Reflection Journal: Maximum 5 pages in length excluding bibliography & title page. 1- Share what you have learned over the course (Key content, principles of challengers, etc. text attached). 2

Tab le o f C on te n ts

T itle P age

C opyrig ht P age

D ed ic a tio n

F ore w ord

I n tr o ductio n

C hap te r 1 - T H E E V O LV IN G J O URN EY O F S O LU TIO N S E LLIN G

C hap te r 2 - T H E C H ALLE N GER ( P A RT 1 ): A N EW M ODEL F O R H IG H P E R FO RM ANCE

C hap te r 3 - T H E C H ALLE N GER ( P A RT 2 ): E X PO RTIN G T H E M ODEL T O T H E C O RE

C hap te r 4 - T EA CH IN G F O R D IF FE R EN TIA TIO N ( P A RT 1 ): W HY I N SIG HT M ATTER S

C hap te r 5 - T EA CH IN G F O R D IF FE R EN TIA TIO N (P A RT 2 ): H OW T O B UIL D IN SIG HT-L E D

C O NVER SA TIO NS

C hap te r 6 - T A IL O RIN G F O R R ESO NANCE

C hap te r 7 - T A KIN G C O NTR O L O F T H E S A LE

C hap te r 8 - T H E M ANAGER A ND T H E C H ALLE N GER S E LLIN G M ODEL

C hap te r 9 - I M PLE M EN TA TIO N L E SSO NS F R O M T H E E A RLY A DOPT ER S

A F TE RW ORD

A ckn ow le d gem en ts

A PPE N DIX A - E xcerp t f r o m th e C halle nger C oachin g G uid e

A PPE N DIX B - S ellin g S ty le S elf- D ia gno sti c

A PPE N DIX C - C halle nger H ir in g G uid e: K ey Q uesti o ns to A sk i n th e I n te rv ie w

I N D EX PO RTFO LIO / P EN GU IN

Publis h ed b y th e P enguin G ro up

Penguin G ro up ( U SA ) I n c., 3 75 H udso n S tr e et,

New Y ork , N ew Y ork 1 0014, U .S .A .

Penguin G ro up ( C anada), 9 0 E glin to n A venue E ast, S uit e 7 00,

Toro nto , O nta rio , C anada M 4P 2 Y 3

(a d iv is io n o f P ears o n P enguin C anada I n c.)

Penguin B ooks L td , 8 0 S tr a nd, L ondon W C2R 0 R L, E ngla nd

Penguin I re la nd, 2 5 S t. S te phen’s G re en, D ublin 2 , I re la nd

(a d iv is io n o f P enguin B ooks L td )

Penguin B ooks A ustr a lia L td , 2 50 C am berw ell R oad, C am berw ell,

Vic to ria 3 124, A ustr a lia

(a d iv is io n o f P ears o n A ustr a lia G ro up P ty L td )

Penguin B ooks I n dia P vt L td , 1 1 C om munit y C entr e , P anchsh eel P ark ,

New D elh i– 11 0 0 17, I n dia

Penguin G ro up ( N Z), 6 7 A pollo D riv e, R ose dale , A uckla nd 0 632,

New Z eala nd ( a d iv is io n o f P ears o n N ew Z eala nd L td )

Penguin B ooks ( S outh A fric a) ( P ty ) L td , 2 4 S tu rd ee A venue,

Rose bank, J o hannesb urg 2 196, S outh A fric a

Penguin B ooks L td , R egis te re d O ffic es:

80 S tr a nd, L ondon W C2R 0 R L, E ngla nd

Fir s t p ublis h ed in 2 011 b y P ortf o lio / P enguin ,

a m em ber o f P enguin G ro up ( U SA ) I n c.

Copyrig ht © T he C orp ora te E xecutiv e B oard C om pany, 2 011 A ll r ig hts r e se rv ed

Challe nger™ , C halle nger R ep™ , a nd C halle nger D evelo pm ent P ro gra m ™ a re tr a dem ark s a nd s e rv ic e m ark s o f T he C orp ora te

Executiv e B oard C om pany.

S um mary d esc rip tio n o f

Situ atio nal S ale s N eg otia tio n

®

tr a in in g a nd m eth odolo gy u se d b y p erm is sio n o f B ayG ro up I n te rn atio nal, I n c.

S SN N egotia tio n P la nner™ a nd © 2 009 B ayG ro up I n te rn atio nal, I n c.

Situ atio nal S ale s N eg otia tio n

® a nd S SN ™ a re tr a dem ark s a nd

se rv ic e m ark s o f B ayG ro up I n te rn atio nal, I n c.

Slid es f ro m “ T he P ow er o f P la nnin g th e U npla nned” p re se nta tio n u se d b y p erm is sio n o f W . W . G ra in ger, I n c.

LIB RA RY O F C O NGRESS C ATA LO GIN G I N P U BLIC ATIO N D ATA

Dix on, M atth ew , 1 972–

The c halle nger s a le : ta kin g c ontr o l o f th e c usto m er c onvers a tio n / M atth ew D ix on a nd B re nt A dam so n.

p. c m .

In clu des in dex.

IS B N : 9 78-1 -1 01-5 4589-8

1. S ale s m anagem ent. 2 . S ellin g. 3 . C usto m er r e la tio ns. I . A dam so n, B re nt. I I. T it le .

HF5438.4 .D 59 2 011

658.8 5— dc23 2 011 026907

W it h out lim it in g th e r ig hts u nder c opyrig ht r e se rv ed a bove, n o p art o f th is p ublic atio n m ay b e r e pro duced, s to re d in o r in tr o duced in to a

r e tr ie val s y ste m , o r tr a nsm it te d, in a ny f o rm o r b y a ny m eans ( e le ctr o nic , m echanic al, p hoto copyin g, r e cord in g o r o th erw is e ), w it h out th e

prio r w rit te n p erm is sio n o f b oth th e c opyrig ht o w ner a nd th e a bove p ublis h er o f th is b ook.

The s c annin g, u plo adin g, a nd d is tr ib utio n o f th is b ook v ia th e I n te rn et o r v ia a ny o th er m eans w it h out th e p erm is sio n o f th e p ublis h er is

ille gal a nd p unis h able b y la w . P le ase p urc hase o nly a uth oriz e d e le ctr o nic e dit io ns a nd d o n ot p artic ip ate in o r e ncoura ge e le ctr o nic p ir a cy

of c opyrig hta ble m ate ria ls . Y our s u pport o f th e a uth or’s r ig hts is a ppre cia te d.

http :/ /u s.p enguin gro up.c om To th e m em bers o f th e C orp ora te E xecuti v e B oard a ro und th e w orld , w ho c halle nge u s e v ery d ay to

deliv er i n sig hts w orth y o f th eir ti m e a nd a tte nti o n FO REW ORD

T H E H IS T O RY O F

s a le s h as b een o ne o f s te ad y p ro gre ss in te rru p te d b y a fe w r e al b re akth ro ughs

t h at h av e c hanged th e w ho le d ir e cti o n o f th e p ro fe ssio n. T hese b re akth ro ughs, m ark ed b y r a d ic al n ew

t h in kin g a nd d ra m ati c i m pro vem ents i n s a le s r e su lts , h av e b een r a re . I c an o nly th in k o f th re e o f th em

i n th e la st c entu ry . T he fir s t s ta rte d a b out a h und re d y ears a go , w hen in su ra nce c o m panie s fo und th at

t h ey co uld doub le th eir sa le s by a sim ple change in se llin g str a te gy. B efo re th is fir s t gre at

b re akth ro ugh, in su ra nce p olic ie s— in c o m mon w ith m any o th er p ro ducts s u ch a s fu rn itu re , h o use ho ld

g o ods, a nd c ap ita l e q uip m ent— were s o ld b y s a le sp eo ple w ho s ig ned u p c usto m ers a nd th en e v ery

w eek v is ite d e ach o f th em to c o lle ct p re m iu m s o r i n sta llm ent p aym ents . A fte r s ig nin g u p a h und re d o r

s o p eo ple , th e s a le sp ers o n w as to o b usy c o lle cti n g w eekly p re m iu m s to d o a ny m ore s e llin g o f n ew

b usin ess. T hen s o m e a no nym ous g eniu s h it o n a n id ea th at g re w in to w hat w e n o w c all th e h unte r-

f a rm er m odel. S up pose , i n ste ad o f o ne p ers o n b oth s e llin g th e p olic y a nd c o lle cti n g th e p re m iu m s, th e

t w o r o le s w ere s p lit. T here w ould b e

pro ducers,

w ho o nly s o ld , b acked u p b y l e ss e xp erie nced — and

t h ere fo re c heap er—

co lle cto rs,

w ho c am e b ehin d to lo ok a fte r e xis ti n g c usto m ers a nd c o lle ct th e

w eekly pre m iu m s. T he id ea w as a sp ecta cula r su ccess and it changed th e in su ra nce in d ustr y

o vern ig ht. T he c o ncep t q uic kly sp re ad to o th er in d ustr ie s, a nd fo r th e fir s t ti m e se llin g b ecam e a

“ p ure ” r o le , w ith o ut th e b urd en o f c o lle cti o n. TH E S E C O ND B R EA K TH RO UG H

W e d on’t k no w e xactl y w hen th e p ro ducer/c o lle cto r id ea w as fir s t in tr o duced , b ut w e c an b e v ery

s p ecific a b out th e d ate o f th e s e co nd g re at b re akth ro ugh. I t h ap pened i n J u ly 1 925, w hen E . K . S tr o ng

p ub lis h ed

The P sy ch olo gy o f S ellin g

. T his se m in al w ork in tr o duced th e id ea o f sa le s te chniq ues,

s u ch a s fe atu re s a nd b enefits , o bje cti o n h and lin g, c lo sin g, a nd , p erh ap s m ost im porta nt, o pen a nd

c lo se d q uesti o nin g. It s h o w ed th at th ere w ere th in gs p eo ple c o uld le arn th at w ould h elp th em s e ll

m ore e ffe cti v ely , a nd i t g av e r is e to th e s a le s tr a in in g i n d ustr y .

Lookin g b ack fr o m th e s o phis ti c ate d p ers p ecti v e o f to day, m any o f th e th in gs S tr o ng w ro te a b out

s o und h eav y-h and ed a nd s im plis ti c . N ev erth ele ss, h e— and th o se w ho f o llo w ed h im — changed s e llin g

f o re v er. P erh ap s th e m ost im porta nt a sp ect o f h is c o ntr ib uti o n w as th e id ea th at s e llin g w asn ’t a n

i n nate a b ility . It w as a s e t o f id enti fia b le s k ills th at c o uld b e le arn ed . A nd in 1 925, th at w as r a d ic al

i n d eed . It o pened s e llin g to a m uch w id er ra nge o f p eo ple a nd , fr o m a necd ota l re p orts o f th e ti m e,

b ro ught a b out d ra m ati c i n cre ase s i n s a le s e ffe cti v eness. TH E T H IR D B R EA K TH RO UG H

T he th ir d g re at b re akth ro ugh c am e in th e 1 970s, w hen r e se arc hers b ecam e in te re ste d in th e id ea th at

t h e te chniq ues a nd s k ills th at w ork ed i n s m all s a le s m ig ht b e v ery d iffe re nt f r o m th o se th at w ork ed i n

l a rg er a nd m ore c o m ple x o nes. I h ad th e g o od fo rtu ne to b e a n in te gra l p art o f th is r e v olu ti o n. In th e

’ 7 0s I d ir e cte d a h uge re se arc h p ro je ct, tr a ckin g 1 0,0 00 s a le sp eo ple in tw enty -th re e c o untr ie s. W e

f o llo w ed s a le sp eo ple in to m ore th an 3 5,0 00 s a le s c alls a nd a naly ze d w hat m ad e s o m e o f th em m ore

s u ccessfu l th an o th ers in c o m ple x s a le s. F ro m th is tw elv e-y ear p ro je ct w e p ub lis h ed a n um ber o f

b ooks, s ta rti n g w ith

SP IN S ellin g

. T his m ark ed th e b egin nin g o f w hat w e n o w c all th e c o nsu lta ti v e

s e llin g e ra . It w as a b re akth ro ugh b ecause it in tr o duced m uch m ore s o phis ti c ate d m odels o f h o w to

s e ll c o m ple x p ro ducts a nd s e rv ic es a nd , l ik e th e e arlie r b re akth ro ughs, b ro ught a b out s ig nific ant g ain s

i n s a le s p ro ducti v ity .

The la st th ir ty y ears h av e b een m ark ed b y a lo t o f s m all im pro vem ents in s e llin g, b ut w e h av en’t

s e en m any g am e-c hangin g d ev elo pm ents th at c o uld c la im to b e b re akth ro ughs. T ru e, th ere ’v e b een

s a le s a uto m ati o n, sa le s p ro cess, a nd c usto m er re la ti o nsh ip m anagem ent. T echno lo gy h as p la yed a

b ig ger a nd b ig ger ro le in s e llin g. T here h av e a ls o b een h uge c hanges to tr a nsa cti o nal s e llin g a s a

r e su lt of th e In te rn et. B ut all th ese hav e been in cre m enta l changes, ofte n w ith questi o nab le

p ro ducti v ity g ain s, a nd n o ne o f th em , to m y w ay o f th in kin g, q ualifie s a s a b ona fid e b re akth ro ugh in

h o w to s e ll d iffe re ntl y a nd m ore e ffe cti v ely . TH E P U RCH ASIN G R EV O LU TIO N

I n te re sti n gly , th ere

has

b een a b re akth ro ugh d ev elo pm ent o n th e o th er s id e o f th e s e llin g in te ra cti o n.

P urc hasin g h as g o ne th ro ugh a m ajo r r e v olu ti o n. F ro m b ein g a d ead -e nd fu ncti o n in th e 1 980s w here

t h o se w ho c o uld n’t c ut it in H R w ent to d ie , it h as e m erg ed a s a v ib ra nt s tr a te gic fo rc e. A rm ed w ith

p ow erfu l p urc hasin g m eth o dolo gie s s u ch a s s u p plie r s e gm enta ti o n s tr a te gie s a nd s o phis ti c ate d s u p ply

c hain m anagem ent m odels , th e r is e o f th e n ew p urc hasin g h as d em and ed fu nd am enta l s h ifts in s a le s

t h in kin g.

I’ v e b een w aiti n g to s e e h o w th e s a le s w orld w ould re act to th e c hanges in p urc hasin g. If e v er

t h ere w as a ti m e fo r th e n ext b re akth ro ugh, it’ s d ue in re sp onse to th e p urc hasin g re v olu ti o n. B ut

n o th in g b ig h as a p peare d o n th e s a le s s c ene. I t’ s b een a b it l ik e w aiti n g f o r th e i n ev ita b le e arth q uake.

Y ou k no w it’ s g o in g to c o m e s o m ed ay, b ut y o u c an’t p re d ic t w hen— yo u ju st h av e a fe elin g th at it’ s

d ue; s o m eth in g i s a b out to h ap pen. TH E F O URTH B R EA K TH RO UG H?

W hic h b rin gs m e to

The C halle n ger S ale

a nd th e w ork o f th e S ale s E xecuti v e C ouncil. It’ s to o s o on

t o k no w w heth er th is i s th e b re akth ro ugh th at w e’v e b een w aiti n g f o r: O nly ti m e w ill te ll. O n th e f a ce

o f it, th eir re se arc h has all th e in iti a l sig ns th at it m ay b e gam e-c hangin g. F ir s t, lik e th e o th er

e xam ple s, i t f lie s i n th e f a ce o f c o nv enti o nal w is d om . B ut w e n eed m ore th an th at. M any c ra zy i d eas

v io la te e sta b lis h ed th in kin g. W hat m akes th is d iffe re nt i s th at, l ik e th e o th er b re akth ro ughs, o nce s a le s

l e ad ers u nd ers ta nd it, th ey s a y, “ O f c o urs e ! It’ s c o unte rin tu iti v e, b ut it m akes s e nse . I s h o uld h av e

k no w n.” T he l o gic y o u’ll f in d i n

The C halle n ger S ale

l e ad s to th e i n esc ap ab le c o nclu sio n th at th is i s

v ery d iffe re nt th in kin g a nd i t w ork s.

I’ m n o t g o in g to s p oil th eir s to ry b y te llin g e ith er th e d eta ils o r th e p unch lin e. T hat’ s fo r y o u to

r e ad . B ut I w ill te ll y o u w hy I th in k th e r e se arc h th at th ey h av e d one i s th e m ost i m porta nt a d vance i n

s e llin g f o r m any y ears a nd m ay i n d eed j u sti fy th e r a re a nd c o vete d l a b el o f “ sa le s b re akth ro ugh.” It’s G ood R ese a rc h

T he re se arc h is so lid , a nd b elie v e m e, I d on’t sa y th is lig htl y . M uch o f th e so -c alle d re se arc h in

s e llin g h as m eth o dolo gic al h o le s s o b ig th at y o u c o uld f ly a j u m bo j e t th ro ugh th em . W e l iv e i n a n a ge

w hen e v ery c o nsu lta nt a nd e v ery a uth o r c la im s “ re se arc h” to p ro ve th e e ffe cti v eness o f w hat th ey a re

s e llin g. O nce r e se arc h w as a s u re w ay to g ain c re d ib ility ; n o w it’ s fa st b eco m in g a s u re w ay to lo se

i t. C usto m ers are rig htl y cynic al ab out unsu p porta b le cla im s th at m asq uera d e und er th e nam e o f

r e se arc h, su ch as, “O ur re se arc h pro ves th at sa le s m ore th an doub le d afte r ta kin g our tr a in in g

p ro gra m ,” o r “ W e f o und i n o ur r e se arc h th at w hen s a le sp eo ple u se d o ur s e v en c usto m er b uyin g s ty le s

m odel, it c ause d c usto m er s a ti s fa cti o n to in cre ase b y 7 2 p erc ent.” C la im s lik e th ese a re u np ro vab le

a sse rti o ns th at e ro de th e c re d ib ility o f g enuin e r e se arc h.

I w as a t a c o nfe re nce in A ustr a lia w hen I fir s t h eard th at th e S ale s E xecuti v e C ouncil h ad s o m e

s ta rtl in g n ew r e se arc h o n s a le s e ffe cti v eness. I m ust a d m it th at, w hile I r e sp ecte d th e S E C a nd th eir

g o od tr a ck r e co rd o f s o lid m eth o dolo gy, I h ad b een b itte n e no ugh b y p oor r e se arc h to th in k to m yse lf,

“ T his w ill p ro bab ly b e y et a no th er d is a p poin tm ent.” W hen I g o t b ack to m y o ffic e in V ir g in ia , I

i n v ite d th e r e se arc h te am to s p end a d ay w ith m e a nd w e w ent th ro ugh th eir m eth o dolo gy w ith a f in e-

t o oth c o m b. I a d m it th at I c o nfid entl y e xp ecte d to e xp ose s e rio us fla w s in w hat th ey h ad d one. In

p arti c ula r, I h ad tw o c o ncern s:

1.

Puttin g s a le sp eo ple in to fiv e b uckets .

T he re se arc h c la im ed th at s a le sp eo ple fe ll in to o ne o f

f iv e d is ti n ct p ro file s:

The H ard W ork er

The C halle nger

The R ela ti o nsh ip B uild er

The L one W olf

The R eacti v e P ro ble m S olv er

This s o und ed n aïv e a nd a rb itr a ry to m e. W hat, I a sk ed th e te am , w as th e ra ti o nale fo r th ese fiv e

b uckets ? W hy n o t s e v en? O r te n? T hey w ere a b le to s h o w m e th at th ese w ere n o t i n v ente d c ate go rie s

b ut o nes th at e m erg ed o ut o f a m assiv e a nd s o phis ti c ate d s ta ti s ti c al a naly sis . A nd th ey u nd ers to od, i n

a w ay th at m any re se arc hers don’t, th at th eir fiv e buckets w ere behav io ra l clu ste rs , no t rig id

p ers o nality ty p es. I w as s a ti s fie d th at th ey h ad p asse d m y f ir s t te st.

2.

The h ig h- v ersu s lo w -p erfo rm er tr a p

. A la rg e p erc enta ge o f th e r e se arc h in to e ffe cti v e s e llin g

c o m pare s h ig h p erfo rm ers w ith l o w p erfo rm ers . I n th e e arly y ears o f m y o w n r e se arc h I d id th e s a m e

t h in g. A s a r e su lt I le arn ed a lo t a b out lo w p erfo rm ers . W hen y o u a sk p eo ple to c o m pare th eir r o ck

s ta rs w ith th eir l o se rs , y o u f in d th at th ey c an d is se ct th e l o se rs w ith s u rg ic al p re cis io n b ut f in d i t h ard ,

i f n o t i m possib le , to p ut th eir f in ger o n e xactl y w hat m akes th eir r o ck s ta rs r o ck. I s o on l e arn ed th at I

e nd ed u p w ith a d eta ile d u nd ers ta nd in g o f p oor p erfo rm ance a nd n o t m uch e ls e . I f m y r e se arc h w as to

h av e any m eanin g I had to co m pare to p perfo rm ers w ith av era ge, or co re , perfo rm ers . It w as

r e assu rin g to f in d th at th e S E C r e se arc h h ad a d opte d e xactl y th at a p pro ach. It’s B ase d o n a n I m pre ssiv e S am ple

I t’ s c o m mon f o r s a le s r e se arc h to b e b ase d o n s m all s a m ple s o f f ifty to e ig hty p arti c ip ants d ra w n f r o m

j u st th re e o r f o ur c o m panie s. L arg er-s c ale r e se arc h i s h ard er to d o a nd s ig nific antl y m ore e xp ensiv e.

M y o w n re se arc h h ad u se d s a m ple s o f a th o usa nd o r m ore , n o t b ecause w e lik ed m egastu d ie s b ut

b ecause — giv en th e no is y data of re al- life se llin g— we had no cho ic e if w e w ante d to dra w

s ta ti s ti c ally m eanin gfu l in sig hts . T he in iti a l s a m ple in th e C halle nger re se arc h w as 7 00, w hic h h as

s in ce g ro w n to 6 ,0 00. T hat’ s i m pre ssiv e b y a ny s ta nd ard . W hat’ s e v en m ore i m pre ssiv e i s th at n in ety

c o m panie s p arti c ip ate d in th e r e se arc h. W ith a s a m ple th is w id e w e c an r u le o ut m any o f th e fa cto rs

t h at n o rm ally p re v ent re se arc h fr o m g enera liz in g its re su lts to c o ver s e llin g a s a w ho le . T he S E C

f in d in gs a re n o t a b out a p arti c ula r o rg aniz a ti o n o r a s p ecific in d ustr y . T hey a p ply a cro ss th e w ho le

s p ectr u m o f s e llin g, a nd th at’ s i m porta nt. It D id n’t F in d W hat t h e R ese a rc h ers E xp ecte d

I a lw ays m is tr u st r e se arc h th at fin d s e xactl y w hat it s e eks. R ese arc hers , lik e e v ery b ody e ls e , h av e a

b und le o f p re ju d ic es a nd p re co nceiv ed id eas. If th ey k no w w hat th ey a re lo okin g fo r, b y g o sh th ey

w ill f in d i t. I w as r e ally p le ase d to h ear th at th e r e se arc hers th em se lv es w ere s tu nned to d is c o ver th at

t h eir re su lts w ere a lm ost th e o pposite o f w hat th ey h ad e xp ecte d . T hat’ s a v ery h ealth y s ig n a nd a

f r e q uent c hara cte ris ti c o f s ig nific ant r e se arc h. L ook a gain a t th eir f iv e p ro file s:

The H ard W ork er

The C halle nger

The R ela ti o nsh ip B uild er

The L one W olf

The R eacti v e P ro ble m S olv er

Most s a le s e xecuti v es, if th ey w ere fo rc ed to c ho ose ju st o ne p ro file to m ake u p th eir s a le s fo rc e,

w ould h av e c ho se n th e R ela ti o nsh ip B uild er, a nd th at’ s ju st w hat th e r e se arc h te am w as e xp ecti n g to

f in d . T hin k again . T he re se arc h sh o w ed th at R ela ti o nsh ip B uild ers w ere unlik ely to be sta r

p erfo rm ers . In co ntr a st, th e C halle ngers , w ho are aw kw ard to m anage and asse rti v e both w ith

c usto m ers a nd w ith th eir o w n m anagers , c am e o ut o n to p. A s y o u’ll s e e i n th e b ook, C halle ngers w on

o ut n o t b y a s m all m arg in b ut a m assiv e o ne. A nd th e m arg in w as f a r g re ate r i n c o m ple x s a le s. TH E D EC LIN E O F R ELAT IO NSH IP S E LLIN G

H ow c an w e e xp la in th ese c o unte rin tu iti v e fin d in gs? In th e b ook, M att D ix o n a nd B re nt A dam so n

b uild a v ery p ers u asiv e c ase . L et m e a d d m y o w n tw o c ents ’ w orth to w hat th ey s a y. C onv enti o nal

w is d om h as lo ng h eld th at s e llin g is a b out r e la ti o nsh ip s a nd th at in c o m ple x s a le s, r e la ti o nsh ip s a re

t h e u nd erp in nin g o f a ll s a le s s u ccess. Y et o ver th e l a st te n y ears th ere h av e b een s o m e d is tu rb in g h in ts

t h at re la ti o nsh ip -b ase d se llin g m ay b e le ss e ffe cti v e th an it u se d to b e. M y o w n stu d ie s o f w hat

c usto m ers v alu e fr o m s a le sp eo ple w ould b e a g o od e xam ple . W hen w e a sk ed 1 ,1 00 c usto m ers w hat

t h ey v alu ed in sa le sp eo ple , w e w ere su rp ris e d a t h o w fe w ti m es th ey m enti o ned re la ti o nsh ip s. It

s e em s th at th e o ld a d vic e, “ B uild r e la ti o nsh ip s f ir s t a nd th en s a le s w ill f o llo w ,” n o l o nger h o ld s tr u e.

T hat’ s n o t to s a y th at r e la ti o nsh ip s a re u nim porta nt. I th in k a b ette r e xp la nati o n i s th at th e r e la ti o nsh ip

a nd th e p urc hasin g d ecis io n h av e b eco m e d eco up le d . T oday y o u’ll o fte n h ear c usto m ers s a y, “ I h av e a

g re at re la ti o nsh ip w ith th is sa le s re p b ut I b uy fr o m h er c o m peti ti o n b ecause th ey p ro vid e b ette r

v alu e.” P ers o nally , I b elie v e th at a c usto m er r e la ti o nsh ip i s th e

re su lt

a nd n o t th e c ause o f s u ccessfu l

s e llin g. It is a re w ard th at th e s a le sp ers o n e arn s b y c re ati n g c usto m er v alu e. If y o u h elp c usto m ers

t h in k d iffe re ntl y a nd b rin g th em n ew id eas— whic h is w hat th e C halle nger r e p d oes— th en y o u e arn

t h e r ig ht to a r e la ti o nsh ip . TH E C H ALLEN G E O F C H ALLEN G E

A t th e h eart o f th is b ook is th e d em onstr a te d s u p erio rity o f C halle ngers in te rm s o f c usto m er im pact

a nd th ere fo re s a le s r e su lts . M any p eo ple a re ta ken a b ack b y th is f in d in g— and I s u sp ect s o m e r e ad ers

w ill fe el th e s a m e. B ut w hile th e a rti c ula ti o n o f th e C halle nger id ea is n ew , th e e v id ence h as b een

v is ib le a ll a ro und u s. S urv eys o f c usto m ers c o nsis te ntl y sh o w th at th ey p ut th e h ig hest v alu e o n

s a le sp eo ple w ho m ake th em th in k, w ho b rin g n ew id eas, w ho fin d c re ati v e a nd in no vati v e w ays to

h elp th e custo m er’s b usin ess. In re cent years , custo m ers hav e b een d em and in g m ore d ep th and

e xp erti s e . T hey e xp ect s a le sp eo ple to te ach th em th in gs th ey d on’t k no w . T hese a re th e c o re s k ills o f

C halle ngers . T hey a re th e s k ills o f th e f u tu re , a nd a ny s a le s f o rc e th at i g no re s th e m essa ge o f th is b ook

d oes s o a t i ts p eril.

I’ v e b een in th e b usin ess o f s a le s in no vati o n a ll m y p ro fe ssio nal life , s o I d on’t a nti c ip ate th at th e

p ub lic ati o n o f th is im porta nt re se arc h w ill b rin g a n in sta nt re v olu ti o n. C hange is s lo w a nd p ain fu l.

B ut I d o k no w th is : T here w ill b e a fe w c o m panie s th at w ill ta ke th e fin d in gs th at a re la id o ut h ere

a nd w ill im ple m ent th em w ell. T ho se c o m panie s w ill re ap h uge g ain s a nd s ig nific ant c o m peti ti v e

a d vanta ge fr o m b uild in g C halle nge in to th eir s a le s fo rc e. A s th e S E C r e se arc h s h o w s, w e liv e in a n

e ra w hen p ro duct in no vati o n a lo ne c anno t b e th e b asis fo r c o rp ora te su ccess. H ow y o u se ll h as

b eco m e m ore i m porta nt th an w hat y o u s e ll. A n e ffe cti v e s a le s f o rc e i s a m ore s u sta in ab le c o m peti ti v e

a d vanta ge th an a g re at p ro duct s tr e am . T his b ook g iv es y o u a w ell- a rti c ula te d b lu ep rin t f o r b uild in g a

w in nin g sa le s fo rc e. M y ad vic e is th is : R ead it, th in k ab out it, im ple m ent it. Y ou, and yo ur

o rg aniz a ti o n, w ill b e g la d th at y o u d id .

Pro fe sso r N eil R ackham

Auth o r o f

SP IN S ellin g

IN TR O DUCTIO N

A S U RPR IS IN G L O OK I N TO T H E F U TU RE

I N T H E U NFO RG ETTA BLE

e arly m onth s o f 2 009, a s th e b otto m fe ll o ut o f th e g lo bal e co no m y,

b usin ess-to -b usin ess sa le s le ad ers aro und th e w orld fa ced an ep ic p ro ble m and an ev en d eep er

m yste ry .

Custo m ers h ad v anis h ed o vern ig ht. C om merc e h ad g ro und to a h alt. C re d it w as s c arc e, a nd c ash

e v en s c arc er. F or a nyo ne i n b usin ess, ti m es w ere to ugh. B ut f o r h ead s o f s a le s, th ey w ere a n a b so lu te

n ig htm are . I m agin e h av in g to g et u p e v ery m orn in g, r a lly y o ur tr o ops, a nd s e nd th em i n to a b attl e th ey

c o uld n’t p ossib ly w in . T o fin d b usin ess w here n o ne c o uld b e fo und . T ru e, sa le s h as a lw ays b een

a b out th e g o od fig ht— ab out w in nin g b usin ess o fte n in th e fa ce o f str o ng re sis ta nce. B ut th is w as

d iffe re nt. I t’ s o ne th in g to s e ll to r e lu cta nt, e v en n erv ous c usto m ers . I t’ s a no th er th in g a lto geth er to s e ll

t o n o o ne a t a ll. A nd th at’ s w here w e w ere i n e arly 2 009.

Yet th ere in la y th e m yste ry . S ta rin g d ir e ctl y in to th e te eth o f th e to ughest sa le s e nv ir o nm ent in

d ecad es— if n o t e v er— a s m all b ut u niq uely g ifte d n um ber o f s a le s re p s

were

s e llin g. In fa ct, th ey

w ere s e llin g a l o t. W hile o th ers s tr u ggle d to c lo se e v en th e s m alle st o f d eals , th ese i n d iv id uals w ere

b rin gin g in th e k in d o f b usin ess m ost re p s c o uld o nly d re am o f e v en in a n u p e co no m y. W ere th ey

l u cky? W ere th ey ju st b orn w ith it? A nd m ost im porta nt, h o w c o uld y o u p ossib ly c ap tu re th at m agic ,

b ottl e it, a nd e xp ort it to e v ery o ne e ls e ? F or m any c o m panie s, th eir v ery s u rv iv al d ep end ed o n th e

a nsw er.

It w as in to th is env ir o nm ent th at th e S ale s E xecuti v e C ouncil (S E C )— a pro gra m w ith in th e

C orp ora te E xecuti v e B oard — la unched w hat h as b eco m e o ne o f th e m ost im porta nt s tu d ie s o f s a le s

r e p p ro ducti v ity in d ecad es. T ask ed b y o ur m em bers — head s o f s a le s fr o m th e w orld ’s la rg est, b est-

k no w n c o m panie s— we s e t o ut to i d enti fy w hat e xactl y s e t th is v ery s p ecia l g ro up o f s a le s r e p s a p art.

A nd h av in g n o w s tu d ie d th at q uesti o n i n te nsiv ely f o r th e b ette r p art o f f o ur y ears , s p annin g d oze ns o f

c o m panie s and th o usa nd s of sa le s re p s, w e hav e dis c o vere d th re e co re in sig hts th at hav e

f u nd am enta lly r e w ritte n th e s a le s p la yb ook a nd le d B 2B s a le s e xecuti v es a ll o ver th e w orld to th in k

v ery d iffe re ntl y a b out h o w th ey s e ll.

The fir s t in sig ht w as s o m eth in g w e w ere n’t o rig in ally e v en lo okin g fo r. It tu rn s o ut th at ju st a b out

e v ery B 2B s a le s r e p in th e w orld fa lls in to o ne o f fiv e d is ti n ct p ro file s, a s p ecific s e t o f s k ills a nd

b ehav io rs th at d efin e h is o r h er p rim ary m ode o f i n te ra cti n g w ith c usto m ers . N ow , th at’ s i n te re sti n g i n

a nd o f its e lf, a s y o u’ll b e a b le to fin d y o urs e lf a nd y o ur c o lle agues in th ese p ro file s w hen y o u s e e

t h em . T hese fiv e p ro file s p ro ve to b e an in cre d ib ly p ra cti c al w ay o f d iv id in g th e w orld in to a

m anageab le s e t o f a lte rn ati v e s a le s te chniq ues.

