The Challenger Sale: marketing CEB services - no breakthrough!
Reviewed in Germany on 2 January 2015
In this book you will find valuable hints on how to improve the performance of your sales leaders and sales representatives; some are well known since decades, at least in globally leading high tech companies:
Page 6/7: shift from Product to Solution Selling. Pg. 9: Rise of the Consensus-Based Sale. Pg. 12: put a big corporate bear hug around your stars. Pg. 32: combination of skills that matters. Pg. 34: Building the Challenger Sales Force is a journey, not an overnight trip. Pg. 38: Tailor the teaching message to different types of customers. Pg. 40: pushing for agreement on value, rather than price. Pg. 41: asserting control can take many forms. Sales professional takes the lead in the customer discussion with a specific end in mind. Pg. 57: ... you have to know what your unique strengths are. We have been consistently surprised by the number of executives who struggle mightily on this issue. How one head of marketing at a well-known manufacturing company put it: "If I polled a hundred reps on our core value proposition, I'd get at least a hundred different answers. "We hear this all the time, usually coupled with a slow shake of the head and a rueful sight; it's one of those age-old truths of sales and marketing. Pg. 58: Only 14% of companies' so-called unique benefits were perceived by customers as both unique and beneficial! It's no wonder, then, that reps continually revert to price. Pg. 59: You have to know your customers' business better than they know it themselves - at least that part of their business that speaks to your capabilities. Pg. 63: Commercial Teaching requires you to think very differently about customer segmentation ... the best at this approach have learned to also segment customers by need or behavior. Needs analysis is not something you can afford to leave in the hands of your individual reps. Pg. 69: Like any good headline, your goal is to catch your customer off guard with an unexpected viewpoint - to surprise them, make them curious, and get them wanting to hear more.
Pg. 74: A Look in the Mirror. This teaching choreography allows you to audit and improve the sales conversation with customers. ... think about the first four or five pages. Pg. 75: Are the first four pages of your sales materials all about you, or about the customer? Pg. 77: ... it requires input from the entire commercial organization. Pg. 79: Commercial Teaching provides a road map for addressing one of the toughest challenges in all of B2B sales and marketing, namely getting the two functions to work together in the first place. Pg. 80: Eighty percent of marketing collateral winds up in the trash, while 30 percent of sales time is spent reproducing the very collateral they just threw away. Pg. 116/117: Figure 6.7. Desired Outcomes and Supplier Capabilities Mapped to Functional Roles. Figure 6.8. Value Planning Tool as Stage-Gate Between Project Development and Execution. Pg. 121: Our research shows that Challengers take control across the entirety of the sales process. Pg. 123: High performers map out not just who the key stakeholders are, but what these stakeholders care about and why they care about these things. Pg. 133: Figure 7.2. Negotiation Analysis and Action Plan - Source: SSN Negotiation Planner(tm) and © 2009, BayGroup International, Inc. Pg. 141: Portrait of a World-Class Sales Manager. Pg. 143: Management Fundamentals - performance on integrity and reliability tends to be binary. Either you're reliable or you're not. You have integrity or you don't. Pg. 146: Figure 8.2. Attributes affecting Frontline Sales Manager Performance. Pg. 161: Innovative managers are sharing best practices. Pg. 162: One member told us, "If we had religiously followed our sales process last year, our three biggest deals would have never gotten done." Pg. 167: Figure 8.10. SCAMPMPER Framework (My comment [MC]: decades ago called creativity techniques). Pg. 174: Outside of compensation, sales training represents one of the biggest discretionary spending areas for a sales organization. It also represents one of the biggest time and money sinks. Research by Neil Rackham has shown that 87 percent of sales training content is forgotten by reps within thirty days. MC: consider this experience before you spend money on such trainings, often provided by trainers with rather short-lived sales professional experience and without sales manager experiences. Pg. 176/177: Never put these ten words in your pitch deck: Leader, Leading, Best, Top, Unique, Great, Solution, Largest, Innovative, Innovator.
