The Challenger Customer - Softcover

Nick Toman Pat Spenner

Softcover

ISBN 10: 0241196566 ISBN 13: 9780241196564

Publisher: Portfolio Penguin, 2015

Synopsis

Four years ago, the bestselling authors of The Challenger Sale overturned decades of conventional wisdom with a bold new approach to sales. Now their latest research reveals something even more surprising: Being a Challenger seller isn't enough. Your success or failure also depends on who you challenge.

About this title

About the Author

BRENT ADAMSON is a managing director in the Sales and Marketing Practice of CEB.  He is a coauthor of The Challenger Sale and a frequent contributor to the Harvard Business Review. 
MATTHEW DIXON is executive director of the Financial Services and Customer Contact Practices of CEB.  He is a coauthor of both The Challenger Sale and The Effortless Experience and is a frequent contributor to the Harvard Business Review.
PAT SPENNER is a managing director in the Sales and Marketing Practice of CEB.  He is a frequent contributor to Forbes and the Harvard Business Review.
NICK TOMAN is a managing director in the Sales and Marketing Practice of CEB.  He is a coauthor of The Effortless Experience and is a frequent contributor to the Harvard Business Review.

CEB is the leading member-based advisory company. By combining the best practices of thousands of member companies with its advanced research methodologies and human capital analytics, CEB equips senior leaders and their teams with insight and actionable solutions to transform operations.

Excerpt. © Reprinted by permission. All rights reserved.

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ISBN 978-0-698-40618-6

To the members of CEB around the world, who challenge us every day to deliver insights worthy of their time and attention

FOREWORD

INTRODUCTION

THE HARDEST PART OF SELLING SOLUTIONS

CHAPTER 1

THE DARK SIDE OF CUSTOMER CONSENSUS

CHAPTER 2

THE MOBILIZER

CHAPTER 3

THE ART OF UNTEACHING

CHAPTER 4

BUILDING COMMERCIAL INSIGHT

CHAPTER 5

COMMERCIAL INSIGHT IN ACTION

CHAPTER 6

TEACHING MOBILIZERS WHERE THEY LEARN

CHAPTER 7

TWO TYPES OF TAILORING

CHAPTER 8

TAKING CONTROL OF CONSENSUS CREATION

CHAPTER 9

MAKING COLLECTIVE LEARNING HAPPEN

CHAPTER 10

SHIFTING TO A CHALLENGER COMMERCIAL MODEL: IMPLICATIONS AND IMPLEMENTATION LESSONS

ACKNOWLEDGMENTS

INDEX

FOREWORD

The odd combination of where I live and what I do for a living have turned me into a bit of a walking punch line over the past decade or so.

Let me explain.

I live in the Greater Washington, D.C., metropolitan area—the seat of the U.S. government—and I run one of the world’s most widely used sources of insight into corporate performance. So several hundred times a year in cities around the world, I introduce myself by saying “I’m here from Washington, D.C., to share some insights about best management practices.”

Business cultures differ widely across regions and nations, so the response to this statement runs the gamut from “You’ve got to be sh*&%ng me” (Silicon Valley, Amsterdam) to “I’m sorry, I think I misheard you” (Singapore, Minneapolis) to “Ah, you’ll feel at home here after a glass of wine. Try the Super Tuscan” (Rome). While the tone of responses varies, no one misses the irony at the heart of the statement. Like many national capitals, Washington has become a byword for organizational dysfunction. This is largely because citizens believe the U.S. Congress and similar deliberative legislative bodies that seem to take forever to act are useless, especially since when they do act they achieve only modest—if any—results.

All around the world, I routinely hear how much better off we’d be if only government would run itself like a business. The unfortunate truth is that—in many respects—it already does.

More specifically, business is increasingly running itself like a dysfunctional legislative body.

I THOUGHT THIS BOOK WAS ABOUT SALES AND MARKETING?

You’re now thinking that you’ve picked up the wrong book, but the headline of our recent work on sales, marketing, and the buying process suggests that in most B2B commercial environments purchasing looks a lot like a bickering Congress or Parliament on a bad day.

That’s why we’ve done a deep dive into the modern company’s buying process. As we started comparing notes across companies and industries, we realized that the stories commercial leaders were sharing were eerily similar to our own experiences—particularly when we were working with leaders to engineer dramatic innovations or step-function improvements in outcomes.

