Our summer series on sales methodologies aims to shed light on some of the techniques that have been developed in the world of sales. Among the most influential is “The Challenger Sale” – a strategy born out of meticulous research by Matthew Dixon and Brent Adamson, and backed by the CEB, now Gartner. This isn’t your typical sales strategy based on relationship building; it’s a dramatic shift in approach that promises better outcomes in a complex selling environment.
In this post, we’ll dive deep into the Challenger Sale methodology, explore its foundational principles, understand the results it produces, and walk through its process step by step. Hopefully, some of you will feel empowered to read the book and use its methodology to embark on a new (more successful) selling approach. Let’s jump in.
1. The Core Idea: The Five Sales Profiles
Based on extensive research and numerous interviews with sales professionals across various industries, the authors of “The Challenger Sale” identified five distinct B2B sales profiles:
- Relationship Builders: Focus on building and nurturing strong personal and professional relationships and tend to work to resolve tensions in the sales process.
- Hard Workers: Are self-motivated, put in long hours, and handle more tasks than their peers.
- Lone Wolves: Are very confident, often follow their own instincts, and prefer working alone.
- Reactive Problem Solvers: Focus on post-sales follow-up, ensuring that all client issues are resolved quickly.
- Challengers: Have a deep understanding of the customer’s business and aren’t afraid to challenge preconceptions or the status quo.
Of these profiles, Challengers significantly outperformed the others, especially in complex selling environments.
The most prevalent profile among sellers is typically the Relationship style. This “makes sense to most sales leaders. These reps have enjoyable conversations — they seek to satisfy customer demands and resolve tension.” However, according to the authors, the Relationship style has the lowest proportion of high achievers at 7%, whereas nearly 40% of higher performers use the Challenger style.
This has implications for sales teams around the world as the author’s believe Challengers are made not born, and therefore everyone can learn the Challenger style.
2. The Challenger Sales Model
Challengers follow a three-step process: teach, tailor, and take control, all while building constructive tension within the sales conversation.
- Teach: Challengers provide their customers with new perspectives on their business, helping them identify unrecognised pain points or potential opportunities.
Their research found the seven highest-impact areas that make for a positive customer experience occur when:–
• A rep offers unique / valuable perspectives on the market
• A rep helps the customer navigate alternatives
• A rep provides ongoing advice and consultation
• A rep helps the customer avoid potential landmines
• A rep educates the customer on new issues / outcomes
• The supplier is easy to buy from
• The supplier has widespread support across organisation
- Tailor: Challengers adapt their sales pitch to the customer’s unique needs and objectives. Creating a pitch that resonates is a key factor in winning organisational support. To ensure resonance, the pitch should have messaging that’s tailored the decision-maker you’re speaking with. Directors will have different concerns than VPs, and VPs different than a CEO.
- Take Control: While being respectful of the customer’s concerns, Challengers aren’t afraid to express a differing opinion, especially if it’s in the customer’s best interest. Taking control of a sale means that a rep demonstrates and holds firm on value – not competing on price – and keeps momentum going across the sales process. Reps must take control early on and veto prospects who are unlikely to move forward or get key .decision makers involved.
3. Commercial Teaching
The teaching approach outlined in the book is called “Commercial Teaching,” where a salesperson teaches their prospect how to think about their needs. This approach must :
Lead to your unique strengths. Why should people buy from you over anyone else?
Challenge customer assumptions. How can you reframe the problem for your customers?
Catalyse action. Customers need to understand why they should take an action, and the urgency to do it now.
Scale across customers. Your sales team must have a core group of market or industry insights that scale across different kinds of customers.
The book breaks down commercial teaching into six points:
In this initial phase, it’s all about rapport building. Salespeople establish a connection with the client by demonstrating an understanding of their business and the challenges they face. By using benchmarking data, you can show the client where they stand relative to competitors or industry standards. This not only provides value but also paves the way for more in-depth discussions. It’s about saying, “I understand your world, and here’s where things stand.”