In my comments (MC) I explain why I would not support the implementation of the Challenger Sale model. I appreciate Neil Rackham as author of his books Managing Major Sales, Rethinking the Sales Force, SPIN Selling, and SPIN Selling Fieldbook. However, I do not agree with his Foreword in this book:
Page IX/X: The History of sales has been one of steady progress interrupted by a few real breakthroughs that have changed the whole direction of the profession. These breakthroughs marked by radical new thinking and dramatic improvements in sales results, have been rare. I can only think of three of them in the last century. The first started about a hundred years ago, when insurance companies found that they could double their sales by a simple change in selling strategy. ... an idea that grew into what we now call the hunter-farmer model. The second breakthrough happened ... in July 1925, when E.K. Strong published The Psychology of Selling.
My comment (MC): The book title of Strong's book is "The Psychology of Selling Life Insurance"; if that was a breakthrough it applies to selling Life Insurance.
Rackham obviously ignores John H. Patterson (1844-1922), the founder of NCR (in 1884) and Thomas Watson Sr. (1874-1956), the founder of IBM. Patterson initiated the first NCR sales script created by Patterson's brother-in-law, Joseph H. Crane, in 1887. `How I sell National Cash Registers', which became known as the Primer, contained instructions not only on what salesmen should say but also on what they were to do while saying it. The Primer divided a sale into four steps: approach, proposition, demonstration, and close. The Manual reached its maximum size in the edition of 1904, with nearly 200 pages. Worthington C. Holman published a book in 1905: "Ginger Talks - I-The Talks of a Sales Manager to His Men." Dedicated to John H. Patterson, founder of the first school of salesmanship, in which thousands of the highest class of salesmen have been trained.
In August 1926, Watson wrote: "I started as a salesman when I was nineteen. Later I became sales manager of the National Cash register Company and for years felt the influence of one of the greatest salesman the world has ever known - the late John H. Patterson. Small wonder that I should have developed a sales complex." On September 15th, 1932 Watson said in a speech given in the `Sales Executives Club of New York': "The greatest of all of Mr. Patterson`s contributions, however, was his inauguration of the first school for salesmen. I think everyone who does selling in a big way today is following Mr. Patterson`s plan of running schools to teach salesmen....". In the obituary on June 20th, 1956, The New York Times quoted Thomas Watson Sr. as "often called "The world's greatest salesman". Patterson and Watson Sr. sold solutions.
Page XII: Rackham: Which brings me to The Challenger Sale ... But I will tell you why I think the research that they have done is the most important advance in selling for many years and may indeed justify the rare and coveted label of `sales breakthrough.' Page 201, `Acknowledgements' ... Outside of CEB, we of course owe thanks to Neil Rackham ... for his time and thoughtful considerations throughout this project. MC: this explains Rackham's praise for The Challenger Sale.
Page XVI: Rackham: How you sell has become more important than what you sell. An effective sales force is a more sustainable competitive advantage than a great product stream.
MC: with my decades of experience as sales representative, sales manager, branch office manager, service line manager, business development manager in a very successful, global ICT corporation I disagree. You need both. The best sales force cannot compensate missing product and service streams.
Chapter 2: The Challenger (Part 1) Page 15: We surveyed hundreds of frontline sales managers across ninety companies around the world, asking those managers to assess three reps each from their teams - two average performers and one star performer - along forty-four different attributes ... well over 6,000 reps all over the world. Page 17: The first thing we did was to run a factor analysis on the data.
MC: the companies that provided input were members of CEB. There is no transparency of the member companies (size, industries, global spread etc.). There is no information about the selection, segmentation and analysis of the sales managers who (subjectively) selected the sales representatives on whom the factor analysis of forty-four different attributes was applied. Only 23 of the 44 attributes were published.
Page 17/18: Finding #1: There are five types of sales reps ... The Hard Worker, The Challenger, The Relationship Builder, The Lone Wolf, The Reactive Problem Solver.
MC: no effort was made to analyze and segment the sales managers themselves and interdependencies between sales managers and sales person types.
Page 22: Finding #2: One clear Winner (The Challenger) and one clear Loser (The Relationship Builder).
