More Related Content Similar to Harvard Business Manager_Driving Sales_STERN Similar to Harvard Business Manager_Driving Sales_STERN (20) Harvard Business Manager_Driving Sales_STERN1. ©Harvard Business Manager - February 2016 1
Harvard Business Manager
Driving Sales*Translated into English by CEB.
**Original article published in
German under the headline "Die
Erneuerung des Vertriebs" in
Harvard Business manager 2/2016.
In 2012, software group SAP decided to launch a new way of selling
worldwide. In just three years, they turned 5500 salespeople into
creative marketers, who closed significantly more deals.
By RAINER STERN
In the past, SAP predominantly sold conventional
business software for enterprise resource planning
(ERP) or supply chain management. However, our
business has changed dramatically over the past ten
years: our products now help companies to network,
and support them in developing digital business models.
Our customers’ requirements changed too. Conventional
selling no longer achieves the desired results. Customers
no longer want our employees merely to explain to them
which computer program will best solve their problems:
nowadays they already know that. Rather, they expect
our sales staff to have an in-depth knowledge of their
sector, business processes and relevant key performance
indicators. What our customers want to talk about
are their business challenges, and they are extremely
receptive when salespeople suggest ideas to generate
new business.
Since we have been able to represent entire value chains
digitally and – most importantly – in real time using our
software, we have also been able to help our customers
in new ways. This applies to many companies, and is
enabling businesses to evolve from merely offering
products to providing services. For example, we’ve
helped one sanitary product supplier move from simply
selling paper towels and soap by the pallet load to
guaranteeing that their customers’ sanitary facilities will
always be adequately stocked, minimizing their storage
requirements.
Identifying similar ideas that could lead to new deals,
required a new sales approach.
In 2011, CEB – a best practice insight and technology
company – published “The Challenger Sale” (see p.5).
The two authors – Brent Adamson and Matthew Dixon
– show that a specific type of salesperson is particularly
successful at selling complex products. They call this
the ‘Challenger’ – a salesperson who is able to push his
or her customers and advise them how to move out
of their comfort zone. Adamson and Dixon described
three main steps that Challengers use in their approach
to selling: they present their customers with risks and
new opportunities for their businesses, teach them
something new, and develop tailor-made business
strategies using their customers’ products and their own
knowledge.
CEB’s study proved that this way of selling is extremely
successful. There are 4.5 times as many top salespeople
in the Challenger group, and their close rates are
on average 14% higher than those of other types of
salespeople (see box on p. 3). Based on CEB’s research,
we conducted an analysis of our own sales staff and
found that around half of them were not fulfilling their
potential – simply because of the way they worked.
As a result, our Board decided at the end of 2012 to
retrain all SAP sales staff worldwide. Our goal was for
5500 sales staff to be using the Challenger model within
three years. As our global continuous development
executive, my role was to implement the training program
at our Sales University. The following work-in-progress
report provides an insight into this global program.
We emphasized the benefit of the
training program to the personal
development of the participants.
1. PRINCIPLES OF THE TRAINING PROGRAM
The success of the training program would depend on
being able to demonstrate an increased sales revenue.
Our training aimed to encourage our salespeople to
change the way they sell. We therefore focused on two
groups: individual salespeople and their supervisors, the
sales managers. The intention was to help individuals sell
using the Challenger methodology, and to teach their
managers how to coach. We aimed to put managers in
a position where they could lead their teams to use the
desired sales techniques. Working with CEB and other
partner companies who provided us with coaching, we
developed a detailed training program for both target
groups. This consisted of a mix of factual knowledge
and practical exercises, evaluating success regularly.
The training began with a two-week preparatory phase
with videos, specialist presentations from the “Ted Talks”
series and recorded presentations (e-learning). At the
end of this input stage, we invited the sales teams to
a two-day group workshop, which included practical
exercises. This training was followed by a 90-day phase
in which course members were to practice what they
had learned, and improve, in their day-to-day sales.