That s a id , it’ s r e ally th e s e co nd in sig ht th at c hanges e v ery th in g. W hen y o u ta ke th o se fiv e p ro file s

a nd c o m pare th em w ith a ctu al s a le s p erfo rm ance, y o u fin d th ere is a v ery c le ar w in ner a nd a v ery

c le ar lo se r: O ne of th em sp ecta cula rly outp erfo rm s th e oth er fo ur, w hile one of th em fa lls

d ra m ati c ally b ehin d . Y et th ere is s o m eth in g v ery d is tu rb in g a b out th ese r e su lts . W hen w e s h o w th em

t o sa le s le ad ers , w e hear th e sa m e th in g again and again . T hese le ad ers fin d th e re su lts d eep ly

t r o ub lin g, b ecause th ey’v e p la ced b y fa r th eir b ig gest b et o n th e p ro file le ast lik ely to w in . T his o ne

i n sig ht h as s h atte re d th e w ay m any s a le s l e ad ers th in k a b out th e k in d o f r e p s th ey n eed to s u rv iv e a nd th riv e i n a to ugh e co no m y.

And th at b rin gs u s to th e th ir d a nd fin al c o re in sig ht fr o m th is w ork — arg uab ly th e m ost e xp lo siv e

of th em a ll. A s w e d ug d eep er in to th e d ata , w e fo und s o m eth in g e v en m ore s u rp ris in g. W hile w e’d

se t o ut fo ur y ears a go to fin d th e w in nin g r e cip e fo r s a le s r e p s u ccess in a d ow n e co no m y, a ll o f th e

data in d ic ate s o m eth in g fa r m ore im porta nt. T he p ro file m ost lik ely to w in is n ’t w in nin g

beca use

o f

th e d ow n eco no m y, b ut

ir re sp ectiv e

o f it. T hese re p s are w in nin g b ecause th ey’v e m aste re d th e

co m ple x s a le , n o t b ecause th ey’v e m aste re d a c o m ple x e co no m y. In o th er w ord s, w hen w e u nlo cked

th e m yste ry o f h ig h p erfo rm ance in th e d ow n e co no m y, th e s to ry tu rn ed o ut to b e m uch b ig ger th an

anyo ne h ad a nti c ip ate d . Y our v ery b est s a le s r e p s— th e o nes w ho c arrie d y o u th ro ugh th e d ow ntu rn —

are n’t j u st th e h ero es o f to day, b ut a re a ls o th e h ero es o f to m orro w , a s th ey a re f a r b ette r a b le to d riv e

sa le s a nd d eliv er c usto m er v alu e i n

any

k in d o f e co no m ic e nv ir o nm ent. W hat w e u lti m ate ly f o und i s a

dra m ati c ally i m pro ved r e cip e f o r a s u ccessfu l s o lu ti o n s a le s r e p .

We c all th ese w in nin g r e p s C halle ngers , a nd th is i s th eir s to ry . 1

TH E E V O LV IN G J O URN EY O F S O LU TIO N S ELLIN G

I N E A RLY 2 009,

th e te am at th e S ale s E xecuti v e C ouncil se t o ut to answ er th e m ost p re ssin g

q uesti o n o n th e m in d s o f sa le s le ad ers a t th e ti m e: H ow c an w e se ll o ur w ay th ro ugh th e w ors t

e co no m y i n d ecad es?

It w as a q uesti o n n atu ra lly a cco m panie d n o t o nly b y u rg ent c o ncern — ev en fe ar— but a ls o b y a

s e nse o f re al m yste ry . In a w orld w here B 2B se llin g h ad g ro und to n early a c o m ple te h alt, sa le s

e xecuti v es w ere s u rp ris e d to fin d a h and fu l o f re p s s ti ll b rin gin g in b usin ess ty p ic al o f th e b est o f

t i m es, n o t th e w ors t. B ut w hat w ere th ey d oin g d iffe re ntl y ? H ow w ere th ese re p s s ti ll s e llin g w ell

w hen v ir tu ally n o o ne e ls e w as s e llin g a t a ll?

In s tu d yin g th is q uesti o n in s ig nific ant d ep th w e d is c o vere d s o m eth in g s u rp ris in g. W hat s e t th ese

b est re p s a p art w asn ’t so m uch th eir a b ility to su cceed in a d ow n e co no m y, b ut th eir a b ility to

s u cceed i n a c o m ple x s a le s m odel— one th at p la ces a h uge b urd en o n b oth r e p s a nd c usto m ers to th in k

a nd behav e diffe re ntl y . T hat m odel is ofte n re fe rre d to as “so lu ti o n se llin g” or a “so lu ti o ns

a p pro ach”— or s im ply “ so lu ti o ns” — and h as c o m e to d om in ate s a le s a nd m ark eti n g s tr a te gy a cro ss

t h e l a st te n to tw enty y ears .

The s to ry w e f o und i n o ur r e se arc h, h o w ev er, to ld u s s o m eth in g v ery i m porta nt a b out th e w orld o f

s o lu ti o n se llin g. It’ s e v olv in g d ra m ati c ally . A s su p plie rs se ek to se ll e v er b ig ger, m ore c o m ple x,

d is ru p ti v e, a nd e xp ensiv e “ so lu ti o ns,” B 2B c usto m ers a re n atu ra lly b uyin g w ith g re ate r c are a nd

r e lu cta nce th an e v er b efo re , d ra m ati c ally re w riti n g th e p urc hasin g p la yb ook in th e p ro cess. A s a

r e su lt, tr a d iti o nal, ti m e-te ste d s a le s te chniq ues n o l o nger w ork th e w ay th ey u se d to . C ore -p erfo rm in g

r e p s s tr u ggle m ig hti ly i n a ll b ut th e m ost s tr a ig htf o rw ard o f s a le s, l e av in g a n a la rm in g n um ber o f h alf-

c o m ple te d d eals in th eir w ake a s th ey a tte m pt to a d ap t to c hangin g c usto m er d em and s a nd e v olv in g

b uyin g b ehav io rs .

Fro m th is p ers p ecti v e, th e d ow n e co no m y th at s o tr o ub le d s e nio r s a le s e xecuti v es w hen w e fir s t

l a unched th is w ork p ro ved to b e a r e d h errin g. T he d ow ntu rn e xacerb ate d th e w id enin g g ap b etw een

c o re - a nd s ta r-p erfo rm in g re p s, b ut it d id n’t c ause it. In fa ct, th e s to ry la id o ut h ere is n ’t a b out th e

e co no m y a t a ll. It’ s a b out th e e v olv in g w orld o f s o lu ti o n s e llin g a nd th e s k ills n ecessa ry to d riv e

c o m merc ia l s u ccess a cro ss th e fo re se eab le fu tu re ir re sp ecti v e o f e co no m ic c o nd iti o ns. A s th e w orld

o f so lu ti o n se llin g c o nti n ues to c hange, S ale s E xecuti v e C ouncil re se arc h c le arly in d ic ate s th at a

s p ecific s e t o f s a le s r e p s k ills h as e m erg ed a s s ig nific antl y m ore lik ely to d riv e c o m merc ia l r e su lts

t h an th o se e m phasiz e d in e ith er tr a d iti o nal p ro duct s e llin g o r e arly s o lu ti o n s e llin g. T o u nd ers ta nd

w hy th o se s k ills m atte r s o m uch, i t’ s h elp fu l to f ir s t e xam in e th e e v olu ti o n o f th e s a le s m odel i ts e lf. TH E P A T H T O S O LU TIO N S E LLIN G

S olu ti o n se llin g co m es in m any fla v ors , b ut genera lly d esc rib es th e m ig ra ti o n fr o m a fo cus o n

t r a nsa cti o nal s a le s o f in d iv id ual p ro ducts (u su ally b ase d o n p ric e o r v olu m e) to a fo cus o n b ro ad -

b ase d c o nsu lta ti v e s a le s o f “ b und le s” o f p ro ducts a nd s e rv ic es. T he k ey to i ts s u ccess i s th e c re ati o n

o f b und le d o ffe rin gs th at n o t o nly m eet b ro ad er c usto m er n eed s i n a u niq ue a nd v alu ab le w ay, b ut a ls o

t h at co m peti to rs can’t easily re p lic ate . T he best so lu ti o ns, th ere fo re , are no t ju st uniq ue, but

s u sta in ab ly s o , a llo w in g a s u p plie r to a d dre ss c usto m er c halle nges i n e ith er n ew o r m ore e co no m ic al

w ays r e la ti v e to th e c o m peti ti o n.

Why does th at m atte r? Solu ti o n se llin g is la rg ely driv en by su p plie rs ’ atte m pts to esc ap e

d ra m ati c ally in cre asin g c o m moditi z a ti o n p re ssu re a s in d iv id ual p ro ducts a nd s e rv ic es b eco m e le ss

d iffe re nti a te d o ver ti m e. B ecause i t i s h ard er f o r a c o m peti to r to o ffe r th e f u ll s p ectr u m o f c ap ab iliti e s

c o m pris in g a w ell- d esig ned s o lu ti o n b und le , i t’ s m uch e asie r to p ro te ct p re m iu m p ric in g i n a s o lu ti o n

s a le th an i n a tr a d iti o nal p ro duct s a le .

Not s u rp ris in gly , th e a p pro ach h as b eco m e w id ely p opula r a cro ss b usin ess-to -b usin ess s a le s fo r

t h at r e aso n. In fa ct, to g et a s e nse o f h o w w id esp re ad s o lu ti o n s e llin g h as b eco m e, in a r e cent S E C

s u rv ey w e ask ed sa le s le ad ers to chara cte riz e th eir prim ary sa le s str a te gy acro ss a m ulti s te p

c o nti n uum fr o m tr a d iti o nal p ro duct sa le s o n o ne e nd to fu ll- o n c usto m iz e d so lu ti o n se llin g o n th e

o th er. T he re su lt? F ully th re e-q uarte rs of re sp ond ents re p orte d asp ir a ti o ns to be so m e kin d of

s o lu ti o ns p ro vid er to a m ajo rity o f th eir c usto m ers . E sse nti a lly , s o m e fla v or o f s o lu ti o n s e llin g h as

b eco m e a d om in ant s a le s s tr a te gy a cro ss a lm ost e v ery i n d ustr y .

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

F ig ure 1 .1 .

T he S hift f r o m P ro duct to S olu ti o n S ellin g

Now , w e d on’t d is p ute th e v alu e o f th is lo ng-te rm m ig ra ti o n to s o lu ti o n s e llin g— parti c ula rly a s a

w ay to e sc ap e re le ntl e ss c o m moditi z a ti o n p re ssu re — but th e str a te gy n o neth ele ss b rin gs w ith it a

n um ber o f re al c halle nges. C hie f a m ong th em a re tw o c halle nges th at e xp la in h o w — and w hy— th e

s o lu ti o ns m odel h as n ecessa rily e v olv ed o ver ti m e. T he f ir s t i s th e b urd en th at s o lu ti o ns p la ces o n th e custo m er. T he s e co nd i s th e b urd en i t p la ces o n th e r e p . TH E C UST O M ER B U RDEN O F S O LU TIO NS

B y d efin iti o n, a s h ift to s o lu ti o n s e llin g r e su lts i n c usto m ers ’ e xp ecti n g y o u to a ctu ally “ so lv e” a r e al

p ro ble m a nd n o t ju st s u p ply a re lia b le p ro duct. A nd th at’ s h ard to d o. It re q uir e s th at y o u n o t o nly

u nd ers ta nd th e custo m er’s und erly in g p ro ble m s o r challe nges as w ell if no t b ette r th an th ey d o

t h em se lv es, b ut als o th at yo u can id enti fy new and b ette r m eans o f ad dre ssin g th o se challe nges,

a rti c ula te c le ar b enefits fr o m u sin g lim ite d re so urc es to s o lv e th at p ro ble m v ers u s c o m peti n g o nes,

a nd d ete rm in e th e r ig ht m etr ic s to m easu re s u ccess. A nd th e o nly w ay to d o a ll o f th at is to a sk th e

c usto m er l o ts o f q uesti o ns. S o r e p s s p end a g re at d eal o f ti m e a sk in g th in gs l ik e, “ W hat’ s k eep in g y o u

u p a t n ig ht? ” i n a n a tte m pt to tr u ly u nd ers ta nd a c usto m er’s c o m peti n g c halle nges.

The p ro ble m w ith a ll o f th is “ d is c o very ” is th at it c an o fte n ta ke o n th e fe el o f a p ro tr a cte d p in g-

p ong m atc h betw een th e su p plie r and custo m er. The custo m er exp la in s th eir need s, th e re p

s u m mariz e s h er u nd ers ta nd in g, th e c usto m er c o nfir m s w heth er o r n o t th e r e p g o t i t r ig ht, s h e c re ate s a

p ro posa l, th e c usto m er r e v ie w s a nd a m end s i t, a nd o n a nd o n.

This co m plic ate d and ofte n ra th er pro tr a cte d pro cess re q uir e s a huge am ount of custo m er

i n v olv em ent a t e ach s ta ge, p la cin g tw o k in d s o f b urd en o n th e c usto m er: T he fir s t is ti m e, a nd th e

s e co nd is ti m in g. N ot o nly d oes th is d ance e nta il sig nific ant c usto m er c o m mitm ent a cro ss a w id e

r a nge o f d iffe re nt s ta keho ld ers , c o nfe re nce c alls , a nd p re se nta ti o ns, b ut fr o m th e c usto m er’s p oin t o f

v ie w , m ost o f th is e ffo rt c o m es e arly , b efo re th ey s e e a ny v alu e. R eally , it’ s a n a ct o f fa ith o n th eir

p art th at th ey’re g o in g to g et a nyth in g i n r e tu rn f o r a ll o f th eir tr o ub le .

This h as le d to s o m eth in g w e c all “ so lu ti o ns fa ti g ue.” A s s o lu ti o ns c o m ple xity h as in cre ase d , th is

b urd en o n c usto m ers h as g o ne u p a s w ell, l e ad in g c usto m ers to e ngage w ith s u p plie rs v ery d iffe re ntl y

w hen it c o m es to c o m ple x d eals . In fa ct, fo ur tr e nd s re ally sta nd o ut in d esc rib in g h o w c usto m er

b uyin g b ehav io r i s e v olv in g r a p id ly . The R is e o f t h e C onse nsu s-B ase d S ale

F ir s t, w e h av e se en a sig nific ant in cre ase in th e n eed fo r c o nse nsu s in o rd er to g et d eals d one.

B ecause th e p ayo ff o f b uyin g a co m ple x so lu ti o n is so uncerta in , ev en C -le v el executi v es w ith

s ig nific ant d ecis io n-m akin g a uth o rity a re u nw illin g to g o o ut o n a lim b to m ake a la rg e p urc hase

d ecis io n w ith o ut th e s u p port o f th eir te am s. O ur r e se arc h a t th e S ale s E xecuti v e C ouncil i n d ic ate s th at

w id esp re ad s u p port fo r a s u p plie r a cro ss th eir te am is th e n um ber-o ne th in g s e nio r d ecis io n m akers

l o ok f o r i n m akin g a p urc hase d ecis io n ( a f in d in g w e’ll d is c uss i n m ore d ep th l a te r i n th is b ook).

And o f c o urs e , th at n eed f o r c o nse nsu s h as h uge i m plic ati o ns f o r s a le s p ro ducti v ity . N ot o nly d oes

t h e re p n o w h av e to sp end th e ti m e tr a ckin g d ow n a ll th ese in d iv id uals a nd se llin g th em o n th e

s o lu ti o n, b ut th e r is k th at a t le ast o ne o f th em is g o in g to s a y n o g o es u p w ith e ach n ew s ta keho ld er

t h at r e p h as to e ngage. In cre ase d R is k A versio n

S eco nd , a s d eals h av e b eco m e m ore c o m ple x a nd m ore e xp ensiv e, m ost c usto m ers h av e b eco m e

m uch m ore c o ncern ed a b out w heth er th ey’ll

ever

s e e a r e tu rn o n th eir in v estm ent. A s a r e su lt, m any

a re m ovin g a ggre ssiv ely to re q uir e s u p plie rs to s h are m ore d eep ly in th e p erc eiv ed h ig her ris k o f

t h ese so lu ti o ns th em se lv es. It’ s n o th in g n ew fo r c usto m ers to d em and ju st- in -ti m e d eliv ery o r o n-

d em and p ro ducti o n, b ut m ore a nd m ore w e’re s e ein g r e v is io ns to th e v ery m etr ic s c usto m ers u se to

j u d ge th e su ccess o f a so lu ti o n im ple m enta ti o n. A s a re su lt, in th e w orld o f co m ple x so lu ti o ns,

s u p plie r s u ccess is o fte n m easu re d b y th e p erfo rm ance o f th e c usto m er’s b usin ess, n o t th e s u p plie r’s

p ro ducts .

Sup plie rs l o okin g to g ro w a s o lu ti o ns b usin ess, th en, a re g o in g to h av e to r u n r ig ht a t r is k , b uild in g

i t d ir e ctl y in to th eir v alu e p ro po siti o n, a s a n in cre asin gly la rg e n um ber o f c usto m ers a re n o lo nger

w illin g to a ccep t a t f a ce v alu e th at “ so lu ti o ns” w ill u lti m ate ly d eliv er th e k in d o f v alu e th at s u p plie rs

p ro m is e u p f r o nt. Gre ate r D em and f o r C usto m iz atio n

T hir d , a s d eal c o m ple xity g o es u p , s o d oes c usto m ers ’ n atu ra l te nd ency to w ant to m odify th e d eal to

m ore c lo se ly m eet th eir s p ecific n eed s. W here as s u p plie rs ty p ic ally s e e c usto m iz a ti o n p ure ly fr o m a

c o st p ers p ecti v e, c usto m ers s e e c usto m iz a ti o n a s p art o f th e p ro m is e o f a “ so lu ti o ns” s a le : “ If y o u’re

g o in g to ‘ s o lv e’ m y p ro ble m , th en th is i s w hat I n eed i t to d o. W hy s h o uld th at c o st m ore m oney? A fte r

a ll, if it d oesn ’t d o th at, th en it’ s n o t re ally a ‘s o lu ti o n,’ is it? ” It’ s h ard to a rg ue w ith th at k in d o f

l o gic . C usto m iz a ti o n: E very o ne w ants i t; n o o ne w ants to p ay f o r i t. The R is e o f T hir d -P arty C onsu lt a nts

F in ally , o ver th e la st s e v era l y ears , w e’v e s e en a d ra m ati c a nd tr o ub lin g r is e in th e n um ber o f th ir d -

p arty c o nsu lta nts e m plo yed b y c usto m ers to h elp th em “ extr a ct m axim um v alu e fr o m th e p urc hase

d ecis io n.” A w ell- e sta b lis h ed p ra cti c e in so m e se cto rs — co rp ora te h ealth in su ra nce in th e U nite d

S ta te s, fo r e xam ple — th is tr e nd re ally to ok o ff g lo bally in la te 2 009, fo rg ed b y th e n eed o f m ost

c o m panie s to c ut c o sts o n th e o ne h and , a nd th e e v en m ore u rg ent n eed o f r e centl y la id -o ff in d ustr y

e xp erts to f in d a j o b o n th e o th er. T yp ic ally , th ese n ew ly m in te d c o nsu lta nts s o ld th eir s e rv ic es l a rg ely

o n th e b asis o f th eir a b ility to s a v e c o m panie s m oney. In th at c ase , “ extr a cti n g m axim um v alu e fr o m

t h e p urc hase d ecis io n” r e ally w as n o th in g m ore th an c o de f o r d oin g e v ery th in g p ossib le to s ti c k i t to

s u p plie rs o n p ric e, u p to a nd in clu d in g g o in g b ack a nd a ud iti n g p rio r d eals to u nco ver g ro und s fo r

r e nego ti a ti o n.

Over ti m e, h o w ev er, l a rg er o rg aniz a ti o nal p la yers h av e b eco m e d eep ly i n v olv ed i n th e p urc hase a s

w ell. In th eir c ase , “ extr a cti n g m axim um v alu e fr o m th e p urc hase d ecis io n” ty p ic ally tr a nsla te s in to

s o m eth in g c lo se r to h elp in g c usto m ers n av ig ate s o lu ti o ns c o m ple xity . T he f a ct o f th e m atte r i s th at a s

s u p plie rs s e ek to s e ll i n cre asin gly b ro ad s o lu ti o ns to e v er m ore c o m ple x c usto m er p ro ble m s, a s o fte n

a s n o t th e c o m ple xity o f th o se p ro ble m s is so h ig h th at c usto m ers a re th em se lv es u nq ualifie d to

n av ig ate — le t a lo ne e v alu ate — pote nti a l c o urs e s o f a cti o n o n th eir o w n. T hey n eed h elp . R ath er th an

t u rn in g to th e s u p plie rs f o r th at h elp , h o w ev er, th ey l o ok to “ neutr a l” th ir d -p arty e xp erts .

As a re su lt, su p plie rs to day are fr e q uentl y co nfr o nte d w ith new and aggre ssiv e th ir d -p arty

i n te rm ed ia rie s lo okin g to ta ke th eir s h are o f “ v alu e” fr o m th e d eal. A nd y o u c an b e s u re th at th at

p ound o f fle sh is g o in g to c o m e fr o m th e su p plie r sid e, n o t th e c usto m er sid e, g iv en w ho m th ese

c o nsu lta nts a re w ork in g fo r. In th is w orld , y o u c an e asily w in d u p w ith a ll th e c usto m er’s b usin ess,

b ut n o ne o f th eir m oney.

All f o ur o f th ese tr e nd s i n c usto m er b uyin g b ehav io r h av e l e d to a h ard tr u th f o r s a le s o rg aniz a ti o ns

a ll o ver th e w orld — and e sp ecia lly fo r th e re p s w ho s e ll fo r th em : W hile th e e co no m y h as g o tte n

b ette r, s e llin g h asn ’t g o tte n a ny e asie r. It’ s th e p hysic s o f s a le s: S up plie rs c alle d th e s o lu ti o ns p la y,

a nd c usto m ers h av e m ad e th eir c o unte rm ove. C usto m ers a re lo okin g fo r w ays to re d uce b oth th e

c o m ple xity a nd th e r is k th at s u p plie rs ’ s o lu ti o n s e llin g e ffo rts h av e f o is te d u p on th em . A W ID EN IN G T A LEN T G AP

H ow d oes th is s o lu ti o ns s to ry p la y o ut fo r in d iv id ual r e p p erfo rm ance? T he im pact h as b een n o th in g

s h o rt o f d ra m ati c .

In a re cent s tu d y, o ur te am a t th e S ale s E xecuti v e C ouncil c o nd ucte d a n a naly sis lo okin g a t th e

i m pact o f a c o m pany’s s a le s m odel— in o th er w ord s, tr a nsa cti o nal s e llin g v ers u s s o lu ti o n s e llin g— on

t h e p erfo rm ance d is tr ib uti o n o f th eir s a le s re p s. W hat w e fo und w as e ye-o penin g a nd m ore th an a

l ittl e tr o ub lin g.

In a tr a nsa cti o nal s e llin g e nv ir o nm ent, th e p erfo rm ance g ap b etw een a v era ge a nd s ta r p erfo rm ers i s

5 9 p erc ent. S o th e sta r p erfo rm er se lls ab out half as m uch as th e co re p erfo rm er. H ow ev er, in

c o m panie s w ith so lu ti o n se llin g m odels th e d is tr ib uti o n is v ery d iffe re nt. T here , sta r p erfo rm ers

o utp erfo rm c o re p erfo rm ers b y a lm ost

200 p erc en t.

T he g ap i s f o ur ti m es g re ate r. P ut a no th er w ay, a s

s a le s b eco m e m ore c o m ple x, th e g ap b etw een c o re a nd s ta r p erfo rm ers w id ens d ra m ati c ally .

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 1 .2 .

C ore V ers u s H ig h P erfo rm ers i n T ra nsa cti o nal ( L eft) a nd S olu ti o n S ellin g ( R ig ht)

Env ir o nm ents

This l e ad s u s to th re e c o nclu sio ns. F ir s t, a s a s o lu ti o ns p ro vid er, y o u’v e g o t to f in d a w ay to p ut a

b ig c o rp ora te b ear h ug a ro und y o ur s ta rs . T hey’re c arry in g th e d ay fo r y o u. O ne h ead o f s a le s in

b usin ess s e rv ic es to ld u s r e centl y th at o f th eir h und re d s a le s r e p s,

tw o

w ere r e sp onsib le fo r b rin gin g

i n 8 0 p erc ent o f th e c o m pany’s re v enue. W hile th e situ ati o n in y o ur o rg aniz a ti o n m ay n o t b e a s

e xtr e m e, th e s h ift to s o lu ti o n s e llin g h as u nd oub te d ly s e en a d ra m ati c r is e in k ey-p ers o n d ep end ency

p ro ble m s a cro ss m any s a le s fo rc es. It’ s n o t ju st th at s ta rs a re c arry in g th e d ay fo r y o u; th ey’re o fte n

c arry in g th e e nti r e c o m pany.

Seco nd , a s y o ur s a le s m odel b eco m es m ore c o m ple x, th e v alu e o f n arro w in g th e g ap b etw een y o ur

c o re a nd s ta r p erfo rm ers g o es u p r a d ic ally . In th e tr a nsa cti o nal w orld , th e v alu e o f g etti n g s o m eo ne

j u st h alfw ay fr o m g o od to g re at is a 3 0 p erc ent im pro vem ent. T hat’ s n o t b ad . B ut th e v alu e o f th e

s a m e m ove i n a s o lu ti o ns e nv ir o nm ent i s a n a lm ost 1 00 p erc ent i m pro vem ent. P ut s im ply , c lo sin g th at

g ap i s w orth a l o t m ore th an i t u se d to b e.

Fin ally , th e p enalty fo r n o t c lo sin g th e g ap is te rrify in g. A s y o ur m odel e v olv es, le ft u nte nd ed , th e co re w ill f a ll f a rth er a nd f a rth er b ehin d , u nti l th ey u lti m ate ly c an’t e xecute th e n ew m odel a t a ll. A N EW W AY F O RW AR D

I n th is w orld o f d ra m ati c ally c hangin g c usto m er b uyin g b ehav io r a nd r a p id ly d iv erg in g s a le s ta le nt,

y o ur s a le s a p pro ach m ust e v olv e o r y o u w ill b e l e ft b ehin d .

So th e q uesti o n n o w i s : W hat d o y o u d o a b out i t? I f y o u’re g o in g to w in g o in g f o rw ard , y o u’v e g o t

t o e q uip r e p s to g enera te n ew d em and i n a w orld o f r e lu cta nt, r is k -a v ers e c usto m ers — custo m ers w ho

a re s tr u gglin g to b uy c o m ple x s o lu ti o ns j u st a s m uch a s y o u a re s tr u gglin g to s e ll th em . T hat’ s g o in g to

t a ke a v ery s p ecia l k in d o f s a le s p ro fe ssio nal i n d eed . A s th e w orld o f s a le s h as e v olv ed d ra m ati c ally

a cro ss th e la st te n to tw enty y ears , o ur re se arc h in d ic ate s th at th e b est re p s h av e e v olv ed a s e t o f

u niq ue a nd p ow erfu l s k ills to k eep u p . A nd th at’ s w here o ur s to ry g o es n ext. 2

TH E C HA LLEN GER ( P A RT 1 ): A N EW M ODEL F O R H IG H P ER FO RM ANCE

T H E N EED T O

u nd ers ta nd w hat y o ur s ta r-p erfo rm in g r e p s a re d oin g to s e t th em se lv es a p art fr o m

t h eir c o re -p erfo rm in g c o lle agues h as n ev er b een m ore u rg ent. T he w orld o f s a le s is c hangin g. T he

p re -re cessio n r e cip e f o r s a le s s u ccess w on’t g et th e j o b d one i n a p ost- re cessio n e co no m y. T hat s a id ,

t h e eco no m y its e lf se rv es o nly as a b ackd ro p to th is sto ry . T he re al sto ry re v olv es aro und th e

d ra m ati c c hange in c usto m er b uyin g b ehav io rs a cro ss th e la st fiv e y ears th at w e re v ie w ed in th e

p re v io us c hap te r— all i n r e sp onse to s u p plie rs ’ e ffo rts to s e ll l a rg er, m ore c o m ple x, m ore d is ru p ti v e,

a nd m ore e xp ensiv e s o lu ti o ns.

Sti ll, i f n o th in g e ls e , th e g lo bal e co no m ic c o lla p se s e rv ed to th ro w th e w id enin g g ap b etw een c o re

a nd s ta r r e p s i n to s ta rk c o ntr a st. E ven i n th e d ep th s o f th e d ow ntu rn , w hen m ost r e p s w ere f a r b ehin d

q uo ta , s o m e r e p s— quite in exp lic ab ly — sti ll m anaged n o t ju st to h it th eir g o als , b ut to e xceed th em .

W hat w ere th ey d oin g d iffe re ntl y ? G enera lly , th e te nd ency i n s a le s i s to s im ply c halk u p th e d iffe re nce

t o n atu ra l ta le nt a nd a ssu m e s ta rs a re j u st b orn w ith i t. I t’ s n o t a s i f y o u c an j u st ta ke th eir s k ill, b ottl e

i t, a nd s p rin kle i t o ver y o ur c o re p erfo rm ers to c lo se th e g ap . R ig ht?

Well, w hat if y o u c o uld ? W hat if y o u c o uld tr a ck d ow n th e r e p lic ab le p art o f w hat tr u ly s e ts s ta r

p erfo rm ers a p art, c ap tu re th at m agic , a nd e xp ort it to th e r e st o f y o ur s a le s o rg aniz a ti o n? Im agin e a

w orld w here a ll y o ur r e p s— or a t l e ast m any m ore o f th em — perfo rm ed l ik e s ta rs . W hat w ould th at b e

w orth to y o u? W hat w ould i t m ean f o r th e o vera ll p erfo rm ance o f y o ur c o m pany?

Well, in 2 009, in a w orld w here o nly th e sta rs w ere se llin g to b egin w ith , it c o uld m ean th e

d iffe re nce b etw een b ankru p tc y a nd s u rv iv al. A nd i t w as i n th is h ig h-s ta kes w orld th at w e f ir s t s e t o ut

t o answ er th e q uesti o n: W hic h sk ills , b ehav io rs , kno w le d ge, and atti tu d es m atte r m ost fo r hig h

p erfo rm ance? IN S E A R CH O F A N SW ER S

T o f ig ure th is o ut, w e s u rv eyed h und re d s o f f r o ntl in e s a le s m anagers a cro ss n in ety c o m panie s a ro und

t h e w orld , a sk in g th o se m anagers to a sse ss th re e r e p s e ach f r o m th eir te am s— tw o a v era ge p erfo rm ers

a nd o ne s ta r p erfo rm er— alo ng f o rty -fo ur d iffe re nt a ttr ib ute s. A nd w hile th e i n iti a l m odel w as b uilt o n

a n analy sis of th e fir s t 700 re p s fo r w ho m w e had data — re p re se nti n g ev ery m ajo r in d ustr y ,

g eo gra p hy, a nd g o -to -m ark et m odel— we’v e s in ce in cre ase d th at n um ber to w ell o ver 6 ,0 00 r e p s a ll

o ver th e w orld as w e co nti n ue to ru n th is dia gno sti c su rv ey th ro ugh our S E C S olu ti o ns— th e

i m ple m enta ti o n a rm o f th e S ale s E xecuti v e C ouncil— gro up . A mong o th er th in gs, c o nti n uin g th at w ork

h as a llo w ed u s to d ete rm in e w heth er o r n o t th e s to ry i n th e d ata h as c hanged o ver ti m e, e sp ecia lly i n

l ig ht o f th e re cent s lo w b ut s te ad y e co no m ic re co very . A nd fo r re aso ns w e’ll re v ie w m om enta rily ,

w e’v e b een a b le to e sta b lis h q uite c le arly th at th ese fin d in gs h o ld tr u e ir re sp ecti v e o f e co no m ic

c o nd iti o ns.

So w hat e xactl y w as in th is s u rv ey? T he ta b le o n p age 1 6 p ro vid es a s a m ple o f th e r e p a ttr ib ute s

w e te ste d a s p art o f th is w ork . W e a sk ed m anagers to a sse ss a tti tu d es, in clu d in g th e d egre e to w hic h

t h eir r e p s s e ek to r e so lv e c usto m er is su es a nd th eir w illin gness to r is k d is a p pro val. W e a sk ed a b out

s k ills a nd b ehav io rs , lik e th e r e p s’ le v el o f b usin ess a cum en a nd n eed s-d ia gno sis a b ility . W e lo oked

a t a cti v iti e s, lik e re p s’ te nd ency to fo llo w th e s a le s p ro cess a nd th o ro ughly e v alu ate o pportu niti e s.

A nd , fin ally , w e a sk ed a b out re p s’ k no w le d ge o f th eir c usto m ers ’ in d ustr y a s w ell a s th eir o w n

c o m panie s’ p ro ducts .

In te rm s o f d em ogra p hic s, th e stu d y c o vere d a w id e ra nge o f se llin g m odels , e v ery th in g fr o m

h unte rs to f a rm ers , f ie ld r e p s to i n sid e s a le s r e p s, k ey a cco unt m anagers to b ro ad -b ase d a cco unt r e p s,

a s w ell a s b oth d ir e ct s e lle rs a nd in d ir e ct s e lle rs . T hat s a id , w e c are fu lly c o ntr o lle d fo r th in gs lik e

r e p te nure , g eo gra p hy, a nd a cco unt s iz e to m ake s u re th at th e r e su lts a p ply n o t o nly u niv ers a lly a cro ss

t h e e nti r e sa m ple , b ut a ls o b ro ad ly a cro ss th e w id e ra nge o f th e c o m panie s re p re se nte d in S ale s

E xecuti v e C ouncil m em bers h ip .

Fin ally , b ecause w e w ere w ork in g w ith s a le s re p s, w e h ad a v ery p ra cti c al m eans o f m easu rin g actu al p erfo rm ance, nam ely each in d iv id ual re p ’s p erfo rm ance again st go al. W hen yo u p ut it all

to geth er, w hat a ll o f th is w ork g iv es y o u i s a v ery r o bust d ata -d riv en s n ap sh o t o f r e p p erfo rm ance th at

allo w s y o u to a nsw er th e q uesti o n, “ O f a ll th e th in gs a s a le s r e p

co uld

d o w ell, w hic h o nes a ctu ally

matte r m ost fo r s a le s p erfo rm ance?” It’ s a n e xtr e m ely th o ro ugh p ic tu re o f w hat “ go od” lo oks lik e

when i t c o m es to s a le s r e p s k ill a nd b ehav io r.

