Insight Selling and the Challenger Sale A primer. 1 Insight Selling and the Challenger Sale - A primer

Transcription

1 Insight Selling and the Challenger Sale A primer 1 Insight Selling and the Challenger Sale - A primer

2 Executive summary Customers don t need you the way they used to. Over the last three decades, B2B selling has evolved from a transac8onal (product- price) approach, to a rela8onship- based process, and to a solu8ons- based model. Today, this way of selling is being challenged by procurement- savvy teams that cut the grass under your best sales reps feet. p. 4 Solutions selling has been the holy grail for a long time Solu8ons selling is largely driven by suppliers adempt to escape a drama8cally increasing commodi8za8on of their products and services. p. 5 but it has increasingly become a burden to both customers and suppliers Selling ever bigger, more complex, disrup8ve, and expensive solu8ons requires a lot of discovery 8me and effort, from both sides. The result is a solu8ons fa8gue : tradi8onal, 8me- tested sales techniques have become a burden to both customers and suppliers, and an alarming number of half- completed deals remain on the table. This has lead customers to react and engage with suppliers in a very different way. p. 6 Can one type of sales rep make a difference? The characteristics of Insight Selling Among different profiles of sales execu8ves, the one that has a much higher chance of being successful today, par8cularly in complex sales, is the Challenger. This is the one who uses a deep understanding of a customer s business to serve them and to teach them, pushing their thinking, and providing different views on how to manage and compete. Insight Selling is about targe8ng customers that can act quickly and decisively, teaching them something new and provoca8ve about how to compete in their market. Messages are tailored to the specific metrics and economics of the company and its key individuals. All along, the Challenger is in control of the sales, pressuring the decision making cycle. p. 7 p. 8 The Insight Selling conversation in practice The best sales conversa8on present the customer with a compelling story about their business first, teaches them a new perspec8ve, connects this with their reality, and then leads to how it can be realized via unique differen8a8ng capabili8es. p. 9 2 Insight Selling and the Challenger Sale - A primer

3 Executive summary The advantages of Insight Selling By proac8vely proposing a solu8on tailored to specific customer needs and leveraging your unique capabili8es, you are more in control. You are likely to gain faster widespread buy- in, to increase your chances to win the deal, while gaining the loyalty and respect of your customers. p. 10 Think about the possibilities Insight selling gives you a Blue Ocean way of compe8ng where you are in the lead of customer proposals and you play by your own rules. p. 11 Winning at Insight Selling requires specific capabilities How can you build these capabilities? Insight selling requires ad- hoc resources, processes, and tools in strategic planning, marke8ng (insight & ideas genera8on), sales and HR. Only a handful of large, ouen interna8onal, players are capable of hos8ng these capabili8es in- house, par8cularly in terms of insight genera8on and the rela8ve ability to create innova8ve proposals underlined by a deep industry and customer knowledge. Choosing the right build, buy, rent and partner model depends on the economics of your business, the breadth of your target markets and your ability to enter an adjacent business in a sustainable way. p. 12 p. 13 Partnering Partnering with a management consul8ng firm could be the most effec8ve shortcut to building insight- selling capabili8es. p Insight Selling and the Challenger Sale - A primer

4 The problem Customers don t need you the way they used to. Over the last three decades, B2B selling has evolved from a transac8onal (product- price) approach, to a rela8onship- based process, and to a solu8ons- based model. Today, this way of selling is being challenged by procurement- savvy teams that cut the grass under your best sales reps feet. Our legacy B2B used to be about relationship, product, and solution selling Since the 1980 s, best pracices in B2B selling and markeing moved away from the tradiional transacional and then relaionship- based approach to a more soluions- oriented one. Sales reps have become experts at discovering customers needs and at selling them soluions based on a relaively complex combinaion of products and services. Part of the deal is to find and nurture an anchor within the customer organizaion who can help navigate the company and drive the deal to compleion. The whole process is focused on a]aching your company s soluion to a customer problem, on jusifying why it is be]er than the compeiion, and on providing evidence and reference to the expected benefits. The new reality Armed and skilled customers make you come short in the sales cycle In the current economic environment, B2B customers have learned to buy with greater care and reluctance than ever before. With increasingly sophisicated procurement teams and the help of procurement consultants, B2B customers can readily define soluions for themselves. According to a recent study*, nearly 60% of a typical purchasing decision researching soluions, ranking opions, sepng requirements, benchmarking pricing, etc. - is completed before even having a conversaion with your sales teams. To win a deal, you have to get ahead of the RFP. But even if you can, it is increasingly no longer sufficient. It is very likely that you will not get away of the RFP process and that you will have to play by rules set by your customers, or its procurement consultants. RelaIonships coninue to be key, but good relaionships are more the result and not the cause of successful sales. 4 Insight Selling and the Challenger Sale - A primer (*) CEB research, 2012 Panel of 1,400 companies

