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Commercial Excellence Forum The Challenger Sale

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Commercial Excellence Forum 2015

Meetings 2015 March 6, 2015 Challenger Sale June 12, 2015 Differentiate to outperform competition October 2nd , 2015 Sales Acceleration

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About CEB

Who We Are CEB is the leading member-based advisory company. By combining best practices with advanced research methodologies and human capital analytics, we equip senior leaders and their teams with insight and actionable solutions to transform operations. CEB enables executives to harness peer perspectives and tap into breakthrough innovation without costly consulting or reinvention. The CEB member network includes more than 16,000 executives and the majority of top companies globally.

25+ Years of Experience

50+ Countries Represented

5,300+ Participating Organizations

225,000 Business Professionals 50%

of the Dow Jones Asian Titans 50

85% of the Fortune 500

70% of the FTSE 100

Marketing & Communications

Innovation & Strategy

Information Technology

Finance

Legal, Risk & Compliance

Human Resources

Procurement & Operations

Sales & Service

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Challenger Sale – Based on Research and Hard Facts

Source: CEB research 2011 Quant snapshot: 6,000 B2B customers across geographies and industries to test the drivers of loyalty, including:

■ Willingness to repurchase and pay a premium price ■ Willingness to consider new offerings ■ Willingness to recommend the supplier

+250.000 questionaires and interviews conducted. 4.960 samples from loyal customers further analyzed. +30.000 sales reps representing all major industries and geographical areas, to test the drivers of performance, including: ■ Attitudes ■ Skills/Behaviors ■ Activities ■ Knowledge 717 individual buyers across geographies and industries to test their approach to driving purchase decisions within a group.

Research Book

Authors: Matthew Dixon & Brent Adamson

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CEB Sales Effectiveness Solutions Not Just Theory/Proven Implementation Success

250+ Challenger

Implementations

60,000+ Sales Professionals

Trained

300+ Commercial Insights

Created

Direct Measurable Impact

Billions of Euros in Documented Revenue Increase

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Some facts about value proposition that you might not know….

COMPANY Value Proposition

CUSTOMER Value Perception

• Only 47% of the information used during customers’ purchase decisions comes from a supplier.

• Only 14% of Customers perceive a real difference between supplier offerings AND value the difference enough to pay for it.

• Only 13% of CMOs agreed that “If I Removed the Identifying Information for Our Commercial Collateral and Pitch Material, Our Customers Could Easily Determine It Came from Us.” Source: CEB Research

© 2014 CEB. All rights reserved. 8

A Different Kind of Buying

Customer Due Diligence

Begins

Customer’s First Outreach

to Supplier

Customer Purchase Decision

57% Complete

Customer Needs Well-Scoped

Priorities Set

Requirements Mostly Defined

Providers Compared

Prices Benchmarked

Customer Purchase Timeline

© 2014 CEB. All rights reserved. 9

What Drives Purchasing Decisions

Company and Brand Impact

Product and Service Delivery

Sales Experience

Value-to- Price Ratio

53%

19%

19%

9%

Percentage of Contribution to Customer Loyalty

What customers want from sellers: • Unique perspectives on my business • Help me navigate alternatives • Help me avoid potential mistakes • Teach me about new issues • Be supported within my organization

© 2014 CEB. All rights reserved. 10

Profile of Today’s Sellers

The Hard Worker

• Strong process

management skills • Doesn’t give up easily • Self-motivated • Interested in feedback

and development

The Relationship

Builder

• Builds advocates in customer organization

• Generous in giving time to help others

• Good interpersonal skills

The Challenger

• Personalizes sales

message to the customer

• Knows how to drive the customer to a decision

• Delivers new insight to customers

The Lone Wolf

• Follows own instincts • Self-assured • Difficult to control

The Problem Solver

• Reliably responds to

internal and external stakeholders

• Ensures that all problems are solved

• Detail oriented

5 Behavioral Profiles Identified in CEB research of 30,000 sellers

© 2014 CEB. All rights reserved. 11

Challengers Most Likely to Win

22%

14%

26%

17%

12%

7%

The Hard Worker The Problem Solver The RelationshipBuilder

23%

15%

39%

25%

The Challenger The Lone Wolf

Percentage of Core Performers

Percentage of High Performers

Percentage of Population

© 2014 CEB. All rights reserved. 12

Complexity Widens the Gap…

20%

54% 25%

25%

26%

10% 18%

7% 11% 4% Relationship

Builder

Problem Solver

Hard Worker

Lone Wolf

Challenger

Complex Selling

Transactional Selling

High performers are 4.7x more likely to be

Challengers in complex environments.