We s h o uld a ls o p oin t o ut w hat w e d id

not

s tu d y. T his w ork is d efin iti v ely n o t a n e xam in ati o n o f

sa le s re p p ers o nality ty p es o r p ers o nal str e ngth s. T hat k in d o f th in g is h ard to m easu re a nd e v en

hard er to d o a nyth in g a b out. If w e w ere to te ll y o u th at “ charis m a” is h ugely im porta nt to sa le s

su ccess, y o u m ig ht n o t d is a gre e, b ut y o u’d lik ely str u ggle to k no w w hat to a ctu ally

do

w ith th at

in fo rm ati o n. S ure , o ver ti m e y o u m ig ht fin d n ew h o m es fo r a ll o f y o ur n o ncharis m ati c r e p s a nd h ir e

more o utg o in g o nes in ste ad . B ut w hile th at m ay in fa ct h elp p erfo rm ance to m orro w , it w ould b e

aw fu lly d iffic ult to e xecute p ra cti c ally , in o rd er to im pro ve p erfo rm ance to day. In ste ad , fir s t a nd

fo re m ost, w e w ante d to p ro vid e a d vic e a ro und w hat y o u c an d o r ig ht n o w w ith th e r e p s y o u

alr e a dy

hav e ( th o ugh th ere i s c erta in ly a h ir in g s to ry th at c o m es o ut o f th ese r e su lts a s w ell) .

To th at e nd , lo okin g b ack a t th e lis t o f v aria b le s, y o u’ll n o ti c e th at a ll o f th e a ttr ib ute s w e te ste d

were fo cuse d o n r e p s’

dem onstr a te d b eh avio rs

. In o th er w ord s, h o w m uch m ore o r le ss lik ely is a

re p to d o “ X ”? O r h o w e ffe cti v e i s a r e p a t d oin g “ Y ”? W e d id th at b ecause s k ills a nd b ehav io rs

are

th in gs y o u c an d o s o m eth in g a b out r ig ht a w ay. Y ou m ay o r m ay n o t b e c haris m ati c , b ut th ro ugh b ette r

co achin g, fo r e xam ple , I c an h elp y o u d o a b ette r jo b o f fo llo w in g th e s a le s p ro cess. O r, th ro ugh

bette r tr a in in g a nd to ols , I c an i m pro ve y o ur p ro duct o r i n d ustr y k no w le d ge.

This i s a s u rv ey a b out g etti n g th in gs d one. I t w asn ’t d esig ned s o m uch to d ete rm in e w hy y o ur s ta rs

are b ette r, b ut ra th er to d ete rm in e ho w to m ake yo ur co re b ette r. T hin k o f th e p ote nti a lly huge

co m merc ia l v alu e c urre ntl y l o cked u p i n th e m id dle 6 0 p erc ent o f y o ur s a le s f o rc e. W hat w ould i t b e

worth to m ake e ach o f th o se r e p s e v en j u st a l ittl e b it b ette r? O ur s u rv ey f o cuse d o n th e th in gs y o u c an

do r ig ht n o w to h elp th e c o re p erfo rm ers y o u a lr e ad y h av e a ct m ore lik e th e s ta rs th at y o u w is h th ey

were .

So w hat d id w e fin d ? W hic h o f th ese m any a ttr ib ute s m atte rs m ost? A t th e h ig hest le v el, th e s to ry

re v olv es aro und th re e key fin d in gs, each re p re se nti n g a ra d ic al d ep artu re fr o m ho w m ost sa le s

executi v es th in k a b out h o w to d riv e s a le s s u ccess. L et’ s ta ke th em o ne b y o ne. FIN DIN G # 1: T H ER E A R E F IV E T YPES O F S A LES R EPS

T he fir s t th in g w e d id w as to ru n a fa cto r a naly sis o n th e d ata . P ut sim ply , fa cto r a naly sis is a

s ta ti s ti c al m eth o dolo gy fo r g ro up in g a la rg e n um ber o f v aria b le s in to a sm alle r se t o f c ate go rie s

w ith in w hic h v aria b le s c o -p re se nt a nd m ove to geth er. F or e xam ple , i f w e w ere s tu d yin g e co sy ste m s,

a fa cto r a naly sis o f e v ery p ote nti a l e co sy ste m v aria b le w ould te ll u s th at th in gs lik e in te nse h eat,

s a nd , a rid c o nd iti o ns, s c o rp io ns, a nd c acti te nd to c o -p re se nt i n n atu re . B ecause w e te nd to f in d th em

t o geth er, w e c o uld g iv e th is c ate go ry a n am e, i .e ., “ a d ese rt.”

When w e ra n fa cto r a naly sis o n th e d ata fr o m o ur sa le s re p stu d y, w e fo und so m eth in g re ally

i n tr ig uin g. T he a naly sis in d ic ate d v ery c le arly th at c erta in r e p c hara cte ris ti c s te nd to c lu m p to geth er.

T he fo rty -fo ur a ttr ib ute s w e te ste d fe ll in to fiv e d is ti n ct g ro up s, e ach c o nta in in g a v ery d iffe re nt

c o m bin ati o n o f r e p c hara cte ris ti c s. W hen a r e p te nd s to b e g o od a t o ne a ttr ib ute in th at g ro up , h e o r

s h e i s v ery l ik ely to b e g o od a t a ll o f th e o th ers i n th at g ro up a s w ell.

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 2 .1 .

T he F iv e S ale s R ep P ro file s

Fig ure 2 .1 sh o w s th ese fiv e d is ti n ct re p p ro file s a s w ell a s th e d esc rip ti v e v aria b le s th at a re

c lu ste re d w ith in each. T hese gro up s are no t necessa rily m utu ally exclu siv e. G oin g back to th e

e co sy ste m e xam ple e arlie r, th in k o f it th is w ay: A ll d ese rts h av e in te nse h eat a nd s a nd , b ut in te nse

h eat a nd s a nd a re n o t u niq ue to d ese rts . Y ou fin d th ese th in gs in o th er e co sy ste m s to o, m ayb e ju st in

d iffe re nt a b und ance. I n o ur s tu d y, e v ery r e p h as a t l e ast a b ase lin e l e v el o f p erfo rm ance a cro ss a ll th e

a ttr ib ute s w e te ste d . F or e xam ple , to o ne d egre e o r a no th er, a ll s a le s r e p s a d here to a fo rm al s a le s

p ro cess. A ll r e p s h av e a t le ast a m in im um a ccep ta b le le v el o f p ro duct a nd in d ustr y k no w le d ge. B ut

f o r a lm ost e v ery r e p , a s p ecific s u b se t o f th ese a ttr ib ute s d efin es th eir p rim ary a p pro ach to c usto m ers .

We lik e to th in k o f th ese p ro file s a s c o lle ge o r u niv ers ity d egre es. In o rd er to g ra d uate , e v ery

s tu d ent m ust c o ver a b ro ad c o re c urric ulu m : s c ie nce, la nguage, h is to ry , m ath , e tc . B ut a t th e s a m e

t i m e, u niv ers ity s tu d ents h av e a “ p rim ary ” o r “ m ajo r” a s w ell— th e th in g th ey s p ecia liz e in th at s e ts

t h em a p art. A nd th at’ s w hat th ese fiv e p ro file s a re a ll a b out. T hey a re th e fiv e d is ti n ct “ m ajo rs ” in

s a le s.

These f iv e p ro file s a re n o t g ro up s th at w e p ut to geth er b ase d o n o ur i n te rp re ta ti o n o f th e d ata o r o ur vie w o f th e w orld . W e le t th e a naly sis te ll th e s to ry . T he fiv e p ro file s a re s ta ti s ti c ally d eriv ed , b ut

th ey a ccura te ly a nd c o m ple te ly d esc rib e th e fiv e m ost c o m mon p ro file s fo und in th e re al w orld .

In te re sti n gly , th ey’re r e la ti v ely e v enly d is tr ib ute d a cro ss o ur s a m ple p opula ti o n.

So w ho a re th ese d iffe re nt re p s? A s w e g o th ro ugh th e fiv e p ro file s, a sk y o urs e lf th e fo llo w in g

questi o ns: W hic h o f th ese fiv e p ro file s d o y o u th in k b est d esc rib es th e b ulk o f y o ur sa le s fo rc e?

Where h av e y o u p la ced y o ur b ets a s a n o rg aniz a ti o n o r, p erh ap s m ore p ra cti c ally s p eakin g, w hic h

ty p e o f r e p a re y o u tr y in g to r e cru it r ig ht n o w ? W hic h a re y o u tr y in g to g et y o ur r e p s to b ehav e m ore

lik e? The H ard W ork er

H ard W ork ers a re e xactl y w ho th ey s o und lik e. T hese a re th e r e p s w ho s h o w u p e arly , s ta y la te , a nd

a re a lw ays w illin g to p ut i n th e e xtr a e ffo rt. T hey’re th e “ no se to th e g rin d sto ne” s e lle rs . T hey’re s e lf-

m oti v ate d a nd d on’t g iv e u p e asily . T hey’ll m ake m ore c alls in a n h o ur a nd c o nd uct m ore v is its in a

w eek th an ju st a b out a nyo ne e ls e o n th e te am . A nd th ey e nth usia sti c ally a nd fr e q uentl y se ek o ut

f e ed back, a lw ays l o okin g f o r o pportu niti e s to i m pro ve th eir g am e.

A C SO a t a g lo bal l o gis ti c s c o m pany p ut i t l ik e th is : “ T hese g uys b elie v e th at d oin g th e r ig ht th in gs

t h e rig ht w ay w ill in ev ita b ly get yo u re su lts . If th ey d o eno ugh calls , se nd eno ugh e-m ails , and

r e sp ond to e no ugh R FPs [re q uests fo r p ro posa l] , it’ ll a ll c o m e to geth er b y th e e nd o f th e q uarte r.

T hey’re th e o nes w ho w ere actu ally p ayin g atte nti o n w hen w e p ound ed th e im porta nce o f sa le s

p ro cess.” The R ela tio nsh ip B uild er

J u st a s th e n am e im plie s, R ela ti o nsh ip B uild ers a re a ll a b out b uild in g a nd n urtu rin g s tr o ng p ers o nal

a nd pro fe ssio nal re la ti o nsh ip s and ad vocate s acro ss th e custo m er org aniz a ti o n. They’re very

g enero us w ith th eir ti m e a nd w ork v ery h ard to e nsu re th at c usto m ers ’ n eed s a re m et. T heir p rim ary

p ostu re w ith c usto m ers is la rg ely o ne o f a ccessib ility a nd s e rv ic e. “ W hate v er y o u n eed ,” th ey’ll te ll

c usto m ers , “ I’ m h ere to m ake th at h ap pen. J u st s a y th e w ord .”

Not su rp ris in gly , o ne V P o f sa le s w e re centl y in te rv ie w ed to ld us, “O ur custo m ers

lo ve

our

r e la ti o nsh ip b uild ers . T hey’v e w ork ed v ery h ard to b uild c usto m er re la ti o nsh ip s, so m eti m es o ver

y ears . I t f e els l ik e th at’ s r e ally m ad e a h uge d iffe re nce to o ur b usin ess.” The L one W olf

T he L one W olf w ill lo ok fa m ilia r to a nyo ne in s a le s. L one W olv es a re d eep ly s e lf- c o nfid ent. A s a

r e su lt, th ey te nd to f o llo w th eir o w n i n sti n cts i n ste ad o f th e r u le s. I n m any w ays, th e L one W olv es a re

t h e “ p rim a d onnas” o f th e s a le s f o rc e— th e “ co w boys” w ho d o th in gs “ th eir w ay” o r n o t a t a ll. M ore

o fte n th an n o t th ey d riv e s a le s le ad ers c ra zy — th ey h av e n o p ro cess c o m plia nce, n o tr ip r e p orts , n o

C RM ( c usto m er r e la ti o nsh ip m anagem ent) e ntr ie s.

“F ra nkly ,” o ne h ead o f sa le s to ld u s, “ I’ d fir e th em if I c o uld , b ut I c an’t, b ecause th ey’re a ll

c ru sh in g th eir n um bers .” A nd th at’ s th e c ase f o r m ost c o m panie s. O n a v era ge, L one W olv es te nd to d o

v ery w ell d esp ite e gre gio usly flo uti n g th e s y ste m , b ecause if th ey d id n’t d o w ell, th ey’d p ro bab ly

h av e b een f ir e d a lr e ad y. The R eactiv e P ro ble m S olv er

T he R eacti v e P ro ble m S olv er i s h ig hly r e lia b le a nd v ery d eta il- o rie nte d . W hile e v ery r e p i n o ne w ay

o r a no th er i s f o cuse d o n s o lv in g c usto m er p ro ble m s, th ese i n d iv id uals a re n atu ra lly d ra w n to e nsu rin g

t h at a ll o f th e p ro m is e s th at a re in ev ita b ly m ad e a s p art o f a s a le a re a ctu ally k ep t o nce th at d eal is

d one. T hey te nd to fo cus v ery h eav ily o n p ost- s a le s fo llo w -u p , e nsu rin g th at s e rv ic e is su es a ro und

i m ple m enta ti o n a nd e xecuti o n a re a d dre sse d q uic kly a nd th o ro ughly .

One S E C m em ber d esc rib ed th e p ro ble m s o lv er a s “ a c usto m er s e rv ic e r e p i n s a le s r e p c lo th in g.”

A s s h e p ut i t, “ T hey c o m e i n to th e o ffic e i n th e m orn in g w ith g ra nd p la ns to g enera te n ew s a le s, b ut a s

s o on a s a n e xis ti n g c usto m er c alls w ith a p ro ble m , th ey d iv e rig ht in ra th er th an p assin g it to th e

p eo ple w e a ctu ally p ay to s o lv e th o se p ro ble m s. T hey fin d w ays to m ake th at c usto m er h ap py, b ut a t

t h e e xp ense o f f in d in g w ays to g enera te m ore b usin ess.” The C halle nger

C halle ngers are th e deb ate rs on th e te am . T hey’v e go t a deep und ers ta nd in g of th e custo m er’s

b usin ess a nd u se th at u nd ers ta nd in g to p ush th e c usto m er’s th in kin g a nd te ach th em s o m eth in g n ew

a b out h o w th eir c o m pany c an c o m pete m ore e ffe cti v ely . T hey’re n o t a fr a id to s h are th eir v ie w s, e v en

w hen th ey’re d iffe re nt a nd p ote nti a lly c o ntr o vers ia l. C halle ngers a re a sse rti v e— th ey te nd to “ p re ss”

c usto m ers a littl e — both o n th eir th in kin g a nd a ro und th in gs lik e p ric in g. A nd a s m any s a le s le ad ers

w ill te ll y o u, th ey d on’t re se rv e th eir C halle nger m enta lity fo r c usto m ers a lo ne. T hey te nd to p ush

t h eir o w n m anagers a nd s e nio r l e ad ers w ith in th eir o w n o rg aniz a ti o ns a s w ell. N ot i n a n a nno yin g o r

a ggre ssiv e m anner, m in d y o u— th en w e’d s im ply h av e to c all th is p ro file “ th e J e rk ”— but in a w ay

t h at f o rc es p eo ple to th in k a b out c o m ple x i s su es f r o m a d iffe re nt p ers p ecti v e.

As o ne m em ber p ut it, “ W e h av e a h and fu l o f C halle ngers in o ur c o m pany, a nd a lm ost a ll o f th em

s e em to h av e a s ta nd in g ti m e s lo t o n o ur C SO ’s c ale nd ar to d is c uss w hat th ey’re s e ein g a nd h earin g i n

t h e m ark et. T he C SO l o ves i t. T hey’re c o nsta ntl y b rin gin g f r e sh i n sig ht to th e ta b le th at f o rc es h im to

c o nsta ntl y c heck h is s tr a te gy a gain st r e ality .” FIN DIN G # 2: O NE C LEA R W IN NER A N D O NE C LEA R L O SE R

I f y o u s te p b ack a nd lo ok a t th e fiv e p ro file s, a sk y o urs e lf: W hic h w ould y o u p re fe r to h av e o n y o ur

t e am ? I n m any w ays, th ey a ll l o ok g o od.

But a s in te re sti n g a s it is th at re p s fa ll in to o ne o f fiv e d is ti n ct p ro file s, it’ s re ally th e se co nd

f in d in g th at’ s p ro ven s o c o m ple te ly s u rp ris in g. W hen y o u ta ke th ese f iv e p ro file s a nd c o m pare th em to

a ctu al sa le s p erfo rm ance, y o u fin d so m eth in g v ery d ra m ati c . O ne in p arti c ula r p erfo rm s h ead a nd

s h o uld ers ab ove th e oth er fo ur, and one fa lls dra m ati c ally behin d , yet th e re su lts go again st

c o nv enti o nal w is d om . W hen m ost s a le s le ad ers s e e h o w e ach p ro file p erfo rm s, th ey te ll y o u q uite

f r a nkly , th ey’v e i n d eed p la ced th eir b ig gest b et o n th e p ro file l e ast l ik ely to w in .

So w ho w in s? T he a nsw er i s th e C halle nger b y a l a nd slid e. T ake a l o ok a t f ig ure 2 .2 .

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 2 .2 .

C ore a nd H ig h P erfo rm ers b y P ro file

In co m parin g th e fiv e re p p ro file s w ith actu al sa le s p erfo rm ance, th e fir s t th in g w e d id w as

s e p ara te c o re p erfo rm ers fr o m sta r p erfo rm ers a nd a naly ze e ach in d ep end entl y . T o d ete rm in e sta r

p erfo rm ers , w e a sk ed p arti c ip ati n g c o m panie s to te ll u s w hic h o f th eir r e p s i n th e s a m ple f e ll i n to th e

t o p 20 perc ent of th eir sa le s fo rc e as m easu re d by perfo rm ance again st go al. O nce w e had

c ate go riz e d a ll th e r e p s in o ur s a m ple b y p erfo rm ance, w e th en d ete rm in ed th e d is tr ib uti o n o f e ach

g ro up a cro ss th e f iv e p ro file s. A nd w hat w e f o und w as f a sc in ati n g.

Fir s t, th e dis tr ib uti o n of

co re

perfo rm ers acro ss th e fiv e pro file s is fa ir ly ev en. N o pro file

d om in ate s am ong av era ge sa le s re p s. It tu rn s out co re perfo rm ers are n’t av era ge because th ey

g ra v ita te to a s p ecific p ro file ; th ey’re a v era ge b ecause w ell, th ey’re a v era ge. T hey s h o w u p in a ll

f iv e c ate go rie s a nd a chie v e a v era ge p erfo rm ance i n e v ery s in gle o ne. I n o th er w ord s, th ere ’s n o t o ne

w ay to b e a v era ge, b ut fiv e. M ed io crity c o m es in m ulti p le fla v ors . In d eed , y o u s e e th is in fig ure 2 .2

i n th e r e la ti v ely e v en d is tr ib uti o n o f th e l ig hte r-s h ad ed b ars a cro ss th e f iv e p ro file s.

But w hen y o u lo ok a t th e d is tr ib uti o n o f

sta r

p erfo rm ers a cro ss th ese s a m e fiv e p ro file s, y o u fin d

s o m eth in g co m ple te ly d iffe re nt. W hile th ere m ay b e fiv e w ays to b e av era ge, th ere ’s cle arly a

d om in ant w ay to b e a s ta r. A nd th at, b y f a r, i s th e C halle nger p ro file , c o m pris in g n early 4 0 p erc ent o f

a ll h ig h p erfo rm ers i n o ur s tu d y.

You’ll r e m em ber th at th e C halle nger r e p is th e r e p w ho lo ves to d eb ate . T he o ne w ho u se s h is o r her d eep u nd ers ta nd in g o f a c usto m er’s b usin ess n o t s im ply to s e rv e th em , b ut to te ach th em : to p ush

th eir th in kin g a nd p ro vid e th em w ith n ew a nd d iffe re nt w ays to th in k a b out th eir b usin ess a nd h o w to

co m pete .

So w hat tr u ly s e ts th em a p art? In o ur a naly sis , o f th e fo rty -fo ur o r s o a ttr ib ute s w e te ste d , s ix o f

th em s h o w ed u p a s s ta ti s ti c ally s ig nific ant i n d efin in g s o m eo ne a s a C halle nger r e p :

• O ffe rs th e c usto m er u niq ue p ers p ecti v es

• H as s tr o ng tw o-w ay c o m munic ati o n s k ills

• K no w s th e i n d iv id ual c usto m er’s v alu e d riv ers

• C an i d enti fy e co no m ic d riv ers o f th e c usto m er’s b usin ess

• I s c o m fo rta b le d is c ussin g m oney

• C an p re ssu re th e c usto m er

At fir s t g la nce, th is lis t m ay s e em lik e a s tr a nge m ix o f u nre la te d q ualiti e s. In fa ct, w hen w e fir s t

put to geth er th e l is t o f a ttr ib ute s to b e te ste d , i t’ s u nlik ely a nyo ne w ould h av e p ic ked th ese p arti c ula r

six a s th e k ey c o m ponents o f s ta r p erfo rm ance. N oneth ele ss, th at’ s h o w th e a naly sis c am e o ut. E ach o f

th ese a ttr ib ute s re p re se nts a p arti c ula r w ay in w hic h C halle nger re p s s ig nific antl y o utp erfo rm th eir

co lle agues i n th e c o re .

That s a id , i f w e g ro up th e a ttr ib ute s i n to th re e c ate go rie s w e f in d th ey p ain t a v ery c le ar p ic tu re o f

who th e C halle nger tr u ly is . A C halle nger is re ally d efin ed b y th e a b ility to d o th re e th in gs: te ach,

ta ilo r, a nd ta ke c o ntr o l:

• W ith th eir u niq ue p ers p ecti v e o n th e c usto m er’s b usin ess a nd th eir a b ility to e ngage in r o bust

tw o-w ay dia lo gue, C halle ngers are ab le to

te a ch fo r diffe re n tia tio n

durin g th e sa le s

in te ra cti o n.

• B ecause C halle ngers p osse ss a s u p erio r s e nse o f a c usto m er’s e co no m ic a nd v alu e d riv ers ,

th ey a re a b le to

ta ilo r fo r r e so nance,

d eliv erin g th e r ig ht m essa ge to th e r ig ht p ers o n w ith in

th e c usto m er o rg aniz a ti o n.

• F in ally , C halle ngers are co m fo rta b le dis c ussin g m oney and can, w hen need ed , pre ss th e

custo m er a b it. I n th is w ay, th e C halle nger

ta kes c o ntr o l

o f th e s a le .

These a re th e d efin in g a ttr ib ute s o f th e C halle nger— th e a b ility to te ach, to ta ilo r, a nd to ta ke

co ntr o l. T hey’re th e p illa rs o f w hat w e’v e c o m e to c all th e C halle nger S ellin g M odel, a nd th e r e st o f

th is b ook w ill p ro vid e a r o ad m ap f o r b uild in g th ese c ap ab iliti e s i n y o ur s a le s f o rc e.

Befo re w e tu rn to a c lo se r a naly sis o f C halle ngers , h o w ev er, le t’ s re tu rn b rie fly to o ur o vera ll

re su lts . B ecause a s b ig a n a h-h a! a s i t h as b een f o r s a le s l e ad ers a ro und th e w orld th at th e C halle nger

is s o m uch m ore l ik ely to w in th an a ny o th er p ro file , i t’ s p ro ven e q ually s u rp ris in g— and f r a nkly m uch

more tr o ub lin g— fo r s a le s e xecuti v es to l e arn th at th e R ela ti o nsh ip B uild er f a lls s o f a r b ehin d . I n o ur

stu d y, o nly

7 p erc en t

o f a ll s ta r p erfo rm ers fe ll in to th e R ela ti o nsh ip B uild er p ro file , fa r fe w er th an

any o th er. A nd th is fin d in g s h o uld b e a re al re d fla g fo r a ll s a le s le ad ers e nco ura gin g th eir re p s to

sim ply g o o ut a nd “ b uild d eep er r e la ti o nsh ip s” w ith c usto m ers , o r, a s o ne c o m pany to ld th eir r e p s i n

th e d ep th s o f th e r e cessio n, to g o o ut a nd “ hug y o ur c usto m ers .”

Now , b efo re w e g o a ny fu rth er, w e s h o uld e m phasiz e th at th ese re su lts b y n o m eans s u ggest th at

custo m er r e la ti o nsh ip s a re n’t im porta nt fo r s a le s— th is w ould b e a n aïv e c o nclu sio n. O f c o urs e th ey

are im porta nt, p arti c ula rly in c o m ple x s a le s w here r e p s a re r e q uir e d to e ngage in r e la ti o nsh ip s w ith multi p le s ta keho ld ers . I f y o ur c usto m ers d on’t k no w w ho y o u a re , o r w ors e , o utr ig ht d is lik e y o u, y o u

must f ix th at f ir s t. B ut a t th e s a m e ti m e, i f y o ur s tr a te gy a s a s a le s r e p i s l a rg ely o ne o f b ein g a v aila b le

to ta ke c are o f w hate v er y o ur c usto m er n eed s— of a cq uie sc in g to th e c usto m er’s e v ery d em and — th at

can b e a r e cip e fo r d is a ste r in a n e nv ir o nm ent w here y o ur c usto m ers a re m ore r e lu cta nt th an e v er to

buy y o ur s o lu ti o ns fo r a ll th e r e aso ns w e d is c usse d in c hap te r 1 . In th at e nv ir o nm ent, a s c riti c al a s a

str o ng c usto m er re la ti o nsh ip m ay b e, fa m ilia rity a lo ne is n ’t e no ugh to w in th e b usin ess. A s e rv ic e-

orie nte d q uarte rly c heck-in c all w ith y o ur c usto m er c an b e a g re at w ay to

fin d

b usin ess, b ut i t’ s n o t a

very go od w ay to

make

b usin ess. A s a re su lt, in a w orld w here fin d ab le b usin ess has all b ut

vanis h ed , R ela ti o nsh ip B uild ers a re d oom ed to f a il.

Sourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 2 .3 .

C halle nger V ers u s R ela ti o nsh ip B uild er P ro file

So is th e C halle nger p ro file re ally all th at d iffe re nt fr o m th at o f th e R ela ti o nsh ip B uild er? It

ab so lu te ly is . W hen y o u lo ok a t th e a ttr ib ute s th at d efin e th e C halle nger a nd c o m pare th em w ith th e

ones th at d efin e th e R ela ti o nsh ip B uild er, a s w e’v e d ep ic te d i n f ig ure 2 .3 , y o u’ll s e e w hy.

Challe nger r e p s s u cceed f o r a ll o f th e r e aso ns w e j u st d is c usse d — th ey e xcel a t te achin g, ta ilo rin g,

and ta kin g c o ntr o l. M eanw hile , a s th e C halle nger is fo cuse d o n p ush in g th e c usto m er o ut o f th eir

co m fo rt z o ne, th e R ela ti o nsh ip B uild er is fo cuse d o n b ein g a cce p te d in to it. T hey fo cus o n b uild in g

str o ng p ers o nal r e la ti o nsh ip s a cro ss th e c usto m er o rg aniz a ti o n, b ein g l ik ab le a nd g enero us w ith th eir

ti m e. T he R ela ti o nsh ip B uild er ad opts a se rv ic e m enta lity . W hile th e C halle nger is fo cuse d o n

custo m er v alu e, th e R ela ti o nsh ip B uild er i s m ore c o ncern ed w ith c usto m er c o nv enie nce.

The C halle nger r e p w in s b y m ain ta in in g a c erta in a m ount o f c o nstr u cti v e te nsio n a cro ss th e s a le .

The R ela ti o nsh ip B uild er, o n th e o th er h and , s tr iv es to r e so lv e o r d efu se te nsio n, n o t c re ate i t. I t’ s th e

exact o pposite a p pro ach. G ra nte d , th e c o nv ers a ti o n w ith th e R ela ti o nsh ip B uild er is in m ost c ase s a

very p ro fe ssio nal o ne, b ut it d oesn ’t re ally

help

th e c usto m er m ake p ro gre ss a gain st th eir g o als .

They’re l ik ab le , b ut th ey’re n o t v ery e ffe cti v e. T he C halle nger, b y c o ntr a st, k no w s th at th ere i s v alu e

fo r b oth y o u a nd y o ur c usto m ers i n m ain ta in in g th at te nsio n a l ittl e b it l o nger i n a m anner th at p ush es

th e c usto m er to th in k d iffe re ntl y a b out th eir o w n b usin ess— ab out th e w ays i n w hic h y o u m ig ht b e a b le to h elp th em (to sa v e m oney o r m ake m oney) a nd , u lti m ate ly , a b out th e v alu e y o u p ro vid e a s a

su p plie r.

Here ’s h o w a g lo bal h ead o f s a le s i n th e h o sp ita lity i n d ustr y p ut i t w hen h e s a w th ese r e su lts : “ Y ou

kno w , th is i s r e ally h ard to l o ok a t. F or th e l a st te n y ears , i t’ s b een o ur s ta te d s tr a te gy to h ir e e ffe cti v e

Rela ti o nsh ip B uild ers . A fte r a ll, w e’re i n th e h o sp ita lity b usin ess. A nd f o r a w hile , th at w ork ed f in e.

But e v er s in ce th e e co no m y c ra sh ed , m y R ela ti o nsh ip B uild ers a re c o m ple te ly l o st. T hey c an’t s e ll a

th in g. A nd a s I l o ok a t th is , I n o w k no w w hy.” F IN DIN G # 3: C H ALLEN G ER S A R E T H E S O LU TIO N S E LLIN G R EP, N O T

JU ST T H E D O W N E C O NO M Y R EP

T he d ra m ati c d iffe re nce b etw een C halle ngers a nd a ll o th er r e p s b rin gs u s to o ur th ir d a nd a rg uab ly

m ost d ra m ati c fin d in g. A lm ost in ev ita b ly a t th is p oin t in o ur sto ry , a q uesti o n n atu ra lly c o m es u p

a b out th e “ sta yin g p ow er” o f th e C halle nger p ro file . A fte r a ll, w e fir s t d eriv ed th ese fin d in gs a t a

v ery s p ecific a nd u niq uely b ad m om ent o f e co no m ic p erfo rm ance. S o is it p ossib le th at th e s u p erio r

p erfo rm ance o f C halle ngers is s im ply a te m pora ry p heno m eno n— a p ro duct o f th e G re at R ecessio n

a nd th e b ru ta l s a le s e nv ir o nm ent it e ngend ere d ? If th at’ s th e c ase , a re w e lik ely to c o m e b ack in tw o

o r th re e y ears a nd fin d th at s o m e o th er p ro file — perh ap s o ne a s y et u nid enti fie d — is m ore lik ely to

w in ? B ase d o n w hat w e’re s e ein g i n th e d ata , w e d on’t b elie v e th at’ s th e c ase . T o s h o w y o u w hy, l e t’ s

s h ift o ur p ers p ecti v e to th e lo nger v ie w fo r a m om ent a nd lo ok a t th e C halle nger fin d in gs in th e

c o nte xt o f th e b ro ad er s h ift to w ard s o lu ti o n s e llin g.

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 2 .4 .

H ig h P erfo rm ance b y S ale s R ep P ro file i n L ow -a nd H ig h-C om ple xity S ale s

Env ir o nm ents

If w e lo ok a t th e d ata th ro ugh a d iffe re nt le ns— th e le ns o f s a le s c o m ple xity — we fin d s o m eth in g

e v en m ore d ra m ati c . A fte r o ur in iti a l a naly sis , w e w ent b ack to th e d ata a nd d iv id ed u p th e h ig h

p erfo rm ers a cco rd in g to th e c o m ple xity o f th e d eals th ey w ere s e llin g ( s e e f ig ure 2 .4 ), c o m parin g s ta r

p erfo rm ers w ho s e ll r e la ti v ely s im ple , s ta nd -a lo ne p ro ducts a cro ss a s h o rte r s a le s c ycle v ers u s th o se

w ho s e ll m ore c o m ple x b und le s o f p ro ducts a nd s o lu ti o ns a cro ss a r e la ti v ely l o nger s a le s c ycle .

In co m ple x sa le s, C halle ngers ab so lu te ly dom in ate , w ith

more th an 50 perc en t

of all sta r

p erfo rm ers f a llin g i n to th is c ate go ry . T he o nly g ro up th at c an e v en c o m e c lo se a re th e L one W olv es—

w ho , m ost s a le s le ad ers w ill a gre e, a re h ard to fin d a nd e v en h ard er to c o ntr o l. A t th e s a m e ti m e,

R ela ti o nsh ip B uild ers n early fa ll o ff th e m ap e nti r e ly — th e lik elih o od th at th ey a chie v e s ta r s ta tu s when y o u’re s e llin g c o m ple x s o lu ti o ns f a lls to

nea rly z e ro

.

This e xp la in s w hy s o m any o rg aniz a ti o ns s tr u ggle w ith th e m ig ra ti o n to s o lu ti o ns. T he w orld o f

so lu ti o n s e llin g is a lm ost d efin iti o nally a b out a d is ru p ti v e s a le . It’ s n o t th at y o u’re a sk in g c usto m ers

to b uy y o ur p ro duct a nd p ut it u p o n th e s h elf w ith a ll o f th e o th er p ro ducts th ey’v e b ought. R ath er,

yo u’re a sk in g c usto m ers to c hange th eir b ehav io r— to s to p a cti n g in o ne w ay a nd s ta rti n g a cti n g in

ano th er. T o m ake th at h ap pen, h o w ev er, y o u h av e to g et c usto m ers to th in k d iffe re ntl y a b out h o w th ey

opera te . Y ou n eed to s h o w th em a n ew w ay to th in k a b out th eir b usin ess. F ro m th at p ers p ecti v e, it’ s

re ally n o s u rp ris e th at in th is m ore c o m ple x w orld o nly o ne p ro file w in s— and it w in s b y a c o untr y

mile .