As the research team’s work continued, my own mind kept going back to a conversation I had with the controller of a German multinational who was using our work to radically simplify and accelerate information flow through his company. I visited on a day when the project’s kickoff (and ultimate ROI) had been delayed by three months due to a last-minute review requested by something called the “excellence assurance center of excellence” (that is not a typo).

The controller was in what could (charitably) be called a foul mood. The project itself was slated to last only six months, and he had enthusiastic support from the CEO and partnership from the CIO and head of HR. In terms of large-scale change management, he had really done everything right. And yet—at the eleventh hour, out of nowhere—a new stakeholder arrived on the scene, slowing down and lowering the aspiration of this fast-moving and ambitious effort. Leaning back in his chair, the CFO moaned, “I didn’t even know we had an excellence assurance COE.”

He got up, walked toward the window, and said, “This is a total [long German word that definitely didn’t mean “Really great day for our company: I just couldn’t be prouder to work here!”].

And it wasn’t a great day. Nor, by the end, was it a great project. By the time the COE review was complete, the project was rescoped twice, suffered three delays, and ultimately delivered a fourth of the original business value.

When I shared this story with an HR chief of a major conglomerate, she remarked, “That’s ridiculous.” I nodded, thinking she was going to share a story about how decisive she and her C-suite peers were relative to this poor controller’s company. She continued, laughing. “I once lost two months to our firm’s project-naming committee. He should be happy with that outcome.”

THE NEW REALITY FOR SALES: BIG, COMPLEX PROCESSES AND BIG, GERMAN CURSE WORDS

If it’s this difficult for a C-level executive to drive change through an organization, just imagine how hard it is for someone on the outside to galvanize support for a disruptive new solution. The data that we analyzed points to purchase processes characterized by an ever-expanding array of stakeholders with often competing agendas, changing purchase criteria, and—most troubling—a reversion to lowest-common-denominator behaviors.

Why?

We see this behavior as part of a broader trend in corporate operations. Several factors are reshaping how companies operate and make decisions, and all of them have implications for sales and marketing.

First, simply put, big companies are just bigger. The smallest Fortune 500 company is many times the size of the smallest one just twenty years ago. And with big size comes big complexity.

Information flows are multiplying quickly. While this means more educated buyers, it also means more people in the process—each with access to competing information and each empowered to form (and share) opinions. At its worst, information overflow can lead to complete decision paralysis—bad for companies and bad for the suppliers trying to engage with them.

Professional and control functions are strengthening within companies, with many having a say in virtually every decision. This is driven partly as a result of the need for scale and consistency across larger entities and partly because of concerns about risk and regulation. Obviously from a commercial perspective, the most important of these is procurement, but procurement is only one of the folks invited to the party—compliance, data privacy, IT security, EH&S, and quality often all weigh in on major buying decisions.

Emphasis on collaborative decision making is increasing in an attempt to reap the benefits of diverse perspectives on business issues.

None of these things are bad. In fact, all are undeniably good—bigger opportunities, more information, professional and analytic participants, and collaboration among different parties all ought to strengthen buying dynamics and make the process more likely to yield a successful purchase.

But all too often they don’t. Different functions bring different agendas to the table. Excessive collaboration adds time (but not value) to the process. Information abundance buries the core issues; opportunities that initially combined strategic advantage for the buyer with strategic opportunity for the seller get watered down or abandoned altogether. In the end, if any deal is reached, it’s for less scope and impact than what was initially proposed.

IF YOU CAN’T BEAT ’EM, MOBILIZE ’EM

By now, I’ve painted a pretty depressing picture of what lies ahead: slow processes, stalled deals, and customers unable to agree, settling for the lowest common denominator—or worse still, the status quo. But, thankfully, that’s not what’s in store. Beyond documenting and understanding the drivers of this tough new buying environment, we also found pioneering strategies for not only surviving, but also thriving in it.

Supported by an enormous amount of research, real-world sales experience, and practical lessons from leading sales and marketing teams, this book lays out a step-by-step path anyone can follow to dramatically improve commercial performance. It’s a path few are on today, but any company can pursue by carefully identifying and equipping a few select customer stakeholders to far more effectively mobilize the colleagues around them.

Whether you’re in sales, marketing, service, or support—from the front line to the corner office—each chapter of The Challenger Customer provides surprising findings for rewriting the rules for how the best companies connect with current customers, dramatically boosting sales performance as a result. All designed to drive decisive action among customer organizations increasingly predisposed to systematically avoid it. I hope you read it all the way through and consider its recommendations closely. Not only will your organization thank you, but your customers will too.