2. 2 ©Harvard Business Manager - February 2016
For this phase, we produced e-learning sequences and
podcasts and organized telephone conferences between
course members and coaches, so they could share their
experiences and ask questions.
2. ROLLOUT OF THE TRAINING PROGRAM
Getting established sales managers to dedicate two days
coaching role-playing games is not an easy task. Before
starting such a program, we needed to keep in mind that
each salesperson would be weighing up whether they
should invest two days in the training, or if they would
be better off investing in their current sales project.
We therefore designed all our materials and events to
highlight their relevance to personal work. From concrete
real-life examples, participants discovered how to gain
more time to do their actual job, how to achieve higher
contract values, and how to close more sales.
To train 5500 salespeople, we needed a global structure
allowing us to run as many of the required courses
at the same time. At SAP, continuous development is
provided by our Sales University; and I was responsible
for the Sales Leadership Program. It comprises of a
central management group and local teams in all sales
regions worldwide. We delegated the task of rolling out
the training to the local country teams in all six SAP
regions. However, to ensure that all our sales colleagues
worldwide would be working to the same concept, we
equipped them with all the content and it was up to
them to complement this with actual local examples.
We started in early 2013 with a group of sales managers
selling to the public sector in our North American
region. This was a group whose sales projects were
particularly complicated and time-consuming, so using
more effective sales methods would reap particularly
positive results. We believed that if this target group
succeeded we would secure the necessary advocacy in
the business.
We had provided all the participants with our training
documents two weeks beforehand. Now, with the
two-day practical phase coming up, we invited our
head of the public sector sales service to launch the
workshop. We also engaged a particularly experienced
sales manager who had previously worked at Procter
& Gamble and was well versed in the concept of the
Challenger Sale. Her presentation was tailored entirely
to those present: she introduced herself to the twenty
sales managers present, and closed with striking words:
“I know my global clients inside and out. I know all
their locations worldwide and know precisely what the
company is doing at each one of them.” She paused for
dramatic effect. Then she concluded, “I hold platinum
status with three airlines.”
Her confident approach and her experience won the
respect of the participants, and they engaged in the
role-playing games that followed. We had managed
the first hurdle. And the practical program had been
accepted. All the workshops that followed made minor
adjustments to meet local needs, using the model below.
SALES MANAGERS: COACHING, NOT
INSTRUCTING
Increasingly salespeople handle more and more
customer projects in parallel. These are new business
projects with an uncertain outcome; we call them sales
opportunities. Sometimes salespeople discover they
have hit a wall in terms of closing a deal and ask what
they should do. Often, their sales managers will then
give precise instructions on what should happen next. To
change this behaviour, a typical manager workshop task
reads, “Managers should lead their staff, and get them
to develop their projects themselves, resulting in the
increased probability of closing a deal”.
Synopsis (or Abstract)
GLOBAL SCHOOL
In 2012, SAP’s sales director decided to train its
salespeople globally so everyone would be using the
same method. The author, who was in charge of this
project, describes how he successfully got 5500 sales
staff worldwide to permanently change the way they
acted towards their customers.
APPLICABLE CONTENT
The whole training program revolved around workshops
tailored closely to the everyday working life of
employees, using exercises based not on theoretical
cases, but on specific customer projects they were
working on. This content was supported by two
communications strategies, starting with the Board
advertising the program to individual sales managers.
Additional measures ensured that those who went on
these courses reported the training’s effectiveness to
colleagues. By the time the program ended, participants
had seen their sales increase by 27%.
3. ©Harvard Business Manager - February 2016 3
Harvard Business Manager
THE STUDY
For many years now, Brent Adamson and Matthew
Dixon from CEB have been looking at how buying and
selling are changing. In their articles in Harvard Business
Manager, they start by describing a transformation in
buying and recruitment.