Once rapport is established, the salesperson presents a new perspective or insight that the customer might not have considered. This could be an unrecognised problem or a new opportunity they’ve overlooked. The goal here is to shake their current understanding a bit, compelling them to see things in a new light.
(iii) Rational Drowning
This is where the salesperson intensifies the client’s understanding of the problem. Through facts, figures, and data, they illustrate the depth and scope of the problem, making the client realise the urgency of the situation. It’s about saying, “Here’s the data that shows why this is a big deal.”
(iv) Emotional Impact
While data and figures appeal to the logical side of decision-making, sales decisions, especially big ones, are often driven by emotion. In this phase, the salesperson connects the problem to personal impacts. How might the problem affect the client personally, or their team, or even their customers? This makes the urgency felt on an emotional level.
(v) New Way
After highlighting the problem and its impacts, it’s time to pave a way forward. The salesperson introduces a new framework or approach to address the problem. This isn’t about pitching the product yet but introducing a new way of thinking that aligns with the salesperson’s solution. It’s about saying, “There’s a better way to tackle this.”
(vi) Solution / Implementation Map
Finally, with the groundwork laid, the salesperson introduces their product or solution, tying it directly to the teaching points they’ve established. They outline how their solution addresses the problem, using the new framework or approach they’ve introduced. This provides the client with a clear path forward, linking each step of the proposed solution to the insights shared earlier.
In essence, commercial teaching is about leading the customer on a journey, from understanding their current world to seeing new problems or opportunities, feeling the urgency of those issues, and ultimately realising that the salesperson’s solution is the best way forward.
4. The Results
Companies that have adopted the Challenger Sale methodology report several benefits:
- Increased Sales Efficiency: By focusing on potential challenges and solutions, sales reps can move the sales process along more quickly.
- Larger Deals: By positioning themselves as trusted advisors rather than just product sellers, Challengers often secure larger commitments from customers.
- Long-Term Relationships: While the methodology may seem more confrontational, the aim is to establish long-term partnerships based on trust and mutual benefit.
An example of a team using the Challenger Sale is Dell Technologies. Dell has been recognised for its modern sales strategies, particularly post its EMC acquisition, in the complex B2B environment of enterprise technology.
Dell Technologies and The Challenger Sale Model
Dell’s evolution from a PC manufacturer to an enterprise solution provider meant that its sales approach had to shift from transactional to consultative, especially as it sought to provide holistic IT solutions to businesses worldwide.
- Facing the Challenge: As the enterprise technology landscape evolved rapidly with the advent of cloud computing, IoT, and AI, simply understanding the product was not enough. Dell’s salespeople needed to understand the broader tech landscape and the challenges and opportunities these trends presented to their clients.
- Challenger Training: Dell recognised this need and began integrating Challenger principles into their sales training programs. Sales reps were trained to challenge the preconceived notions of their clients, many of whom might still see Dell as just a hardware provider. By offering new insights into the tech industry and how integrated solutions could drive efficiency, Dell aimed to reposition its brand and its offerings.
- Engagement Strategy: Dell’s sales teams shifted their focus from just product discussions to understanding a client’s entire IT ecosystem. They presented insights on potential bottlenecks, security threats, and areas for optimisation, often introducing clients to challenges they hadn’t even considered.
- Results: Dell’s adoption of Challenger principles has been credited as one of the factors that helped the company transition from a PC-centric business model to a comprehensive IT solutions provider. Their salespeople succeeded in forging deeper, consultative relationships with clients, leading to larger enterprise deals and long-term partnerships.
This shift in sales strategy, combined with other business decisions, has helped Dell remain a significant player in the highly competitive enterprise technology landscape.
5. How It Works In Practice
Implementing the Challenger Sale isn’t merely about adopting a new set of tactics but fostering a holistic shift in mindset for both sales reps and leadership. Here’s a look at its implementation and considerations for its adoption:
- Research and Preparation: Successful Challengers invest significant time in understanding their customers’ industry, potential disruptions, and unique business challenges. This deep knowledge allows them to provide valuable insights that the customer might not have considered.
