A core tenant in the The Challenger Sale methodology is teaching for differentiation. While differentiation may appear to be a straight-forward and basic concept it is actual very difficult to document and communicate when the judge, jury and executor is the lens of a prospect, as opposed to the vendor’s perspective.
A popular B2B sales belief is that the shortest path to signing a new logo is for a sales rep to develop a deep understanding of a customer’s needs and to bridge this to to the solution that you are selling. This is very consistent with solution selling-discovering or learning about a customer’s business issues or pain points and then building a tight correlation between those issues and the solution offered. While this approach has been very popular for decades, sales organizations have spent an inordinate amount of time and money teaching reps how to ask the right questions. The goal was to uncover the customer’s objectives and strategies for the upcoming year and the projects or systems that needed to be budgeted to support those initiatives. In a sense, a sales rep was a detective trying to connect with the right people to ask the right questions which would reveal what was really going on in a company. The thinking was that by putting the prospect at ease so he or she would volunteer the solution they sought allowed a rep to perfectly align their solution to the needs of the prospect.
In contrast, the Challenger Sales assumes that a customer does not know exactly what they need. The underlying premise of teaching for differentiation is that the sales rep brings value to the table by telling a prospect what they need and opens up their myopic view to a solution to which they were previously oblivious. In short, customers do not have the time or interest to educate a sales rep on their industry or business. A Challenger Sales rep must know the customer’s world better than the customer knows it so that they can teach the customer-teaching for differentiation.
The CEB surveyed well over 5,000 individuals across industries, geographies and job titles to understand what they were looking for in a B2B vendor. The goal was to gauge their level of loyalty to that supplier. Specifically, three key questions were asked:
- Will you keep buying from this vendor?
- Will you buy more from this vendor going forward?
- Will you advocate on this vendor’s behalf across your organization?
The CEB states that the combination of these three questions better predicts deeper customer relationships. And, these questions are a more accurate predictor to growth than any other metric tested by the CEB.
It’s important to note that in order to be successful, one has to have an investment in brand, product and price/value. Being deficient in these areas relative to alternatives or substitutes will not be overcome with simply a better sales experience. If the market is weak relative to the former, then improving within these areas should yield more loyalty. However, if there is a level of investment in brand, product and price/value that the market deems undifferentiated, then investment and improvement in the sales experience should yield more loyalty. In all, while the investments in time, people and resources made in brand building, product and customer satisfaction are not the only step to building loyalty, they are the first step.
Teaching for Differentiation – The Power Of Insight
Of the 50 or so attributes that the CEB tested in the loyalty survey, 17 of them were within the sales experience category. Further analysis revealed that seven rose to the top of the pack with respect to their direct, positive impact on loyalty. According to the CEB, the most significant contributor to customer loyalty is not the brand, product or value to price ratio, but the sales experience (53%). The sales experience includes the following:
- The sales rep offers unique and valuable perspectives on the market
- The sales rep helps a customer navigate alternatives
- The sales rep provides ongoing advice or consultation
- The sales rep helps a customer navigate landmines
- The sales rep educates on business issues and potential outcomes
- The vendor is easy to do business with
- The vendor has widespread support across the customer’s organization
These attributes are generated from learning, understanding or being educated. Such an environment is a perfect breeding ground for a Challenger rep to help a customer identify a new opportunity to cut costs, find a new revenue stream, further penetrate a market, expand into a new market and mitigate risks that the customer was not aware of previously. Teaching for differentiation addresses the challenge for the sales rep is to teach the customer something new. The value of a sales rep’s insights will build loyalty — and that happens before anything ever is sold.
Insight is about teaching customers to think differently, challenging the status quo or the way it has always been done before. Challenger reps leverage the collective knowledge of their organizations so that they can offer customers new perspectives. These new perspectives are aligned with the customer’s financial success in a compelling, assertive manner that both resonates and is a catalyst for changing behavior.
Teaching for Differentiation – Commercial Teachings
The focus of commercial teaching is not to prime the pump for competitors, but to fill the pipeline with qualified opportunities with a high probability to close. If a rep fails at commercial teaching then he or she is basically providing free consulting for the benefit of competitors. A subtle by imperative point is that the Challenger rep has to focus on teaching customers the value capabilities provided by their solutions – otherwise all efforts will be futile.
Commercial teaching has four primary rules:
- Lead to the solution’s unique strengths (defendable strengths)
- Challenge the customer’s assumptions
- Catalyze action – make something happen
- Scale across customers
It’s important to note that these are not necessarily capabilities of sales reps; rather they are organizational capabilities. The entire organization needs to embrace and empower the Challenger Sale methodology.
Teaching for Differentiation – Lead to Your Unique Strengths
At the end of the day, at some point, the rubber has to meet the road. In order for this to happen, it’s a good idea to start with the differentiation and then develop the teachings. While some differentiation may be similar to a few competitors in the market, there will need to be something that an organization does better than anyone else. And that “something” has to be core to the insights and teachings that the Challenger reps will be communicating to prospects. Otherwise, you will simply be priming the pump for the competition.