If y o u’re n o t b uild in g o r h ir in g C halle nger r e p s, c hances a re y o u’re g o in g to c o m e u p w ell s h o rt a s

yo ur d eals b eco m e m ore c o m ple x. C halle ngers a re n’t j u st th e d ow n e co no m y r e p o f to day; th ey’re th e

so lu ti o n-s e llin g re p o f to m orro w . If y o u’re lo okin g to g ro w th ro ugh s o lu ti o ns, y o u’re g o in g to n eed

Challe nger r e p s to d o i t.

If y o u s to p a nd th in k a b out y o ur b est s a le sp eo ple — th e o nes b rin gin g in th e b ig gest d eals fr o m th e

most c o m ple x c usto m ers , y o u c an s e e th em i n th is p ic tu re . C hances a re th ey’re y o ur b est C halle ngers .

That s a id , i m plic it i n th is f in d in g i s a l e sso n f o r h o w y o u m ig ht th in k a b out th e l e ss c o m ple x, m ore

tr a nsa cti o nal p arts o f y o ur b usin ess, a s w ell. In th ese a re as ( m any o f th em in th e in sid e o r te le sa le s

parts o f y o ur c o m pany), it p ro bab ly d oesn ’t m ake s e nse to o verin v est in b uild in g C halle ngers , a s th e

data s u ggest th at H ard W ork ers a re m ore l ik ely to w in th e d ay th ere . I f s a le s s u ccess i s m ore a m atte r

of c all v olu m e th an c all q uality , H ard W ork ers a re p rim ed to s u cceed . C halle ngers a re c riti c al i n th e

co m ple x w orld o f s o lu ti o n s e llin g, b ut th ey’re n o t r e q uis ite f o r e v ery p art o f th e b usin ess.

The o vera ll c o nclu sio n f r o m o ur r e se arc h i s th is : I f y o u’re o n th e j o urn ey to m ore o f a v alu e-b ase d

or s o lu ti o ns-o rie nte d s a le s a p pro ach, th en y o ur a b ility to

ch alle n ge

c usto m ers is a b so lu te ly v ita l fo r

yo ur s u ccess g o in g f o rw ard . I t’ s th ere fo re i m pera ti v e to u nd ers ta nd j u st w hat e xactl y m akes s o m eo ne

a C halle nger. A fte r a ll, it’ s o ne th in g to te ll r e p s, “ B e a C halle nger!” It’ s a no th er th in g a lto geth er to

te ll th em e xactl y w hat y o u w ant th em to

do

. 3

TH E C HA LLEN GER ( P A RT 2 ): E X PO RT IN G T H E M ODEL T O T H E C O RE

A C H ALLEN G ER I S

d efin ed b y th e a b ility to d o th re e th in gs— te ach, ta ilo r, a nd ta ke c o ntr o l— and

t o d o a ll o f th is th ro ugh th e u se o f c o nstr u cti v e te nsio n.

These a re th e p illa rs o f w hat w e c all th e C halle nger S ellin g M odel— an a p pro ach to s a le s th at is

b ase d o n w hat C halle ngers d o. It’ s a m eth o dolo gy th at w e’v e w ork ed o n w ith c o m panie s a cro ss a

w id e ra nge o f in d ustr ie s— co m panie s a s d iv ers e a s T ale cris B io th era p euti c s, P M I, B rin ks, a nd th e

s o lu ti o ns b usin ess o f T ho m so n R eute rs — to im ple m ent w ith in th eir o w n sa le s o rg aniz a ti o ns. It’ s

p re m is e d o n th e n o ti o n th at w ith th e r ig ht tr a in in g, c o achin g, a nd s a le s to ols , m ost r e p s— ev en a rd ent

R ela ti o nsh ip B uild ers — can l e arn to ta ke c o ntr o l o f th e c usto m er c o nv ers a ti o n l ik e a C halle nger.

The C halle nger S ellin g M odel i s s im ple i n th eo ry , b ut c o m ple x i n p ra cti c e, a nd e arly a d opte rs w ill

a tte st to th at. T he r e st o f th is b ook is d ed ic ate d to s h arin g p ro ven b est p ra cti c es, to ols , a nd le sso ns

l e arn ed to h elp c o m panie s, c o m merc ia l l e ad ers , m anagers , a nd r e p s i m ple m ent th e C halle nger S ellin g

M odel.

Befo re w e b egin th is jo urn ey, it m akes s e nse to d is c uss s o m e o f th e fu nd am enta l p rin cip le s th at

u nd erlie th e m odel a nd th at w ill b eco m e th em es th ro ugho ut th e c o urs e o f th is b ook. Prin cip le # 1: C halle n gers A re M ad e, N ot J u st B orn

O ne o f th e q uesti o ns w e o fte n h ear i s w heth er b ein g a C halle nger i s a q uesti o n o f n atu re o r n urtu re f o r

s a le s re p s. In o th er w ord s, a re C halle ngers b orn o r m ad e? T here a re a fe w w ays to a nsw er th is

q uesti o n.

One o f th e th in gs w e k no w fr o m o ur re se arc h is th at e v ery re p in o ur stu d y h ad tr a ces o f th e

C halle nger “ gene,” it ju st w asn ’t th e th in g th ey “ m ajo re d ” in . B ut b ecause w e fo cuse d o ur w ork

s p ecific ally o n sk ills , atti tu d es, b ehav io rs , and kno w le d ge, th at te ll us th at w ith th e rig ht to ols ,

t r a in in g, c o achin g, a nd r e w ard a nd r e co gniti o n s y ste m , y o u c an lik ely e q uip m any o f y o ur r e p s w ho

m in o r in c halle ngin g (a nd m ayb e e v en th o se w ho ju st to ok a fe w c re d its in it) to a ct m ore lik e

C halle ngers w hen th ey’re in fr o nt o f th e c usto m er. W hile th ere m ay b e re p s w ho w on’t m ake th e

t r a nsiti o n, th ere a re m any, m any m ore w ho w ill i f y o u i n v est th e ti m e a nd e nerg y to g et th em th ere .

Furth erm ore , th e id ea th at C halle ngers a re b orn a nd n o t m ad e is s o m ew hat ir re le v ant. W hile w e

m ig ht n o t b e a b le to r e w rite th eir D NA, if w e a re a b le to m odify n o n– C halle nger r e p b ehav io r e v en

t e m pora rily a s th ey f a ce o ff w ith c usto m ers ( to “ fle x,” a s o ne m em ber p ut i t) , th at e ffo rt i s l ik ely ti m e

w ell s p ent. A fte r a ll, w e a re n’t a w are o f a ny s a le s l e ad er w ho i s r e ad y to l e t g o o f a ll b ut a h and fu l o f

h is r e p s a nd r e hir e a n e nti r e ly n ew s a le s f o rc e— th at i s , n o h ead o f s a le s w ho w ants to k eep h is j o b.

Our o pera ti n g p rin cip le w ith m em bers h as b een to f o cus o n a rm in g th em w ith th e to ols a nd tr a in in g

t h ey n eed to im pro ve th eir e xis ti n g s a le s fo rc e r ig ht n o w . T his is a w orth y g o al a nd o ne th at th e b est

o rg aniz a ti o ns hav e sh o w n gre at su ccess in purs u in g. T here is am ple ev id ence to su ggest th at

C halle ngers c an b e m ad e. W e’v e s e en th is fir s th and : O ur o w n S E C S olu ti o ns g ro up (th e c o nsu lti n g

a rm o f S E C ) h as h ad tr e m end ous s u ccess h elp in g o ur m em bers to b uild C halle ngers w ith in th eir o w n

o rg aniz a ti o ns.

If y o u a re a s a le s r e p , r e gard le ss o f w heth er o r n o t y o u a re a n atu ra l C halle nger, th is d is c ussio n o f

t h e C halle nger S ale s M odel c o nta in s in sig hts th at w ill h elp b oost y o ur p ers o nal e ffe cti v eness a s a

s a le sp ers o n. W hile y o ur c urre nt a p pro ach m ay d iffe r f r o m th e C halle nger m odel, d on’t th in k o f th ese

d iffe re nces a s in su rm ounta b le o r s o m eho w c arv ed in s to ne. U nd ers ta nd in g th at th ese g ap s e xis t a nd ,

m ore i m porta nt, th at y o u h av e i t i n y o ur p ow er to c lo se th em , i s a c riti c al p art o f th e j o urn ey. Prin cip le # 2: I t’s t h e C om bin atio n o f S kills T hat M atte rs

O ne o f th e k ey le sso ns fr o m o ur w ork is th at it’ s th e c o m bin ati o n o f th e C halle nger a ttr ib ute s— th e

a b ility to te ach, ta ilo r, ta ke c o ntr o l, a nd d o it a ll w hile le v era gin g c o nstr u cti v e te nsio n— th at se ts

C halle ngers a p art.

If y o u te ach w ith o ut ta ilo rin g, y o u c o m e o ff a s ir re le v ant. If y o u ta ilo r b ut d on’t te ach, y o u ris k

s o und in g lik e e v ery o th er su p plie r. If y o u ta ke c o ntr o l b ut o ffe r n o v alu e, y o u ris k b ein g sim ply

a nno yin g. T hus th e V enn d ia gra m y o u s e e in fig ure 3 .1 . T his is a g ra p hic al s n ap sh o t o f w hat “ go od”

l o oks lik e w hen it c o m es to re p p erfo rm ance. T hin k o f th is a s a s in gle s n ap sh o t o f th e “ new h ig h

p erfo rm er.” B ecause th ese s k ills a re m ost e ffe cti v e w hen u se d in c o m bin ati o n, w e s tr o ngly u rg e o ur

m em bers to a v oid th e te m pta ti o n to “ cherry -p ic k” w hen i t c o m es to r o llin g o ut th e m odel.

But ju st a s n atu re a b ho rs a v acuum , c o m panie s a b ho r d up lic ati v e in v estm ent. F or th is r e aso n, w e

o fte n h ear c o m merc ia l l e ad ers ta lk a b out s k ip pin g e le m ents o f th e m odel g iv en r e cent i n iti a ti v es. F or

i n sta nce, s o m e c o m panie s w is h to fo cus o nly o n ta ilo rin g a nd ta kin g c o ntr o l b ecause th ey re centl y

p oure d m oney in to d esig nin g n ew s a le s c o lla te ra l. W hile w e c an’t d ic ta te w hat c o m panie s d o w ith

t h e m odel, w e a re u p fr o nt w ith o ur fe ed back a ro und s u ch p arti a l r o llo uts : In d iv id ual e le m ents o f th e

m odel, w hen in v este d in , c an d eliv er p erfo rm ance im pro vem ents o ver th e sta tu s q uo , b ut fo r th e

m odel to r e ally w ork , a ll e le m ents m ust b e i n v este d i n a nd d ev elo ped . T here a re n o s h o rtc uts to f u lly

r e aliz in g th e p ote nti a l p erfo rm ance g ain s th at th e m odel o ffe rs .

S ourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 3 .1 .

K ey S kills W ith in th e C halle nger S ellin g M odel P rin cip le # 3: C halle n gin g I s A bou t O rg an iz a tio n al C ap ab ilit y , N ot J u st R ep S kills

M any o rg aniz a ti o ns a ssu m e th at th e m ig ra ti o n to th e C halle nger S ellin g M odel is a q uesti o n o nly o f

i m pro vin g i n d iv id ual r e p s k ills . F or th e m odel to r e ally w ork , th at i s e m phati c ally n o t th e c ase . T his

j o urn ey is a ctu ally ju st a s m uch a b out b uild in g o rg aniz a ti o nal c ap ab iliti e s a s it is a b out d ev elo pin g

i n d iv id ual s k ills .

Build in g a te achin g cap ab ility , w hic h w e w ill d is c uss in m uch m ore d eta il in th e fo llo w in g

c hap te rs , i s n o t s o m eth in g th at y o u j u st w ant y o ur i n d iv id ual r e p s o ut th ere f ig urin g o ut o n th eir o w n.

W hile it is tr u e th at s o m e o f y o ur e xis ti n g C halle ngers c an d o th is e ffe cti v ely , a n o rg aniz a ti o n th at

l e av es th e te achin g c o nte nt u p to i ts i n d iv id ual r e p s w ill b e p ulle d i n m any d iffe re nt d ir e cti o ns a s r e p s

p ro m is e custo m ers so lu ti o ns to m yria d busin ess is su es— in clu d in g m any yo ur co m pany is no t

e q uip ped to s o lv e.

The a ct o f d eliv erin g a te achin g p itc h i s a s k ill, to b e s u re , b ut th e

co nte n t

o f a te achin g p itc h— th e

b usin ess is su es y o u te ach c usto m ers to v alu e, th e id ea a ro und w hic h y o u r e fr a m e h o w th e c usto m er

t h in ks a b out th eir b usin ess— must b e s c ala b le a nd re p eata b le , a nd a s s u ch, m ust b e c re ate d b y th e

o rg aniz a ti o n ( in m ost o rg aniz a ti o ns, th is i s th e j o b o f m ark eti n g).

The s a m e c an b e s a id f o r p arts o f ta ilo rin g. W hile th ere i s a c le ar r o le f o r th e i n d iv id ual r e p o n th e

t a ilo rin g fr o nt, n am ely , re co gniz in g h o w to m odify th e te achin g m essa ge fo r d iffe re nt in d iv id uals

a cro ss th e c usto m er o rg aniz a ti o n, th e o rg aniz a ti o n h as a n im porta nt r e sp onsib ility w hen it c o m es to

t a ilo rin g a s w ell. F ir s t, o rg aniz a ti o ns c an le v era ge b usin ess in te llig ence a nd r e se arc h a sse ts to h elp

d ev elo pin g C halle ngers b ette r ta ilo r th eir m essa ges to e ach c usto m er’s i n d ustr y a nd c o m pany c o nte xt.

T he o rg aniz a ti o n a ls o b ears th e r e sp onsib ility fo r id enti fy in g w hic h te achin g m essa ges w ill r e so nate

w ith w hic h sta keho ld ers . A o ne-s iz e -fits -a ll te achin g m essa ge is unlik ely to b e te nab le fo r m ost

s u p plie rs , a sid e fr o m th o se w ho se ll in a sin gle lin e o f b usin ess to a h ig hly h o m ogeneo us se t o f

c usto m ers . Y et in d iv id ual c usto m er s ta keho ld er s e gm enta ti o n a t th is le v el, a gain , is ju st a s m uch a n

o rg aniz a ti o nal c ap ab ility a s i t i s a n i n d iv id ual s k ill.

If ta ilo rin g is h alf in d iv id ual/h alf o rg aniz a ti o nal, th e o nly c o m ponent o f th e C halle nger m odel th at

c an tr u ly b e c alle d a

la rg ely

in d iv id ual s k ill is ta kin g c o ntr o l. H ere is w here r e p u p sk illin g w ill p ay

s ig nific ant d iv id end s, a nd in c hap te r 7 w e w ill e xp la in th e b est w ay to d riv e th is b ehav io r in to th e

f r o nt lin e. H ow ev er, it is w orth n o ti n g th at e v en h ere , th e o rg aniz a ti o n h as a ro le to p la y. N am ely ,

C halle nger r e p s a rm ed w ith p ow erfu l te achin g m essa ges p ro duced b y th eir o rg aniz a ti o ns w ill b e i n a

m uch b ette r p ositi o n to ta ke c o ntr o l o f th e c usto m er c o nv ers a ti o n. A s w ell, re cent S E C re se arc h

s h o w s th at th e o rg aniz a ti o n p la ys a n i m porta nt r o le i n e q uip pin g r e p s to i d enti fy a nd p ro perly e ngage

w ith th e r ig ht s ta keho ld ers o n th e c usto m er s id e— an i m porta nt p art o f ta kin g c o ntr o l o f th e s a le . Prin cip le # 4: B uild in g t h e C halle n ger S ale s F orc e I s a J ou rn ey, N ot a n

Overn ig h t T rip

A b ig m is ta ke w e se e o rg aniz a ti o ns m ake in th eir C halle nger e ffo rts is a ssu m in g th at c hange w ill

h ap pen in sta ntl y . M ovin g to a C halle nger m odel is a co m merc ia l tr a nsfo rm ati o n, o ne th at early

a d opte rs te ll u s ta kes ti m e to g et r ig ht. P re cis e ly b ecause th e C halle nger m odel d em and s c hanges b oth

t o o rg aniz a ti o nal c ap ab iliti e s a nd to i n d iv id ual r e p b ehav io rs a nd s k ills , i t i s h ard w ork .

Ram min g th ro ugh C halle nger tr a in in g fo r re p s w ith o ut a ls o c are fu lly c o nstr u cti n g ro bust te achin g

p itc hes fo r th em to d eliv er o r a rm in g fr o ntl in e m anagers to re in fo rc e th e rig ht b ehav io rs a nd s k ills

m ig ht y ie ld a sm all b um p in re p p ro ducti v ity , b ut tw o o utc o m es a re p ra cti c ally g uara nte ed : T he

p erfo rm ance b oost a tta in ed w ill f a ll w ell s h o rt o f w hat i t c o uld h av e d eliv ere d i f d one p ro perly , a nd

m ore l ik ely th an n o t i t w ill b e p erc eiv ed a s th e tr a in in g “ fla v or o f th e m onth ,” s o on to b e f o rg o tte n o r

r e je cte d b y m ost r e p s.

Early a d opte rs a tte st to th e fa ct th at m ovin g to th e C halle nger S ellin g M odel is a jo urn ey. T ho se

w ho ’v e b een d ow n th is p ath p eg th e ti m e to fu ll a d opti o n in te rm s o f y ears , n o t w eeks o r m onth s.

I n d eed , m uch o f th e u p fr o nt e ffo rt w ill b e s p ent g etti n g y o ur o w n le ad ers h ip te am o n b oard w ith th e

n ew m odel. T he C halle nger m odel, in o th er w ord s, is n ’t a b olt- o n so ftw are up date — it’ s a new

o pera ti n g sy ste m fo r th e c o m merc ia l o rg aniz a ti o n. T ho se lo okin g fo r a q uic k w in w ould b e w ell

a d vis e d to l o ok e ls e w here .

If y o u’re re ad y to ta ke y o ur o rg aniz a ti o n o n th is tr a nsfo rm ati o n jo urn ey, h o w ev er, re ad o n. T he

a d vanta ges th at a re a ccru in g to fir s t m overs a re e no rm ous. T he C halle nger m odel o ffe rs a n ew a nd

p ow erfu l w ay o ut o f th e s o lu ti o n s e llin g m ora ss th at h as h ad s a le s o rg aniz a ti o ns a cro ss i n d ustr ie s a nd

a ro und th e w orld i n a v is e g rip f o r y ears . DO ES T H E C H ALLEN G ER S E LLIN G M ODEL W ORK?

S oon a fte r w e b egan s h arin g th e fin d in gs fr o m o ur r e se arc h, w e b egan h earin g s to rie s b ack fr o m o ur

m em bers a b out h o w th eir r e p s w ere e m plo yin g th e p rin cip le s o f th e C halle nger S ellin g M odel w ith

c usto m ers — ofte n to o uts ta nd in g e ffe ct. L et’ s l o ok a t e ach o f th e p illa rs o f th e m odel i n tu rn to g iv e a

s e nse o f w hat i t l o oks l ik e w hen d one w ell. Tea ch in g f o r D if fe re n tia tio n

T he th in g th at r e ally s e ts C halle nger r e p s a p art i s th eir a b ility to te ach c usto m ers s o m eth in g n ew a nd

v alu ab le ab out ho w to co m pete in th eir m ark et. O ur re se arc h o n custo m er lo yalty , w hic h w e’ll

d is c uss in d ep th in th e n ext c hap te r, s h o w s th at th is is th e e xact b ehav io r th at w in s c usto m ers fo r th e

l o ng te rm .

Teachin g is a ll a b out o ffe rin g c usto m ers u niq ue p ers p ecti v es o n th eir b usin ess a nd c o m munic ati n g

t h o se p ers p ecti v es w ith p assio n a nd p re cis io n i n a w ay th at d ra w s th e c usto m er i n to th e c o nv ers a ti o n.

T hese new p ers p ecti v es ap ply no t to yo ur p ro ducts and so lu ti o ns, b ut to ho w th e custo m er can

c o m pete m ore e ffe cti v ely in th eir m ark et. It’ s in sig ht th ey c an u se to fr e e u p o pera ti n g e xp ense s,

p enetr a te n ew m ark ets , o r r e d uce r is k .

To s e e h o w th is te achin g a p pro ach w ork s in p ra cti c e, w e’ll g iv e y o u a fe w e xam ple s. T he fir s t is

f r o m o ne o f o ur m em bers a t a n o ffic e f u rn itu re m anufa ctu re r. A s e nio r m em ber o f th e c o m pany’s s a le s

l e ad ers h ip te am to ld u s th e s to ry o f a re p w ho w as s tr u gglin g to g ain tr a cti o n w ith a p ro sp ecti v e

c usto m er. T he c usto m er h ad ju st b uilt a n ew h ead quarte rs fa cility a nd o ne o f th eir c o m peti to rs h ad

b een s e le cte d to fu rn is h th e b uild in g. T he c o m pany s e em ed to h av e b een c ut o ut o f th e b usin ess, b ut

t h e r e p — a b ra nd -n ew h ir e — sti ll f e lt th ere w as a n o pportu nity to g ain a f o oth o ld i n th e n ew b uild in g

b efo re th e c o m pany to ok d eliv ery f r o m th eir c o m peti to r. A fte r s o m e p ers is te nce, s h e l a nd ed a m eeti n g

w ith th e c o m pany’s h ead o f r e al e sta te a nd f a ciliti e s.

One o f th e k ey p rio riti e s fo r th is c o m pany w as to c re ate c o lla b ora ti v e s p aces w here e m plo yees

c o uld m ore e ffe cti v ely i n te ra ct w ith o ne a no th er. I n l o okin g a t th e a rc hite ct’ s d esig ns, s h e w as a b le to

t e ll h im , “ W ell, w e h av e ro bust d ata th at in d ic ate s th at c o lla b ora ti o n d oesn ’t h ap pen in g ro up s o f

e ig hts . I t h ap pens i n tw os a nd th re es, a nd w hen y o u g et to s e v en i t s to ps b ein g p ro ducti v e. Y ou m ay b e

b uild in g th e w ro ng s iz e c o nfe re nce r o om s.”

“T hat’ s g re at to k no w ,” r e sp ond ed th e c usto m er, “ b ut th e c o nfe re nce r o om s h av e a lr e ad y b een b uilt.

W hat c an w e d o a b out th at n o w ?”

Lev era gin g h er p ro duct k no w le d ge, th e r e p e xp la in ed h o w th ey c o uld p ut u p a m ovab le w all d ow n

t h e m id dle o f th e c o nfe re nce ro om s, c re ati n g tw o ro om s th at w ould fit s m alle r g ro up s o f th re e a nd

f o ur. T hen s h e ta lk ed a b out a p ro duct th e c o m pany o ffe rs th at c o uld h elp fa cilita te c o lla b ora ti o n fo r

t h em . S he s ta rte d fr o m a n in sig ht, ta ught th e c usto m er a b out a p ro ble m th ey d id n’t k no w th ey h ad ,

d ev elo ped i n te re st, a nd c hanged th e w ho le d ir e cti o n o f th e a cco unt.

Ano th er g o od e xam ple c o m es f r o m a g lo bal p harm aceuti c al c o m pany. A nyb ody w ho k no w s p harm a

k no w s a b out th e a rm s r a ce th at th e in d ustr y ’s b ig p la yers h av e b een lo cked in fo r y ears — to o m any

r e p s fig hti n g to g et fa ce ti m e w ith to o fe w d octo rs . In th is to ugh s a le s e nv ir o nm ent, th is p arti c ula r

c o m pany w as lo okin g to b re ak th ro ugh a nd b eco m e th e s u p plie r th at p hysic ia ns p re fe r to s p end ti m e

w ith . H ow ev er, c usto m er s u rv ey d ata c le arly in d ic ate d th at in th e e yes o f c usto m ers , s u p plie rs w ere

i n d is ti n guis h ab le f r o m o ne a no th er.

To c ut th ro ugh th e n o is e , th e c o m pany in q uesti o n w ork ed to a rm its r e p s to te ach p hysic ia ns n ew

i n sig hts — no t a b out th eir p ro ducts , b ut a b out h o w to im pro ve th eir o w n e ffe cti v eness a s m ed ic al

p ra cti ti o ners . R ely in g o n th e c o m pany’s w ealth o f k no w le d ge o n d is e ase m anagem ent, th eir m ark eti n g

t e am b uilt a s e rie s o f “ p ati e nt j o urn eys” th at r e p s c o uld s h are w ith d octo rs . T hese j o urn eys l o oked a t

t h e e nti r e c ycle o f a n i lln ess, f r o m th e ti m e s y m pto m s a p pear to tr e atm ent a nd , f in ally , f o llo w -u p .

For a d octo r, s e ein g th e fu ll life c ycle o f a n illn ess c an b e p re tty e ye-o penin g. F or e xam ple , th e co m pany k no w s th at p ati e nts w ith a c erta in i lln ess h av e a n a v era ge o f 2 .5 e xacerb ati o ns— fr e q uentl y

re q uir in g a v is it to th e e m erg ency ro om — a y ear. H ow ev er, th e fa m ily p hysic ia n fo r th ese p ati e nts

mig ht n ev er k no w th at th ese e m erg encie s o ccur b etw een v is its . A s a c o nse q uence, th ey a re tr e ati n g

th e p ati e nts f o r a m uch l e ss s e v ere m ed ic al c o nd iti o n th an th e p ati e nts a ctu ally h av e. O nce th ey l e arn

th is n ew in fo rm ati o n, th ey c an c hange th e p ati e nt’ s tr e atm ent to a v oid o r s u b sta nti a lly re d uce th ese

exacerb ati o ns, w hic h re ally im pro ves th e q uality o f p ati e nt c are th e p hysic ia n c an d eliv er. T his is

in sig ht p hysic ia ns v alu e, a nd it’ s h elp ed th is p arti c ula r s u p plie r g ain a ccess to p hysic ia ns in a w ay

th ey n ev er e njo yed b efo re .

One l a st e xam ple . I n s a le s th ese d ays, th ere ’s a l o t o f d is c ussio n a b out h o w r e p s c an “ get a head o f

th e R FP.” T his s to ry illu str a te s h o w te achin g c an b e u se d e ffe cti v ely n o t ju st to g et a head o f a n R FP,

but to a ctu ally r e sh ap e a n R FP i n a g iv en s u p plie r’s f a v or.

The sto ry c o m es fr o m a su p plie r o f e m plo yee b enefit m anagem ent se rv ic es w ho w as re centl y

in fo rm ed b y a l o ngti m e c usto m er th at th e c o m pany h ad d ecid ed to p ut th e c o ntr a ct f o r th e b usin ess o ut

to b id i n a n a tte m pt to s a v e m oney. F ru str a te d th at th is l o ngti m e c usto m er w as tr y in g to p ull th em i n to

a p ric e w ar, th e su p plie r to ld th em th at th ey w ere n’t in te re ste d in th at k in d o f p artn ers h ip w ith a

clie nt, i.e ., o ne b ase d o n p ric e. S o th ey to ld th e c usto m er th at th ey w ould re sp ectf u lly d eclin e to

su b m it a b id i n r e sp onse to th e f o rth co m in g R FP. B ut n o t b efo re th ey m ad e a r a th er u niq ue g estu re .

They to ld th e c usto m er th at s in ce th ey w ere n’t g o in g to b e p arti c ip ati n g i n th e b id din g p ro cess, b ut

valu ed th e lo ng-te rm w ork in g r e la ti o nsh ip th ey h ad , th ey w ould b e h ap py to h elp th em th in k th ro ugh

th e c o nstr u cti o n o f th eir R FP to e nsu re th at th ey w ere re q uesti n g th e rig ht th in gs o ut o f th eir n ext

su p plie r.

Appre cia ti v e o f th e fr e e c o nsu lti n g th e s u p plie r w as o ffe rin g, th e c usto m er in v ite d th em d ow n fo r

th e d ay, w here th ey s p ent a fe w h o urs o utl in in g w hat s h o uld b e in th e b id . T he d is c ussio ns in clu d ed

ad vic e a lo ng th e lin es o f, “ If a ny s u p plie r te lls y o u th e fo llo w in g th re e th in gs, th ey’re w ro ng. A nd

here ’s w hy.” “ If th ey s a y y o u n eed th ese fo ur th in gs, y o u a ctu ally d on’t, a nd h ere ’s w hy.” “ N o m atte r

what, m ake s u re th at y o ur b id in clu d es th e fo llo w in g tw o th in gs, a nd h ere ’s w hy.” “ If a ny c o m pany

te lls y o u th o se tw o th in gs a re n’t n ecessa ry , te ll th em th ey’re w ro ng. A nd h ere ’s w hy. T hey’re ju st

tr y in g to g et y o u to b uy w hat th ey w ant to s e ll, b ut h ere ’s w hy y o u n eed to in sis t o n th ese tw o k ey

th in gs.”

The c usto m er fo und th e a d vic e to b e h ugely v alu ab le , a s th ese w ere p oin ts th ey w ould n’t h av e

th o ught to c o nsid er o n th eir o w n. O nce th e R FP w as b uilt, th e s u p plie r’s a cco unt te am l o oked a t i t a nd

sa id , “ O kay, w ell, i f

th at

i s th e b id y o u’re g o in g to p ut o ut th ere , th en w e’d l ik e to p arti c ip ate s in ce i t

desc rib es e xactl y th e k in d o f p artn ers h ip w e’d l ik e to h av e w ith y o u.”

This l a st e xam ple i n p arti c ula r i llu str a te s w hy th is te achin g a p pro ach w ork s s o w ell. T he c o nte nt o f

th e r e p ’s te achin g p itc h i s c are fu lly l in ked to th e s u p plie r’s u niq ue c ap ab iliti e s. T he a b ility o f a s a le s

re p to d eliv er th is k in d o f u niq ue in sig ht is a rg uab ly th e m ost p ow erfu l w eap on in th e C halle nger’s

ars e nal a nd a ctu ally th e b ig gest d riv er o f B 2B c usto m er lo yalty . W e’ll fo cus o n b uild in g th is k in d o f

te achin g c ap ab ility i n c hap te rs 4 a nd 5 . Tailo rin g f o r R eso n an ce

W hile te achin g i s a b ove a ll o th ers th e d efin in g a ttr ib ute o f b ein g a C halle nger, th e a b ility to ta ilo r th e

t e achin g m essa ge to d iffe re nt ty p es o f custo m ers — as w ell as to d iffe re nt in d iv id uals w ith in th e

c usto m er o rg aniz a ti o n— is w hat m akes th e te achin g p itc h r e so nate a nd s ti c k w ith th e c usto m er.

Tailo rin g r e lie s o n th e r e p ’s k no w le d ge o f th e s p ecific b usin ess p rio riti e s o f w ho m ev er h e o r s h e i s

t a lk in g to — th e s p ecific o utc o m es th at p arti c ula r p ers o n v alu es m ost, th e r e su lts th ey’re o n th e h o ok to

d eliv er f o r th eir c o m pany, a nd th e v ario us e co no m ic d riv ers m ost l ik ely to a ffe ct th o se o utc o m es.

If a C halle nger r e p i s s itti n g a cro ss th e ta b le f r o m a h ead o f m ark eti n g, h e u nd ers ta nd s h o w to c ra ft

h is m essa ge to r e so nate w ith h er s p ecific p rio riti e s. A nd i f h e’s m eeti n g w ith s o m eo ne i n o pera ti o ns,

h e k no w s h o w to m odify th e m essa ge a cco rd in gly . B ut th is is n ’t ju st a m easu re o f b usin ess a cum en,

i t’ s a m easu re o f a gility — th e r e p ’s a b ility to ta ilo r th e s to ry to th e in d iv id ual s ta keho ld er’s b usin ess

e nv ir o nm ent. W hat s p ecific ally d o th ey c are a b out? H ow is th eir p erfo rm ance m easu re d ? H ow d o

t h ey f it i n to th e o vera ll c usto m er o rg aniz a ti o n?

An exam ple th at d em onstr a te s th e p ow er o f effe cti v e ta ilo rin g co m es fr o m o ur m em ber at a

b usin ess s e rv ic es p ro vid er. T w o o f th eir r e p s h ad b een j o in tl y w ork in g o ne a cco unt f o r a p pro xim ate ly

s ix m onth s, b uild in g r a p port w ith th e b usin ess l e ad ers a cro ss th e o rg aniz a ti o n, a ll th e w hile p re p arin g

f o r a b ig p ro posa l p re se nta ti o n to th e c o m pany’s C EO a nd m anagem ent te am . A fte r m ulti p le m eeti n gs

a nd p re se nta ti o ns, th e re p s h o m ed in o n w hat th ey th o ught w as m ost n eed ed b y th e c usto m er— an

o uts o urc in g s o lu ti o n th at w ould d eliv er c o st s a v in gs to th e b usin ess.

But j u st a w eek b efo re th ey w ere a b out to p re se nt to th e C EO a nd h is te am , th e r e p s a tte nd ed th eir

o w n c o m pany’s a nnual sa le s m eeti n g, w hic h h ad fo cuse d o n b uild in g C halle nger sk ills a cro ss th e

s a le s o rg aniz a ti o n. A t th e s e ssio n o n ta ilo rin g, th e r e p s r e aliz e d th at th ey h ad n’t f u lly i n v esti g ate d th e

p ers o nal m oti v ati o ns a nd b usin ess o bje cti v es o f th e c usto m er’s C EO a nd w ere p ote nti a lly u np re p are d

t o m ake th eir b est p itc h a t th e u p co m in g m eeti n g.

They c alle d a l a st- m in ute m eeti n g w ith s o m e o f th e k ey s ta keho ld ers i n th e c usto m er o rg aniz a ti o n to

b ette r u nd ers ta nd th e p ers o nal g o als a nd o bje cti v es o f th e C EO — all i n a n a tte m pt to s e e i f th ere w as

s o m e in sig ht th ey c o uld b rin g to th e ta b le th at w ould p ers o nally a p peal to h im . W hat th ey le arn ed in

t h is m eeti n g p ro ved in v alu ab le . T hey fo und o ut th at th e C EO w as e xtr e m ely fo cuse d o n th e p oor

c usto m er s a ti s fa cti o n s c o re s th e c o m pany h ad r e centl y r e ceiv ed . A nd th ey le arn ed th at th e C EO w as

h im se lf a te chno lo gy j u nkie .