- Engaging Conversations: Instead of beginning with product features or solutions, Challengers lead with broader industry insights and stories. They challenge the customer’s current thinking, pushing them to perceive their problems or opportunities in a new light.
- Debate, Not Diplomacy: Challengers aren’t confrontation seekers, but they do appreciate the value of healthy debates. They are confident enough in their research and insights to push back when they believe a customer’s view might not be in their best interest.
- Solutions Over Products: It’s not about just selling a product or service; it’s about positioning that product as the optimal solution to a unique challenge. Challengers show how their offer can address specific pain points or capitalise on opportunities, often in ways the customer hadn’t considered.
Who Should Use the Challenger Sale Methodology?
While the Challenger Sale offers compelling advantages, it might not be a one-size-fits-all solution:
- Complex Selling Environments: In industries where the products or solutions are complex and differentiation is subtle, the Challenger Sale shines. Here, salespeople need to bring more to the table than just product knowledge—they need to provide fresh perspectives.
- Knowledge-Driven Industries: If you’re selling in a field that’s rapidly evolving, like technology or pharmaceuticals, the ability to challenge customers with new information can be invaluable.
- Experienced Sales Professionals: The Challenger Sale can be particularly effective for experienced salespeople who have already built a foundation of industry knowledge and can confidently challenge their customers’ thinking.
- Not Ideal for Transactional Sales: For straightforward, transactional sales, where the buying decision is primarily price-driven, the Challenger methodology might be overkill. In such cases, Relationship Builders or Hard Workers might fare just as well, if not better.
In conclusion, the Challenger Sale methodology offers a fresh perspective on sales strategies, one that aligns with the complexities and challenges of today’s business landscape. Since its launch in 2011, the Challenger Sale has had a big impact on the sales world with many companies adopting its approach and an entire industry of sales consultants has grown to support and teach its approach. Its best used in complex selling environments where a consultative approach with a customer is best.
Using a CRM with The Challenger Sale
A CRM system can significantly enhance the Challenger Sale approach by supporting the sales team in their efforts. Here’s how:
1. Data Collection and Analysis
- Customer Insights: A CRM system can store valuable information about the customer’s industry, their challenges, purchasing habits, past interactions, and more. This data serves as a foundational layer for salespeople to understand and then challenge their customers’ perspectives.
- Benchmarking Data: If integrated with the right tools, a CRM can pull benchmarking data which salespeople can use in the “Warmer” phase to show customers where they stand in relation to industry peers.
2. Sales Training and Knowledge Base
- Resource Repository: CRMs can be loaded with industry trends, reports, and insights in their file storage facility. Salespeople can tap into this knowledge to prepare for their interactions, equipping themselves with the insights they need to challenge customers.
- Sales Playbooks: Playbooks can be created within the CRM, guiding sales reps on how to effectively implement the Challenger Sale methodology based on different customer profiles.
3. Collaboration and Strategy Formulation
- Team Collaboration: Modern CRMs have collaboration tools, allowing sales teams to discuss strategies for specific clients, brainstorm ways to challenge them, and come up with new insights.
- Account Mapping: For larger accounts, salespeople can create detailed account maps, outlining all key stakeholders, their perspectives, and potential ways to challenge and engage them.
4. Personalisation and Tailoring
- Customer Segmentation: CRMs allow for detailed customer segmentation, helping salespeople tailor their messaging and approach based on specific customer profiles.
- Interaction History: By referencing past interactions stored in the CRM, salespeople can further personalise their engagement, ensuring that their challenges and insights align with the customer’s unique history and needs.
5. Feedback and Iteration
- Recording Outcomes: After employing the Challenger approach, salespeople can record the outcomes in the CRM. Did challenging the customer lead to a positive engagement? Was the deal closed? This data is valuable for refining the approach over time.
- Feedback Loop: Managers and trainers can provide feedback directly within the CRM, guiding salespeople on how to better implement the Challenger methodology in future interactions.
6. Integration with Learning Management Systems (LMS)
- Continuous Learning: A CRM integrated with an LMS can provide sales reps with ongoing training modules on the Challenger Sale methodology, ensuring they stay updated with evolving techniques and best practices.