThe advantages of Insight sellingBy proactively proposing a solution tailored to specific customer needs and leveraging your unique capabilities, you aremore in control. You are likely to gain faster widespread buy-in, to increase your chances to win the deal, while gainingthe loyalty and respect of your customers.Before the deal After the dealYou proactively pitch to your own unique strengths Insight selling strongly drives customer’s loyalty Greatest • Supplier has widespread Accelerate • Much of the heavy lifting is done before drivers of  Helps me avoid support across my organization loyalty potential land time to individual reps go in front of the customer, • Supplier is easy • Helps me shorten mines decision considerably reducing “solution-fatigue”. the buying cycle  Helps me to buy from navigate  Offers unique, • Matches alternatives valuable • With a pitch tailored to the specific interests of communication perspectives on the Increase and the company, those who most benefit from it to my • Collaborates with the market preferences other suppliers  Educates me on new accelerate become your internal advocates and allies within issues and outcomes widespread the customer organization. They help you sell • Portrays a realistic  Provides ongoing support your proposal to the different stakeholders. picture of purchase advice or DECISION costs & difficulties consultation MAKERS • Excels in diagnosing our  Helps me • As you craft a proposal that combines customer’s specific needs • Helps me improve quantify my professional financial Increase your challenges and your unique capabilities, you are • Remains readily standing and meet value accessible KPIs chances of less likely to go through a competitive bid, incl. winning the formalities of the procurement department • Advocates for me within • Supplier adjusts to the organization and/or third parties. our unique needs and • Proactively specifications • Demonstrates a Weakest accelerates decision high level of • As you are being proactive, you are more in drivers of making professionalism loyalty Take control control of the sales process, guiding the customer on how to make it happen. Weakest drivers of Greatest drivers of loyalty loyalty END USERS AND INFLUENCERS11 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/ Straligence, Adapted from CEB research, 2012
  • Insight sellingThink about the possibilitiesInsight selling gives you a “Blue Ocean” way of competing where you are in the lead of customer proposals and you playby your own rules. Imagine if you could: • Know your customers’ industry as well as, or even better than, they know it themselves. • Combine the strengths of a management consulting and research firm with your unique business capabilities. • Trigger a series of workshops together with key customer executives to challenge the status quo and imagine new opportunities. • Proactively propose insightful solutions to multiple industries and customers, widening your portfolio of opportunities and increasing your win rates. • Keep competitors at bay by proposing solutions that strongly fit your unique capabilities with the economics and operational/growth targets of your customers. • Turn the sales process upside-down by having customers come to you for your unique advantage instead of having your sales-reps make cold calls. Imagine if you had the insight and capabilities of a management consulting firm in your go to market model.12 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Organizing for Insight SellingWinning at Insight Selling requires specific capabilitiesInsight selling requires ad-hoc resources, processes, and tools in strategic planning, marketing (insight & ideasgeneration), sales and HR. Only a handful of large, often international, players are capable of hosting these capabilities in-house, particularly in terms of insight generation and the relative ability to create innovative proposals underlined by adeep industry and customer knowledge. Multinational Large national Small – Medium Area / Function Capability / Requirements player player player • Differentiating capabilities that are clearly defined, understood andStrategic communicated.Planning • Target industries and customers segmented also based on needs. • Ability to leverage insight and supporting data across industries and markets.Insight & Ideas • Ability to generate and quantify customer-specific insight, incl. competitive,Generation Machine financial, operational challenges. • Innovation capabilities to define a new point of view on the customer’s business,(Marketing, products, business model, etc.Sales, R&D, • Ability to quantify the economic impact of your proposal on your customer’sOperations, Accounts bottom line.Mgmt, etc.) • Ability to define the impact of your proposal on your customer’s organization. • Processes and sales metrics adapted to insight selling.Sales • Sales culture supporting insight-selling and “Challengers”. • Performance metrics and processes that include a link to the customer’s businessPost-Sales or operational performance. • Recruitment process optimized to hire “Challengers”.HR • Marketing and business development staff capable of supporting sales rep in the identification of new opportunities and the generation of new insight and proposals.13 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • Organizing for Insight SellingHow can you build these capabilities?Choosing the right build, buy, rent and partner model depends on the economics of your business, the breadth of yourtarget markets and your ability to enter an adjacent business in a sustainable way. Description / Example Issues, who is it for • Recruit industry professionals and consultants in view of • Time and effort required to build the team and creating a dedicated team responsible for generating insight supporting processes and tools. Build and supporting your sales reps. • Suitable if you are restricting your activities to a highly • Equip the team with the industry databases, knowledge specialized niche market. tools, and processes required to perform their analysis. • Potential cultural mismatch jeopardizing your • Acquire a specialized consultancy with the skills and effectiveness and return on investment. resources to generate insight in the markets you compete in. Buy • Suitable if you are restricting your activities to a specific • Acquire and extend the industry databases and knowledge market and have a high-margin business justifying the tools required to generate insight. investment. • Address conflicts of interest cased by the core business • Partner with a consulting firm that is capable of covering of the partner, i.e. consulting activities with your target Rent your industries with rented resources and tools. customers. • Ad-hoc collaboration, typically on a time and material basis. • Suitable for ad-hoc, large strategic pursuits, and new market / services development. • Relatively independent go-to-market JV leveraging the • Willingness of consulting firm to limit its services to your JV / Alliance capabilities of the consulting firm and your key company and your markets. competences. • Suitable if you cover a large number of customers in • Collaboration based on a shared risk-revenue model. multiple industries.14 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • OpportunityPartneringPartnering with a management consulting firm could be the most effective shortcut to building insight-selling capabilities. INSIGHT-BASED GO TO MARKETYour teams Marketing and Solution specialists Sales business development support Co-development Development of Collaboration Ad-hoc research Facilitation of of insight with industry thought with your teams on customer innovation your leadership on proactiveConsulting firm’s industries, workshops with marketing, sales collateral for proposals andservices markets and your customers and technical sales & marketing on answering customers and your staff staff efforts competitive bids On demand, based on your specific needsCollaboration Medium to long term partnership linked to a specific industry / marketmode Partnerships – Joint Venture15 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/
  • www.straligence.com16 ⎥ Insight Selling and the Challenger Sale - A primer ⎥ http://www.straligence.com/2012/09/24/insight-selling/