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Monday, April 30, 2012

Challenger Sales Model: Teaching for differentiation

The first pillar of challenger sales model is: Teaching for differentiation.

  • If you are going to sell "solutions" the thinking goes, you're got to first "discover" your customers most pressing points of pain and then build a tight connection between whats keeping them up at night and what you are seeking to sell.
  • Customers don't actually know what is going to solve their problem. They know the problem but not the solution that will solve the problem.
  • Rather than asking customers what they need, the better sales technique might in fact be what they need.
  • Its not what you sell, its how you sell it:
  • In B2B sales environment there is a good chance of out performing the competition if sales/buying experience provides the following

    • Offers unique perspective in the market.
    • Helps client navigate alternatives.
    • Provides ongoing advice or consultation.
    • Helps clients avoid potential land mines.
    • Educates clients on new issues and outcomes.
    • Supplier is easy to buy from.
    • Supplier has widespread support across buyers organization.
  • The Power of Insight:Customer loyalty is much less about what you sell and much more about how you sell. The best companies don't win through the quality of the products they sell, but through the quality of the insight they deliver as part of the sale itself. The battle for customer loyalty is won or lost long before a thing ever gets sold. And the best reps win that battle not by "discovering" what customers already know they need, but by teaching them a new way of thinking altogether.
  • Not just any teaching, commercial teaching:

    Bad place to be: You've given the customer what they want, but in the process you've actually given your competitor exactly what they want too - your business. It's one thing to challenge customers with new ideas, and another thing altogether to ensure you get paid for it. To make this happen teaching efforts have to meet very specific criteria. The following are the key rules of that help in establishing the specific criteria using commercial teaching.

    1. Lead your unique strengths: Commercial teaching must tie directly back to some capability where you outperform your competitors. If what you're teaching inevitably leads back to what you do better than anyone else, then you're in a much better position when it comes to winning the business.

      You've only really succeeded when the customer asks, "Wow, how can I make that happen?" and you're able to say, "Well, let me show you how we're better able to help you make that happen than anyone else."

      If you leave the cients troubled by a new problem they never knew they had and with no real way of doing anything about it. Yes, customers want insight on how they could operate more productively, but insight they cant't do anything about actually makes things worse, not better. Then you really have given them something to keep them up at night.

      In order to ensure that your teaching efforts ultimately lead to your unique strengths, you actually have to know what your unique strengths are.

      The key question that a challenger sales rep should ask themselves, why should customers buy from you over anyone else?

    2. Challenge customer assumptions: Whatever you teach your customers has to actually teach them something. It has to challenge their assumptions and speaks to their world in ways they haven't thought or fully appreciated before.

      Challenger reps are looking for a different customer reaction altogether. Rather than, "yes, I totally agree!" they know they're on the right track when they hear their customer say, "huh, I never thought of it that way before." The best indicator of a successful re frame, in other words, isn't excited agreement but thoughtful reflection. You've just shown your customer a different way to think about their business - perhaps a land mine they'd overlooked, a trend they under appreciated, or an alternative they prematurely dismissed - and now you've got them curious. They're wondering, "what exactly does this mean for my business?" or even better, "what else do't I know?"

      Just because we've helped them see things differently doesn't mean we've necessarily persuaded them to do things differently. That's next and it's just important.

    3. Catalyze action: A well executed teaching conversation isn't about the supplier's solution at all - at least not initially, It's about the customer's business, laying out an alternative means either save money or make money they'd previously overlooked. In a conversation like that, traditional ROI calculations prove useless because they're focused on the wrong things.

      Before you convince customers to take that action, you first have to show them why the insight you just shared with them merits any action at all, especially when that insight competes directly with conventional wisdom.

      If you're going to build an ROI calculator, make sure it calculates the return on pursuing the reframe, not purchasing your products. Before they buy anything, customers first need to understand what's in it for them to fix their problem.

    4. Scale across customers: Challenger reps should have small set of well-scripted insights along with two or three easy-to-remember diagnostic questions designed to map the right insight to the right customer.

How to build insight-led conversations

A conversation involving teaching for differentiation isn't so much about delivering a formal presentation as it's about telling a compelling story. Along the way, there should be some real drama, perhaps a bit of suspense, and maybe even a surprise or two. Ultimately, the goal is to take customers on a roller coaster ride, leading first to a rather dark place before showing them the light at the end of the tunnel. That light, of course, is your solution.