In other words, while it is important to teach customers what is important, it is critical to outperform competitors in those areas. It’s key to communicate through insights and teachings so that customers get to that “a ha” moment, but it is even more imperative that one ties that insight to the organization’s unique solution–teaching for differentiation.
For the teaching for differentiation approach to work well, it is paramount that the sales organization targets the right prospects in order to increase the probability that one can help this prospect’s company. It is pointless, from a revenue perspective, to teach a prospect something new and compelling if there is nothing a solution can do to monetize it. Also, an organization must be able to document their unique strengths. This means there is unanimous consensus inside the organization as well as validation from analysts, customers and prospects that the differentiation is real, meaningful and defendable. If no differentiated solutions exist in the market from the customer’s perspective, then downward price pressure will be effectively applied from the market to the vendor.
The CEB found that only 35% of B2B companies were able to establish themselves as truly preferred over the competition. Among these preferred vendors, customers perceived only 50% of them to be actually relevant to their needs. Furthermore, customers communicated that most of the differentiated claims were not delivered consistently enough to actually influence preference. The net result was that only 14% of vendors’ unique benefits were perceived by companies to be both unique and beneficial.
Teaching for Differentiation – Challenge Customers’ Assumptions
In teaching for differentiation, the focus for the Challenger rep is to establish a connection between insight and the customer. The Challenger rep has to challenge a customer’s assumptions and be relevant to their world in a way the customer has not yet considered. A Challenger rep has to put data, information or knowledge in front of a customer that changes the lens in which they view the opportunity or problem. In other words, the task is to get the customer to “Think different.”
For teaching for differentiation to be effective, a Challenger rep must know the market, technology, customer and competitors better than the customer. Again, this is not a sale rep’s responsibility but an organizational responsibility where the sales rep is the interface back to the customer. On the one hand, the Challenger sales rep has an advantage because they are speaking to many customers in the same space—similar to an analyst. The key will be to gather the data points, then synthesize and internalize them into a meaningful, relevant dialogue that plays to the organization’s unique differentiation.
The litmus test for whether teaching for differentiation has changed a customer’s thinking lies in their reaction. If a customer offers confirmation of an existing thought or feeling then the result is negative. The confirmation may have included content that resonated with the customer but did nothing to force the customer to think differently. On the other hand, if a customer starts with “I never…” then the rep is on to something. If the customer is really hooked, they will press for more insight and clarity through additional questions and meetings.
Teaching for Differentiation – Catalyze Action
Commercial teaching is really a two-phased process. In step one, the goal is to get a customer to think differently. In step two, the most important step from a sales perspective is to motivate the customer to act—i.e. make a purchase. A Challenger rep knows this up front and, like a good lawyer, leads the customer down this path by building a business case early on, and reinforcing over and over the action needed that is critical for the business.
To clarify, getting a customer to act is not the traditional ROI or TCO model building that occurs with solution selling—i.e. “How do I justify this huge price tag?” The Challenger Sales methodology moves the focus of ROI from the vendor’s solution to the customer’s business- a new way to increase revenue, decrease cost, and increase market share, productivity or customer satisfaction. ROI calculators in the Challenger Sale methodology focus not on the solution but on the financial metrics of the business.
Teaching for Differentiation – Scale Across Customers
Commercial teaching is most effective when deployed segment by segment as opposed to a broad horizontal approach. The primary reason is that the Challenger Sale methodology and commercial teachings are heavily dependent upon knowledge. That knowledge does not come only from the sales team but from the organization. It’s most effective and efficient for the organization to focus on one segment, nail it and then scale it rather than fracturing the organization’s resources across multiple segments. This includes everything from target market, messaging and positioning to the offering, sales tools, marketing campaigns, etc.
For the approach to be most effective, an organization must have a few powerful insights that logically lead to a solution which are applicable to a homogeneous set of prospects. A homogeneous set of customers may not be the typical cut of industry, revenue, employees or geography. The key is to find a segment of prospects that have similar needs because those customers will most likely react in a similar fashion to the insights of a Challenger Sales rep.
In today’s market, prospects are savvy and do not have the time, energy or interest to educate a sales rep whom they do not know so that they can parrot back what they heard and present their solution. While deals may exist that can be sold like this, the trend for this type of sale is down. A new breed of sales reps – Challenger sales reps — challenges the way a prospect thinks about their business in a non-aggressive manner that is insightful to the prospect. These insights change the way the prospect thinks about their business by providing data, knowledge and insights they never would have realized on their own. Any go-to-market strategy requires a successful sales-force and the Challenger sale methodology will prepare a sales team for successful battle in the field,but, it requires active participation from the entire organization.
Teaching for differentiation is one of the sales enablement investments that will pay dividends for years to come.