4.7x

Percentage of High Performing Sales Professionals

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The Challenger fingerprint

Challenger

• Offers unique perspective • Two-way communication skills

• Knows customer value drivers • Can ID economic drivers

• Comfortable discussing money • Can pressure the customer

Builds Constructive Tension

Tailors

Asserts Control

Teaches

Leading to differentiators

Relationship Builder

• Forms good relationships • Builds customer advocates • Builds cross-functional relationships

• Can work with anyone • Is genuine

• Accessible to the customer • Gives time to help others • Respects the customer’s time

Reduces Tension

Gets along with Others

Likeable

Generous with Time

Leading with differentiators

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A Challenger disrupts the customer’s thinking through 3 key skills Challengers™ deliver a unique sales experience by using specific skills to create a rational and emotional case for change for their customers.

Teaches for Differentiation …delivers Commercial Insight in rational and emotional compelling way through two-way dialogue Tailors for Resonance …customizes sales messages for businesses and individuals

Takes Control … guides customers to recommended action by reinforcing the value of change

Source: Corporate Executive Board

Leading to: Constructive Tension A productive force that compels customer action It is generated from exploring unfamiliar topics with the customer

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Are we creating constructive tension ? Sellers more often remain on the left side of the spectrum, leaving customers in a comfort zone that does not inspire action

• Uses indirect accommodating language

• Engages with customer in a respectful manner

• Keeps to customer’s point of view

• Directly pursues goals in a constructive way

• Uses direct language • Engages with customer in a

respectful manner but pushes to consider new possibilities

• Uses aggressive, unfriendly language

• Does not engage but talks at the customer

• Is dismissive of customer’s point of view

Passive Assertive Aggressive

Engaging customers through commercial teaching Café exercise

ComEx

Copenhagen

© 2014 The Corporate Executive Board Company. All Rights Reserved. © 2014 CEB. All rights reserved.

COMMERCIAL INSIGHT IS UNIQUELY POWERFUL

Only Commercial Insight can disrupt customers’ buying criteria in suppliers’ favor. A Commercial Insight has the attributes of an insight, but also centers on a better course of action based on the company’s unique capability or strength.

Hierarchy of Information Conveyed Through Commercial Messages Illustrative

Source: CEB research.

Commercially insightful messages lead back to the supplier exclusively, and also challenge conventional wisdom.

Commercial Insight

General Information

Accepted Information

Thought Leadership

Insight

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2

3

4

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20 © 2014 The Corporate Executive Board Company. All Rights Reserved.

DELIVERING COMMERCIAL INSIGHT L

evel

of C

usto

mer

Exc

item

ent

Positive

Neutral

Negative

Reframe

Rational Drowning

Warmer

Emotional Impact

A New Way

Our Solution

What do we want to sell?

Who do we want to Teach?

Customer Contact

Challenger™ Messages follow the best practice Commercial Teaching Choreography.

Solution

Remember: Challenger Messages lead with insight that leads back to your solution, enabling your team to sell more.

© 2014 CEB. All rights reserved.

From the SALES EXECUTIVE COUNCIL

IT’S WITHIN YOUR CONTROL Case in Point: Unrecognized Driver

Dentsply teaches customers about a problem that customers’ previously thought was unsolvable.

COMPANY SNAPSHOT Dentsply International Inc.

Industry: Health Care Products 2011 Sales (USD): $2,537M Employees: 11,800

Source: Cargill; Sales Executive Council research.

Acknowledge the customer problem:

Dentists have struggled with hygienist absenteeism and early retirement due to Carpal Tunnel Syndrome.

That has long been considered a cost of business in the dental industry.

Teach customers how the problem is more manageable than previously thought:

While most dentists believe such wrist conditions are unavoidable, in most cases, they are preventable.

Recent studies have demonstrated that a very specific cause: the weight and ergonomics of the instruments hygienists use.

Present a new way forward, that only Dentsply can offer:

To solve these challenges, hygienists need tools that are lighter and more comfortable.

Only Dentsply offers ergonomically correct and light enough dental tools.

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Base your approach on differentiators that drives value for the customer

VALUE TO THE CUSTOMER

UNIQUENESS

Low High Low

High

Differentiators

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From differentiator to challenging customers

Differentiator

95% transport reliability

Delta to competition

20% higher than second best

Value driver influenced

Buffer stock costs

Impact %

20 % reduction

Ideal customer characteristics

Fashion retailers with Asian

production and European sales

Reference cases

H&M

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The challenger pitch – the acid test

It gives the customer a new and different perspective on their business

Challenge customers assumptions Based on facts Linked to customer needs It creates constructive tension Drives toward action Lead to your unique strengths

Tailoring to your customers Café exercise

ComEx

Copenhagen

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What does tailoring mean?