5 The problem Solutions selling has been the holy grail for a long time Solu8ons selling is largely driven by suppliers adempt to escape a drama8cally increasing commodi8za8on of their products and services. The product-solutions selling continuum Most companies have the ambition to be positioned as solutions providers Silo- Based Product Sales Product Bundling Advice & Service Wrap- Around Needs- Based Product Customiza8on Customer Process Enhancement Fully Integrated Partnership Product Selling Solu8ons Selling Nature of rela8onship Selling skills Customer expecta8ons Supplier reacts to purchase orders Strong knowledge of product por_olio Quality product / service at good price Supplier viewed as a trusted advisor Boardroom- level engagement with customer Strategic insight on the customer s business A shib to soluion selling results in customers expecing you to actually solve a real problem and not just to supply a reliable product. This implies that you not only understand the customer s underlying problems or challenges as well if not be]er than they do themselves, but also that you can idenify new and be]er means of addressing those challenges, ariculate clear benefits form using limited resources, and determine the right metrics to measure success. 5 Insight Selling and the Challenger Sale - A primer Straligence, Adapted from CEB research, 2012

6 The problem but it has increasingly become a burden to both customers and suppliers Selling ever bigger, more complex, disrup8ve, and expensive solu8ons requires a lot of discovery 8me and effort, from both sides. The result is a solu8ons fa8gue : tradi8onal, 8me- tested sales techniques have become a burden to both customers and suppliers, and an alarming number of half- completed deals remain on the table. This has lead customers to react and engage with suppliers in a very different way. SoluIons FaIgue The solutions-based discovering process has become a burden What is keeping you up at night? What are your compeing challenges? The problem with providing an answer to these quesions is that it can oben take the feel of a protracted ping- pong match between the supplier and the customer. The customer explains their needs, the rep summarizes their understanding, the customer confirms whether or not the rep got it right; a proposal is made, the customer reviews and amends it, and on and on. This requires a huge amount of customer involvement at an early stage before they see any value. Customer buying trends Customers have been taking initiatives and four major trends are emerging 1 Consensus- based sales 2 The payoff of complex soluion is uncertain and C- level execuives increasingly require the widespread support of their teams in a large purchase decision. This leads to even longer selling efforts to align the interests of all involved paries. 3 Greater demand for customiza8on 4 A soluion approach implies that customers look for an offer that is tailored to their needs. They see customizaion as part of the soluion, and do not intend to pay a premium for it. To the sell- side, this implies longer Imes and higher efforts and costs. Increased risk aversion The uncertainty of a pay- off in large and complex deals pushes execuives to ask for a shared- risk and reward agreement. Here the lead KPI is the performance of a customer s business, not the one of the supplier s product or service. The rise of third party consultants Customers increasingly rely to a neutral third- party to extract maximum value from the purchase decision, i.e. help them reduce the risks, costs and complexity linked to the soluion. Needless to say, this adds pressure to the sales rep and can extend the sales cycle. 6 Insight Selling and the Challenger Sale - A primer Straligence, Adapted from CEB research, 2012

7 Searching for a soluion Can one type of sales rep make a difference? Among different profiles of sales execu8ves, the one that has a much higher chance of being successful today, par8cularly in complex sales, is the Challenger. This is the one who uses a deep understanding of a customer s business to serve them and to teach them, pushing their thinking, and providing different views on how to manage and compete. The Relationship Builder The Problem Solver The Hard Worker The Lone Wolf The Challenger Sales Profiles Builds & nurtures strong advocates in the customer organizaion. Generous in giving Ime to help others. Gets along with everyone. Highly reliable in responding to internal and external stakeholders. Detail oriented. Ensures that all problems are solved. Always willing to go the extra mile. Doesn t give up easily. Self- moivated. Interested in feedback and development. Tends to follow own insincts instead of the rules. Self- assured. Difficult to control. Always has a different view. Has a deep understanding of the customer s business. Loves to debate. Pushes the customer. 7% 12% 17% 25% 39% Top performers The highest percentage of top sales performers is found under the Challenger profile High Low Complexity of sales In complex environments, the Challenger is by far the profile that is most likely to succeed. The Rela8onship Builder is highly unlikely to succeed in complex sales environments. In environments with low complexity, the most successful profiles are the Hard Worker and the Lone Wolf. INSIGHT SELLING 7 Insight Selling and the Challenger Sale - A primer Straligence, Adapted from CEB research, 2012

