Challenger Selling

All the right notes but not necessarily in the right order

– for some clients in SEMEA, Asia and beyond

Challenger sales reveal the benefits of addressing sizeable business opportunity

So what do we mean by a Challenger Sale

Selling a unique solution for a previously unidentified, significant, company opportunity

Challenger sales people should have a deep understanding of the client’s business, a good relationship with key individuals and use both to push their client’s thinking, leading them to learn something new about how their company can compete more effectively.

Challengers are assertive – they press clients on their thinking, their company’s potential performance and on pricing for the potential value a solution offers.

A pure “challenger” in this way is differentiated from a pure “relationship” sales person – who focuses upon a long term friendship at all costs.

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The challenger sale is a well planned journey…

• The supplier will be viewed as a trusted advisor (a critical friend)

• Needs boardroom (C-level) engagement with clients

• Provides strategic insight regarding the clients business through an hypothesis

• Meets the need for a consensus-based sale to offset the increased risk of buying complex solutions

• The hypothesis – based approach with multiple key stakeholders enables the co-creation of a widely advocated value based offering

A challenger sale is about telling a compelling story that takes the client on a roller-coaster ride, leading them through a natural emotional low, towards the light at the end of the tunnel. That light needs to be the supplier’s solution, approach or partnership. So the whole sales planning process needs to start with the USP of the supplier offering, then working backwards to where the client’s business is positioned within its existing markets.

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… from hypothesis to benefit realisation

Only the last steps focus upon the supplier

1. The Warmer – what we have found (WWF) in your sector is that companies are facing “3 main challenges……” – a presentation of your hypothesis for this target client

2. The Reframe – a different way to think about their business and these challenges + why it matters (£/ $/ .. value). Identifying challenges and the potential gain in resolving them – “Buckets of Opportunity”

3. Rational Drowning – a numbers driven rationale for resolving the challenges involving either: avoidable costs, lost revenue, risk mitigation or innovation towards the creative destruction of existing markets and the opportunity for those who occupy the new space. At this point an ROI of resolving these challenges is often given.

4. Emotional Impact – personalising the analysis. “this really does apply to your company and role”. Providing examples of what has happened in similar companies that resonate with the clients experiences.

5. A new way – a route map forwards to solve these challenges. Ideally, this will involve the client developing specific capabilities and adopting new behaviours to achieve a much better way of operating

6. Solution – presentation and negotiation of the supplier’s unique capability to support the clients new way of operating

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During the Challenger Sale , the client moves through a natural emotional curve

+ve

-ve

• We know what we should do• We must act on this • But how….

• There is a solution• We have some options

• We have a plan for success - USP• We have an answer• Negotiating on value not price

2. Reframe3. Rational Drowning

4. Emotional Impact

5. A WayForward

1. Warmer 6. Our

Solution

Em

otional Sta

te

Confidence

We have a way forward

• A different way of looking at our business • There are buckets of opportunity here:

•Increasing revenue, avoiding costs•Penetrating new markets or avoiding risks

Tailor presentation to generate widespread support across the organisation

• Hypothesis based approach• A useful insight into our sector

• ROI on Solving these challenges

• This applies to us / me• It’s difficult

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A Challenger salesperson is looking to become the trusted advisor

2. Reframe3. Rational Drowning

4. Emotional Impact

5. A WayForward

1. Warmer 6. Our

Solution

Trust = (Credibility * Intimacy) / Risk

T = C * I / R

C I R

Tailoring presentation to generate a widespread support across the organisation

Increase creditability Increase Intimacy Reduce Perceived Risk

How well does this work for a Peach and Coconut client type ?

Specific Self Diffuse

Public

Private Private

Public

(Peach) (Coconut)

There are dangers in specific to diffuse encounters

• Peach: Peach: Peach: Peach: You can make a new best friend on a US plane ride – but then never meet again

• Coconut: Coconut: Coconut: Coconut: It can take a long time to overcome the reserve of a German contact – but when you do a long term relationship may well follow

THT Consulting.com

The road to becoming a trusted advisor -North America and Northern Europe

The standard Challenger sales process is clearly effective in Universal and Specific societies like North America, Northern Europe and their like.

Here “Trust” (becoming a trusted advisor) can be set up in the order credibility, intimacy(depth of relationship) and perceived risk reduction.

Contracts are very important and to be adhered to no matter what.

A “peach” like (Specific cultural) presentation of the rational, analytical case outside of a deep relationship is more acceptable to a “specific” audience who have many rapidly formed situational relationships.

The building of a deeper relationship is ultimately necessary but is done after formal business meetings

The sales person’s challenge and relationship moves them into a trusted advisor – a critical friend

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There are preferred ways for interacting with people who are:

How to approach Peaches -(for Coconut types)

• (Expect / Seek) to discover the objectives, principals and numerical targets of their organisation

• Be quick, to the point and efficient

• Have a clear structure to your statements and remain relevant to the issue at all times

• Do not be offended by confrontations; they are usually not personal

How to approach Coconuts -(for peach types)

• (Expect / Seek) to discover the history, background and future vision of their organisation

• Take time, allow them to feel comfortable in your company

• Let the encounter flow occasionally nudging its direction

• Do not get impatient when people are indirect or circuitous

THT Consulting.com

The East and West have differing Cultural Norms …

Contracts Universalism / Particularism Covenants

SwitzerlandNederland USA UK Germany,Sweden, Denmark

Russia, China, India Japan, Singapore, France, Spain, Italy

USA Nederland, UK, Sweden, Denmark

China Japan, Italy, India, Singapore, Russia, Germany, Spain, France

… as do the North and South of Europe

Specific Self Diffuse

THT Consulting.com

Therefore, EMEA and Asian sales may need to operate somewhat differently

In more diffuse and particularistic societies like (Russia, China, India, Japan, Singapore, …) relationships are far more important.

Here, contracts are at best an indication of initial understanding, what’s more important is the deep commitment of a relationship that will flex contracts as external factors unexpectedly change. So, more of a covenant between long term partners

But “coconut’s” – diffuse people with a hard, formal exterior who have a limited number of long term relationships – would want to build a firm relationship before hearing any rational arguments or analysis.

Further, a great deal of rapport is required before a challenge to personal or company performance or missed opportunity would be acceptable

The sales person’s rapport, relationship and then challenge makes them a trusted advisor – a critical friend

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Challenger Selling offers huge rewards for those who master the pursuit

Whatever the route required to become a trusted advisor and making the Challenger Sale – pre sale upfront investments are high

– A challenger sale requires considerable unpaid research and consultancy initially to identify sector and especially company insights

– A clear understanding of the USP of the ‘supplier’s’ products and services (to drive towards)

– Significant time and capability from the “challenger” towards building support and advocacy across the organisation

– A support team to analyse and prepare the ammunition

Therefore the way any sales pursuits are qualified need to be more stringent before committing such costly resources to uncertain gains

The standard published Challenger sale approach is not culturally sensitive

However, the rewards for the suppliers able to get ahead of an RFP and set The Agenda will be substantial initial and ongoing sales – 12 –