The opportunities you focus on How you present your Insight The metrics you use in your discussions

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Tailor your Challenger Pitch

Source: Corporate Executive Board

Current industry changes / trends?

Company objectives?

Personal communication style?

Stakeholder KPIs?

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The death of sole decision making

! Facts about decision making (from CEB research); Number of persons involved in decision process in average; 1990; 1,7 2000; 2,2 2012; 5,4

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Decision makers and loyalty

! Facts about decision making (from CEB research); • Decision makers think of themselves as buying from organizations,

not from individuals (aspects of the overall sales experience are nearly twice as important as individual sales rep attributes)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Widespreadsupport for thesupplier in myorganization

Organization iseasily accessible

Organization iseasy to buy from

Organization iswilling to

collaborate withother suppliers

Provide the bestvalue for the best

price

Flexible inadjusting to

unique productneeds

Sales Experience drivers of customer loyalty for decision makers

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Influencers / End users and loyalty

! Facts about decision making (from CEB research); • Influencers and end users place much more emphasis on the

individual sales rep selling to them, they buy from people !

0%10%20%30%40%50%60%70%80%90%

100%

Drivers of sales representativ loyalty for influencers and end users (indexed)

Taking control to achieve results Café exercise

ComEx

Copenhagen

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Facts about (not) taking control

In average 51% of sales persons pipeline are stocked

Typical reason / indicators Repeated discussions No vision / customer has not defined success criteria Confusion about next steps No action / customer neglects commitments

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Pipeline management ?

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Challengers works differently with pipeline

Traditional approach Many opportunities Long period of disqualification General customer knowledge

The Challengers pipeline Few opportunities Tough & targeted qualification Specifc in-depth customer knowledge

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How Challengers respond

Value Momentum

Taking Control: Taking control is respectfully and empathetically guiding the customer to a recommended action by discussing

alternatives and reinforcing the value of making a change

Familiarize themselves with measures and use real numbers

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Forward motion

Value Momentum

Taking control of the buying process can be done by driving…:

• Set and manage deadlines and milestone • Confirm agreement and move forward • Define common goals • Suggest next step

Applying pressure on the customer

Being comfortable discussing money

• Discuss ROI confidently • Address money/finances directly • Align company’s value to the customer • Address objections candidly

Taking control does not mean being aggressive. When Challenger take control they:

Appear calm, balanced and professional Remain confident, bold and a few steps ahead

Possess a well articulated point of view Are prepared to discuss a strong value proposition

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We see three typical commercial barriers for truly living and executing a differentiated value proposition

Company Value

Proposition

Customer Value

perception

Marketing not able to formulate differentiated value propositions and value messages truly resonating with customer’s needs and value perception”

Marketing/sales not able to align and engage with each other AND not able to design powerful sales tools fit for execution in sales situation”

Sales not able to convey and articulate customer-specific value of company product/services

– thereby not selling the “differentiated value proposition”

Most common barriers

You need a complete and integrated “marketing-sales chain” to define, communicate and execute your value proposition

Marketing “Translating” company product/services to differentiated insights and messages for target segments

Align & Engage Alignment of sales approach and practical sales execution tools – and create sales engagement in the communication

Sales Deliver insights and challenge customers. Articulate, substantiate and convey superior customer-specific value of company offering

MARKETING-SALES CHAIN

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Marketing has a strong role in driving the development value propositions – in strong coorporation with Sales

Company Value

Proposition

Customer Value

perception

Drive structured market and customer insight

Mapping of segment and customer needs and challenges

Formulation of corporate and segment specific value propositions

Defining marketing and communication strategy

Prioritization of marketing and sales resources

Development of segment specific communication platform, ie. what should we communicate to whom?

Development of sales tool box targeted to relevant segments and stakeholders, i.e. dialogue tools, value calculator etc.

Building Marketing and Sales performance “cockpit”

Marketing “Translating” company product/services to differentiated insights and messages for target segments

Align & Engage Alignment of sales approach and practical sales execution tools – and create sales engagement in the communication

Sales Deliver insights and challenge customers. Articulate, substantiate and convey superior customer-specific value of company offering

MARKETING-SALES CHAIN

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