TOM MONAHAN

Chairman and Chief Executive Officer

CEB

INTRODUCTION

THE HARDEST PART OF SELLING SOLUTIONS

This is a book of surprises.

Chief among them is the surprising decline of historically effective selling strategies that now fail to generate anything near hoped-for returns.

Despite suppliers’ improved ability to convey their unique value, there’s strong evidence that today’s customers are less willing than ever before to actually pay for that value, even when they perceive it—at least not when they believe the next best, less expensive alternative is “good enough” to meet their needs. While today’s suppliers may win the battle for awareness, consideration, recommendation, and even preference, they still lose when it comes to what matters most: getting paid. As exasperating as it seems, the very solutions most companies developed to escape commoditization have themselves become commoditized in the eyes of their customers.

It all leaves commercial leaders wondering, “What do we do now? What’s left when the classic sales and marketing playbook we’ve relied on for so many years falls short?”

It was partly in response to these questions that CEB’s sales and marketing practice conducted the research that led to the publication of The Challenger Sale—an in-depth examination of the sales rep behaviors most likely to succeed in today’s commercial environment. But while the debate raged around us as to whether Challenger was right or wrong, new or old, too controversial or not controversial enough, we were focused on something else entirely: What else is there?

In fact, the more research we did, the more insights we uncovered and the more convinced we became that there was a second part to this story—one potentially more powerful than the first. It turns out, the far bigger story isn’t about suppliers’ struggle to sell solutions, it’s the customer’s struggle to buy them. While there are many reasons customers fail to buy, our data shows clearly that the primary culprit is the dramatic increase in both number and diversity of customer stakeholders typically involved in solutions purchases today—and, more damning, the severe dysfunction that is bred by the ever-expanding number of individuals who need to weigh in before a deal is signed.

In the end, what has long seemed to salespeople like a well-designed strategy to “stick it to suppliers” or beat them up on price is more often than not a function of a far less sinister but arguably infinitely more intractable problem: the inability of customer stakeholders themselves to achieve broad agreement on a common course of action in the first place. Much of the commoditization pressure suppliers face today isn’t the result of customers’ willingness to settle for “good enough,” it’s their failure to agree on anything more. And that’s a challenge most sales and marketing strategies fail to solve as it’s a problem they were never designed to address in the first place. In fact, current sales and marketing tactics exacerbate this problem rather than overcome it.

Of course, it’s hard enough to sell effectively. How exactly are we supposed to help our customers to buy more effectively? Here, the research holds a final, delightful surprise: just as we learned in our previous work that it is critical to have Challenger sellers, our latest work shows that it is equally (if not more) critical to have Challenger buyers.

In a series of quantitative studies, we were able to isolate and study these individuals. These aren’t your run-of-the-mill “coaches” or advocates doling out information to the sales rep and vocally championing a given supplier with colleagues. These are a special breed of customer stakeholder focused much more on marshaling the internal resources and buy-in necessary to compel their colleagues to collectively think and act beyond the status quo, irrespective of supplier. As we’ve studied these individuals in a great deal of depth, what we’ve found is: in a world of diverse and potentially dysfunctional customer stakeholders, it’s not just that you challenge, but who you challenge that really matters. To win today, you need a Challenger inside the customer organization.

These customer Challengers exist and can be found—but only if suppliers are looking for them in the first place. Because everything we’ve learned in all of our research clearly suggests that finding these individuals, winning them over, and then equipping them to win takes a completely different kind of commercial strategy than what’s worked so well in the past.

Who are these customer Challengers? We call them Mobilizers, and this is their story.

CHAPTER ONE

THE DARK SIDE OF CUSTOMER CONSENSUS

THE PROBLEM OF 1 OF 3

If there is one concern most top of mind among senior sales and marketing leaders around the world, it is the inexorable downward pressure on deal size, margins, and growth as they navigate continued uncertain times. While their CEOs mandate a “return to double-digit growth,” commercial leaders find themselves more frequently than ever before competing on little else but price.

Perhaps most frustrating, however, is that traditionally proven strategies designed to drive that growth no longer work nearly as well as they used to—leaving senior executives to assume they’ve somehow lost their way, broadly calling fo...

About this edition

• Publisher: Portfolio Penguin
• Publication date: 2015
• ISBN 10: 0241196566
• ISBN 13: 9780241196564
• Binding: Paperback