In ste ad o f g o in g in to th e m eeti n g w ith th e c o st s a v in gs– fo cuse d p itc h th ey h ad a lr e ad y p re p are d ,

t h ey s w itc hed g ears a nd f o cuse d th e c o nv ers a ti o n o n w ays i n w hic h th e s o lu ti o n th ey w ere p ro posin g

n o t only w ould cut co sts but co uld at th e sa m e ti m e im pro ve custo m er sa ti s fa cti o n and is su e

r e so lu ti o n r e sp onse ti m e b y l e v era gin g n ew te chno lo gie s th e s u p plie r h ad r e centl y d ev elo ped . W hat’ s

m ore , th e te chno lo gy w ould a llo w e v ery o ne fr o m th e C EO d ow n to lin e m anagers to g et re al- ti m e

v is ib ility i n to c usto m er s e rv ic e i s su es a nd i s su e r e so lu ti o n r e sp onse ti m es.

The C EO im med ia te ly s a t u p a nd lis te ned w ith r a p t a tte nti o n to th e s a le s p itc h. W hat w as to b e a

s ta nd ard r e v ie w o f a s u p plie r p ro posa l tu rn ed in to a s u rp ris in g d is c ussio n o f o ne o f th e C EO ’s h o t-

b utto n is su es. A t th e e nd o f th e p re se nta ti o n, th e C EO th anked th e r e p s fo r s h ed din g n ew lig ht o n a

p ers is te nt b usin ess p ro ble m a nd d em onstr a ti n g c ap ab iliti e s th at h e d id n’t re aliz e th e s u p plie r h ad .

W hile th e c o m peti to rs s tu ck to th eir s ta nd ard p ro posa ls , th is s u p plie r w on th e b usin ess b y ta ilo rin g

t h eir m essa ge to w hat th e C EO c are d a b out m ost. In a ti m e w hen c o nse nsu s is m ore im porta nt th an ev er to g et th e d eal d one, i t’ s n o s u rp ris e th at th e r e p w ho w in s i n th is e nv ir o nm ent i s th e o ne w ho c an

effe cti v ely ta ilo r th e m essa ge to a w id e ra nge of custo m er sta keho ld ers in ord er to build th at

co nse nsu s. T his i s a to pic w e’re g o in g to e xp lo re i n a l o t m ore d ep th i n c hap te r 6 . Takin g C on tr o l o f t h e S ale

T he fin al c hara cte ris ti c th at s e ts C halle nger r e p s a p art is th eir a b ility to a sse rt a nd m ain ta in c o ntr o l

o ver th e s a le . N ow , b efo re w e g o a ny f u rth er, i t’ s i m porta nt to n o te th at b ein g a sse rti v e d oes n o t m ean

b ein g a ggre ssiv e o r, w ors e sti ll, a nno yin g o r a b usiv e. T his is a ll a b out th e re p s’ w illin gness a nd

a b ility to s ta nd th eir g ro und w hen th e c usto m er p ush es b ack.

A C halle nger’s a sse rti v eness ta kes tw o f o rm s. F ir s t, C halle ngers a re a b le to a sse rt c o ntr o l o ver th e

d is c ussio n o f p ric in g a nd m oney m ore g enera lly . T he C halle nger r e p d oesn ’t g iv e i n to th e r e q uest f o r

a 1 0 p erc ent d is c o unt, b ut b rin gs th e c o nv ers a ti o n b ack to th e o vera ll s o lu ti o n— push in g f o r a gre em ent

o n v alu e, ra th er th an p ric e. S eco nd , C halle ngers a re a ls o a b le to c halle nge c usto m ers ’ th in kin g a nd

p re ssu re th e c usto m er’s d ecis io n-m akin g c ycle — both to r e ach a d ecis io n m ore q uic kly a s w ell a s to

o verc o m e th at “ in d ecis io n i n erti a ” th at c an c ause d eals to s ta ll i n d efin ite ly .

In fa ct, if y o u th in k a b out it, if a k ey to a C halle nger r e p ’s s u ccess is te achin g— or r e fr a m in g h o w

t h at c usto m er s e es th eir w orld — th en th e r e p i s g o in g to h av e to b e w illin g to g et a l ittl e s c uffe d u p i n

t h e p ro cess. J u st a s y o u c an’t b e a n e ffe cti v e te acher if y o u’re n o t g o in g to p ush y o ur s tu d ents , y o u

c an’t b e a n e ffe cti v e C halle nger if y o u’re n o t g o in g to p ush y o ur c usto m ers . T his a p pro ach is so

i m porta nt to day w ith c usto m er r is k a v ers io n a s h ig h a s i t i s . I t’ s f u nny, s a le s l e ad ers o fte n l a m ent th at

c o re -p erfo rm in g r e p s f a ll i n to th eir c o m fo rt z o ne w hen s e llin g, b ut a rg uab ly th e b ig ger p ro ble m i s th at

c usto m ers o fte n fa ll in to th eir c o m fo rt z o ne w hen it c o m es to b uyin g. A nd th at’ s w hat th e C halle nger

r e p d oes— sh e m oves c usto m ers o ut o f th eir c o m fo rt z o ne b y s h o w in g th em th eir w orld i n a d iffe re nt

l ig ht. T he k ey, o f c o urs e , i s to d o th is w ith c o ntr o l, d ip lo m acy, a nd e m path y.

As one of our lo ngti m e m em bers , th e fo rm er C SO of one of th e w orld ’s la rg est chem ic al

m anufa ctu re rs , e xp la in s, “ In p ra cti c e, a sse rti n g c o ntr o l c an ta ke m any f o rm s. I n e sse nce, i t m eans th at

t h e s a le s p ro fe ssio nal ta kes th e le ad in th e c usto m er d is c ussio n w ith a s p ecific e nd in m in d .” W hile

t h e e nti r e to olk it f o r ta kin g c o ntr o l i s b oth l a rg e a nd c o m ple x, th ere a re m any s im ple to ols th at c an b e

a p plie d w ith p ow er.

“D is c ussio ns o ver p ric e— pric e in cre ase s o r re q uests fo r p ric e d ecre ase s— are v ery h ig h-v alu e

a re as fo r th e s a le s p ro fe ssio nal to ta ke c o ntr o l o f,” h e s a ys. “ W hen th e to pic o f p ric e c o m es u p , a

p ow erfu l te chniq ue i s f o r th e s a le s p ro fe ssio nal to s h ift th e d is c ussio n f r o m p ric e to v alu e. T he v alu e

o f th e c urre nt o ffe rin g i s a g re at p la ce to s ta rt th is d ia lo gue. D urin g th e c o urs e o f s u ch a d is c ussio n, i t

i s use fu l to get th e custo m er to ra nk th e ele m ents o f th e o ffe rin g in o rd er o f im porta nce. T his

s o m eti m es e nab le s th e c usto m er to s e e th e o ffe rin g in a d iffe re nt lig ht; th ese n ew in sig hts a re v ery

u se fu l to b oth th e s a le s p ro fe ssio nal a nd th e c usto m er a s th ey th in k a b out v alu e.”

He to ld u s th e s to ry o f o ne o f h is s a le s r e p s, w ho w as i n a s itu ati o n w here h e h ad to l e t a l o ngti m e

c usto m er k no w a b out a p ric e i n cre ase — one th at w as n o t o nly s u b sta nti a l, b ut a ls o o ut o f s y nc w ith th e

e co no m y. N one o f th e c usto m er’s o th er s u p plie rs w ere ra is in g p ric es, b ut th e ra w m ate ria l fo r th e

s u p plie r’s p ro duct h ad g o ne u p s o m uch th at i t d ic ta te d th e n eed . A t th e s a m e ti m e, y ears b efo re , th at

s a m e c usto m er h ad r e q ueste d th at th e p ro duct b e s h ip ped i n a n e xp ensiv e, n o nsta nd ard p ackage. O ver

t i m e, th e co st o f th is p ackage had su b sta nti a lly re d uced th e p ro fita b ility o f th e b usin ess fo r th e

s u p plie r. D urin g th e d is c ussio n o f th e p ric e in cre ase , th e s a le s p ro fe ssio nal a sk ed th e c usto m er to

r a nk th e v ario us f e atu re s o f th e s u p plie r’s o ffe rin g. T he e xp ensiv e c usto m p ackagin g d id n’t r a nk i n th e

t o p th re e. A s a c o nse q uence, th e s u p plie r a nd th e s a le s p ro fe ssio nal a gre ed to a l o w er p ric e i n cre ase

a nd a s h ift to s ta nd ard p ackagin g. T he c hange i n p ackagin g i m pro ved p ro fita b ility m ore th an th e p ric e in cre ase its e lf. “ T his w as a g re at o utc o m e,” h e sa id , “ usin g a re la ti v ely sim ple d ev ic e to a sse rt

co ntr o l i n a p ric e d is c ussio n to d eliv er a w in f o r b oth p arti e s.” A R O AD M AP F O R T H E R EST O F T H IS B O OK

W hat’ s th e b est p ath to b uild in g C halle nger re p s? H ere is h o w w e’ll ta ckle th is q uesti o n in th e

f o llo w in g c hap te rs :

• In c hap te rs 4 a nd 5 , w e’ll lo ok a t th e n o ti o n o f te achin g. W e’ll a d dre ss th e q uesti o ns o f w hy

te achin g w ork s a nd w hat y o ur r e p s s h o uld b e te achin g i n th e f ir s t p la ce— as w ell a s w hat th e

co nte nt o f th eir “ te achin g p itc h” sh o uld lo ok lik e. M uch o f th is c hap te r w ill c ente r o n th e

criti c al ro le th at th e org aniz a ti o n— in m ost co m panie s, m ark eti n g— pla ys in id enti fy in g

“custo m er-w orth y i n sig hts ” th at l e ad to a s u p plie r’s u niq ue c ap ab iliti e s.

• In c hap te r 6 , w e’ll lo ok a t ta ilo rin g. W e’ll ta ke a d eep d iv e in to w hy ta ilo rin g is a n e ffe cti v e

ap pro ach in to day’s s a le s e nv ir o nm ent a nd lo ok a t w hat th e b est s a le s o rg aniz a ti o ns d o to

eq uip th eir r e p s to ta ilo r— in o th er w ord s, g et th em to a d ap t th eir s a le s a p pro ach a nd m essa ge

to s p ecific in d iv id uals a cro ss th e c usto m er o rg aniz a ti o n. A c riti c al p art o f th e ta ilo rin g s to ry

is th e s h ift w e d is c usse d i n c hap te r 1 to w ard c o nse nsu s b uyin g w ith in c usto m er o rg aniz a ti o ns.

We’ll s p end s o m e ti m e u np ackin g th is tr e nd i n m ore d eta il i n c hap te r 6 .

• In c hap te r 7 , w e’ll d ig d eep in to th e a re a o f ta kin g c o ntr o l a nd d is c uss te chniq ues fo r g etti n g

re p s to i n cre ase th eir a sse rti v eness w ith o ut b eco m in g a ggre ssiv e. A s m enti o ned b efo re , ta kin g

co ntr o l i s a n e asily m is u nd ers to od e le m ent o f th e C halle nger S ellin g M odel. P oorly a p plie d , i t

will d o m ore harm th an go od, b ut co rre ctl y ap plie d , it can b e th e d iffe re nce b etw een a

decis io n a nd “ no d ecis io n.” In a w orld w here th e c usto m er’s s ta tu s q uo is r e ally y o ur w ors t

enem y, a nd c usto m ers a re so in cre asin gly ris k -a v ers e , th e a b ility to ta ke c o ntr o l c an b e a

gam e-c hanger f o r y o ur s a le s r e p s.

• In chap te r 8 , w e w ill lo ok at th e criti c al ro le o f th e fr o ntl in e sa le s m anager in b uild in g

Challe ngers acro ss th e sa le s fo rc e. S pecific ally , w e’ll lo ok at th e is su e of co achin g—

so m eth in g m ost s a le s o rg aniz a ti o ns c o nti n ue to n egle ct. T his is a n a re a o f d eep e xp erti s e fo r

th e S ale s E xecuti v e C ouncil a nd o ne w here w e h av e s o m e c o unte rin tu iti v e d ata a nd p ow erfu l

best p ra cti c es to sh are w ith y o u. T he sto ry d oesn ’t e nd w ith c o achin g, h o w ev er. In so m e

re cent w ork w e’v e c o m ple te d , w e’v e f o und th at h ig h-p erfo rm in g s a le s m anagers a ls o p osse ss

a u niq ue a b ility to in no vate a t th e d eal le v el w ith th eir re p s. If c o achin g is a b out im parti n g

sk ills kno w n to driv e sa le s su ccess, sa le s in no vati o n is ab o ut m ovin g in d iv id ual deals

fo rw ard in a p urp ose fu l m anner. T hey’re d iffe re nt s k ills , b ut b oth a re h ugely im porta nt in a n

org aniz a ti o n s e ekin g to m ake a s h ift to th e C halle nger m odel.

• In c hap te r 9 , w e’ll o ffe r s o m e a d diti o nal w ord s o f g uid ance to le ad ers w ho a re s e ekin g to

tr a nsfo rm th eir c o m merc ia l o rg aniz a ti o ns in to C halle nger o rg aniz a ti o ns. If y o u’re g o in g to

em bark o n th is j o urn ey o f b uild in g C halle ngers , h o w d o y o u d esig n th e c hange e ffo rt s o th at i t

le ad s to r e al, l o ng-te rm c hange a nd n o t j u st th e n ext “ fla v or o f th e m onth ” u p sk illin g e ffo rt?

• L astl y , i n th e a fte rw ord , w e’ll l o ok a t th e n o ti o n o f c halle ngin g b eyo nd th e w orld o f s a le s. T he

Challe nger m odel i s o ne th at, w e b elie v e, i s a b usin ess c o ncep t, n o t j u st a s a le s c o ncep t, a nd

is o ne th at w e’v e s e en e ffe cti v ely e m plo yed i n a v arie ty o f c o rp ora te s e tti n gs— fr o m I T to H R

to f in ance, l e gal, a nd s tr a te gy— and w e’ll d is c uss th is i n m ore d eta il i n th is c lo sin g s e cti o n o f

th e b ook.

4

TEA CHIN G F O R D IF FER EN TIA T IO N ( P A RT 1 ): W HY I N SIG HT M AT TER S

O VER T H E L A ST

fifte en y ears , m ost s a le s tr a in in g h as c ente re d o n a c o re p rin cip le : T he s h o rte st

p ath to s a le s s u ccess i s a d eep u nd ers ta nd in g o f c usto m ers ’ n eed s. I f y o u’re g o in g to s e ll “ so lu ti o ns,”

t h e th in kin g g o es, y o u’v e g o t to f ir s t “ d is c o ver” y o ur c usto m ers ’ m ost p re ssin g p oin ts o f p ain a nd th en

b uild a ti g ht c o nnecti o n b etw een w hat’ s k eep in g th em u p a t n ig ht a nd w hat y o u’re s e ekin g to s e ll.

Not s u rp ris in gly , th en, s a le s l e ad ers h av e s p ent m illio ns o f d olla rs a nd u nto ld h o urs tr a in in g r e p s to

a sk b ette r q uesti o ns. L ots o f th em . P ro bin g q uesti o ns. F in ancia l q uesti o ns. H yp oth eti c al q uesti o ns.

O pen-e nd ed questi o ns. F ollo w -u p questi o ns. A ll desig ned to fig ure out as deep ly as possib le

c usto m ers ’ “ to p th re e s tr a te gic o bje cti v es fo r th e c o m in g y ear,” o r “ th e tw o th in gs th ey’v e g o t to g et

r ig ht th is q uarte r,” o r— bette r s ti ll— th eir c urre nt “ b urn in g p la tf o rm s.”

The i d ea b ein g, i f w e j u st d ig d eep e no ugh to f in d “ th e s to ry b ehin d th e s to ry ,” w e’ll e v entu ally g et

t o a p la ce w here c usto m ers a re s o f o rth co m in g a b out w hat th ey tr u ly n eed th at r ig ht th ere o n th e s p ot

w e c an c ra ft a h ig hly ta rg ete d o ffe r th at p ro vid es th e p erfe ct “ so lu ti o n” to th eir p ro ble m . A s o lu ti o n s o

p erfe ctl y a lig ned w ith th eir n eed s th at th ey h av e n o c ho ic e b ut to b uy i t— no m atte r w hat th e c o st.

It s o und s g re at o n p ap er, b ut th is a p pro ach s u ffe rs o ne m ajo r p ro ble m : It d oesn ’t w ork n early a s

w ell to day a s i t u se d to . C erta in ly i t n o l o nger w arra nts th e m assiv e tr a in in g i n v estm ents p oure d i n to

i m pro vin g re p s’ d is c o very sk ills . A nd th at’ s n o t ju st b ecause im pro vin g re p s’ a b ility to a sk g o od

q uesti o ns pro ves co lo ssa lly diffic ult— esp ecia lly am ong co re -p erfo rm in g re p s— but, m uch m ore

i m porta nt, b ecause th is a p pro ach is b ase d o n a d eep ly fla w ed a ssu m pti o n: th at c usto m ers a ctu ally

k n ow

w hat th ey n eed i n th e f ir s t p la ce. T hat c usto m er n eed s a re s im ply th ere w aiti n g to b e u nlo cked ,

e ith er w illin gly o r b egru d gin gly , th ro ugh th e m aste ry o f o ur i n te rro gati v e te chniq ue.

But w hat i f c usto m ers tr u ly d on’t k no w w hat th ey n eed ? W hat i f c usto m ers ’ s in gle g re ate st n eed —

i r o nic ally — is to

fig ure o ut

e xactl y w hat th ey n eed ?

If th is w ere tr u e, r a th er th an

ask in g

c usto m ers w hat th ey n eed , th e b ette r s a le s te chniq ue m ig ht in

f a ct b e to

te ll

c usto m ers w hat th ey n eed . A nd th at’ s e xactl y w hat C halle ngers d o. W hen y o u g et d ow n

t o it, C halle ngers a re n’t s o m uch w orld -c la ss in v esti g ato rs a s th ey a re w orld -c la ss te achers . T hey

w in n o t b y u nd ers ta nd in g th eir c usto m ers ’ w orld a s w ell a s th e c usto m ers k no w i t th em se lv es, b ut b y

a ctu ally k no w in g th eir c usto m ers ’ w orld

bette r

th an th eir c usto m ers k no w it th em se lv es, te achin g

t h em w hat th ey d on’t k no w b ut s h o uld .

Acro ss th e n ext tw o c hap te rs w e d iv e d eep i n to th e C halle nger’s a b ility to te ach— arg uab ly th e f ir s t

a m ong e q uals a cro ss th e th re e c entr a l C halle nger c o m pete ncie s. A c riti c al p art o f o ur te achin g s to ry

w ill b e a c lo se , c o ncre te l o ok a t w hat te achin g i s a nd i s n o t. W hat i t l o oks l ik e a nd s o und s l ik e, h o w

i t w ork s, a nd h o w to e nsu re w e g et p aid w hen i t’ s d one r ig ht. A nd a lo ng th e w ay, w e’ll a d dre ss to ugh

q uesti o ns w ith s o m e s u rp ris in g a nsw ers . T hin gs l ik e:

• H ow exactl y is a “te achin g” co nv ers a ti o n all th at diffe re nt fr o m a tr a d iti o nal sa le s

co nv ers a ti o n?

• W hat k in d o f c o lla te ra l d o I n eed to te ach e ffe cti v ely ? • H ow m uch o f th is i s tr u ly a m atte r o f i n d iv id ual s k ill v ers u s o rg aniz a ti o nal c ap ab ility ?

• W hat’ s th e r o le o f m ark eti n g i n g etti n g th is r ig ht?

And p erh ap s m ost i m porta nt:

• D o c usto m ers r e ally w ant to b e ta ught i n th e f ir s t p la ce?

Let’ s s ta rt w ith th e la st q uesti o n fir s t. T hat’ s re ally w here th e ru b ber h its th e ro ad in a ny s a le s

ap pro ach: w ith th e c usto m er. A nd i n th e c ase o f th e C halle nger a p pro ach, th is i s th e q uesti o n w e h ear

most o fte n. A fte r a ll, it s e em s o n th e s u rfa ce ra th er a rro gant to s im ply s h o w u p a nd d ecla re to th e

custo m er, “ H ello , I ’ m h ere to te ach y o u!”

But th at’ s e xactl y w hat w e’re s a yin g. P erh ap s n o t in th o se w ord s p er s e — in fa ct, a lm ost c erta in ly

no t in th o se w ord s. B ut s ti ll, a fte r fo ur y ears o f e xte nsiv e c usto m er r e se arc h, w hat w e e m phati c ally

kno w to b e tr u e is th at th at’ s

exa ctly

w hat c usto m ers a re lo okin g fo r m ore th an a nyth in g e ls e in a

su p plie r. IT ’S N O T W HAT Y O U S E LL, I T ’S H OW Y O U S E LL

B egin nin g lo ng b efo re th e g lo bal e co no m y w ent o ff a c liff in 2 008 a nd c o nti n uin g rig ht th ro ugh th e

e nsu in g d ow ntu rn , th e te am a t th e S ale s E xecuti v e C ouncil a nd its sis te r p ro gra m , th e M ark eti n g

L ead ers h ip C ouncil, a p ro gra m o f th e C orp ora te E xecuti v e B oard , h av e s u rv eyed w ell o ver 5 ,0 00

i n d iv id uals at our clie nts ’ custo m er org aniz a ti o ns— ev ery o ne fr o m busin ess ow ners and C -s u ite

e xecuti v es to e nd u se rs , p urc hase in flu encers , p ro cure m ent o ffic ers , a nd e v en th ir d -p arty c o nsu lta nts

— in o rd er to d ete rm in e w hat e xactl y th ey’re l o okin g f o r i n a b usin ess-to -b usin ess s u p plie r.

Specific ally , a cro ss r o ughly fifty q uesti o ns w e a sk ed e ach r e sp ond ent to r a nk th e n am ed s u p plie r

( i.e ., o ur c lie nt o rg aniz a ti o n) v ers u s s im ila r s u p plie rs i n te rm s o f v ario us a ttr ib ute s o f th eir p ro ducts ,

b ra nd , s e rv ic e, a nd p ric e-to -v alu e r a ti o . W e a sk ed a b out a ll th e ty p ic al r e aso ns w hy s o m eo ne m ig ht

c ho ose one su p plie r over ano th er— th in gs lik e pro duct perfo rm ance, pro duct fe atu re s, bra nd

r e co gniti o n, se rv ic e re sp onse ti m es. In ad diti o n, w e ask ed th o se sa m e in d iv id uals a num ber o f

q uesti o ns a b out th e s a le s e xp erie nce its e lf— what it’ s a ctu ally lik e to b uy fr o m th e n am ed s u p plie r

r e la ti v e to th eir c o m peti to rs . F in ally , w e a sk ed e ach r e sp ond ent th re e s p ecific q uesti o ns to g auge th eir

l e v el o f l o yalty to th at s u p plie r: “ O n a s c ale f r o m o ne to s e v en, h o w w illin g a re y o u to :

• k eep b uyin g f r o m th is p arti c ula r s u p plie r;

• b uy e v en m ore f r o m th is s u p plie r g o in g f o rw ard ;

• a d vocate o n th is s u p plie r’s b ehalf a cro ss y o ur o rg aniz a ti o n?”

We w ere n’t ask in g ab out a custo m er’s genera l le v el of hap pin ess, or sa ti s fa cti o n, or ev en

l ik elih o od to b uy— all o f w hic h w e’v e f o und i n e arlie r w ork a t th e M ark eti n g L ead ers h ip C ouncil to

h av e l ittl e i m pact o n B 2B c usto m er l o yalty — but r a th er a b out th eir w illin gness to j o in th at s u p plie r o n

a “ so lu ti o ns jo urn ey.” A cro ss y ears o f lo yalty re se arc h, w e’v e fo und th at th e c o m bin ati o n o f th ese

t h re e q uesti o ns b ette r p re d ic ts d eep er c usto m er r e la ti o nsh ip s a nd , u lti m ate ly , c o m merc ia l g ro w th th an

a ny o th er l o yalty m etr ic w e’v e te ste d .

When w e p ut a ll o f th at in fo rm ati o n to geth er— te ns o f th o usa nd s o f d ata p oin ts — and th en ru n it

t h ro ugh e xte nsiv e a naly sis , it a llo w s u s to d ete rm in e, o f a ll th e w ays to o utp erfo rm th e c o m peti ti o n,

w hat th e m ost i m porta nt f a cto rs a ctu ally

are

d riv in g u p c usto m er l o yalty .

The a nsw er is n o t o nly fa sc in ati n g b ut s o u nexp ecte d fo r m ost s a le s a nd m ark eti n g e xecuti v es th at

t h e re su lts h av e la nd ed in m ore b oard ro om -le v el c o nv ers a ti o ns th an a ny o th er p ie ce o f re se arc h

w e’v e e v er c o nd ucte d ( s e e f ig ure 4 .1 ).

Sourc e: S ale s E xecuti v e C ouncil r e se arc h.

Fig ure 4 .1 .

R ep re se nta ti v e D riv ers o f C usto m er L oyalty

The f ir s t th in g y o u f in d w hen y o u l o ok a t th e a naly sis i s a d efin iti v e i m pact o n l o yalty f r o m b ra nd ,

pro duct, a nd s e rv ic e. W hen y o u c o m bin e th ese f a cto rs y o u f in d th at 3 8 p erc ent o f c usto m er l o yalty i s

attr ib uta b le to y o ur a b ility to o utp erfo rm th e c o m peti ti o n in th ese a re as. S ellin g a w ell- b ra nd ed ,

hig hly d iffe re nti a te d p ro duct, s u p porte d b y h ig her-th an-in d ustr y -a v era ge s e rv ic e w ill u nd oub te d ly g et

yo u m ore lo yalty . If yo u’re w ay b ehin d th e co m peti ti o n in any o f th ese th re e cate go rie s, th at’ s

pro bab ly w here y o u w ant to s ta rt.

That s a id , m any e xecuti v es l o ok a t th ese r e su lts w ith g enuin e s u rp ris e . T hey e xp ect th ese f a cto rs to

acco unt f o r m uch m ore , m ayb e 7 0, 8 0, o r e v en 9 0 p erc ent o f c usto m er l o yalty . A fte r a ll, i f th ey c an’t

win l o yalty o ff th eir s u p erio r b ra nd , p ro duct, a nd s e rv ic e, w ell th en, w hat e ls e i s th ere ?

But th e re aso n fo r th eir su rp ris in gly lo w im pact ste m s la rg ely fr o m a c o m mon tr e nd c ap tu re d

perfe ctl y in a sto ry to ld to u s re centl y b y th e g lo bal h ead o f m ark eti n g a t o ne o f th e w orld ’s to p

fin ancia l s e rv ic es f ir m s. W hen s h e s a w th is d ata , s h e s a id , “ F our y ears a go , o ur c o m pany w as s itti n g

at o nly 6 5 p erc ent c usto m er s a ti s fa cti o n d ue to a l o ng tr e nd o f g enera lly p oor c usto m er s e rv ic e a cro ss

our e nti r e in d ustr y . S eein g th is p ro ble m a s a r e al g ro w th o pportu nity , a cro ss th e n ext th re e y ears w e

se t a b out a naly zin g a nd i m pro vin g s e rv ic e a cro ss e v ery m ajo r c usto m er to uchp oin t, i n v esti n g m illio ns

of d olla rs a nd c o untl e ss h o urs a lo ng th e w ay. A nd th e r e su lts w ere p heno m enal! A t th e e nd o f th re e

years , w e had in cre ase d custo m er sa ti s fa cti o n fr o m

65

p erc ent to

95

p erc ent.” S ound s fa nta sti c ,

doesn ’t i t?

“B ut,” s h e c o nti n ued , “ th ere w as o nly o ne p ro ble m . In th o se s a m e th re e y ears , o ur tw o b ig gest

co m peti to rs d id th e e xact s a m e th in g. T hey i n v este d r o ughly th e s a m e a m ount o f m oney a nd a chie v ed

more o r l e ss th e e xact s a m e r e su lt. S o h ere w e a re , f o ur y ears l a te r, a nd o ur e nti r e i n d ustr y s its a t 9 6

perc ent c usto m er s a ti s fa cti o n. D on’t g et m e w ro ng, th at’ s g re at, b ut a s a r e su lt w e’v e s e en a b so lu te ly

no c o m merc ia l b enefit fr o m a ll th at e xp ense . S ati s fie d c usto m ers le av e u s e v ery d ay, b ecause th ey

kno w th ey’ll b e tr e ate d e q ually w ell s o m ew here e ls e .”

Now , i s i t f a ir to s a y th at th is c o m pany h ad to i n v est th at k in d o f ti m e a nd m oney s im ply to s ta y i n

th e g am e? A bso lu te ly . H ad th ey n o t, th ey’d ju st a s lik ely b e o ut o f b usin ess to day. B ut th e le sso n is

sti ll m ad denin gly fa m ilia r. W e p our m illio ns o f d olla rs in to b ra nd , p ro duct, and se rv ic e se ekin g

gro w th , a nd r e ally o nly g et s ta tu s q uo . O ur c usto m ers a re m ore s a ti s fie d , b ut th ey’re n o t n ecessa rily

any m ore l o yal.

So w hat’ s h ap penin g h ere ? T o f in d o ut, w e w ent o ut a nd d is c usse d th ese f in d in gs w ith s o m e o f th e

custo m ers w ho h ad c o m ple te d th e s u rv ey a nd h eard s o m eth in g th at m ig ht s u rp ris e y o u. In lig ht o f th e re su lts — th e re la ti v ely lo w im pact o n lo yalty o f b ra nd , p ro duct, a nd s e rv ic e— we e xp ecte d a t le ast

so m e

o f th ese c usto m ers to e xp re ss re al d is sa ti s fa cti o n w ith th e s u p plie r in q uesti o ns a cro ss th ese

th re e c ate go rie s. B ut th at’ s n o t w hat w e h eard a t a ll. In fa ct, it w as ju st th e o pposite . T hey

lo ved

th e

pro duct! T he b ra nd w as

world -c la ss

! T he s e rv ic e w as

fa nta stic

! B ut i f th at w as th e c ase , th en w hy i n

th e w orld w ere th e l o yalty s c o re s f o r th ese a ttr ib ute s s o l o w ?

The a nsw er l a y i n w hat th ese c usto m ers w ould o fte n s a y n ext. “ S ure ! T hey’v e g o t a

gre a t

p ro duct!

It p erfo rm s e xactl y l ik e th ey s a id i t w ould ! B ut th e c o m peti ti o n’s g o t a g re at p ro duct to o!” O r, “ T heir

bra nd is

world -c la ss

!

Every o ne

k no w s th eir b ra nd ! B ut th e c o m peti ti o n’s g o t a w orld -c la ss b ra nd

to o!” O r, “ T heir s e rv ic e i s

fa nta stic

! I n f a ct, I ’ d p ut th em r ig ht u p th ere w ith th e c o m peti ti o n!” S ound

fa m ilia r?

Over and o ver w e fo und th at custo m ers , genera lly sp eakin g, se e sig nific antl y le ss d iffe re nce

betw een u s a nd th e c o m peti ti o n th an w e d o o urs e lv es. It’ s n o t th at th ey th in k m ost su p plie rs a re

parti c ula rly

bad

o n b ra nd , p ro duct, o r se rv ic e. It’ s ju st th at th ey d on’t th in k th ey’re p arti c ula rly

diffe re n t

. S o w hile w e sp end m uch o f o ur ti m e e m phasiz in g su b tl e d iffe re nces, c usto m ers te nd to

fo cus f ir s t o n th e g enera l s im ila riti e s.

Does th is m ean y o u s h o uld s to p i n v esti n g i n b ra nd , p ro duct, a nd s e rv ic e? C erta in ly n o t! I t’ s a ll s ti ll

hugely im porta nt. B ut— at le ast in th e B 2B w orld — th e in v estm ents w e m ake in b ra nd b uild in g,

pro duct d ev elo pm ent, a nd im pro ved c usto m er se rv ic e a re n o t th e

fin al

ste p to w in nin g c usto m er

lo yalty , b ut th e

fir st

. I t’ s th e p ric e o f e ntr y to g ain in g c usto m er l o yalty a t a ll.

In fa ct, a fte r th ey’v e h ad a c hance to w ra p th eir h ead s a ro und th is fin d in g fo r a w hile , s a le s a nd

mark eti n g e xecuti v es te nd to a gre e, a s th ey s e e i t e v ery s in gle d ay i n th eir o w n b usin ess. H ow ev er, i n

many c ase s, th eir n atu ra l i n clin ati o n a cro ss th e l a st s e v era l y ears , a t l e ast, i s to e xp la in a w ay th e l o w

im pact o n l o yalty f r o m b ra nd , p ro duct, a nd s e rv ic e a s a n atu ra l b y-p ro duct o f c usto m ers ’ i n te nse f o cus

on re d ucin g c o sts . S ure , c usto m ers a re lo yal, th ey’d a rg ue. T hey’re ju st lo yal to w ho ev er’s g o t th e

lo w est p ric e.

But it tu rn s o ut, th at’ s n o t th e c ase e ith er. O nly 9 p erc ent o f c usto m er lo yalty is a ttr ib uta b le to a

su p plie r’s a b ility to o utp erfo rm th e c o m peti ti o n o n p ric e-to -v alu e ra ti o . Y es, y o u m ig ht b e c heap er

th an th e c o m peti ti o n, b ut i n th e e yes o f y o ur c usto m er, y o u l ik ely p ro vid e l e ss v alu e a s w ell. S o y o ur

lo w er p ric e m ay g et y o u th e d eal, b ut i t a lm ost c erta in ly w on’t g et y o u m uch l o yalty .

If y o ur c usto m er is d ead se t o n b uyin g th e c heap est o pti o n to day, th en c hances a re p re tty g o od

th ey’ll b e d ead s e t o n b uyin g th e c heap est o pti o n to m orro w a s w ell. A nd th at m ay o r m ay n o t b e y o u.