During the purchase process, buyers were looking
increasingly for something special that offered them
the chance to put forward better internal arguments
(see “Through tiebreak to sales success” in service
box page 5). In their 2011 bestseller, “The Challenger
Sale”, CEB then published the findings of a massive
study of particularly effective sales strategies, looking
at how 6000 salespeople from 90 companies behaved
and sold, and asking 1100 customers what they valued
most about salespeople. What the consultants found
was surprising: relationships with customers were
mentioned only very rarely, contradicting the old sales
saying, “First relationship, then close”. Instead, what
they valued above all was how much and what type of
value a salesperson added. The consultants concluded
that a good relationship is primarily the result of selling
successfully, not the starting point.
A NEW KIND OF SALESPERSON
They found that in complex sales situations amongst
different kinds of salespeople like the ‘Hard Worker’ or
the ‘Relationship Builder’, one kind stood out above all
– the ‘Challenger’. CEB studied how salespeople types
were distributed amongst the top group of people. 54%
were ‘Challengers’ in a complex selling environment.
They like debating, challenging views and can also
turn what their customers are currently thinking ‘on its
head’. They’re not afraid to advise customers to make
uncomfortable changes.
In successful sales teams, the ‘Challenger’ approach
is now standard. Instead of preaching the technical
benefits of their products, the sales staff of a global
telecoms equipment supplier will now talk about the
commercial benefits they offer, like eliminating network
inefficiencies. For example, they explain how much
customers can save if they cut out needless service calls
through better automation, and then offer the products
required.
THREE STRATEGIES TO SUCCEED
The best salespeople have abandoned old methods
and developed a new approach to selling based on the
following skills:
One
Teach: in step one, salespeople deliver
comprehensive new findings about the potential
customer’s business through Commercial Teaching.
This takes the form of a disruptive insight that
challenges the customer’s current thought process
in a rationally and emotionally compelling way. This
could include new ways to cut costs, open up new
market opportunities or minimize risks. This helps
customers realize that they do need to act and are
therefore more willing to do so.
Two
Tailor: Challengers tailor their communication
and message to a client’s business and individual
attributes. They don’t talk to a marketing manager
the same way they would to a production manager.
They always focus on people’s particular priorities to
ensure a more effective conversation.
Three
Take Control: Challengers aren’t afraid to
respectfully and empathetically guide the client to
a recommended action by reinforcing value and
momentum for change. That means, for example,
they don’t ‘give in’ when someone demands a 10%
discount, but steer the discussion back to the added
value/assert the value of the opportunity. They are
also comfortable questioning what their customers
think and pushing them into making a decision. As
such, they prevent opportunities from running into
the sand – and, above all, no decision ever being
made.
Michael Leitl
The Challenger
Model
4. 4 ©Harvard Business Manager - February 2016
During the workshops, the coaches took on the roles
of individual salespeople and we asked sales managers
to always ask them two probing questions thus
encouraging participants to think like Challengers. For
example: “What creative idea did you use to surprise
customers? What other customers do you know in the
same sector and what are the relevant KPIs?” Practical
exercises like this were used throughout the course,
in addition to short theoretical sections. By the time
the seminar ended, people recognised that coaching
saves managers a lot of time in the long run. This
is because salespeople learned how to solve many
problems themselves. Over time, they no longer ask
their managers for individual advice on how to proceed,
asking them instead simply to approve a different
solution they have already worked out themselves.
SALES STAFF: SELLING THROUGH PROVOKING
For salespeople, the role-playing was about specific
sales strategies. To lay the foundations for subsequent
sales growth at the same time, we handed each
participant an actual task from their department’s
current sales pipeline. Using this sales opportunity, the
trainer then helped the salesperson work through the
different strategies and then practiced with them. It
was particularly important to practice the unfamiliar
aspects of the Challenger concept, such as deliberately
disagreeing with customers, even telling customers why
their current business model would only offer very slight
prospects for growth. Learning to challenge customers
was important, because many salespeople are inclined
to create a particularly harmonious atmosphere when
selling.
As the workshop participants had already practised
these methods through role-playing based on a specific
case, they were well prepared when it came to actually
talking to their customers after the training. If they had
any questions, they were able to discuss these with the
trainers in regular phone calls over the next 90 days.