A purposeful choreography: The six steps of a world class teaching pitch

  1. The Warmer: Building credibility by reading their mind, demonstrating empathy [Customer State: Intrigued, Customer Excitement: Neutral/negative]

    A well-designed teaching pitch starts off with your assessment of your customer's key challenges.

    Never underestimate the value in being able to demonstrate to your customer that they're not alone when it comes to their most pressing challenges. The conclude your review by asking for their reactions. When you pit all together, it should sound something like, "We've worked with a number of companies similar to yours, and we've found that these 'N' challenges come up again and again as by far the most troubling. Is that what you're seeing too, or would you add something else to the list?"

    The whole point, of course, is to build credibility. Essentially, what you're saying to your customer is, "i understand your world," and "I'm not here to waste your time asking you to teach me about your business."

  2. Reframe: First reframe of on-recognized problem, need or assumption. Commercial teaching follows boot camp theory of shocking the customer with the unkown.[Customer State: Drowning, Customer Excitement: Positive]

    At this stage you now introduce a new perspective that connects those challenges to either a bigger problem or a bigger opportunity than they ever realized they had.

    The Reframe is simply about the insight itself. It's just the headline. And 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.

    If you're going to reframe, then be sure you really reframe. This is not the place to be timid, as the entire approach rests on your ability to surprise your customer and make them curious for more information.

  3. Rational Drowning:Gradual intensification of their problem, both in degrees and closeness to the customer. [Customer State: Drowning, Customer Excitement: Neutral/negative]

    In this phase it's time for the data, graphs, tables and charts you need to quantify for the customer the true, often hidden, cost of the problem or size of the opportunity they'd completely overlooked. Rational Drowning is the numbers-driven rational for why your customer should think differently about their business, but presented specifically in a way designed about their business, but presented specifically in a way designed to make them squirm a little but - to feel like they're drowning. Marketers often refer to this as the "FUD factor" - fear, uncertainty and doubt.

    Before you demonstrate how your solution can economically solve a key customer challenge, you've got to convince the customer that the challenge is worth solving in the first place.

  4. Emotional Impact: Psychological features of the problem, or presence in the individual's workflow, humanizing the problem [Customer State: Involved, Customer Excitement: Negative]

    Emotional impact is all about making absolutely sure that the customer sees themselves in the story you're telling.

    Emotional impact isn't about the numbers; it's about the narrative. You've got to paint a picture of how other companies just like the customer's went down a similarly painful path by engaging in behavior that the customer will immediately recognize as typical of their own company.

  5. Value Proposition - A New Way: A new framework for addressing the problem - implicitly tied to the supplier value proposition. Then building back the customer's confidence in a new solution. [Customer State: Involved, Customer Excitement: Neutral/Negative]

    This is a point-by-point review of the specific capabilities the clients would need to have in order to make good on whatever opportunity to make money, save money or mitigate risk that you've just convinced them they're facing. As tempting as it might be at this point to launch into a review of how you can help this step is still about the solution, not about the supplier.

  6. Your solution and implementation map: Map of supplier services or solutions linked back to key teaching points; highlighted path to implementation. [Customer State: Relieved, Customer Excitement: Positive]

    The goal of this step is to demonstrate how your solution is better able than anyone else's to equip them to act differently.

    You've taught the customer something new and valuable about their business (which is what they were looking from the conversation), in a way that specifically leads them to value your capabilities over those of the competition.

Sunday, April 29, 2012

The Challenger Sales Model

I am reading a very interesting book on Challenger Sales Model written by Matthew Dixon and Brent Adamson. I am going to document some quick notes so that I can come back to the blog and refresh myself very often. I highly recommend reading this book for complete insights as my notes are merely key points that I want to remember. I do not claim any ownership of the model or research published in the book and my notes do not replace the reading :)

Lets look at the findings of the Challenger Sales model before diving deep.

Finding #1: The model classifies the sales execs in the following five types:
  1. The Hard Worker
    • Always willing to go extra mile
    • Doesn't give up easily
    • Self-motivated
    • Interested in feedback and development
  2. The Challenger
    • Always has a different view of the world
    • Understand the customer's business
    • Loves to debate
    • Pushes the customer
  3. The Relationship Builder
    • Builds strong advocates in customer organization
    • Generous in giving time to help others
    • Gets along with everyone
  4. The Lone Wolf
    • Follows own instincts
    • Self assured
    • Difficult to control
  5. The Reactive Problem Solver
    • Reliably respond to internal and external stakeholders
    • Ensures that all problems are solved
    • Detailed oriented