Afte r a ll, th ere ’s u su ally littl e s to ppin g y o ur c o m peti ti o n fr o m d is c o unti n g th eir w ay to a w in . In th at

gam e, l o yalty i s e sse nti a lly i r re le v ant, a s c usto m ers a re n’t l o okin g f o r a p artn er, th ey’re l o okin g f o r a

barg ain

. A nd th at’ s n o t w hat th is s to ry i s a ll a b out. T his i s a s to ry a b out a c usto m er’s w illin gness n o t

only to k eep b uyin g f r o m y o u, b ut to b uy e v en m ore o ver ti m e a nd to a d vocate o n y o ur b ehalf. A nd i f

th at’ s yo ur go al, p ric e is sim ply a b ad w ay to get th ere . U nle ss yo ur lo w er p ric es co m e w ith

sig nific antl y h ig her p erc eiv ed v alu e th an th e c o m peti ti o n, to day’s d is c o unts w on’t g et y o u to m orro w ’s

busin ess.

So if only 38 perc ent of custo m er lo yalty is attr ib uta b le to yo ur ab ility to outp erfo rm th e

co m peti ti o n o n b ra nd , p ro duct, a nd s e rv ic e, a nd 9 p erc ent o f lo yalty is a ttr ib uta b le to y o ur a b ility to

outp erfo rm th e c o m peti ti o n o n p ric e-to -v alu e r a ti o , th en w hat a b out th e o th er 5 3 p erc ent? W hat e ls e i s

th ere ?

Well, to u nd ers ta nd th e a nsw er, le t’ s g o b ack to th o se c usto m er c o nv ers a ti o ns w e m enti o ned a

mom ent a go . W hat w e ty p ic ally h eard fr o m c usto m ers , a fte r th ey to ld u s h o w littl e d iffe re nce th ey

sa w b etw een o ne s u p plie r a nd a no th er in te rm s o f b ra nd , p ro duct, a nd s e rv ic e, is th at th ey s a w h uge diffe re nces in th e s a le s e xp erie nce its e lf— th e a ctu al s a le s c o nv ers a ti o ns th ey h ad w ith s u p plie rs o n

an o ngo in g b asis .

Custo m ers w ere p ain fu lly b lu nt o n th is p oin t. S om e re p s, th ey s a id , w ould s o th o ro ughly w aste

th eir ti m e th at a t th e e nd o f th e s a le s c all th ey f e lt a s th o ugh th ey’d j u st b een r o bbed o f a n h o ur o f th eir

liv es— an h o ur th ey w ill n ev er g et b ack. A nd f r a nkly , i t d id n’t m atte r h o w g o od th e r e p ’s p re se nta ti o n

sk ills m ig ht b e. It ju st w asn ’t w orth it to h av e to s it a nd lis te n to a n e xcite d e xp la nati o n o f h o w th e

new and im pro ved M odel X PJ1 78 co uld ru n th re e se co nd s fa ste r w hile usin g le ss energ y and

re q uir in g le ss m ain te nance, “sa v in g yo u ti m e and m oney fo r th e m ore im porta nt th in gs!” W ho

care s? !? ! D o I w ant to s a v e ti m e a nd m oney? O f c o urs e I d o! D o I th in k th at th re e s e co nd s j u sti fie s a 5

perc ent p ric e p re m iu m ? P ro bab ly n o t.

On th e o th er h and , th o se s a m e c usto m ers to ld u s th at

oth er

re p s w ould ta ke th e ti m e to p ro vid e

in fo rm ati o n s o in te re sti n g a nd v alu ab le th at— in th e w ord s o f N eil R ackham — th e c usto m er w ould

hav e b een w illin g to

pay fo r th e c o nversa tio n its e lf

. In o th er w ord s, w hile c usto m ers fo und s o m e

su p plie rs to b e h o rrib le in th e s a le s e xp erie nce, th ey fo und o th ers to b e in v alu ab le . E ven s u p plie rs

th at a p peare d s im ila r in e v ery o th er w ay o n p ap er p erfo rm ed a ll o ver th e m ap w hen it c am e to th e

sa le s e xp erie nce. A nd th at d iffe re nce, i t tu rn s o ut, h as a h uge i m pact o n c usto m er l o yalty .

That’ s th e r e al b om bsh ell fin d in g o f th is w ork . L oyalty is n ’t w on in p ro duct d ev elo pm ent c ente rs ,

in a d verti s e m ents , o r o n to ll- fr e e h elp l in es: L oyalty i s w on o ut i n th e f ie ld , i n th e tr e nches, d urin g th e

sa le s c all. It’ s th e re su lt o f th e c o nv ers a ti o ns o ur re p s a re h av in g w ith c usto m ers e v ery s in gle d ay.

The enti r e re m ain d er of custo m er lo yalty — all 53 perc ent— is attr ib uta b le to yo ur ab ility to

outp erfo rm th e c o m peti ti o n i n th e s a le s e xp erie nce i ts e lf. O ver h alf o f c usto m er l o yalty i s a r e su lt n o t

of

what

y o u s e ll, b ut

how

y o u s e ll. A s im porta nt a s it is to h av e g re at p ro ducts , b ra nd , a nd s e rv ic e,

it’ s a ll f o r n aught i f y o ur r e p s c an’t e xecute o ut i n th e f ie ld .

That s a id , i t’ s o ne th in g to s a y th at th e s a le s e xp erie nce i s h ugely i m porta nt f o r c usto m er l o yalty , b ut

ano th er th in g a lto geth er to u nd ers ta nd h o w . A fte r a ll, r e m em ber, c usto m ers w ere v ery s p ecific h ere .

Som e o f th ese i n te ra cti o ns a re d esp era te ly p ain fu l, o th ers i n cre d ib ly v alu ab le . S o w hat e xactl y n eed s

to h ap pen d urin g th e s a le s e xp erie nce i n o rd er to g enera te s u ch a n i m pact o n c usto m er l o yalty ?

Well, th is is w here th e s to ry r e ally g ets in te re sti n g, b ecause w hen y o u c ra ck o pen th e d ata in sid e

th e s a le s e xp erie nce c ate go ry , w hat y o u fin d is th e e xact s a m e C halle nger s to ry , o nly th is ti m e fr o m

th e c usto m er’s p ers p ecti v e. TH E P O W ER O F I N SIG HT

O f th e fifty o r so a ttr ib ute s w e te ste d in o ur lo yalty su rv ey, se v ente en o f th em fe ll in to th e sa le s

e xp erie nce c ate go ry , e ach r e fle cti n g a t le ast a m arg in ally p ositi v e im pact o n c usto m er lo yalty . T hey

i n clu d ed th in gs lik e, “ D em onstr a te s a h ig h le v el o f p ro fe ssio nalis m ,” “ A dju sts to o ur u niq ue n eed s

a nd sp ecific ati o ns,” “P ortr a ys a re alis ti c p ic tu re o f co sts ,” and “M atc hes co m munic ati o ns to m y

p re fe re nces.” H ow ev er, w hen w e r a nked th e lis t a cco rd in g to im pact, w e fo und s e v en in p arti c ula r

t h at r o se w ay a b ove th e o th ers i n te rm s o f i m porta nce:

• R ep o ffe rs u niq ue a nd v alu ab le p ers p ecti v es o n th e m ark et.

• R ep h elp s m e n av ig ate a lte rn ati v es.

• R ep p ro vid es o ngo in g a d vic e o r c o nsu lta ti o n.

• R ep h elp s m e a v oid p ote nti a l l a nd m in es.

• R ep e d ucate s m e o n n ew i s su es a nd o utc o m es.

• S up plie r i s e asy to b uy f r o m .

• S up plie r h as w id esp re ad s u p port a cro ss m y o rg aniz a ti o n.

Now , if w e sta rt at th e b otto m o f th at lis t and w ork up , th e fir s t th in g w e fin d is sta ti s ti c al

c o rro bora ti o n f o r w hat w e a ll k no w to b e tr u e— and s o m eth in g w e’ll d is c uss i n m ore d ep th i n c hap te r

6 . T he n eed fo r c o nse nsu s a cro ss c usto m er s ta keho ld ers h as g o ne w ay u p . S enio r d ecis io n m akers

i n sid e th e c usto m er a re n o l o nger w illin g to g o o ut o n a l im b f o r a ny s u p plie r o r a ny s o lu ti o n, u nle ss

t h at d eal h as th e s u p port o f h is o r h er te am .

It’ s a lo gic al, if fr u str a ti n g, o utc o m e o f th e la rg er, m ore exp ensiv e, m ore d is ru p ti v e so lu ti o ns

s u p plie rs a re s e ekin g to s e ll. W hen th e s ta kes a re h ig her, y o u c an’t ju st c la w y o ur w ay to th e c o rn er

o ffic e to g et th e d eal d one. Y ou’v e g o t to b uild a n etw ork o f a d vocacy a lo ng th e w ay o r r is k l o sin g th e

d eal a lto geth er d ue to w eak s u p port a cro ss th e o rg aniz a ti o n.

Lik ew is e , c usto m ers p la ce a g re at d eal o f im porta nce o n a s m ooth , u nco m plic ate d p urc hase . N o

o ne w ants to w ork w ith a s u p plie r th at m akes a ny p urc hase m ore c o m plic ate d th an it h as to b e—

e sp ecia lly a s o lu ti o ns p urc hase . N oth in g s lo w s d ow n a d eal fa ste r th an r e p s w ho h av e to c o nsta ntl y

“ check w ith th eir m anager,” o r “ ru n it th ro ugh L egal,” o r “ se e if F in ance w ill b e w illin g to d o th at.”

D on’t m ake y o ur c usto m ers w ork s o h ard to s p end th eir m oney!

There ’s so m eth in g e ls e a b out th is lis t th at re ally ju m ps o ut. T ake a no th er lo ok a t th e to p fiv e

a ttr ib ute s l is te d th ere — th e k ey c hara cte ris ti c s d efin in g a w orld -c la ss s a le s e xp erie nce:

• R ep o ffe rs u niq ue a nd v alu ab le p ers p ecti v es o n th e m ark et.

• R ep h elp s m e n av ig ate a lte rn ati v es.

• R ep p ro vid es o ngo in g a d vic e o r c o nsu lta ti o n.

• R ep h elp s m e a v oid p ote nti a l l a nd m in es.

• R ep e d ucate s m e o n n ew i s su es a nd o utc o m es.

Each o f th ese a ttr ib ute s s p eaks d ir e ctl y to a n u rg ent n eed o f th e c usto m er n o t to

buy

s o m eth in g, b ut

t o

le a rn

s o m eth in g. T hey’re l o okin g to s u p plie rs to h elp th em i d enti fy n ew o pportu niti e s to c ut c o sts ,

i n cre ase re v enue, p enetr a te n ew m ark ets , a nd m iti g ate ris k in w ays th ey th em se lv es h av e n o t y et re co gniz e d . E sse nti a lly th is is th e c usto m er— or 5 ,0 00 o f th em a t le ast, a ll o ver th e w orld — sa yin g

ra th er e m phati c ally , “ S to p w asti n g m y ti m e. C halle nge m e. T each m e s o m eth in g n ew .”

It’ s a p ow erfu l c o nclu sio n th at r u ns c o ntr a ry to y ears o f th o ught a nd tr a in in g in B 2B s a le s. S ure , a

su p plie r h as to h av e g re at p ro ducts , b ra nd , a nd s e rv ic e. B ut fr o m th e c usto m er’s p ers p ecti v e, m ost

alr e ad y d o. A fte r a ll, if th at w ere n’t th e c ase , th ey p ro bab ly w ould n’t b e s p eakin g w ith th at s u p plie r

in th e f ir s t p la ce. I n ste ad , w hat s e ts th e b est s u p plie rs a p art i s n o t th e q uality o f th eir p ro ducts , b ut th e

va lu e o f th eir in sig ht

—new id eas to h elp c usto m ers e ith er m ake m oney o r s a v e m oney in w ays th ey

did n’t e v en k no w w ere p ossib le .

In th is s e nse , c usto m er l o yalty i s m uch l e ss a b out w hat y o u s e ll a nd m uch m ore a b out h o w y o u s e ll.

The b est c o m panie s d on’t w in th ro ugh th e q uality o f th e p ro ducts th ey s e ll, b ut th ro ugh th e q uality o f

th e in sig ht th ey d eliv er a s p art o f th e s a le its e lf. T he b attl e fo r c usto m er lo yalty is w on o r lo st lo ng

befo re a th in g e v er g ets s o ld . A nd th e b est r e p s w in th at b attl e n o t b y “ d is c o verin g” w hat c usto m ers

alr e ad y k no w th ey n eed , b ut b y te achin g th em a n ew w ay o f th in kin g a lto geth er.

Custo m ers a re v ery c le ar o n th is p oin t. T hey p la ce m uch g re ate r v alu e o n r e p s’ te achin g s k ills th an

on th eir d is c o very s k ills . T o g o b ack to th e d ata fo r a m om ent, m uch fa rth er d ow n th e lis t w ith in th e

sa le s e xp erie nce i s , “ T he r e p e xcels i n d ia gno sin g o ur s p ecific n eed s.” T he a b ility to d ia gno se n eed s

sc o re s m uch lo w er b ecause , fr a nkly , it’ s ju st n o t a s v alu ab le to th e c usto m er. S ure , it’ s g re at if a r e p

kno w s m y n eed s a s w ell a s I d o a nd c an a sk g re at q uesti o ns to u nco ver th o se n eed s a s q uic kly a s

possib le . B ut w hat I re ally n eed is a re p w ho k no w s m y n eed s

bette r

th an I d o— one w ho can

challe nge m e to th in k d iffe re ntl y a b out m y b usin ess a lto geth er. A nd to d o th at, g re at q uesti o ns a re n’t

eno ugh. Y ou’v e g o t to h av e g re at

in sig hts

.

And b y th e w ay, f o r th o se s e llin g a c o m modity , th is i s a ll th e m ore a p plic ab le . T here ’s n o q uesti o n

th at w in nin g c usto m er lo yalty w hen y o u c an’t d iffe re nti a te y o urs e lf o n p ro duct, b ra nd , o r p ric e is

diffic ult a t b est. B ut th ese fin d in gs p ro vid e th e b est p ossib le p ath fo r d oin g ju st th at. A s a h ead o f

sa le s a t a g lo bal c hem ic al c o m pany p ut i t to u s, “ S ure , y o u a nd I m ay b oth s e ll f iv e-g allo n b uckets o f

unb ra nd ed a xle g re ase a t th e s a m e p ric e. B ut if I c an s e ll m y fiv e-g allo n b ucket o f u nb ra nd ed a xle

gre ase b ette r th an y o u c an se ll y o ur fiv e-g allo n b ucket o f u nb ra nd ed a xle g re ase — well, th en I’ m

go in g to w in . A nd th e w ay I d o th at i s b y h elp in g th e c usto m er th in k d iffe re ntl y a b out th eir b usin ess.”

And h e’s r ig ht. A fte r a ll, i f h e’s n o t, th en th ere ’s r e ally n o th in g l e ft o th er th an p ric e i ts e lf a s th e b asis

fo r d iffe re nti a ti o n. A nd in th at c ase , w hy h av e a s a le s fo rc e a t a ll? P ut th at u nb ra nd ed a xle g re ase

onlin e a nd s e ll i t th ro ugh y o ur W eb s ite . I t’ s a l o t c heap er th at w ay.

So w here d oes th at l e av e u s? I n th is w orld — where q uality i n sig ht tr u m ps a ll e ls e — it’ s n o w ond er,

th en, th at C halle ngers w in . I n sig ht i s a ll a b out te achin g c usto m ers n ew w ays o f th in kin g, p ush in g th em

to re th in k th eir c urre nt p ers p ecti v es a nd a p pro aches. A nd th at’ s e xactl y w hat C halle ngers d o. T hey

te ach c usto m ers n ew p ers p ecti v es, s p ecific ally ta ilo re d to th eir m ost p re ssin g b usin ess n eed s, in a

co m pellin g a nd a sse rti v e e no ugh m anner to e nsu re th at th e m essa ge n o t o nly re so nate s, b ut a ctu ally

driv es a cti o n. A fte r a ll, if y o u d on’t c hange th e w ay a c usto m er th in ks— and , u lti m ate ly ,

acts

—th en

yo u h av en’t re ally ta ught th em a nyth in g to b egin w ith . A t le ast n o th in g w orth d oin g a nyth in g a b out.

And w here ’s th e v alu e i n th at? NO T J U ST A N Y T EA C H IN G .

CO M MERCIA L

TEA C H IN G

S ti ll, a s im porta nt a s te achin g is , it is n o t e no ugh to s im ply b uild a te am o f C halle nger r e p s a nd te ll

t h em , “ G o fo rth a nd te ach!” T hat m ay b e g o od fo r c usto m ers , b ut n o t n ecessa rily g o od fo r b usin ess.

H ere ’s h o w th e g lo bal h ead o f sa le s a t a la rg e e nte rp ris e so ftw are c o m pany p ut it to u s: “ W hat

h ap pens,” he ask ed , “if m y re p go es out, te aches a custo m er so m eth in g co m ple te ly new and

c o m pellin g a b out th eir b usin ess, g ets th em a ll e xcite d to ta ke a cti o n, a nd th at c usto m er th en ta kes th at

i n sig ht, p uts i t o ut to b id , a nd m y c o m peti to r w in s th e d eal? I n th at c ase , i t d oesn ’t f e el l ik e I ’ v e r e ally

w on a nyth in g.”

And h e’s r ig ht, y o u h av en’t. A ll y o u’v e r e ally d one is p ro vid e fr e e c o nsu lti n g. S ure , y o u’v e g iv en

t h e c usto m er e xactl y w hat th ey w ant, b ut i n th e p ro cess y o u’v e a ctu ally g iv en y o ur c o m peti to r e xactl y

w hat

th ey

w ant to o— yo ur b usin ess. A nd th at i s tr u ly a b ad p la ce to b e.

It’ s o ne th in g to c halle nge c usto m ers w ith n ew i d eas, a nd a no th er th in g a lto geth er to e nsu re y o u g et

p aid fo r it. E ven th e w orld ’s b est C halle ngers can’t w in if th ey’re te achin g custo m ers to v alu e

c ap ab iliti e s th ey c an’t c o m peti ti v ely p ro vid e. S o h o w d o w e e nsu re th at o ur te achin g e ffo rts a ctu ally

l e ad to m ore b usin ess fo r u s a nd n o t th e c o m peti ti o n? W ell, to d o th at, w e fin d th at y o ur te achin g

e ffo rts h av e to m eet s o m e v ery s p ecific c rite ria .

We c all th is a p pro ach C om merc ia l T eachin g. A b it u nim agin ati v e, p erh ap s, b ut w e lik e th e n am e

n o neth ele ss because it perfe ctl y cap tu re s w hat C halle ngers ulti m ate ly m ust do: te ach custo m ers

s o m eth in g n ew a nd v alu ab le a b out th eir b usin ess— whic h is w hat th ey w ant— in a w ay th at r e lia b ly

l e ad s to c o m merc ia l w in s fo r u s— whic h o f c o urs e is w hat w e w ant. It s o und s a b it lik e ju jits u , b ut

i t’ s a ctu ally p re tty s tr a ig htf o rw ard ; it’ s ju st n o t n ecessa rily e asy. C om merc ia l T eachin g h as fo ur k ey

r u le s:

1. L ead to y o ur u niq ue s tr e ngth s.

2. C halle nge c usto m ers ’ a ssu m pti o ns.

3. C ata ly ze a cti o n.

4. S cale a cro ss c usto m ers .

As w e w ork th ro ugh th ese r u le s, y o u’ll f in d th at th ey a re a s m uch a b out b uild in g a n o rg aniz a ti o nal

c ap ab ility a s th ey a re a b out d ev elo pin g a n in d iv id ual s k ill, a k ey le sso n o f th e C halle nger s e llin g

m odel w e d is c usse d i n th e p re v io us c hap te r. T his a p pro ach i s a b out m uch m ore th an s im ply b uild in g

C halle ngers ; it’ s a b out b ro ad , lo ng-te rm c o m merc ia l tr a nsfo rm ati o n. M ore o n th at s h o rtl y . F or n o w ,

l e t’ s r e v ie w th e f o ur r u le s o f C om merc ia l T eachin g. Com merc ia l T each in g R ule # 1: L ead t o Y our U niq ue S tr e ngth s

F ir s t and fo re m ost, co m merc ia l te achin g m ust ti e dir e ctl y back to so m e cap ab ility w here yo u

o utp erfo rm y o ur c o m peti to rs . I f w hat y o u’re te achin g i n ev ita b ly l e ad s b ack to w hat y o u d o b ette r th an

a nyo ne e ls e , th en y o u’re i n a m uch b ette r p ositi o n w hen i t c o m es to w in nin g th e b usin ess.

We o fte n p ut it lik e th is : T he s w eet s p ot o f c usto m er lo yalty is o utp erfo rm in g y o ur c o m peti to rs o n

t h o se th in gs y o u’v e ta ught y o ur c usto m ers a re im porta nt. Y es, y o u’v e g o t to g et a c usto m er th in kin g

a b out n ew o pportu niti e s to s a v e o r m ake m oney— opportu niti e s th at m ove th em to ta ke a cti o n. B ut

y o u’v e o nly re ally su cceed ed w hen th e c usto m er a sk s, “ W ow , h o w c an I m ake th at h ap pen?” a nd

y o u’re a b le to s a y, “ W ell, le t m e s h o w y o u h o w w e’re b ette r a b le to h elp y o u m ake th at h ap pen th an

a nyo ne els e .” T hat’ s th e m agic al m om ent. Y ou’v e sh are d new , re le v ant in sig ht— whic h is w hat

c usto m ers a re lo okin g fo r— but a t th e sa m e ti m e, y o u’v e ti e d th at in sig ht to y o ur u niq ue so lu ti o n.

Y ou’v e ta ught y o ur c usto m er n o t j u st to w ant h elp b ut to w ant

yo ur

h elp .

There a re tw o im porta nt c av eats , h o w ev er, to d oin g th is w ell. F ir s t, in o rd er fo r th is a p pro ach to

w ork , y o u’v e g o t to m ake s u re th at y o u a ctu ally

ca n

h elp . F ro m th e c usto m er’s p ers p ecti v e, th ere ’s

n o th in g m ore f r u str a ti n g th an a s u p plie r th at te aches th em a n ew a nd c o m pellin g w ay to s a v e o r m ake

m oney, b ut th en c an’t a ctu ally d o a nyth in g a b out it. O ne h ead o f s a le s w e w ork w ith r e fe rs to th is a s

“ te achin g y o ur c usto m er i n to th e d ese rt.” Y ou l e av e th em tr o ub le d b y a n ew p ro ble m th ey n ev er k new

t h ey h ad a nd w ith n o r e al w ay o f d oin g a nyth in g a b out it. Y es, c usto m ers w ant in sig ht o n h o w th ey

c o uld o pera te m ore p ro ducti v ely , b ut i n sig ht th ey c an’t d o a nyth in g a b out a ctu ally m akes th in gs w ors e ,

n o t b ette r. T hen y o u r e ally

have

g iv en th em s o m eth in g to k eep th em u p a t n ig ht!

Seco nd , a nd th is is th e b ig c av eat, in o rd er to e nsu re th at y o ur te achin g e ffo rts u lti m ate ly le ad to

y o ur u niq ue str e ngth s, y o u a ctu ally h av e to k no w w hat y o ur u niq ue str e ngth s

are

. S ure , it so und s

o bvio us. B ut w e h av e b een c o nsis te ntl y s u rp ris e d b y th e n um ber o f e xecuti v es w ho s tr u ggle m ig hti ly

o n th is i s su e. H ere ’s h o w o ne h ead o f m ark eti n g a t a w ell- k no w n m anufa ctu rin g c o m pany p ut i t: “ If I

p olle d a h und re d r e p s o n o ur c o re v alu e p ro positi o n, I’ d g et

at le a st

a h und re d d iffe re nt a nsw ers .”

W e h ear th is a ll th e ti m e, u su ally c o up le d w ith a s lo w s h ake o f th e h ead a nd a r u efu l s ig h; i t’ s o ne o f

t h o se a ge-o ld tr u th s o f s a le s a nd m ark eti n g.

Yet n o ti c e th at th is e xecuti v e’s la m ent re ally c ap tu re s o nly p art o f th e p ro ble m . Y es, it’ s h ard

e no ugh to g et r e p s to a gre e o n a b ro ad d esc rip ti o n o f w hat th e c o m pany d oes w ell. B ut a sk th o se s a m e

r e p s w hat th e c o m pany a ctu ally d oes

bette r

th an th e c o m peti ti o n, a nd in ste ad o f a h und re d d iffe re nt

a nsw ers y o u’re ju st a s lik ely to g et n o ne a t a ll. A t b est y o u m ig ht h ear s o m eth in g lik e, “ Y eah, th e

c o m peti ti o n c an d o s o m eth in g lik e th at to o, b ut w e d o it s o m uch

bette r

!” O r e v en m ore c o m mon:

“ S ure , y o u c o uld g o w ith th e o th er g uy, b ut k eep in m in d w e’v e b een in th is b usin ess lo nger th an

a nyo ne e ls e . W e’v e b een s e rv in g le ad in g c o m panie s fo r o ver fifty y ears w ith in no vati v e s o lu ti o ns

b acked b y a d eep c o m mitm ent to p ro duct q uality a nd a la se r-lik e fo cus o n s e rv in g c usto m ers .” B la h,

b la h, b la h. A s i f y o ur m ain c o m peti to r d id n’t h av e a “ la se r-lik e” f o cus o n c usto m ers e ith er. O f c o urs e

t h ey d o!

How is a custo m er su p pose d to cho ose betw een tw o su p plie rs th at are more or le ss

u nd iffe re nti a te d ? It’ s a ctu ally ra th er s im ple : T hey c ho ose th e c heap est s u p plie r. W ho w ould n’t? In

t o day’s w orld ,

every o ne

is “ in no vati v e,” “ so lu ti o ns-o rie nte d ,” “ custo m er-fo cuse d ,” a nd — of c o urs e

— “gre en,” s o w hy p ay m ore f o r i t?

In a r e cent s u rv ey o f B 2B c usto m ers , th e M ark eti n g L ead ers h ip C ouncil fo und o nly 3 5 p erc ent o f co m panie s ab le to esta b lis h th em se lv es as tr u ly p re fe rre d o ver th e co m peti ti o n. A nd sti ll m ore

tr o ub lin g, e v en a m ong p re fe rre d c o m panie s, w hen w e te ste d th e im pact o f e ach o f th e b enefits th ey

belie v ed to b e u niq ue, w e f o und th at c usto m ers p erc eiv ed o nly

half

o f th em to b e a ctu ally r e le v ant to

th eir n eed s. A nd a m ong th o se , c usto m ers to ld u s th at m ost w ere n’t d eliv ere d c o nsis te ntl y e no ugh to

actu ally in flu ence th eir p re fe re nce. W hen y o u p ut it a ll to geth er, o nly 1 4 p erc ent o f c o m panie s’ s o -

calle d u niq ue b enefits w ere p erc eiv ed b y c usto m ers a s b oth u niq ue a nd b enefic ia l! A nd a s y o u m ig ht

im agin e, b ein g “ in no vati v e,” “ custo m er-fo cuse d ,” a nd “ gre en” w ere n o t a m ong th em . W hen it c o m es

to d iffe re nti a ti o n, y o ur c usto m ers h o ld y o u to a m uch h ig her s ta nd ard .

It’ s n o w ond er, th en, th at r e p s c o nti n ually r e v ert to p ric e. I t’ s n o t j u st th at th ey s tr u ggle to a rti c ula te

th e v alu e o f th eir s o lu ti o n; th ey s tr u ggle to a rti c ula te th e

uniq ue

v alu e o f th eir s o lu ti o n. A nd th is , it

tu rn s o ut, is th e h ard est p art o f c o m merc ia l te achin g: u nd ers ta nd in g a nd a gre ein g o n w hat it is th at

yo ur c o m pany d oes

bette r

th an a nyo ne e ls e . I t r e q uir e s a v ery d eep u nd ers ta nd in g o f w ho y o u a re a nd

what y o u d o. M uch o f o ur w ork a t b oth th e S ale s E xecuti v e C ouncil a nd th e M ark eti n g L ead ers h ip

Council a cro ss th e la st s e v era l y ears h as a im ed a t p ro vid in g c lie nts th e to ols to fig ure th is o ut—

ev ery th in g fr o m s te p -b y-s te p s e lf- g uid ed e xerc is e s, to fa cilita te d le ad ers h ip w ork sh o ps, to c usto m er

su rv ey b uild ers , to a ctu al c usto m er d ia gno sti c s.

But n o m atte r h o w y o u g o a b out a d dre ssin g it, a ll o f th is w ork u lti m ate ly b oils d ow n to a s in gle

questi o n y o u m ust a nsw er. W e s o m eti m es r e fe r to it a s th e “ D eb O le r q uesti o n,” n am ed a fte r D eb ra

Ole r, v ic e p re sid ent a nd g enera l m anager o f G ra in ger B ra nd a t W . W . G ra in ger, In c. A s D eb p uts it,

“W hy s h o uld o ur c usto m ers b uy f r o m u s o ver a nyo ne e ls e ?” T hat’ s i t. I t’ s d is a rm in gly s im ple . B ut th at

one q uesti o n c an ta ke y o ur e nti r e c o m merc ia l l e ad ers h ip te am to a v ery d ark p la ce a s y o u r e aliz e i t’ s

much h ard er to a nsw er th an y o u m ig ht h av e th o ught. In fa ct, m ost c o m panie s c an’t a nsw er it, a t le ast

no t in a w ay th at’ s c o m pellin g to c usto m ers (a gain , b ein g “ in no vati v e,” “ custo m er-fo cuse d ,” a nd

“so lu ti o ns-o rie nte d ” d oesn ’t c o unt) . A nd fo r th e fe w c o m panie s th at c an a nsw er it, e v en fe w er s ti ll

would f in d a gre em ent o n th at a nsw er a cro ss th eir e nti r e s a le s f o rc e.

So w here d oes th at le av e us? W ell, fir s t and fo re m ost, it m eans th at if yo u’re go in g to b uild

Challe nger r e p s to te ach c usto m ers s o m eth in g n ew a b out th eir b usin ess, y o u’v e l ik ely g o t s o m e w ork

to d o in yo ur o w n b usin ess fir s t. U nle ss yo u can ulti m ate ly co nnect th e in sig hts yo u te ach yo ur

custo m ers b ack to c ap ab iliti e s o nly y o u c an o ffe r, y o u’re m uch m ore l ik ely p ro vid in g f r e e c o nsu lti n g

th an C om merc ia l T eachin g. T hat’ s a d angero us p la ce to b e u nle ss y o u h ap pen to a ls o b e th e lo w est-

co st p ro vid er in th at m ark et (w hic h is im pro bab le s in ce lo w est- c o st p ro vid ers , b y d efin iti o n, c an’t

affo rd th e a d ded c o st o f te achin g c usto m ers ). Com merc ia l T each in g R ule # 2: C halle nge C usto m ers’ A ssu m ptio ns

I f th e fir s t r u le o f C om merc ia l T eachin g is a ll a b out th e c o nnecti o n b etw een in sig ht a nd s u p plie r, th e

s e co nd i s a b out th e c o nnecti o n b etw een i n sig ht a nd c usto m er.

It fe els lik e a n o bvio us p oin t, b ut w e’ll s a y it a nyw ay. D efin iti o nally , w hate v er y o u te ach y o ur

c usto m ers h as to a ctu ally

te a ch

th em so m eth in g. It h as to c halle nge th eir a ssu m pti o ns a nd sp eak

d ir e ctl y to th eir w orld i n w ays th ey h av en’t th o ught o f o r f u lly a p pre cia te d b efo re . T he w ord w e l ik e

t o u se h ere i s “ re fr a m e.” W hat d ata , i n fo rm ati o n, o r i n sig ht c an y o u p ut i n f r o nt o f y o ur c usto m er th at

r e fr a m es th e w ay th ey th in k a b out th eir b usin ess— ho w th ey o pera te o r e v en h o w th ey c o m pete ?

T hat’ s w hat y o ur c usto m ers a re r e ally l o okin g f o r. R em em ber w hat w e s a w i n o ur c usto m er s u rv ey?

• R ep o ffe rs u niq ue a nd v alu ab le p ers p ecti v es o n th e m ark et.

• R ep h elp s m e n av ig ate a lte rn ati v es.

• R ep p ro vid es o ngo in g a d vic e o r c o nsu lta ti o n.

• R ep h elp s m e a v oid p ote nti a l l a nd m in es.

• R ep e d ucate s m e o n n ew i s su es a nd o utc o m es.

There ’s n o th in g o n th at lis t a b out “ co nfir m ati o n” o r “ v alid ati o n.” Y es, c usto m ers a p pre cia te it if

y o u c an c o nfir m w hat th ey a lr e ad y k no w to b e tr u e; th ere ’s v alu e th ere to b e s u re . B ut th ere ’s v astl y

g re ate r valu e in in sig ht th at changes or build s on w hat th ey kno w in w ays th ey co uld n’t hav e

d is c o vere d o n th eir o w n.

That k in d o f i n sig ht i s n o t n ecessa rily e asy to a chie v e. Y ou h av e to k no w y o ur c usto m ers ’ b usin ess

b ette r th an th ey kno w it th em se lv es— at le ast th at part of th eir busin ess th at sp eaks to yo ur

c ap ab iliti e s. It s o und s lik e a n im possib ly h ig h b ar b ut th e re ality is th at m ost s u p plie rs a ctu ally

do

u nd ers ta nd th eir c usto m ers ’ b usin ess b ette r th an c usto m ers d o th em se lv es— when v ie w ed s p ecific ally

t h ro ugh th e le ns of th at su p plie r’s cap ab iliti e s. A co m pany th at se lls prin te rs to ho sp ita ls , fo r

e xam ple , m ay n o t k no w m ore a b out h ealth c are th an th e h o sp ita l a d m in is tr a to rs th ey s e ll to , b ut th ey

c erta in ly kno w m ore ab out in fo rm ati o n m anagem ent in a ho sp ita l se tti n g. A co m pany th at se lls

c o nsu m er p ackaged g o ods p ro bab ly k no w s m ore a b out h o w a nd w hy c o nsu m ers b uy g ro cerie s th an

m ost o f th e r e ta ile rs th ey s e ll to .