8 Insight selling The Characteristics of Insight selling Insight Selling is about targe8ng customers that can act quickly and decisively, teaching them something new and provoca8ve about how to compete in their market. Messages are tailored to the specific metrics and economics of the company and its key individuals. All along, the Challenger is in control of the sales, pressuring the decision making cycle. Insight vs SoluIon Selling Traditional solution selling is based on finding a hook to a recognized need. Insight selling challenges the customer and makes it aware of unknown needs. TARGET TargeIng based on the potenial for change, not to buy. Focus on customers that can act quickly and decisively, that are not paralyzed by structures or relaionships that hamper change. Firms where demand is emerging, pushed by organizaional or market/industry drivers. Target customer Info requirements Engagement 8ming Focus of the conversa8on Flow of informa8on Solu8on Selling Has a clear vision and established demands. What need is the customer seeking to address? Aber the customer has idenified a problem that the supplier can solve. Ask, understand the customer s need and find a hook for your soluion. Asking quesions so that the customer can steer you through the purchasing process. Insight Selling Is agile, has emerging demands, or is in a state of flux. What unrecognized need does the customer have? Before the customer has pinpointed a problem. Offer provocaive insight about what the customer should do. Coach the customer about how to buy, and support it through the process. TEACH TAILOR TAKE CONTROL Delivering insight that reframes the way customers think about their business and their needs. Teaching customers something new, thought provocaive, and valuable about how to compete in their market. Communicate sales messages in the context of the customer, focusing on customer value drivers, economics and performance indicators. Messages are tailored to different types of funcions and individuals within an organizaion. Using control, diplomacy, and empathy, the Challenger pushes the customer out of its comfort zone, focusing on the value added, not on price discounts. Challengers pressure the customer s decision making cycle to reach a decision more quickly and kill indecision ineria. 8 Insight Selling and the Challenger Sale - A primer

9 Insight selling Insight selling in practice The best sales conversa8on present the customer with a compelling story about their business first, teaches them a new perspec8ve, connects this with their reality, and then leads to how it can be realized via unique differen8a8ng capabili8es. The insight-based sales pitch Warm up Reframe Rationalize Bind emotionally Present what s needed Why your solution is unique Surprise with a Leverage Fear Make the Present the Build credibility: new Uncertainty & customer see capabili8es I know your perspec8ve, Doubt via data the challenge/ required to seize world making them based on value opportunity as the opportunity wan8ng more drivers their own Demonstrate how your solu8on is beder than anyone else s Present industry challenges experienced by similar companies. Introduce your assessment of the customer s key challenges. Leverage benchmarking. Introduce a new perspecive that connects challenges to either a bigger problem or a bigger opportunity than the one the customer ever realized. Lay out the business case why the new perspecive is worth considering. Leverage data that directly connects to the customer s economic drivers, i.e. present ROI in terms of solving the challenge, not on buying a soluion. Paint a picture of how other companies went down the same road by connecing the pains in the story to the pains in the customer organizaion. Point by point review of the specific capabiliies the customer would need to grow, to save money, or to miigate risks. Introduce the capabiliies that are truly unique to your organizaion and that can help the customer seize the opportunity and/or face the challenge. 9 Insight Selling and the Challenger Sale - A primer

10 Insight selling The advantages of Insight selling By proac8vely proposing a solu8on tailored to specific customer needs and leveraging your unique capabili8es, you are more in control. You are likely to gain faster widespread buy- in, to increase your chances to win the deal, while gaining the loyalty and respect of your customers. Before the deal You proactively pitch to your own unique strengths Aber the deal Insight selling strongly drives customer s loyalty Accelerate 8me to decision Increase and accelerate widespread support Increase your chances of winning Take control Much of the heavy libing is done before individual reps go in front of the customer, considerably reducing soluion- faigue. With a pitch tailored to the specific interests of the company, those who most benefit from it become your internal advocates and allies within the customer organizaion. They help you sell your proposal to the different stakeholders. As you crab a proposal that combines customer s challenges and your unique capabiliies, you are less likely to go through a compeiive bid, incl. the formaliies of the procurement department and/or third paries. As you are being proacive, you are more in control of the sales process, guiding the customer on how to make it happen. DECISION MAKERS Greatest drivers of loyalty Weakest drivers of loyalty Matches communicaion to my preferences Remains readily accessible Helps me shorten the buying cycle Excels in diagnosing our specific needs Helps me avoid poten8al land mines Collaborates with other suppliers Supplier adjusts to our unique needs and ProacIvely specificaions accelerates decision making Weakest drivers of loyalty Supplier has widespread support across my organizaion Helps me navigate alterna8ves Supplier is easy to buy from Offers unique, valuable perspec8ves on the the market Educates me on new issues and outcomes Portrays a realisic picture of purchase costs & difficulies Helps me improve my professional standing and meet KPIs Provides ongoing advice or consulta8on Helps me quan8fy financial value Advocates for me within the organizaion Demonstrates a high level of professionalism Greatest drivers of loyalty END USERS AND INFLUENCERS 10 Insight Selling and the Challenger Sale - A primer Straligence, Adapted from CEB research, 2012