Finding #2: One clear winner, one clear loser
When the numbers are compared challenger salesperson win by a landslide. The challenger sales person focus on building constructive tension in customer interaction to push the customer of his control zone. The challenger's do the following things very well:
  • Teach
  • Tailor
  • Assert Control
If you teach without tailoring, you come off as irrelevant. If you tailor but don't teach, you risk sounding like every other supplier. If you take control but offer no value, you risk being simply annoying. Finding #3: Challengers are solution selling representatives not just down economy representative. If you do not have complex sale cycle or offering then you might be better of working with hardworker as they are perfectly able to follow the process and close the sale using methodical approach and product information. In order to be a solution seller, one has to understand the clients business needs very clearly and then tailor the solution in such a way that the bundle of solution and services help client solve the big problem.

Pillars of Challenger Sales Model:
  1. Teaching for differentiation: Teaching is all about offering customers unique perspectives on their business and communicating those perspectives with passion and precision in a way that draws the customer into the conversation. These new perspective apply not to the product and solutions, but to how the customer can compete more effectively in their market. Its insight they can use to free up operating expenses, penetrate new markets and reduce risk
  2. Tailoring for resonance: Tailoring relies on reps knowledge of specific business priorities of whomever he or she is talking to. The specific outcomes that particular person values most, the results they're on the hook to deliver for their company, and the various economic drivers most likely to affect those outcomes.In a time when consensus is more important than ever to get the deal done, it is no surprise that the rep who wins in this environment is the one who can effectively tailor the message to wide range of customer stakeholders in order to build that consensus
  3. Take control of the sale: When the topic of price comes up, a powerful technique is for the sales professional to shift the discussion from price to value. The value of customer offering in order of importance. This sometimes enables the customer to see the offering in a different light; these new insights are very useful to both the sales professional and the customer as they think about the value.

In my following posts I will have my cheat sheets for what could possibly help me become a challenger sales person.

Friday, April 27, 2012

Solution based selling

Why Solution based selling matters?

Solution based selling is largely driven by suppliers attempt to escape dramatically increasing commoditizing pressure on individual products and services become less differentiated over time.

Relationship difference in the approach:
  1. Nature of Relationship
    • Product Sell: Supplier reacts to purchase order
    • Solution Sell: Supplier viewed as trusted adviser
  2. Selling Skills
    • Product Sell: Strong Knowledge of product portfolio
    • Solution Sell: Boardroom level engagement with customer
  3. Customer Experience
    • Product Sell: Quality product/service at good price
    • Solution Sell: Provision of strategic insight regarding customer's business
Side effects of Solution Based Selling:
  1. Rise of consensus bases sale -> Its just like a car sales dealer has to convince a family before a luxury car is bought as opposed to a consumer report rating based car buy as its just another commodity. Understanding the team dynamics and interfaces between the department becomes very important.
  2. Increased risk aversion -> In the world of complex solutions, supplier success is often measured by the performance of the customers business, not the suppliers product. The risk factors are considered in the value proposition.
  3. Greater demand for customization -> Solutions are always bespoke to customers business model. The truth is everyone wants customization, no one wants to pay for it. The solution to this problem is to make processes a part of your solution and build innovative solution which are flexible to accommodate various process flows. In car market people say, "The design is free because it costs the same to make a bad design when compared to a good design"
  4. Too many cooks in the house: There is a rise of third party consultants who act on behalf of the clients for vendor and services selection.

Tuesday, April 3, 2012

Why Mobile Analytics is different and exciting?

  • Mobile/Tablets are replacing the way we interact on internet. Tablets are taking the experience of browsing at home from desk to a couch or dining table.
  • Screen sizes and ways to intereact with smart phones and tables are very much different than traditional desktop.
  • Websites can be upgraded when needed but there is no guarantee that the user will upgrade the app even after you push an update to the store.
  • Monetizing the ads in websites was easy as the publisher chose where to place the ads. In mobile apps the ad placement have little or no control on where to place ads. Gaming the users in such a way that they think that there is enough incentive to watch an ad is the best way to make sure the ad was delivered right.
  • With mobile apps now the publishers get complete access to the location profile of the user and thus making ads more valuable if done correctly.
  • Functionally the apps have much more control on the device when compared to a browser running on the machine. When was the last time Apple checked that you programmed a website correctly for Safari? but they like to check each app and update for an app in the app store.

Also there is no business without a customer. So to establish the opportunity I would like to point you to a wonderful experiment that is doing at Grand Central Station: Mobile Story

Also check out this conversation. Really good example of how mobile analytics is different:Expedia Story of Mobile App Analytic