MC: the authors suggest transforming the total sales force according to The Challenger profile with the ambition to arrive at 80% Challenger Sale types, accepting that the remainder of 20% cannot be transformed. The other four types of sales representatives are described with the following attributes which would be lost in case of such a transformation: always willing to go the extra mile; doesn't give up easily; self-motivated; interested in feedback and development; builds strong advocates in customer organization, generous in giving time to help others; self-assured; reliably responds to internal and external stakeholders. My experience: there are overlaps in the attributes of sales persons; they cannot be differentiated in a black and white or mutually-exclusive way. In the whole book you do not find any information about the analyzed sales force (winning new customers, covering existing customers, complexity of business, territory allocation influences, duration of sales experience etc.), criteria and time frame of performance measurement in the 90 CEB member companies. Are they comparing apples with oranges?
Chapter 3: The Challenger (Part 2) - Exporting the model to the core
Page 31: One of the things we know from our research is that every rep in our study had traces of the Challenger "gene", it just wasn't the thing they "majored" in. Page 35: The Challenger model offers a new and powerful way out of the solution selling morass that has had sales organizations across industries and around the world in a vise grip for years.
MC: there is no evidence that their research had a focus on identifying something they call a Challenger "gene". I consider this rather as an inclination to impress readers with buzz words. However, there is ample evidence that the authors want to win customers for their Challenger Sale model without any comparison with other well described solution selling models available on the market. Any company which buys such models from the shelf (or from this book) runs the risk of failing.
Chapter 4: Teaching for Differentiation (Part 1) - Why insights matter
Page 46/51/53/: It's not what you sell, it's how you sell. MC: see above.
Page 47: Figure 4.1. Representative Drivers of Customer Loyalty: 19% company and brand impact; 19% Product and Service Delivery; 9% Value-to-Price Ratio; 53% Sales Experience.
MC: they claim having surveyed well over 5.000 individuals at members' customer organizations asking roughly fifty questions. There are no further details about the objective and content of this research to prove the conclusion they try to convey to the reader.
Page 48: ... a story told us recently by the global head of marketing at one of the world's top financial services firms. ... "At the end of three years, we had increased customer satisfaction from 65 percent to 95 percent." Sounds fantastic, doesn't it? "But," she continued, "there was only one problem. ... So here we are, four years later, and our entire industry sits at 96 percent customer satisfaction."
MC: who believes such stories about the financial service firm industry? I don't!
Page 62: If you're going to build an ROI calculator, make sure it calculates the return on pursuing the reframe, not purchasing your products.
MC: they do not explain what they really mean and how this is done; such a statement is pure blah, blah.
Chapter 5: Teaching for differentiation (Part 2) - how to build insight-led conversations
Page 66: Figure 5.1 Deconstruction of a Commercial Teaching Pitch "1. `Warmer' Building credibility by reading their mind, demonstrating empathy; 2. Commercial Teaching follows boot camp theory of shocking the customer with the unknown ...First reframe of unrecognized problem, need, or assumption; 3. `Rational Drowning' Gradual intensification of the problem; 4. breaking down the problem behind the unknown ... `Emotional impact' Psychological features of the problem, 5. `Value proposition - A New Way'; 6. `Your Solution and Implementation Map'. Customer States along this sequence (1-6): intrigued, drowning, involved, relieved.
MC: they do not provide a team selling-team buying process model, only the sequence in a single "pitch" with strange terms implying that customers accept psychological manipulation. Selling complex solutions cannot be achieved with one pitch as described in Figure 5.1. I am fully convinced and know that each customer presentation has to be prepared carefully, designed according to the audience and performed with the result to convince and win the customer. To relieve the customer cannot be the ultimate objective.
Page 70: Step 3: Rational Drowning is the numbers-driven rationale for why your customer should think differently about their business, but presented specifically in a way designed to make them squirm a little bit - to feel like they're drowning. Marketers refer to this as the "FUD factor" - fear, uncertainty, and doubt.
MC: if professionals use the FUD tactic, it is in difficult competitive situations, especially when they try to delay the decision in favor of better products in their pipeline.