Where v er th e i n sig ht c o m es f r o m , y o u’ll k no w i f y o u’v e a ctu ally r e fr a m ed y o ur c usto m er’s th in kin g

b ase d o n th eir re acti o n. A nd th is is w here so m e re p s re ally fa ll in to a tr a p . Ir o nic ally , if yo ur

c usto m er r e acts to y o ur s a le s p itc h w ith s o m eth in g lik e, “ Y es, I to ta lly a gre e! T hat’ s

exa ctly

w hat’ s

k eep in g m e u p a t n ig ht! ” w ell, th en y o u’v e a ctu ally f a ile d . T hat m ay f e el c o unte rin tu iti v e, b ut i t’ s tr u e

n o neth ele ss. S ure , y o u’v e f o und a n i s su e o r i n sig ht th at

re so nate s

, b ut i t d oesn ’t

re fr a m e

. Y ou h av en’t

a ctu ally ta ught th em a nyth in g. T his is e xactl y w here w e s e e R ela ti o nsh ip B uild ers s tr u ggle a ll th e

t i m e. T hey r e tu rn fr o m a s a le s c all e xcite d a b out th e “ co nnecti o n” th ey e sta b lis h ed w ith a c usto m er

b ecause th ey “ naile d th e is su e m atc h.” “ It w as lik e I w as r e ad in g h is m in d ! E very th in g I p ut o n th e

t a b le w as so m eth in g he w as fo cuse d o n!” B ut th en th ey’re su rp ris e d w hen th at custo m er hasn ’t

r e tu rn ed th eir c alls tw o w eeks la te r. T hey a ssu m e th at th eir s u ccessfu l d ia gno sis o f th e c usto m er’s

n eed s w as s u ffic ie nt to w in th e b usin ess. B ut th at’ s n o t th e c ase . R ap port a nd r e fr a m e a re n o t th e s a m e

t h in g. Ju st because yo u “get” th e custo m er’s busin ess doesn ’t m ean yo u auto m ati c ally

get

th e

c usto m er’s b usin ess. N ot b y a l o ng s h o t. Challe nger r e p s, o n th e o th er h and , a re l o okin g f o r a d iffe re nt c usto m er r e acti o n a lto geth er. R ath er

th an, “ Y es, I to ta lly a gre e!” th ey k no w th ey’re o n th e r ig ht tr a ck w hen th ey h ear th eir c usto m er s a y,

“H uh, I n ev er th o ught o f it th at w ay b efo re .” T he b est in d ic ato r o f a su ccessfu l re fr a m e, in o th er

word s, i s n ’t e xcite d a gre em ent b ut th o ughtf u l r e fle cti o n. Y ou’v e j u st s h o w n y o ur c usto m er a d iffe re nt

way to th in k ab out th eir busin ess— perh ap s a la nd min e th ey’d overlo oked , a tr e nd th ey

und era p pre cia te d , o r a n a lte rn ati v e th ey’d p re m atu re ly d is m is se d — and n o w y o u’v e g o t th em c urio us.

They’re w ond erin g, “ W hat e xactl y d oes th is m ean f o r m y b usin ess? ” o r e v en b ette r, “ W hat

els e

d on’t

I k no w ?”

This is th e p iv ot p oin t o f a ny e ffe cti v e C om merc ia l T eachin g c o nv ers a ti o n. W hen y o ur c usto m er

sa ys, “ H uh, I n ev er th o ught a b out it th at w ay b efo re ,” th ey’re c le arly te llin g y o u th ey’re e ngaged ,

mayb e e v en a l ittl e u nse ttl e d . A nd a s c usto m ers th em se lv es h av e to ld u s, th at’ s e xactl y w hat th ey w ere

ho pin g fo r w hen th ey sa t d ow n w ith yo u in th e fir s t p la ce. T hat’ s w hen th e co nv ers a ti o n its e lf

beco m es s o m eth in g w orth p ayin g f o r.

Sti ll, ju st because w e’v e help ed th em

se e

th in gs diffe re ntl y doesn ’t m ean w e’v e necessa rily

pers u ad ed th em to

do

th in gs d iffe re ntl y . T hat’ s n ext— and i t’ s j u st a s i m porta nt. Com merc ia l T each in g R ule # 3: C ata ly ze A ctio n

I n a w orld o f l im ite d r e so urc es a nd c o m peti n g p rio riti e s, i t’ s n o t e no ugh to c hange th e w ay c usto m ers

t h in k. Y ou’v e u lti m ate ly g o t to g et th em to a ct. W e o fte n j o ke a b out th e c usto m er w ho r e sp ond s to y o ur

r e fr a m e w ith , “ H uh, I n ev er th o ught a b out i t th at w ay b efo re ! . . . I w ond er w hat’ s f o r l u nch . . .” L ik e

D oug, th e d og in th e m ovie

Up

w ho b eco m es c o m ple te ly d is tr a cte d e v ery ti m e h e s e es a s q uir re l,

c usto m ers e asily lo se fo cus. S o if y o u w ant th em to ta ke a cti o n, y o u’ll n eed to b uild a c o m pellin g

b usin ess c ase f o r w hy a cti o n m atte rs i n th e f ir s t p la ce.

This i s w ell- tr o dden g ro und . F or m ost s u p plie rs , th e m ove to “ so lu ti o ns” i s g ro und ed i n a n e ffo rt to

j u sti fy p re m iu m p ric es f o r b und le d p ro ducts a nd s e rv ic es. A s a r e su lt, th ey’v e i n v este d h uge a m ounts

o f ti m e a nd m oney in a w id e r a nge o f to ols d esig ned to h elp c usto m ers c alc ula te th e “ R O I” o r “ to ta l

c o st o f o w ners h ip ” o f th eir o ffe rin gs— usu ally a cco m panie d b y s a le s r e p s’ e nth usia sti c a ssu ra nces o f

t h e “ life ti m e v alu e” o f th eir p ro ducts . “ Y es, w e m ig ht c o st a l ittl e m ore u p f r o nt, b ut l o ok a t w hat y o u

c an s a v e o ver th e n ext fo ur y ears ! O ur s o lu ti o n p ra cti c ally p ays fo r its e lf!” U nle ss y o u c an c o nv in ce

y o ur c usto m ers th ey’ll g et i n cre m enta l v alu e f o r th at p re m iu m p ric e, y o ur s o lu ti o n s tr a te gy i s d oom ed

t o f a il.

In a C om merc ia l T eachin g a p pro ach, th is is e xactl y w here w e fin d th e b ig gest d iffe re nce b etw een

c o m panie s w ho

belie ve

th ey d o th is w ell a nd th o se w ho

actu ally

d o th is w ell. T hat’ s b ecause a w ell-

e xecute d te achin g c o nv ers a ti o n is n ’t a b out th e s u p plie r’s s o lu ti o n a t a ll— at le ast n o t in iti a lly . It’ s

a b out th e c usto m er’s b usin ess, la yin g o ut a n a lte rn ati v e m eans to e ith er s a v e m oney o r m ake m oney

t h ey’d p re v io usly o verlo oked . In a c o nv ers a ti o n lik e th at, tr a d iti o nal R O I c alc ula ti o ns p ro ve u se le ss

b ecause th ey’re f o cuse d o n th e w ro ng th in g.

Nearly e v ery R O I c alc ula to r w e k no w o f is b uilt to h elp c usto m ers c alc ula te th e r e tu rn o n b uyin g

t h e s u p plie r’s s o lu ti o n. B ut b efo re y o u c o nv in ce c usto m ers to ta ke th at a cti o n, y o u f ir s t h av e to s h o w

t h em w hy th e in sig ht y o u ju st s h are d w ith th em m erits a ny a cti o n a t a ll, e sp ecia lly w hen th at in sig ht

c o m pete s d ir e ctl y w ith c o nv enti o nal w is d om . T o th at e nd , th e b est R O I c alc ula to rs in a te achin g

a p pro ach h av e n o th in g to d o w ith y o ur s o lu ti o n a t a ll. R ath er, th ey h elp c usto m ers c alc ula te th e c o sts

t h ey’re i n currin g o r th e r e tu rn s th ey’re f o rg o in g b y f a ilin g to a ct o n th e o pportu nity y o u’v e j u st ta ught

t h em th ey’v e o verlo oked .

If yo u’re go in g to b uild an R O I calc ula to r, m ake su re it calc ula te s th e re tu rn o n p urs u in g th e

r e fr a m e, n o t p urc hasin g y o ur p ro ducts . B efo re th ey b uy a nyth in g, c usto m ers fir s t n eed to u nd ers ta nd

w hat’ s i n i t f o r th em to f ix th eir p ro ble m . Com merc ia l T each in g R ule # 4: S ca le A cro ss C usto m ers

D one w ell, C om merc ia l T eachin g is m uch m ore th an sim ply an effe cti v e sa le s te chniq ue. It’ s a

p ow erfu l c o m merc ia l s tr a te gy. T o b e s u re , it a b so lu te ly w ork s w ell a t th e in d iv id ual d eal le v el, a s

C halle nger r e p s o pportu nis ti c ally u nco ver o ccasio ns to te ach c usto m ers f r e sh i n sig hts ta ilo re d to th eir

s p ecific co nte xt. H ow ev er, th ere are a num ber of im porta nt re aso ns w hy th e ap pro ach is

u nq uesti o nab ly m ore e ffe cti v e w hen d ep lo yed s e gm ent b y s e gm ent r a th er th an c usto m er b y c usto m er.

Fro m a ta cti c al p ers p ecti v e, it’ s no t re alis ti c o r fa ir to exp ect yo ur re p s to und ers ta nd th eir

c usto m ers ’ b usin ess b ette r th an th ey d o th em se lv es w ith o ut a t l e ast s o m e o rg aniz a ti o nal s u p port. Y our

c o re p erfo rm ers w ill s tr u ggle m ig hti ly w ith th at ta sk n o m atte r h o w m uch y o u tr a in th em — esp ecia lly

i f th ey w ork a cro ss a d iv ers e c usto m er b ase .

But im agin e if y o u c o uld p ro vid e th o se s a m e re p s w ith a m anageab ly s m all s e t o f w ell- s c rip te d

i n sig hts a lo ng w ith tw o o r th re e e asy -to -re m em ber d ia gno sti c q uesti o ns d esig ned to m ap th e rig ht

i n sig ht to th e r ig ht c usto m er. T hen th ey’d b e in a m uch b ette r p ositi o n to te ach. It w ould s ig nific antl y

s h ift th e b urd en o f effe cti v e need s d ia gno sis aw ay fr o m fr o ntl in e sa le s re p s and b ack in to th e

o rg aniz a ti o n, w here y o u’v e g o t b oth th e d ep th o f s k ill a nd th e b re ad th o f i n sig ht n ecessa ry to f ig ure i t

o ut i n a d vance.

For th is a p pro ach to tr u ly w ork , y o u n eed a s m all n um ber o f p ow erfu l i n sig hts th at n atu ra lly l e ad to

a n ev en sm alle r num ber o f uniq ue so lu ti o ns, all ap plic ab le acro ss th e b ro ad est p ossib le se t o f

c usto m ers . I n o th er w ord s, y o u n eed s c ale . C om merc ia l T eachin g i s d efin ite ly

not

s o m eth in g y o u ju st

w ant to l e av e i n th e h and s o f i n d iv id ual r e p s.

Com merc ia l T eachin g als o re q uir e s yo u to th in k v ery d iffe re ntl y ab out custo m er se gm enta ti o n.

W hile tr a d iti o nal se gm enta ti o n sc hem es lik e g eo gra p hy, p ro duct silo , o r in d ustr y v erti c al m ay b e

s u ffic ie nt fo r s a le s r e p d ep lo ym ent, th e c o m panie s th at d o b est a t th is a p pro ach h av e le arn ed to a ls o

s e gm ent c usto m ers b y n eed o r b ehav io r. If y o u c an fin d a g ro up o f c usto m ers w ith s im ila r n eed s—

i r re sp ecti v e o f w here th ey a re o r w hat th ey s e ll— th o se c usto m ers w ill lik ely a ll re act in a s im ila r

f a sh io n to a c o m mon s e t o f in sig hts . F or e xam ple , w e h av e s e en C om merc ia l T eachin g w ork v ery

e ffe cti v ely a ro und a c o m mon n eed to f r e e u p c ash , o r r e d uce e m plo yee c hurn , o r i m pro ve w ork p la ce

s a fe ty . I n e ach o f th ese c ase s, th e s u p plie rs i n q uesti o n h elp ed c usto m ers th in k a b out th at n eed i n n ew

a nd su rp ris in g w ays b y re fr a m in g th eir th in kin g, c o nv in cin gly la yin g o ut th e fu lly lo ad ed c o sts o f

i n acti o n, a nd th en p ro vid in g a c re d ib le c o urs e o f a cti o n th at n atu ra lly le d b ack to th e su p plie r’s

u niq ue so lu ti o n. A nd each did it acro ss la rg e gro up s of custo m ers w ho und er any tr a d iti o nal

s e gm enta ti o n s tr a te gy w ould h av e a p peare d , s u p erfic ia lly a t le ast, to h av e n o th in g in c o m mon. T he

c o m mon d eno m in ato r fo r in sig ht, in o th er w ord s, is n ’t g eo gra p hy, o r s iz e , o r in d ustr y . It’ s a c o m mon

s e t o f n eed s.

We’v e d one a g re at d eal o f w ork a t th e M ark eti n g L ead ers h ip C ouncil a cro ss th e la st th re e y ears

h elp in g c lie nts d ev elo p a nd im ple m ent v ario us n eed s-b ase d se gm enta ti o n te chniq ues, b ase d o n a

n um ber o f b est p ra cti c es d ev elo ped a t s o m e o f th e w orld ’s le ad in g B 2B c o m panie s. T he o ne th in g

e v ery c o m pany th at’ s g o ne d ow n th is p ath h as d is c o vere d i s th is : N eed s a naly sis i s n o t s o m eth in g y o u

c an a ffo rd to l e av e i n th e h and s o f y o ur i n d iv id ual r e p s. I f y o ur r e p s’ p rim ary g o al g o in g i n to a s a le s

c all is to “ d is c o ver” th e c usto m er’s n eed s, y o u’v e lo st th e b attl e b efo re y o u’v e e v en b egun to fig ht,

b ecause , f r a nkly , y o ur c usto m ers d on’t w ant to h av e th at c o nv ers a ti o n.

Alte rn ati v ely , C om merc ia l T eachin g eq uip s re p s to te ach custo m ers w hat th ey re ally need b y challe ngin g th e w ay th ey th in k a b out th eir b usin ess a lto geth er, p ro vid in g th em w ith n ew m eans to

ad dre ss th eir to ughest p ro ble m s in w ays th ey w ould h av e n ev er id enti fie d o n th eir o w n. G ra nte d ,

th ere a re s o m e i m porta nt c o nd iti o ns th at m ust b e m et i n o rd er f o r th is a p pro ach to w ork . C om merc ia l

Teachin g m ust le ad to y o ur u niq ue s tr e ngth s, c halle nge c usto m ers ’ a ssu m pti o ns, c ata ly ze a cti o n, a nd

sc ale a cro ss c usto m ers . B ut w hen th ese c o nd iti o ns a re m et, it w ork s— pheno m enally w ell, in fa ct.

And th e re aso n w hy, as w e sa w , is b ecause m ore th an anyth in g els e custo m ers are lo okin g to

su p plie rs to c halle nge th eir th in kin g a nd te ach th em s o m eth in g th ey d on’t k no w .

That sa id , o nce y o u’v e la id th e g ro und w ork fo r e ffe cti v e C om merc ia l T eachin g, y o ur re p s sti ll

hav e to g o o ut a nd a ctu ally

ta lk

to c usto m ers . I f th ey d on’t h av e th e s k ills to c halle nge, e v en th e m ost

pow erfu l i n sig hts w ill f a ll o n d eaf e ars . S o w hat d oes a “ te achin g c o nv ers a ti o n” a ctu ally s o und l ik e?

Is it r e ally a ll th at d iffe re nt? A bso lu te ly . It’ s n o t ju st th at C halle ngers te ach th at s e ts th em a p art, it’ s

th e

way

th at th ey te ach th at re ally m atte rs m ost. W orld -c la ss te achin g c o nv ers a ti o ns, it tu rn s o ut,

fo llo w a v ery s p ecific c ho re o gra p hy, o ne th at ta kes a tr a d iti o nal s a le s c o nv ers a ti o n a nd c o m ple te ly

sta nd s i t o n i ts h ead . L et’ s l o ok a t th at n ext. 5

T EA CHIN G F O R D IF FER EN TIA T IO N ( P A RT 2 ): H O W T O B U IL D I N SIG HT-L ED

CO NVER SAT IO NS

O NCE Y O U’V E A G REED

o n th e u niq ue b enefits th at c le arly s e t y o u a p art f r o m th e c o m peti ti o n a nd

y o u’v e id enti fie d a se t o f c o m pellin g in sig hts th at te ach c usto m ers a n ew w ay to c o m pete m ore

e ffe cti v ely , ho w do yo u put it all to geth er? W ell, if yo u w ere to m ap a w orld -c la ss te achin g

c o nv ers a ti o n— or te achin g “ p itc h”— yo u’d fin d it m oves th ro ugh six d is c re te ste p s, e ach b uild in g

d ir e ctl y to th e n ext.

But befo re w e get to th e ste p s th em se lv es, it’ s im porta nt to no te th e very str o ng em oti o nal

c o m ponent o f a w ell- d esig ned te achin g p itc h. F ra nkly , th is is n ’t s o m uch a b out d eliv erin g a fo rm al

p re se nta ti o n a s i t’ s a b out te llin g a c o m pellin g s to ry . A lo ng th e w ay, th ere s h o uld b e s o m e r e al d ra m a,

p erh ap s a b it o f s u sp ense , a nd m ayb e e v en a s u rp ris e o r tw o. U lti m ate ly , th e g o al i s to ta ke c usto m ers

o n a r o lle r-c o aste r r id e, l e ad in g f ir s t to a r a th er d ark p la ce b efo re s h o w in g th em th e l ig ht a t th e e nd o f

t h e tu nnel. A nd th at l ig ht, o f c o urs e , i s y o ur s o lu ti o n.

Sourc e: S ale s E xecuti v e C ouncil r e se arc h

Fig ure 5 .1 .

D eco nstr u cti o n o f a C om merc ia l T eachin g P itc h A P U RPO SE FU L C H OREO GRAPH Y

I f y o u’re g o in g to su ccessfu lly c o nv in ce re lu cta nt c usto m ers to n o t o nly th in k d iffe re ntl y , b ut a ct

d iffe re ntl y — in w hat i s a lm ost d efin iti o nally g o in g to b e a d is ru p ti v e m anner— th en i t’ s n o t e no ugh f o r

y o ur te achin g p itc h to s im ply c o nv ey a “ co m pellin g b usin ess c ase ” w ith d ata , c harts , a nd g ra p hs. N o

o ne e v er s o ld a nyth in g o ff a s p re ad sh eet a lo ne. D one w ell, a te achin g p itc h m akes c usto m ers f e el s o rt

o f s ic k a b out a ll th e m oney th ey’re w asti n g, o r r e v enue th ey’re m is sin g, o r r is k th ey’re u nkno w in gly

e xp ose d to . B ut if y o ur s to ry fa ils to e ngage b oth s id es o f th e b ra in s im ulta neo usly — th e r a ti o nal a nd

t h e e m oti o nal— it’ s to o e asy fo r y o ur c usto m er to m ake n o d ecis io n e v en o ver a g o od d ecis io n, a s

l o gic a lo ne i s r a re ly e no ugh to o verc o m e th e s ta tu s q uo . D is ru p ti v e c hange i s a s m uch a b out f o llo w in g

y o ur g ut a s i t i s a b out f o llo w in g y o ur h ead .

So w ith th at i n m in d , l e t’ s r e v ie w th e s ix s te p s o f a w orld -c la ss te achin g p itc h. Ste p 1 : T he W arm er

A fte r in iti a l fo rm aliti e s (e .g ., in tr o ducti o ns, ti m e c heck, a gend a se tti n g), a w ell- d esig ned te achin g

p itc h s ta rts o ff w ith y o ur a sse ssm ent o f y o ur c usto m er’s k ey c halle nges. R ath er th an a sk in g, “ W hat’ s

k eep in g y o u u p a t n ig ht? ” y o u la y o ut w hat y o u’re s e ein g a nd h earin g a s k ey c halle nges a t s im ila r

c o m panie s. I f y o u h av e i t, th is i s a g re at p la ce to p ro vid e b enchm ark in g d ata . A t th e v ery l e ast, th is i s

w here y o u s h are a necd ote s fr o m o th er c o m panie s th at c ap tu re th e c halle nges m ost lik ely o f h ig hest

c o ncern to y o ur c usto m er in w ays th at c o rro bora te th eir o w n e xp erie nce. (N ev er u nd ere sti m ate th e

v alu e in b ein g a b le to d em onstr a te to y o ur c usto m ers th at th ey’re n o t a lo ne w hen it c o m es to th eir

m ost p re ssin g c halle nges.) Y ou th en c o nclu d e y o ur r e v ie w b y a sk in g f o r th eir r e acti o ns. W hen y o u p ut

i t a ll to geth er, i t s h o uld s o und s o m eth in g l ik e, “ W e’v e w ork ed w ith a n um ber o f c o m panie s s im ila r to

y o urs , a nd w e’v e fo und th at th ese th re e c halle nges c o m e u p a gain a nd a gain a s b y fa r th e m ost

t r o ub lin g. I s th at w hat y o u’re s e ein g to o, o r w ould y o u a d d s o m eth in g e ls e to th e l is t? ”

The w ho le p oin t o f s te p 1 , o f c o urs e , i s to b uild c re d ib ility . E sse nti a lly , w hat y o u’re s a yin g to y o ur

c usto m er i s , “ I u nd ers ta nd y o ur w orld ,” a nd “ I’ m n o t h ere to w aste y o ur ti m e a sk in g y o u to te ach m e

a b out yo ur busin ess.” It’ s an ap pro ach w e’v e dub bed “H yp oth esis -B ase d S ellin g.” R ath er th an

l e ad in g w ith o pen-e nd ed

questio ns

a b out c usto m ers ’ n eed s, y o u le ad w ith

hyp oth ese s

o f c usto m ers ’

n eed s, in fo rm ed by yo ur ow n exp erie nce and re se arc h. U lti m ate ly , custo m ers su ffe rin g fr o m

“ so lu ti o ns f a ti g ue” l o ve i t n o t o nly b ecause i t m akes th e e nti r e s a le b oth f a ste r a nd e asie r f o r th em , b ut

b ecause i t f e els m uch m ore l ik e a “ get” th an a “ giv e”— th ey g et y o ur i n fo rm ed p ers p ecti v e r a th er th an

h av in g to e d ucate y o u w ith in fo rm ati o n y o u sh o uld h av e b een a b le to fig ure o ut o n y o ur o w n. A

C om merc ia l T eachin g p itc h c uts r ig ht to th e c hase . I t f e els e ffic ie nt. I t h o no rs th e c usto m er’s ti m e a nd

s h o w s th at y o u’v e d one y o ur h o m ew ork . I n o th er w ord s, y o u’v e j u st e sta b lis h ed y o urs e lf a s s o m eo ne

w orth ta lk in g to . O r, a t th e v ery le ast, fo r th e e sp ecia lly re sis ta nt c usto m ers o ut th ere , y o u’v e ju st

b ought y o urs e lf a no th er f iv e m in ute s.

So w hat n ext? W hat a re y o u g o in g to d o w ith th e g o odw ill y o u’v e ju st e sta b lis h ed ? P re se nt y o ur

s o lu ti o n? L ay o ut y o ur “ v alu e p ro positi o n”? T hat’ s th e

la st

th in g y o u w ant to d o n o w ! A lth o ugh it is

t h e n ext ste p th ey’re p ro bab ly e xp ecti n g, a nd it’ s a b so lu te ly th e n ext th in g a c o re -p erfo rm in g re p

w ould d o— and w ith o ut a d oub t w hat y o ur c o m peti to r’s s a le s r e p d id w hen h e w as s itti n g i n th e s a m e

c usto m er’s o ffic e a n h o ur e arlie r.

Thin k a b out it. Y ou ju st g o t y o ur c usto m er to w arm u p to y o u b y ta lk in g a b out th eir b usin ess. W hy

i n th e w orld w ould y o u w ant to ru in a ll th at g o odw ill b y sp outi n g o ff a b out

yo ur

b usin ess? Y ou

h av en’t y et g iv en th em a re aso n to c are . In ste ad , n o w y o u g o to a p la ce y o ur c usto m er n ev er s a w

c o m in g: th e R efr a m e. Ste p 2 : T he R efr a m e

T his i s

th e

c entr a l m om ent o f a C om merc ia l T eachin g p itc h, a s th e e nti r e c o nv ers a ti o n p iv ots o ff w hat

y o u’re a b out to d o n ext.

Build in g o ff th e c halle nges y o ur c usto m er ju st a ckno w le d ged in s te p 1 , y o u n o w in tr o duce a n ew

p ers p ecti v e th at c o nnects th o se c halle nges to e ith er a b ig ger p ro ble m o r a b ig ger o pportu nity th an th ey

e v er re aliz e d th ey h ad . M in d y o u, y o u’re n o t e xp ecte d to a ctu ally c o m e u p w ith th e in sig ht in th e

m om ent. F or re aso ns w e ad dre sse d in th e pre v io us se cti o n, th at kin d of sp onta neo us fla sh of

b rillia nce is n o t o nly to o h ard , it’ s a ctu ally a b ad id ea. R ath er, th is is s o m eth in g y o u’v e c o m e w ell

p re p are d to d is c uss. ( In f a ct, i t m ay h av e b een a b rie f m enti o n o f th is i n sig ht th at w on y o u th e v is it i n

t h e f ir s t p la ce.) T hat s a id , a t th is p oin t, y o ur g o al i s n ’t to l a y o ut th e e xp la nati o ns a nd i m plic ati o ns o f

t h e in sig ht in a ny g re at d eta il— th at w ill c o m e in a fe w m in ute s. R ath er, th e R efr a m e is s im ply a b out

t h e in sig ht its e lf. It’ s ju st th e head lin e. A nd lik e any go od head lin e, yo ur go al is to catc h yo ur

c usto m er o ff g uard w ith a n u nexp ecte d v ie w poin t— to s u rp ris e th em , m ake th em c urio us, a nd g et th em

w anti n g to h ear m ore .

Rem em ber, th e re acti o n y o u’re lo okin g fo r h ere is d efin iti v ely n o t, “ Y es! I to ta lly a gre e! T hat’ s

e xactl y w hat w e’re w ork in g o n!” b ut ra th er, “ H uh, I n ev er th o ught o f it th at w ay b efo re .” If y o ur

c usto m er’s fir s t re acti o n to y o ur in sig ht is e nth usia sti c a gre em ent, th en y o u h av en’t a ctu ally ta ught

t h em a nyth in g. A nd th at’ s is a d angero us p la ce to b e. S ure , it a lw ays fe els g re at w hen y o ur c usto m er

s a ys, “ I a gre e!” B ut i f y o u’v e j u st a rti c ula te d a p ro ble m th ey’v e a lr e ad y th o ught o f, c hances a re p re tty

g o od th ey’v e a lr e ad y th o ught o f a s o lu ti o n to o. A t b est, y o u’re n o w “ te achin g a t th e m arg in s.” D oin g

t h is is a ctu ally b ad fo r

tw o

re aso ns. F ir s t, if y o u fa il to p ro vid e u niq ue in sig ht, th en y o u fa il to

p ro vid e u niq ue v alu e. S eco nd , if y o ur c usto m ers h av e a lr e ad y b egun to c o nsid er p ossib le s o lu ti o ns,

y o u’v e l o st a s ig nific ant o pportu nity to s k ew th eir th in kin g to w ard y o ur s o lu ti o n. P ra cti c ally s p eakin g,

i t’ s lik e fa ilin g to g et a head o f th e R FP. Y ou’re

re sp ondin g

to c usto m ers ’ n eed s r a th er th an

defin in g

t h em . A nd th at’ s a r e cip e f o r i n cre ase d c o m moditi z a ti o n.

If y o u’re g o in g to r e fr a m e, th en b e s u re y o u r e ally r e fr a m e. T his i s n o t th e p la ce to b e ti m id , a s th e

e nti r e a p pro ach re sts o n y o ur a b ility to su rp ris e y o ur c usto m er a nd m ake th em c urio us fo r m ore

i n fo rm ati o n. Y ou’v e ju st b ought y o urs e lf a no th er fiv e m in ute s. S o w hat’ s n ext? W ell, y o u’v e s h o w n

y o ur c usto m er a d iffe re nt w ay to th in k a b out th eir b usin ess, n o w y o u’v e g o t to s h o w th em w hy it

m atte rs . Ste p 3 : R atio nal D ro w nin g

R ati o nal D ro w nin g i s w here y o u l a y o ut th e b usin ess c ase f o r w hy th e R efr a m e i n s te p 2 i s w orth y o ur

c usto m er’s ti m e a nd a tte nti o n.

So n o w it’ s ti m e fo r th e d ata , g ra p hs, ta b le s, a nd c harts y o u n eed to q uanti fy fo r th e c usto m er th e

t r u e, o fte n hid den, co st o f th e p ro ble m o r siz e o f th e o pportu nity th ey’d co m ple te ly o verlo oked .

R ati o nal D ro w nin g is th e n um bers -d riv en ra ti o nale fo r w hy y o ur c usto m er s h o uld th in k d iffe re ntl y

a b out th eir b usin ess, b ut p re se nte d s p ecific ally i n a w ay d esig ned to m ake th em s q uir m a l ittl e b it— to

f e el lik e th ey’re d ro w nin g. M ark ete rs o fte n r e fe r to th is a s th e “ F U D fa cto r” — fe ar, u ncerta in ty , a nd

d oub t. If y o ur p re se nta ti o n is d one w ell, th e c usto m er re acti o n in s te p 3 s h o uld b e s o m eth in g lik e,

“ W ow , I h ad n o id ea w e w ere w asti n g th at k in d o f m oney!” o r “ I’ d n ev er th o ught o f th is a s a n

o pportu nity b efo re . W e’v e g o t to g et a fte r th is o r w e’re g o in g to r e ally m is s o ut! ”

If y o u’re g o in g to p ut a n R O I c alc ula to r in fr o nt o f y o ur c usto m er, th is is w here it g o es. B ut ju st

r e m em ber th e R O I th at y o u’re c alc ula ti n g. In a w orld -c la ss te achin g p itc h a g o od R O I c alc ula to r

c alc ula te s th e R O I o n s o lv in g th e c halle nge y o u’v e j u st ta ught y o ur c usto m er th ey h av e, n o t th e R O I o n

b uyin g y o ur so lu ti o n. If y o ur R O I c alc ula to r is e xp lic itl y a b out y o ur p ro ducts a nd se rv ic es— as it

a lm ost in ev ita b ly is — th en y o u’re ta lk in g a b out th e w ro ng th in g. B efo re y o u d em onstr a te h o w y o ur

s o lu ti o n c an e co no m ic ally s o lv e a k ey c usto m er c halle nge, y o u’v e g o t to c o nv in ce th e c usto m er th at

t h at c halle nge i s w orth s o lv in g i n th e f ir s t p la ce.

Putti n g s te p s 2 a nd 3 to geth er, y o u’v e g o t to s h o w th em s o m eth in g n ew , a nd th en s h o w th em w hy i t

m atte rs . T his is w hat g o od te achin g is a ll a b out.

Gre a t

te achin g, h o w ev er, re q uir e s s o m eth in g e ls e :

e m oti o nal i m pact. Ste p 4 : E m otio nal I m pact

E m oti o nal Im pact is a ll a b out m akin g a b so lu te ly s u re th at th e c usto m er s e es th em se lv es in th e s to ry

y o u’re te llin g. T here ’s n o th in g m ore fr u str a ti n g th an la yin g o ut a c o m pellin g a rg um ent a nd h earin g

y o ur c usto m er s a y, “ Y eah, I s e e w hat y o u’re s a yin g, a nd I’ m s u re it m akes a lo t o f s e nse fo r a lo t o f

y o ur c usto m ers . B ut I’ m s tr u gglin g to s e e h o w th is a p plie s to u s. W e’re d iffe re nt.” U gh. T his is th e

s a le s v ers io n o f th at a w kw ard m om ent w hen y o ur d ate lo oks a t y o u a nd s a ys, “ It’ s n o t y o u. It’ s m e.”

C le arly , w hat th ey’re tr y in g to s a y i s , “ I h av e a b so lu te ly z e ro i n te re st i n a nyth in g y o u h av e to o ffe r.”

So w hat d o yo u d o no w ? H ow d o yo u co unte r th e “w e’re d iffe re nt” d efe nse ? F or th e co re -

p erfo rm in g re p , th e re sp onse is p re d ic ta b le . If o ne c hart w asn ’t e no ugh, tr y tw o. If th e P ow erP oin t

d eck d id n’t g et y o u th ere , se nd th e w hite p ap er. It’ s m ore o f th e sa m e. B ut sim ply re p eati n g th e

b usin ess c ase i n g re ate r d eta il w ill n ev er g et y o u p ast th e “ w e’re d iffe re nt” r e sp onse . T hat’ s b ecause

y o u’re so lv in g fo r th e w ro ng p ro ble m . T he p ro ble m is n ’t th at yo u’v e fa ile d to m ake a lo gic al

p re se nta ti o n, th e p ro ble m is y o u’v e fa ile d to m ake a n e m oti o nal c o nnecti o n. It’ s n o t th at th ey d on’t

b elie v e y o ur s to ry , it’ s ju st th at th ey d on’t s e e it a s

th eir

s to ry . Y ou n eed to g et th em to in te rn aliz e

w hat y o u’re te llin g th em .

