This article is an excerpt from the Shortform summary of "The Challenger Sale" by Matthew Dixon and Brent Adamson. Shortform has the world's best summaries of books you should be reading.
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What is the Challenger Sales process? How does it work?
The Challenger Sales process is a type of sales strategy that allows a rep to control the conversation, and push back against customer doubts. While many sales strategies are customer lead, the Challenger Sales process lets reps guide the conversation as they give their “teaching pitch.” Read more about the Challenger Sales process below.
The Challenger Selling Process
The Challenger Selling Process grew out of the CEB’s research. It’s focused on training reps in the Challenger skills of teaching, tailoring, and taking control. The rest of the book focuses on best practices, tools, and lessons learned by early adopters (companies that tested the methodology) in implementing the model.
The Challenger Selling Model rests on several basic principles:
Principle 1: Challenger skills can be learned.
Rather than committing the time and expense to replace an entire sales force with “natural” Challengers, companies are better off training current reps in new skills and behaviors. Every rep in the study employed Challenger behaviors to a degree; reps can learn to fully implement them. The experience of the test companies proved that Challengers can be created. If you’re a sales rep, you can close the gap between your current skill level and the Challenger model.
Principle 2: The skills must be applied in combination.
While companies may be tempted to skip components of the model, the Challenger skills—teaching, tailoring, and taking control of the conversation—are most effective when used in combination. Implementing the full model is the only way to realize the tremendous performance gains it offers.
Reps who teach without tailoring their message to the recipient will sound irrelevant. Those who tailor without teaching will sound no different from their competitors. Those who take control without teaching something of value will irritate the customer.
Principle 3: The Challenger model requires organizational support.
Companies can’t sustain a Challenger sales process without organizational support from the sales, marketing, research, finance, and human resources departments. These departments must assemble, analyze, frame, and package business intelligence, data, and marketing research into effective teaching pitches (new business insights) that reps can present to customers. The pitches must be compelling, replicable, and adjustable so they resonate with each customer stakeholder.
While taking control of the sales conversation is an individual skill, reps need the right information and tools from their organization to take control effectively.
Principle 4: Building a Challenger sales force takes time.
The training and transition to the Challenger Selling Model take time to do effectively. Pushing the program through quickly might boost rep productivity somewhat, but the gain will be much smaller than what could have been achieved by implementing the program properly. Also, without due diligence, reps are likely to treat the initiative as just the flavor of the month and soon forget it.
Full adoption may take years, rather than weeks or months. It’s not simply a ”bolt-on” software update—it’s a new operating system for the whole company. However, when a company makes the full investment, the Challenger Selling Model offers a way out of the solution selling quagmire.
This section explores what the Challenger Sales process looks like in practice, based on the experiences of companies that applied it. Remember, the three pillars of the model are: teaching for differentiation, tailoring for resonance, and taking control of the sales conversation. (A full chapter is devoted to each principle later in the book).
Teaching for Differentiation
Challengers distinguish themselves from competitors by their ability to teach customers something new about their business. Research on customer loyalty (discussed in Chapter 4) shows that teaching new insights creates loyal customers.
Here’s how a rep selling office furniture applied this kind of teaching in a conversation with a company that was moving into a new office building. The company had already contracted with a competitor for office design and furniture, so the conversation would seem to be a lost cause; however, the rep did three things:
1) She started from an insight and taught the customer about a problem he didn’t know he had. The rep had learned that one of the company’s priorities in moving was to provide collaborative spaces for employees to work on group projects. She knew from her research that collaboration works best in small groups of three or four people. However, she noticed that the collaborative workspaces in the architect’s plan were designed for large groups. She shared her insight and the problem with the customer.
2) She developed interest: The customer was intrigued by the research findings and drawn into a discussion about possible solutions, complicated by the fact that the project was already well underway.
3) She changed the direction of the account: The rep suggested the large rooms could be reconfigured with moveable dividers. Then she introduced dividers and other relevant products from her company that could help the customer facilitate collaboration among employees.
The rep’s teaching pitch was linked directly to her company’s products, yet it was based on a unique insight her competitor had not offered the customer.
Tailoring for Resonance
The second pillar of the Challenger sale process is the ability to tailor the teaching message to different types of customers and to different people within an organization. Tailoring makes the teaching pitch grab and stick with the customer.
(Shortform note: Different people within a company who need to be on board for a sales deal to be approved are referred to in the book as stakeholders. They could be in finance, marketing, operations, or any other company department.)
