As more middle-market firms bump up their growth expectations for 2013, sales people are finding customers ever more demanding. It seems that the best sales people these days come armed not only with information, but also with ideas. Or so Matt Dixon, executive director at CEB, tells us. Dixon, coauthor of The Challenger Sale, says that ideas are quickly becoming the currency of choice for middle-market sales organizations.
Dixon: Well, back in 2009, many companies were telling us that there was this kind of mystery going on in their sales organization. While most sales people were struggling and falling behind in making their quota, there was a handful of sales people that continued to exceed their numbers. The question became, “What are these guys are doing?” Now, what makes the best sales people is an age-old question, but in light of the downturn and the environment that followed, there was suddenly a new urgency around this. We went out to find the answer. We first identified five different profiles of sales people, and we basically were able to classify everyone from our study in these different categories. One of the profiles clearly performed dramatically better than the rest — it was what we called “the challenger.” The one that performed the least well was the “relationship builder.” In fact, it came in dead last, and this really led us to scratch our heads and say, “Well, this is different from anything we’ve ever read. Selling, after all, is about relationships, so how can this really be?” We dug into this quite a bit. We found that it wasn’t just that challengers did better — they did much better when it came to complex selling, and this was especially true when companies were trying to move beyond selling just product and move to solution selling.
MME: Okay, but boil it down for us. What are the outstanding qualities of a “challenger”?
Dixon: They have a finely tuned sense of the intersection of the value they provide and the need of the customer. Challengers teach the customer to do something new. They try to get the customer to think a little differently about their business or think about an issue not on their radar screen or a risk over the horizon that they may not be paying attention to. They’re very good at taking insight — what we call a unique idea — and tailoring it to fit a need, because they know that the person sitting across the table wears many different hats, and they come from many different cultural organizational backgrounds, functional backgrounds, etc. It can’t just be that you have this killer idea and I’m going to walk around and hit every customer as if they’re a nail. So how do I make that idea resonate with the different people sitting across the table? Maybe it’s a CMO or a CFO, maybe an end user. And they are very good at taking control. They are assertive. It doesn’t mean that they are aggressive or obnoxious. They hold their ground and maybe push back and say, “I don’t buy it.” They are empathetic, but nevertheless hold their ground. At the end of the day, an idea has crystallized in such a way that the challenger understands what it is they can do for the customer that nobody else can. They have a capability to bring to the table what nobody else can. And then they create some sense of urgency that makes the customer want to pay for the thing. The sweet spot of customer loyalty is teaching your customers to value the areas where you outperform your competitors.
MME: So what’s changed here since the downturn?
Dixon: One of the things we’ve been tracking is a big change not in how people are selling but in how people are buying, and what I mean by that is that customers have so much information. The amount of due diligence and homework that the customers can do to educate themselves on their own can take them very far down the path of a purchase. In fact, we know that by the time a customer picks up the phone and calls a supplier, their purchase decision is almost 60 percent over. They have already decided, Here’s the business need I’m trying to solve, here are the suppliers out there that I think can fulfill that need. Here’s how they compare to one another in terms of their capability. And they already may have begun to benchmark pricing. When the phone rings for the sales person, all that’s left is the negotiation around price. We had one executive who was head of sales tell us that he has seen this over and over again. Whereas 5 years ago, 5 percent of business went through RFP, now the number is about 85 percent. He told us that every single time his sales people are called to the table to bid on a piece of business, they are up against their two biggest competitors. So how do you take control when it seems that you’ve been called in so late in the purchase decision?
MME: How should sales people respond? What can they do?
Dixon: At the heart of this is the notion that in a world where customers can educate themselves, the thing they really want is the new idea — something you couldn’t find on the Internet or that the purchasing consultant didn’t know about. In fact, when we look at what makes customers loyal, what we find is that more than half of business-to-business loyalty is not what we sell but how you sell it, and specifically your ability to bring new ideas to the table as a sales person. When we talk to customers, they tell us that they don’t want to be asked what’s keeping them up at night. Instead they want to be told, Here are the things that should be keeping them up at night. They want to know, What’s going to blindside me if I don’t get after it? What are your most innovative customers up to? A lot of times, reps come in without ideas, and they come off as seeming to be pushy or irrelevant.