3. COMMUNICATIONS THROUGHOUT THE
PROGRAM
One of the key tasks throughout the project was
communicating at different levels. We had to ensure that
our organization globally was working to our standards,
that our sales staff and managers understood what the
training was all about (and ideally recommended it to
others) and that management were informed regularly
on progress.
EMBEDDING THE PROCESS
We stayed in regular touch with everyone involved
throughout the project period, travelling frequently to
meet with teams in different sales regions, organizing
telephone conferences and discussing matters with
our partner organizations that provided the coaches.
We held weekly meetings about the division of
responsibilities, and the results and problems. We kept
in close touch about a range of topics until the program
was completed three years later.
MOTIVATING SALES STAFF
We invested much of our time in communicating with
the people who would be attending our courses, and
used every opportunity to obtain feedback from those
who had attended in order to improve the courses and
training materials.
Having completed a workshop, for example, we asked
everyone who had taken part to tell their respective
organizations about the program. We filmed sales
managers and staff in workshop breaks and asked them
for feedback. We used what they said and enriched our
videos, brochures and mailshots with their statements.
German sales staff member Nils Tinnermann, for
example, explained in the video how he was able to
demonstrate the benefits of SAP’s products to his
customer’s CFO, as a result of which they signed a
strategically important contract. Ramiro Perdoma from
Columbia explained how one Challenger technique had
helped him win Banco Popular Dominicano as a client
and close a contract worth €550,000. Others stressed
how important constructive conflicts are for successful
negotiations, and underlined the fact that too much
harmony can be counter-productive.
To ensure the many stories and anecdotes from the
workshops spread through SAP’s organization as
effectively as possible, we also set up an internal social
network for the sales teams, where they could exchange
their experiences and share tips, furthering informal
communications within our sales force.
INVOLVING MANAGEMENT
Top management helped us implement this training
strategy in many ways. First, it was about showing our
sales staff and managers time and time again that this is
a project which is important to – and supported by – top
management. To illustrate this, we asked members of
the Board and the CFO to make brief video statements,
explaining the sales role from their perspective,
how they talk with customers themselves and what
topics matter to them. Presenting this very personal
relationship of our group leaders to what our individual
sales staff actually do had a major effect. For the first
time, many of our colleagues realized that even our top
managers are constantly talking to SAP’s customers.
Salespeople realized that how they work with individual
customers can have an impact on Board members’
customer meetings.
5. ©Harvard Business Manager - February 2016 5
Harvard Business Manager
FOLLOWING THE TRAINING, SALES
REVENUE INCREASED BY 27%
We also asked members of top management to
introduce workshops regularly, which gave the events
more weight. Managers would also be able to position
the new sales strategy as part of our global sales
organization.
Finally, we kept management regularly informed about
how we were progressing, but also about any impending
problems. This continuous exchange meant everyone
involved in the project was aware that it had the backing
of top management throughout the cycle. This proved
to be one of the most critical success factors.
RESOLVING CONFLICTS
The first workshops may have gone well, but things did
not always run smoothly, as salespeople were not at all
motivated to sacrifice their time for training, even if they
were instructed by their managers to do so. If they had
doubts, there were also times when executives were not
available at short notice – it even happened that one
seminar room was only half full.
Sometimes, even speaking with those in charge locally
was not enough to resolve the issue. We could not force
them to take part, after all. Nonetheless, to implement
our goals, we were always learning new ways of
communicating, and not just with the regional teams
and salespeople generally at whom our communications
materials were aimed. It was also very important to
communicate with the team’s various direct managers in
sales and with other managers of all levels.
We continuously recorded our successes and problems
and reported both to central and regional management.
If we wanted to get something done, we could refer to
our successes to date and stress how important this
was to our global sales organization. Furthermore we
imposed local penalties via regional managers. For
example, if staff cancelled a workshop and failed to let
us know, they had to bear the costs themselves.
Sometimes, we also stepped in if the staff taking
part were unhappy with the quality, such as when
unexpected language barriers arose in China, or when
some course content was difficult to convey in Japan,
where it was particularly difficult to get people to
practise conflict meetings. In cases like this, we adapted
the course content to suit local customs.