11 Insight selling Think about the possibilities Insight selling gives you a Blue Ocean way of compe8ng where you are in the lead of customer proposals and you play by your own rules. Imagine if you could: Know your customers industry as well as, or even be]er than, they know it themselves. Combine the strengths of a management consuling and research firm with your unique business capabiliies. Trigger a series of workshops together with key customer execuives to challenge the status quo and imagine new opportuniies. ProacIvely propose insigh_ul soluions to muliple industries and customers, widening your por_olio of opportuniies and increasing your win rates. Keep compeitors at bay by proposing soluions that strongly fit your unique capabiliies with the economics and operaional/growth targets of your customers. Turn the sales process upside- down by having customers come to you for your unique advantage instead of having your sales- reps make cold calls. Imagine if you had the insight and capabilities of a management consulting firm in your go to market model. 11 Insight Selling and the Challenger Sale - A primer

12 Organizing for Insight Selling Winning at Insight Selling requires specific capabilities Insight selling requires ad- hoc resources, processes, and tools in strategic planning, marke8ng (insight & ideas genera8on), sales and HR. Only a handful of large, ouen interna8onal, players are capable of hos8ng these capabili8es in- house, par8cularly in terms of insight genera8on and the rela8ve ability to create innova8ve proposals underlined by a deep industry and customer knowledge. Area / Func8on Capability / Requirements Mul8na8onal player Large na8onal player Small Medium player Strategic Planning Insight & Ideas Genera8on Machine (MarkeIng, Sales, R&D, OperaIons, Accounts Mgmt, etc.) Sales Post- Sales HR DifferenIaIng capabiliies that are clearly defined, understood and communicated. Target industries and customers segmented also based on needs. Ability to leverage insight and supporing data across industries and markets. Ability to generate and quanify customer- specific insight, incl. compeiive, financial, operaional challenges. InnovaIon capabiliies to define a new point of view on the customer s business, products, business model, etc. Ability to quanify the economic impact of your proposal on your customer s bo]om line. Ability to define the impact of your proposal on your customer s organizaion. Processes and sales metrics adapted to insight selling. Sales culture supporing insight- selling and Challengers. Performance metrics and processes that include a link to the customer s business or operaional performance. Recruitment process opimized to hire Challengers. MarkeIng and business development staff capable of supporing sales rep in the idenificaion of new opportuniies and the generaion of new insight and proposals. 12 Insight Selling and the Challenger Sale - A primer

13 Organizing for Insight Selling How can you build these capabilities? Choosing the right build, buy, rent and partner model depends on the economics of your business, the breadth of your target markets and your ability to enter an adjacent business in a sustainable way. Descrip8on / Example Issues, who is it for Build Buy Rent Recruit industry professionals and consultants in view of creaing a dedicated team responsible for generaing insight and supporing your sales reps. Equip the team with the industry databases, knowledge tools, and processes required to perform their analysis. Acquire a specialized consultancy with the skills and resources to generate insight in the markets you compete in. Acquire and extend the industry databases and knowledge tools required to generate insight. Partner with a consuling firm that is capable of covering your industries with rented resources and tools. Ad- hoc collaboraion, typically on a Ime and material basis. Time and effort required to build the team and supporing processes and tools. Suitable if you are restricing your aciviies to a highly specialized niche market. PotenIal cultural mismatch jeopardizing your effeciveness and return on investment. Suitable if you are restricing your aciviies to a specific market and have a high- margin business jusifying the investment. Address conflicts of interest cased by the core business of the partner, i.e. consuling aciviies with your target customers. Suitable for ad- hoc, large strategic pursuits, and new market / services development. JV / Alliance RelaIvely independent go- to- market JV leveraging the capabiliies of the consuling firm and your key competences. CollaboraIon based on a shared risk- revenue model. Willingness of consuling firm to limit its services to your company and your markets. Suitable if you cover a large number of customers in muliple industries. 13 Insight Selling and the Challenger Sale - A primer

14 Opportunity Partnering Partnering with a management consul8ng firm could be the most effec8ve shortcut to building insight- selling capabili8es. INSIGHT- BASED GO TO MARKET Your teams Solu8on specialists Sales Marke8ng and business development support Consul/ng firm s services Ad- hoc research on customer industries, markets and customers Co- development of insight with your marke8ng, sales and technical staff Development of industry thought leadership collateral for your sales & marke8ng efforts Facilita8on of innova8on workshops with your customers and your staff Collabora8on with your teams on proac8ve proposals and on answering compe88ve bids On demand, based on your specific needs Collabora/on mode Medium to long term partnership linked to a specific industry / market Partnerships Joint Venture 14 Insight Selling and the Challenger Sale - A primer

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