To tailor a message to a particular stakeholder, the rep needs to understand:
- The stakeholder’s specific business priorities
- The outcomes the person cares most about
- The results they have to deliver (how their performance is measured)
- The economic drivers affecting those outcomes
Here’s an example of how message tailoring can work: While preparing to present an outsourcing solution to a company, a rep learned two things about the CEO: he was a tech junkie and he was concerned about the company’s poor customer service. So the rep focused her presentation on how her proposed solution would improve complaint response time and customer satisfaction by using new technology her company had recently developed.
Taking Control of the Sale
The final pillar of the Challenger sale process is taking control of the sale. Being assertive, or taking control, doesn’t mean being aggressive or irritating; it means standing firm when the customer pushes back.
Challenger reps assert themselves in two ways:
- They control the discussion of pricing and money in general. The rep doesn’t give in to the request for a 10% discount, but instead refocuses the conversation on the value of the supplier’s offering, rather than price.
- They challenge the customer’s thinking and pressure the customer to reach a decision more quickly in order to counter the inertia that can stall decisions indefinitely. To handle reluctance (risk aversion), the Challenger moves customers out of their comfort zone by presenting things from a different perspective.
Just as you can’t be an effective teacher without pushing your students, you can’t teach customers without pushing them to think and act differently. Reps (and teachers) take the lead with a specific end in mind.
Here’s an example of taking control of a discussion about price:
A sales rep needed to inform a longtime customer of a price increase. None of the customer’s other suppliers were increasing their prices, but the rep’s company needed to cover the increasing costs of its raw materials.
Meanwhile, the customer had a special deal with the rep’s company to receive its items in non-standard packaging. Over time, the cost of this packaging had significantly reduced the supplier’s profitability on the sale.
While discussing the price increase, the rep asked the customer to rank various elements of the supplier’s offering in importance. The custom packaging didn’t rank in the top three, so the rep agreed to cut the price increase and switch to standard packaging. The packaging change actually raised the supplier’s profit more than the price increase did.
By getting the customer to rank the features it received from the supplier, the rep helped him see the supplier’s offerings in a different light.
Researchers found that Challengers are very likely to succeed in complex sales, while Relationship Builders are the least likely to succeed. In complex sales, more than half of all top performers are Challengers, while almost none are Relationship Builders.
The reason Challengers do well in complex or solution selling during the Challenger sale process is that it’s a disruptive sales model, requiring customers to think and act in a different way—for instance, to think of value as encompassing more than just price. A sales rep needs the ability to push or challenge customers to rethink how they run their business—a key Challenger skill.
(Note that while Challengers are critical to solution selling, they aren’t required in all aspects of sales operations. For instance, Hard Workers do well in transactional functions—for instance, as inside sales or telesales reps—where success depends on call volume rather than call quality. In these positions, it isn’t necessary to invest in Challenger reps.)
Sales managers who aren’t building or hiring Challenger reps will fall behind as deals get more complex.
Don’t Forget About Effective Coaching in the Challenger Sale Process
One more thing that is extremely important to the challenger sales process is good coaching from managers. Research shows that effective coaching can significantly boost the performance of average reps.
Specific research findings include:
- Improved coaching of weak performers results in only nominal performance improvement. If someone is a bad fit for the job, better coaching won’t fix the problem.
- Improved coaching of star sales reps also is likely to have little performance impact. However, quality coaching improves their retention.
- Improved coaching can substantially boost the performance of average reps. With quality coaching, median performers could improve as much as 19%. Improving coaching effectiveness from weak to strong would result in a performance gain of 6 to 8% for core reps.
This means effective coaching has the potential to greatly improve performance in a complex sales environment. Coaching can mean the difference between hitting or missing sales goals for the majority of your reps. The key is to focus the bulk of coaching efforts on the core performers rather than the lowest or highest performers.
Besides boosting sales performance, coaching is a big factor in employee retention and discretionary or extra effort. Good coaches make people want to stay; bad coaches (and bad managers) are demoralizing and drive people away. This applies regardless of the employee’s performance level.
The Challenger Sales process is demonstrated to be very successful. In fact, those who use the Challenger Sales process are usually the highest performers in sales.
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- Why the best salespeople take control of the sale and challenge the customer's thinking
- How to package your company with a key insight to spark an "a-ha" moment
- How to get the organizational support you need to maintain your sales edge