4. MEASURING SUCCESS
It was evident from the start that this program could
only be considered a success if we could provide hard
evidence that it worked. Each workshop therefore ended
with one of the usual attendee surveys, which gave us
some helpful feedback for improvement. What was
almost more valuable, on the other hand, was the fact
that the workshops were rated, on average, 4.4 out of 5.
In the feedback on the 363 workshops, sales managers
were particularly satisfied with the program, even
though we knew they were not always happy about their
new coaching tasks: 98% said they’d recommend the
program (compared with 90% of staff).
Far more important, though, was that 95% of sales staff
said they would approach their customers differently
from now on, and the hard sales data show this was
not just an empty promise. We measured how much
the training contributed to successful sales at 90
and 180 days after each workshop, comparing how
staff performed before and after the training. We
also measured how their post-training performance
compared with a control group of their colleagues who
had not received the training. In addition, we worked out
specifically what effect training had on sales, using Jack
Phillips’ method, recognized as the worldwide standard
for assessing human resource development measures.
The following five indicators demonstrated the success
of the program:
• Those who had been on the training program closed
26% more deals than before the training (win rate).
• Those who had been on the training increased their
sales revenue by 27% overall.
• Those who had been on the training program
generated 26% more sales opportunities (pipeline)
on average (by way of comparison, the untrained
control group made just 9%).
• Deal size was up by a factor of six.
• Deal closing time was down 25%.
On the whole, the trained sales staff had increased
their business results measurably since completing the
program.
FUTURE PROSPECTS
Markets continued to grow in the last three years. The
issues our customers are mostly concerned with now
are digital transformation and innovation. As a result,
we have already started on a training program for sales
managers and individual salespeople, to help them keep
abreast of these new interests. We are transferring over
the successful aspects from the first program, such as
defining and managing the global rollout centrally, and
dividing the content between our two target groups
of sales managers and sales staff. We have also added
some new elements to our program, including an online
university that enables salespeople around the world to
participate in courses together, taking our sales efforts
to the next level.
6. 6 ©Harvard Business Manager - February 2016
RAINER STERN
is Global Vice President of SAP, heading all sales
leadership programmes at the group’s Sales University
SERVICE
LITERATURE
BRENT ADAMSON, MATTHEW DIXON: The Challenger
Sale: Taking Control of the Customer Conversation,
Redline 2015
HBM ONLINE
KARL SCHMIDT et al., [Consensus is trumps], in Harvard
Business Manager, September 2015, p. 64, reprint no.
201509064
JAMES C. ANDERSON et al., [Through tiebreak to sales
success], in Harvard Business Manager, May 2014, p. 32,
reprint no. 201405032
BRENT ADAMSON et al., [Selling solutions was
yesterday], in Harvard Business Manager, September
2012, p. 22, reprint no. 201209022
INTERNET
The ROI Institute founded by Jack and Patti Phillips in
1992 offers certified training assessment:
www.roiinstitute.net.
CONTACT
rainer.stern@sap.com
REPRINT
No. 201602062, see p. 102 or
www.harvardbusinessmanager.de
© Harvard Business Manager 2016
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THE CHALLENGER SALE RESEARCH
Since the release of the book CEB have continued their
research and have now studied over 100,000 additional
salespeople and managers from around the world.
7. About CEB
CEB is a best practice insight and
technology company. We have a unique
view into what matters—and what works—
when driving corporate performance. With
more than 30 years of experience working
with top companies to share, analyze,
and apply proven practices, we deliver
innovative solutions that help you unlock
your full potential.
Every year we equip over 20,000
senior leaders from more than 10,000
organizations across 110 countries with the
intelligence they need to respond quickly
to evolving business conditions. In doing
so we help them more effectively manage
their talent, customers and operations to
exceed business objectives.
Discover how CEB and The
Challenger Sale can help you.
Please contact us:
challenger@cebglobal.com