Page 71: And that is how you slay the dragon of `we're just different.' If your customer still thinks they're different after step 4, you either have the wrong customer or the wrong story.
MC: if a customer still insists on being different make efforts to win him with a truly tailored solution fitting to this unique customer; it is not only about telling psychologically moving stories.
Page 72: Before they buy your solution, the customer has to buy the solution.
MC: another example of phraseology and hair splitting. If you postpone until step 6 that you are speaking of your solution you risk that the decision maker has already left the meeting.
Chapter 6: Tailoring for Resonance
Page 102: Decision makers think of themselves as buying from organizations, not from individuals.
MC: I agree, which confirms that the rather one-sided "Challenger Sale" model focus is insufficient.
Page 105: Contrary to conventional wisdom, more traditional selling skills like needs analysis are much farther down the list when it comes to driving end-user and influencer loyalty.
MC: many solution buying projects are based on very detailed RFPs with careful description of needs which have to be analyzed, understood, cross-checked, adjusted etc. etc. Mistakes in the "need analysis" will hurt you further up in the sales process and could push you out.
Page 108: Figure 6.4. The New Physics of Sales - Traditional versus Emerging
MC: you need both approaches, not only the one called `Emerging.'
Chapter 7: Taking Control of the Sale
Page 135: anatomy of a successful negotiation
MC: I recommend "Getting to Yes" negotiating an agreement without giving in, updated and revised edition and The Strategy and Tactics of Pricing, A Guide to growing more profitably, fifth edition.
Page 139: But while it's true that it helps for reps to have been born with the "assertiveness gene," ...
MC: buzz word blah blah. .
Chapter 8: The Manager and the Challenger Selling Model
Page 141: When we asked our members about manager capability, a shocking 63 percent reported that their managers do not have the skills and competencies they need as their sales model evolves, to say nothing of the 9 percent of managers who don't even have the skills required to be successful in their role currently. Three-quarters of our members self-identify as having managers who aren't going to perform in the new environment. And that's deeply troubling.
MC: In that case you would have to start analyzing and improving the sales manager situation before doing anything else. This confirms my doubts about the quality and relevance of the whole approach.
Page 146: Figure 8.2. Attributes Affecting Frontline Sales Manager Performance Selling (26.6%), Coaching (28.0%) Owning (45.4%). Page 151: In the conversations we have with our members on this topic, there is another important distinction we make, which is how coaching differs from managing.
MC: according to Figure 8.2 and my long-term sales and sales-management experiences coaching is an integral part of managing sales people according to company, market and customer requirements.
Page 156: One of the key components of our Manager Development Program is "Hypothesis-Based Coaching."
MC: I understand that, step by step, they try to sell you the whole CEB portfolio. However, I prefer real life resp. real project related coaching instead of coaching based on hypotheses.
Chapter 9: Implementation lessons from the early adopters
Page 185: The majority of companies profiled in this book would tell you that this transformation took not months, but years, and that their work continues to this day. As we said earlier in this book, the Challenger Selling Model is a new operating system for the commercial organization, not just another "bolt-on" application to the existing system.
MC: readers do not find sufficient customer satisfaction and loyalty references supporting the move to such a model; the duration of such an initiative and my concerns mentioned above result in my advice to be very careful before you buy-in into such a very expensive and risky project to say the least.
Pages 187 ff: AFTERWORD
MC: in this part CEB is trying to sell the whole CEB portfolio.
Page 209: Scoring Guide. If you rated yourself highly on question 1,4,7, or 10, this means that you have natural sales tendencies in other sales profiles than Challenger Sale: 1 is Relationship Builder, 4 is Lone Wolf, 7 is Problem Solver, 10 is hard Worker.
MC: by answering a single question you can be segmented into one of the four Sales Rep Profiles (Page 18). Maybe, this is the answer to the question of how they built their samples on which they applied statistical analyses to pretend a scientifically sound approach.
I agree with Rackham in the Foreword (Page XII): `It's too soon to know whether this is the breakthrough that we've been waiting for: Only time will tell.' There is only one difference: we are in 2015, not in 2011.
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