So h o w d o y o u d o th at? N ow y o u’v e g o t to m ake i t p ers o nal. A nd th is i s w here a C halle nger r e p ’s

s to ry te llin g a b ility re ally c o m es in to p la y. A s th e n am e im plie s, E m oti o nal Im pact is n ’t a b out th e

n um bers ; it’ s a b out th e n arra ti v e. Y ou’v e g o t to p ain t a p ic tu re o f h o w o th er c o m panie s ju st lik e th e

c usto m er’s w ent d ow n a sim ila rly p ain fu l p ath b y engagin g in b ehav io r th at th e custo m er w ill

i m med ia te ly r e co gniz e a s ty p ic al o f th eir o w n c o m pany.

The s to ry , th ere fo re , s ta rts o ut w ith s o m eth in g l ik e, “ I u nd ers ta nd y o u’re a l ittl e b it d iffe re nt, b ut l e t

m e g iv e y o u a s e nse o f h o w w e’v e s e en th is p la y o ut a t s im ila r c o m panie s . . .” A nd f o r th is to w ork ,

w hate v er yo u sa y next has to

fe el

im med ia te ly fa m ilia r (w hic h is ano th er re aso n w hy a deep

u nd ers ta nd in g o f th e custo m er m ust b e acq uir e d

prio r

to th e sa le s call, no t ju st d urin g it) . T he

r e acti o ns y o u’re lo okin g fo r a re a r u efu l s h ake o f th e h ead , a w ry s m ile , a th o ughtf u l fa ra w ay lo ok.

W hy? B ecause y o u’re l o okin g f o r th e c usto m er to r e p la y th e s a m e s c enario i n th eir h ead a s i t

actu ally

h appen ed t o t h em i n t h eir o w n c o m pany

j u st l a st w eek. I d eally , th e c usto m er’s r e sp onse to y o ur s to ry

i s s o m eth in g lik e, “ W ow , it’ s lik e y o u w ork h ere o r s o m eth in g. Y eah, w e d o th at

all

th e ti m e. It ju st

k ills u s.” A nd th at is h o w y o u s la y th e d ra go n o f “ w e’re ju st d iffe re nt” : b y c re ati n g a n e m oti o nal

c o nnecti o n b etw een th e p ain in th e s to ry y o u’re te llin g a nd th e p ain y o ur c usto m er fe els e v ery d ay

i n sid e th eir o w n o rg aniz a ti o n. If y o ur c usto m er s ti ll th in ks th ey’re d iffe re nt a fte r s te p 4 , y o u e ith er

h av e th e w ro ng c usto m er o r th e w ro ng s to ry .

But if y o u a re s u ccessfu l, n o w y o u’v e g o t y o ur c usto m er b ought in to th e R efr a m e. T hey s e e th e

c halle nge o r o pportu nity a s th eir o w n, a nd n o w th ey’re l o okin g f o r a s o lu ti o n. Ste p 5 : A N ew W ay

C om in g i n to s te p 5 y o u’v e c o nv in ced th e c usto m er o f th e p ro ble m . N ow y o u’v e g o t to c o nv in ce th em

o f th e s o lu ti o n. T his i s a p oin t- b y-p oin t r e v ie w o f th e s p ecific c ap ab iliti e s th ey w ould n eed to h av e i n

o rd er to m ake g o od o n w hate v er o pportu nity to m ake m oney, s a v e m oney, o r m iti g ate r is k th at y o u’v e

j u st c o nv in ced th em th ey’re f a cin g. A s te m pti n g a s i t m ig ht b e a t th is p oin t to l a unch i n to a r e v ie w o f

h o w y o u c an h elp , s te p 5 is s ti ll a b out th e

so lu tio n

, n o t a b out th e

su pplie r

. F acin g a c usto m er w ho

e nth usia sti c ally agre es th at th ey’v e go t th e v ery challe nge yo ur so lu ti o n d ir e ctl y ad dre sse s, it is

d eep ly te m pti n g to ta lk s p ecific ally a b out h o w y o u c an h elp . F or m ost re p s it s im ply fe els lik e th e

o bvio us th in g to d o. B ut s te p 5 i s n ’t a s to ry a b out h o w m uch b ette r c usto m ers ’ l iv es w ould b e i f th ey

b ought y o ur s tu ff (w hic h is w hat m ost re p s w ant to ta lk a b out) , it’ s a b out s h o w in g c usto m ers h o w

m uch b ette r th eir l ife w ould b e i f th ey j u st a cte d d iffe re ntl y . I t’ s a b out b ehav in g d iffe re ntl y , n o t b uyin g

d iffe re ntl y .

Don’t r u sh th is . B efo re th ey b uy

yo ur

s o lu ti o n, th e c usto m er h as to b uy

th e

s o lu ti o n. Y ou’re l o okin g

f o r y o ur c usto m er to s a y s o m eth in g l ik e, “ Y ou’re r ig ht, th at m akes to ta l s e nse . T hat’ s w hat w e n eed to

d o,” o r “ T hat’ s th e k in d o f c o m pany I w ant u s to b e.”

Now

th ey’re r e ad y f o r s te p 6 , Y our S olu ti o n. Ste p 6 : Y our S olu tio n

I f s te p 5 i s a b out g etti n g c usto m ers b ought i n to a cti n g d iffe re ntl y , th e g o al o f s te p 6 i s to d em onstr a te

h o w y o ur s o lu ti o n i s b ette r a b le th an a nyo ne e ls e ’s to e q uip th em to a ct d iffe re ntl y . I n m any w ays, o f

a ll s ix s te p s, th is o ne is th e m ost s tr a ig htf o rw ard , a s it’ s w hat r e p s h av e b een tr a in ed to d o fr o m th e

v ery b egin nin g. T his is w here y o u la y o ut th e s p ecific w ays y o u c an d eliv er th e s o lu ti o n th ey’v e ju st

a gre ed to in s te p 5 b ette r th an a nyo ne e ls e . It’ s a ls o w here a ll o f th e h ard w ork a ro und id enti fy in g

y o ur u niq ue c ap ab iliti e s p ays o ff, b ecause th ey a re fr o nt a nd c ente r in s te p 6 . A fte r a ll, it w ould b e

a b so lu te ly c ru sh in g to g et y o ur c usto m er a ll th e w ay to s te p 6 a nd th en h av e th at d eal g o o ut to a n R FP

t h at y o u c o uld n’t e asily w in . If y o ur c o m peti ti o n is s ti ll in th e ru nnin g a t th is p oin t, th en y o u h av e

e ith er fa ile d to id enti fy cap ab iliti e s th at are tr u ly uniq ue o r yo u hav e fa ile d to le ad to th em as

c o nv in cin gly a s y o u’d h o ped .

If, h o w ev er, y o u’v e g o t th is rig ht, in ste p s 1 –6 y o u’v e a d dre sse d b oth a sp ects o f C om merc ia l

T eachin g— th e “ co m merc ia l” a nd th e “ te achin g”— in o ne c o nv ers a ti o n. Y ou’v e ta ught th e c usto m er

s o m eth in g n ew a nd v alu ab le a b out th eir b usin ess (w hic h is w hat th ey w ere lo okin g fo r fr o m th e

c o nv ers a ti o n), in a w ay th at sp ecific ally le ad s th em to v alu e y o ur c ap ab iliti e s o ver th o se o f th e

c o m peti ti o n ( w hic h i s w hat y o u w ere l o okin g f o r f r o m th e c o nv ers a ti o n).

Now , w hen y o u l o ok b ack a t a ll s ix s te p s to geth er, a sk y o urs e lf th e f o llo w in g q uesti o n: W here d oes

t h e

su pplie r

fir s t e nte r th e c o nv ers a ti o n? N oti c e it’ s n o t u nti l th e v ery e nd in s te p 6 . A nd fo r m any

r e p s, th is i s c o m ple te ly c o unte rin tu iti v e. A fte r a ll, i f I ’ m g o in g to s e ll m y s o lu ti o n to a c usto m er, th en

t h e fir s t th in g I n eed to ta lk a b out is

my so lu tio n

—what it d oes, h o w it’ s d iffe re nt, h o w it h elp s.

R ig ht? W ro ng! T hat’ s n o t th e f ir s t th in g y o u n eed to ta lk a b out, b ut th e

la st

, fo r a v ery s im ple r e aso n:

Y our c usto m er d oesn ’t c are .

That f a ct th at y o ur n ew ly d esig ned X Z-6 90 r u ns 1 5 p erc ent f a ste r, q uie te r, c o ole r, a nd c heap er th an

t h e c o m peti ti o n j u st i s n ’t th at i n te re sti n g to m ost c usto m ers . I f i t

is

, th en w hy b oth er w ith a s a le s c all

a t a ll? J u st s e nd th em a q uo te a nd ta ke th e o rd er o ver th e p ho ne. B ette r y et, s e ll it th ro ugh a n e -s to re

o n th e I n te rn et a nd g et r id o f y o ur s a le s f o rc e a lto geth er.

If, o n th e o th er h and , y o u’re g o in g to ta ke s ix ty m in ute s o f y o ur c usto m er’s p re cio us ti m e f o r a f a ce-

t o -fa ce m eeti n g, y o u’d b ette r m ake su re th at w hate v er y o u d o w ith th at ti m e is v alu ab le to y o ur

c usto m er. L is te nin g to a re v ie w o f h o w y o ur X Z-6 90 is g o in g to s a v e th em ti m e a nd m oney is n ’t.

T alk in g a b out th e c usto m er’s b usin ess i n w ays th at h elp th em b oost p ro ducti v ity i s .

Rem em ber, in th e C om merc ia l T eachin g w orld e v ery th in g is b uilt b ack fr o m th e fin d in g th at, in

y o ur c usto m ers ’ e yes, y o ur p rim ary v alu e a s a s u p plie r i s y o ur a b ility to

te a ch

th em s o m eth in g, n o t to

s e ll

th em so m eth in g. In th e te achin g w orld , th e p itc h is n ’t a b out th e su p plie r a t a ll. It’ s a b out th e

c usto m er. A s a r e su lt, th e b est s a le s r e p s h av e f o und th at y o u c an’t w in c usto m ers ’ i n te re st a nd l o yalty

i f y o u l e ad w ith y o ur d iffe re nti a to rs — all y o ur p ro ducts , s e rv ic es, a nd s o lu ti o ns— no m atte r h o w g o od

t h ey a re . I n ste ad , th e b est s a le s c o nv ers a ti o ns p re se nt th e c usto m er w ith a c o m pellin g s to ry a b out th eir

b usin ess

fir st

, te ach th em s o m eth in g n ew , a nd th en l e ad

to

th eir d iffe re nti a to rs .

By p la cin g y o ur u niq ue str e ngth s in c o nte xt a t th e e nd o f a h ig hly c re d ib le te achin g p itc h y o u

c o m ple te ly c hange th e c usto m er’s d is p ositi o n to w ard y o ur o ffe rin g. B ut to g et th ere , th ere h as to b e a

f lo w to th e c o nv ers a ti o n, a p urp ose fu l c ho re o gra p hy w here y o ur s o lu ti o n is th e n atu ra l o utg ro w th o f

y o ur te achin g, r a th er th an th e s u b je ct o f y o ur te achin g. A nd th at’ s a h uge d iffe re nce. D on’t le ad

with

,

l e ad

to

. R em em ber, th e r e al v alu e o f th e i n te ra cti o n i s n ’t w hat y o u s e ll; i t’ s th e i n sig ht y o u p ro vid e a s part o f th e s a le s i n te ra cti o n i ts e lf. A L O OK I N T H E M IR RO R

T his te achin g c ho re o gra p hy a llo w s y o u to v ery c o ncre te ly a ud it a nd i m pro ve th e s a le s c o nv ers a ti o ns

y o u’re h av in g w ith c usto m ers r ig ht n o w . H ow c lo se ly d oes

yo ur

p itc h fo llo w th is p ath ? D oes it le ad

w ith , o r l e ad to ? H ere ’s a s h o rt q uiz to c o m pare y o ur c urre nt a p pro ach w ith w hat y o u s e e h ere . T hin k

r ig ht n o w a b out w hate v er p ie ce o f c o lla te ra l, o r s lid e d eck, o r c ap ab ility b ro chure y o u ty p ic ally ta ke

i n to a c usto m er m eeti n g. S pecific ally , th in k a b out th e fir s t fo ur o r fiv e p ages. W hat a re th ey a b out?

M ost o f th e ti m e i t’ s s o m eth in g l ik e th is :

• W hat y o u b elie v e in a s a c o m pany. (T op fa v orite s in clu d e “ a c le aner w orld ,” “ se rv in g o ur

custo m ers ,” “in no vati n g fo r th e fu tu re ,” “o ur 150 years of exp erie nce,” “o ur te am of

exp erie nced p ro fe ssio nals d ed ic ate d to h elp in g o ur c usto m ers a chie v e th eir g o als .” )

• A re v ie w o f a ll o f y o ur c ap ab iliti e s. (A fte r a ll, y o u to ok th e ti m e a nd m oney to b uild o ut a

so lu ti o ns c ap ab ility , a nd y o u w ant to m ake s u re y o ur c usto m ers u nd ers ta nd a ll o f th e g re at

ways y o u c an h elp . T here ’s n o th in g m ore f r u str a ti n g th an c usto m ers w ho d on’t f u lly a p pre cia te

all th e g re at th in gs y o u c an d o f o r th em .)

• A lis t o f y o ur to p p artn ers a nd c usto m ers , p re fe ra b ly a cco m panie d b y a s m any o f th eir fu ll-

co lo r lo go s a s p ossib le . (N oth in g c o nv eys c re d ib ility b ette r th an a lo ng lis t o f w ell- k no w n

custo m ers w ho h av e p la ced th eir tr u st i n y o u, r ig ht? )

• A m ap o f a ll o f y o ur l o cati o ns a ll o ver th e w orld . ( If y o ur c usto m ers a re g o in g g lo bal, y o u w ant

th em to k no w y o u’re r ig ht th ere w ith th em , w here v er th at m ig ht b e.)

Sound fa m ilia r? A re th e fir s t fo ur p ages o f yo ur sa le s m ate ria ls all ab out yo u, o r ab out th e

c usto m er? A lm ost i n ev ita b ly , i t’ s th e f o rm er. N ot o nly d o m ost r e p s l e ad w ith , r a th er th an l e ad to , b ut

a lm ost all o f th e sa le s to ols at th eir d is p osa l d o th e sa m e th in g. It’ s a tr e nd as p re d ic ta b le fo r

o rg aniz a ti o ns a s i t i s f o r i n d iv id uals .

So if yo u’re go in g to b uild C halle nger re p s and ask th em to te ach yo ur custo m ers , fo r m any

c o m panie s o ne o f th e f ir s t s te p s w ill i n ev ita b ly h av e to b e a p re tty s ig nific ant r e v ie w o f th e m ate ria ls

y o u p ro vid e th em w ith to d o th at. DEV ELO PIN G A P U RPO SE FU L C H OREO GRAPH Y

S o h o w d o y o u

build

a C om merc ia l T eachin g m essa ge? T he p la ce to b egin i s a ctu ally a t th e e nd w ith

s te p 6 , y o ur s o lu ti o n. Y ou c an’t b uild a c o m pellin g s to ry u nle ss y o u fir s t k no w w hat it’ s b uild in g to .

Y ou’v e g o t to h av e b oth c la rity a nd a gre em ent a cro ss y o ur o rg aniz a ti o n a ro und th e u niq ue b enefits th at

o nly y o u c an o ffe r y o ur c usto m ers . T hat s a id , a s y o u n ail th o se b enefits d ow n, y o u’ll w ant to f o cus i n

p arti c ula r o n th e o nes y o ur c usto m ers c urre ntl y

under

ap pre cia te . N ow th at m ig ht f e el c o unte rin tu iti v e

a t fir s t. W ould n’t y o u d o th e o pposite ? F ocus o n th e u niq ue b enefits th at y o ur c usto m ers tr u ly v alu e?

A fte r a ll, th at’ s M ark eti n g 1 01, r ig ht? E xactl y .

But if y o u w ant to

te a ch

c usto m ers s o m eth in g n ew a nd n o t ju st r e in fo rc e w hat th ey a lr e ad y k no w ,

y o u’ll n eed to e nsu re th at th e “ p unch l in e” o f th at te achin g c o nta in s a n e le m ent o f s u rp ris e a s w ell— a

n ew a nd u nexp ecte d w ay to th in k a b out h o w y o u c an h elp . A lte rn ati v ely , if y o ur c usto m ers a lr e ad y

p la ce h ig h v alu e o n y o ur b enefits o ver th o se o f th e c o m peti ti o n, y o u lik ely d on’t n eed to te ach th em

a nyth in g a t a ll. Ju st ta ke th eir o rd er. B ut b ew are : B y fo cusin g so le ly o n th e

kn ow n

v alu e o f y o ur

o ffe rin g, y o u fo rg o a n o pportu nity to c halle nge c usto m ers ’ th in kin g, w hic h th ey v alu e e v en m ore th an

w hate v er y o u’re s e llin g. Y ou w in th eir b usin ess i n th e s h o rt r u n, b ut p ote nti a lly l o se i t o ver ti m e. B y

h elp in g c usto m ers th in k d iffe re ntl y a b out

th eir

c o m pany, y o u u lti m ate ly w ant th em to th in k d iffe re ntl y

a b out

yo ur

c o m pany.

Once yo u’v e esta b lis h ed cla rity aro und ste p 6 — Your S olu ti o n— yo ur next sto p in b uild in g a

p ow erfu l C om merc ia l T eachin g c o nv ers a ti o n is s te p 2 — th e R efr a m e. Y ou n eed to id enti fy th e c o re

i n sig ht, o r a h-h a! m om ent, th at w ill g et y o ur c usto m er to s a y, “ W ow , I n ev er th o ught a b out i t th at w ay

b efo re .”

To g et th ere , s ta rt w ith th e u niq ue b enefits y o u’v e i d enti fie d f o r s te p 6 a nd th en a sk y o urs e lf, “ W hy

d on’t m y c usto m ers v alu e th o se b enefits

alr e a dy

?” W hat is it a b out h o w th ey v ie w th eir w orld th at

p re clu d es th em fr o m a p pre cia ti n g th o se b enefits a s m uch a s w e th in k th ey e ith er c o uld o r s h o uld ?

T hat’ s th e v ie w y o u n eed to c hange. A nd to c hange it, y o u’ll n eed to p ro vid e th em w ith a n a lte rn ate

v ie w ( th e R efr a m e), a nd th en c o nv in ce th em th at th at a lte rn ate v ie w — were th ey to p urs u e it— co uld

e ith er s a v e o r m ake th em m ore m oney th an th ey r e aliz e d ( s te p 3 ). A fte r th at, it’ s s im ply a m atte r o f

f le sh in g o ut th e r e st o f th e s to ry to c re ate a l o gic al a nd c o m pellin g p ath f r o m s te p 2 to s te p 6 .

Put it a ll to geth er a nd y o u g et: “ W hat’ s c urre ntl y c o sti n g o ur c usto m ers m ore m oney th an th ey

r e aliz e , th at o nly w e c an h elp th em fix ?” T he a nsw er to th at q uesti o n is th e h eart a nd s o ul o f y o ur

C om merc ia l T eachin g p itc h. BU IL D IN G T H E I N SIG HT G EN ER AT IO N M AC H IN E

W hen y o u s te p b ack a nd c o nsid er th e s c o pe o f w hat w e’re p ro posin g h ere , y o u c an b egin to s e e h o w

t h is a p pro ach r e aches d eep b ack in to th e o rg aniz a ti o n. Y es, y o u n eed C halle nger r e p s to d eliv er th e

t e achin g, b ut th e a ctu al c o nstr u cti o n o f th e c o nv ers a ti o n— th e u niq ue b enefits , th e s u rp ris in g c usto m er

i n sig hts , th e ti g htl y packaged te achin g cho re o gra p hy— re q uir e in p ut fr o m th e enti r e co m merc ia l

o rg aniz a ti o n.

Many c o m panie s c ho ose to sh ie ld sa le s re p s fr o m th e c o m ple xity o f th e six -s te p c ho re o gra p hy

a lto geth er b y s im plify in g th e a p pro ach in to th re e k ey e le m ents : ( 1 ) P ro vid in g c usto m ers w ith g am e-

c hangin g in sig ht, (2 ) sp ecify in g and pers o naliz in g th e pote nti a l im pact of th at in sig ht, and (3 )

i n tr o ducin g y o ur c ap ab iliti e s a s th e b est p ossib le m eans o f a cti n g o n th at i n sig ht. I t’ s th e s a m e j o urn ey,

b ut it’ s sim ply easie r to p ro cess fo r re p s tr a d iti o nally accusto m ed to “le ad in g w ith ” ra th er th an

“ le ad in g to .”

It’ s p ossib le y o u’v e b egun w ond erin g: “ Id enti fy in g u niq ue b enefits . . . s e gm enti n g c usto m ers b y

n eed . . . g enera ti n g c o m pellin g c usto m er in sig ht . . . d ev elo pin g te achin g-b ase d c o lla te ra l . . . F or a

b ook a b out in d iv id ual s a le s p erfo rm ance, it s e em s lik e w e’v e w and ere d a lo ng w ay a w ay fr o m th e

i n d iv id ual r e p .” B ut r e m em ber, th is b ook is a b so lu te ly a b out in d iv id ual s a le s r e p s a nd h o w th ey c an

p erfo rm s ig nific antl y b ette r, y et y o u w ould n’t w ant to le av e a ny o f

th ese

th in gs in th e h and s o f y o ur

i n d iv id ual r e p s. T hese a re o rg aniz a ti o nal c ap ab iliti e s, n o t in d iv id ual s k ills . A c riti c al le sso n o f th e

C halle nger a p pro ach i s th e s ig nific ant n eed f o r o rg aniz a ti o nal i n v olv em ent to m ake i t tr u ly s u sta in ab le

a nd n o t j u st th e r e su lt o f i n cid enta l s a le s r e p e xcelle nce. F ew b ut th e v ery b est o f y o ur r e p s c o uld p ull

o ff th is k in d o f te achin g o n th eir o w n c o nsis te ntl y o ver ti m e.

When s a le s l e ad ers f ir s t s e e C om merc ia l T eachin g, th ey u su ally te ll u s s o m eth in g l ik e, “ I’ m h av in g

a h ard e no ugh ti m e g etti n g m y g uys to

se ll

, a nd n o w y o u w ant th em to

te a ch

? G ood lu ck!” B ut it

d oesn ’t h av e to b e th at w ay. A t le ast in te rm s o f te achin g, th e m ost im porta nt s te p s y o u c an ta ke to

m ig ra te y o ur s a le s fo rc e c lo se r to th e C halle nger p ro file h av e le ss to d o w ith th e in d iv id ual re p s

t h em se lv es a nd m uch m ore to d o w ith th e o rg aniz a ti o n th at su p ports th em . In fa ct, in m any w ays,

C om merc ia l T eachin g is lik ely

ea sie r

fo r in d iv id ual re p s th an w hat w e’re a sk in g th em to d o rig ht

n o w . M uch o f th e h eav y lifti n g n ecessa ry to its s u ccess h ap pens lo ng b efo re a n in d iv id ual r e p e v er

g ets i n f r o nt o f a c usto m er.

To u nd ers ta nd w hy, th in k a b out th e jo urn ey fr o m tr a nsa cti o nal s e llin g to s o lu ti o ns s e llin g th at ju st

a b out e v ery B 2B s a le s o rg aniz a ti o n h as u nd erta ken a cro ss th e l a st f iv e to f ifte en y ears ( s e e f ig ure 1 .1

o n page 7). A s part of th at m ove, sa le s sk ill re q uir e m ents hav e go ne up dra m ati c ally . W ith

t r a nsa cti o nal s e llin g, r e p s s o ld l a rg ely o n p ro duct f e atu re s a nd b enefits ; i n th e n ew w orld o f s o lu ti o n

s e llin g, re p s pro be fo r in d iv id ual custo m er need s in th e m om ent, allo w in g th em to su ggest

s p ecific ally ta ilo re d s o lu ti o ns to w hate v er th ey h ear i n r e sp onse . I n i ts p ure st f o rm , s o lu ti o n s e llin g i s

c usto m iz a ti o n i n th e m om ent. I t’ s a n i n cre d ib ly h ig h b ar f o r a ny s a le s r e p . I t’ s n o w ond er, r e ally , th at

s a le s o rg aniz a ti o ns a ll o ver th e w orld s tr u ggle m ig hti ly to h elp th eir te am s m ake th is tr a nsiti o n.

With C om merc ia l T eachin g, y o u c an sig nific antl y b ack o ff o n y o ur e xp ecta ti o ns fo r in d iv id ual

c usto m iz a ti o n a b ility , a s th e o rg aniz a ti o n s te p s in to o ffe r c ru cia l s u p port a ro und th e v ery th in g th at

c usto m ers h av e to ld u s th ey v alu e m ost in s u p plie r in te ra cti o ns, n am ely th e s h arin g o f c o m merc ia l

i n sig ht. T he r e p s’ p rim ary jo b s h ifts fr o m d is c o verin g n eed s to g uid in g a c o nv ers a ti o n. T hat a llo w s

t h e o rg aniz a ti o n to la y o ut th e fr a m ew ork fo r th at c o nv ers a ti o n in a d vance— to “ chalk th e fie ld ,” a s one h ead o f s a le s p ut i t.

There a re a n um ber o f w ays i n w hic h th at c o nv ers a ti o n m ig ht s ti ll ta ke a n u nexp ecte d tu rn o r g o o ff

th e r a ils a lto geth er, a nd i n d iv id ual s k ill i s s ti ll h ugely i m porta nt i n a llo w in g th e b est r e p s to n av ig ate

th o se s c enario s b ette r th an a nyo ne e ls e , b ut C om merc ia l T eachin g p la ces s ig nific ant g uard ra ils a ro und

th e s a le s i n te ra cti o n to p ro vid e r e al s u p port f o r th e r e p .

Fir s t, th e custo m er’s need s are

pre sc o ped

. R ep s d on’t sta rt w ith a b la nk sh eet o f p ap er and

dia gno se each custo m er’s need s in d iv id ually . M uch of th at w ork has been done in sid e th e

org aniz a ti o n th ro ugh b ette r s e gm enta ti o n a nd c usto m er a naly sis , s ig nific antl y r e d ucin g th e b urd en o n

th e o ne s k ill r e p s p ro bab ly s tr u ggle w ith th e m ost.

Seco nd , th e c o nv ers a ti o n is

pre sc rip te d

. A te achin g r e p s ti ll h as to in te ra ct w ith th e c usto m er in a

liv e se tti n g, answ erin g questi o ns and ad ap ti n g to unanti c ip ate d obje cti o ns. H ow ev er, th e re p ’s

openin g s e t o f h yp oth ese s i s a lr e ad y l a id o ut i n d eta il, a nd e v ery s te p a lo ng th e w ay i s c le arly m ark ed

th ro ugh th e te achin g c ho re o gra p hy. B ecause th e te achin g p itc h fo llo w s th e s a m e ta lk in g p oin ts a gain

and a gain , re p s w ill n atu ra lly im pro ve a s th ey le arn fr o m e xp erie nce, b eco m in g m ore c o m pellin g

over ti m e. I n th at r e sp ect, C om merc ia l T eachin g s u p porte d b y th e o rg aniz a ti o n i s m uch m ore c o ncre te

th an r u nnin g a n o pen-e nd ed n eed s a naly sis . It’ s e asie r fo r r e p s to le arn , a nd e asie r fo r m anagers to

co ach.

Fin ally , th e s o lu ti o n th e r e p is w ork in g to w ard is

pre d efin ed

. T he b urd en o n th e r e p to d ete rm in e

th e rig ht so lu ti o n fo r an in d iv id ual custo m er is sig nific antl y re d uced , as th e so lu ti o n is la rg ely

dete rm in ed in ad vance th ro ugh o rg aniz a ti o nal id enti fic ati o n o f th e su p plie r’s uniq ue b enefits and

need s-b ase d s e gm enta ti o n o f c usto m ers . O ne c o m pany w e w ork w ith r e fe rs to th ese p re b uilt s o lu ti o ns

as “ H ap py M eals ,” b ase d o n M cD onald ’s fa m ous “ m eal s o lu ti o n” fo r y o ung c hild re n. T hey’re o ff-

th e-s h elf so lu ti o ns th at fe el c usto m iz e d to c usto m ers , b ecause th ey’re w ell ta ilo re d in a d vance to

th o se c usto m ers ’ m ost c o m mon n eed s.

Of c o urs e , th is a p pro ach s ti ll r e q uir e s g re ate r s k ill th an th e s im ple w orld o f tr a nsa cti o nal s e llin g.

But c o m pare it w ith a w orld o f c la ssic so lu ti o n se llin g o r “ co nsu lta ti v e se llin g” w here re p s a re

exp ecte d to fig ure a ll o f th is o ut o n th eir o w n. W hile y o ur s ta rs w ill g et it r ig ht a t le ast s o m e o f th e

ti m e, y o ur c o re r e p s w ill s tr u ggle m ig hti ly a ll o f th e ti m e. B ut if y o u’v e d one y o ur h o m ew ork in sid e

th e o rg aniz a ti o n to b uild a s o lid te achin g in te ra cti o n to b egin w ith , y o ur r e p s a re fa r b ette r p re p are d

to s u cceed w hen th ey’re i n f r o nt o f th e c usto m er.

So w ho s h o uld d o th e w ork ? C om merc ia l T eachin g is a s m uch a te am s p ort a s a n in d iv id ual o ne.

Ju st a s y o u’ll n eed to a lig n in d iv id ual r e p s to th e C halle nger p ro file to m ake it w ork , y o u’ll n eed to

alig n sa le s and m ark eti n g aro und th e co re cap ab iliti e s im plic it in th e C om merc ia l Teachin g

cho re o gra p hy:

1. I d enti fy y o ur u niq ue b enefits .

2. D ev elo p c o m merc ia l i n sig ht th at c halle nges c usto m ers ’ th in kin g.

3. P ackage c o m merc ia l i n sig ht i n c o m pellin g m essa ges th at “ le ad to .”

4. E quip r e p s to c halle nge c usto m ers .

Com merc ia l T eachin g als o p ro vid es a co ncre te and v ery acti o nab le ro ad m ap fo r ad dre ssin g

arg uab ly o ne o f th e to ughest c halle nges in a ll o f B 2B s a le s a nd m ark eti n g, n am ely g etti n g th e tw o

fu ncti o ns to w ork to geth er i n th e f ir s t p la ce.

Giv en th e c hance, a ny h ead o f s a le s o r m ark eti n g w ill b e h ap py to r e gale y o u w ith e xam ple s o f th e

his to ric ally poor— or no nexis te nt— co lla b ora ti o n betw een th e tw o fu ncti o ns. A t best in m ost

org aniz a ti o ns th ere ’s a th in ly veile d anti p ath y acro ss th e sa le s/m ark eti n g div id e. A t w ors t, it’ s

outr ig ht h o sti lity . W e’v e a ll s e en th e s ta ti s ti c s. E ig hty p erc ent o f m ark eti n g c o lla te ra l w in d s u p i n th e tr a sh , w hile 3 0 p erc ent o f s a le s ti m e i s s p ent r e p ro ducin g th e v ery c o lla te ra l th ey j u st th re w a w ay.

The u nd erly in g c ause o f m uch o f th is d is c o rd ty p ic ally g o es u nad dre sse d . M ost c o m panie s fa il to

defin e a n a gre ed -u p on fr a m ew ork fo r w hat th e tw o fu ncti o ns s h o uld a ctu ally d o to geth er in th e fir s t

pla ce. M any co m merc ia l exec uti v es w ho la m ent th e need fo r gre ate r sa le s and m ark eti n g

“in te gra ti o n” fa il to c o nsid er th e p ro ble m fr o m th e o pposite p ers p ecti v e, w hic h is : W hat

sh ould n’t

th ey d o to geth er?

Com merc ia l T eachin g p ro vid es a ro ad m ap fo r in te gra ti n g a ro und a lim ite d n um ber o f a cti v iti e s

th at tr u ly m atte r. T he a p pro ach d efin es a v ery s p ecific fr a m ew ork fo r “ w hat g o od lo oks lik e” fo r th e

enti r e c o m merc ia l o rg aniz a ti o n, a llo w in g fo r th e id enti fic ati o n o f c o ncre te ro le s, ta sk s, g o als , a nd

re sp onsib iliti e s. F or e xam ple , o nly m ark eti n g h as th e to ols , th e e xp erti s e , a nd th e ti m e to g enera te th e

in sig hts n ecessa ry to c halle nge c usto m ers b oth s c ala b ly a nd r e p eate d ly . A s th e h ead o f m ark eti n g a t a

la rg e te le co m munic ati o ns c o m pany p ut it, m ark eti n g m ust s e rv e a s th e “ in sig ht g enera ti o n m achin e”

th at k eep s re p s w ell e q uip ped w ith q uality te achin g m ate ria l th at c usto m ers w ill fin d c o m pellin g.

Sale s, o n th e o th er h and , w ill h av e to e nsu re th at re p s h av e th e k no w le d ge, sk ills , a nd c o achin g

necessa ry to g o o ut a nd u se th at i n sig ht i n a c o nv in cin g m anner to a ctu ally c halle nge c usto m ers . I t’ s a

sy m bio ti c r e la ti o nsh ip a ro und a c o re p rin cip le .

Eith er w ay, a t th e e nd o f th e d ay y o ur m essa ge lib ra ry , y o ur c o lla te ra l, a nd y o ur p itc h c an’t b e

sta ti c . T hey m ust c o nsta ntl y e v olv e to s ta y c urre nt w ith th e c usto m er’s b usin ess e nv ir o nm ent a nd w ith

a c o m peti ti v e, d ynam ic la nd sc ap e. T his is a b ig jo b— hund re d s o f p ro ducts , d oze ns o f c usto m er

se gm ents , m ulti p le c hannels , a nd a c usto m er e nv ir o nm ent th at e v olv es o n a q uarte rly b asis . T here fo re ,

Com merc ia l T eachin g is n ’t a o ne-ti m e e xerc is e , it’ s a n “ alw ays-o n” c ap ab ility . W ith in p ut fr o m th e

sa le s fo rc e— and at th eir behest— org aniz a ti o ns m ust in v est in tr a in in g m ark ete rs to arti c ula te

diffe re nti a to rs a nd c o nsta ntl y s o urc e f r e sh a nd c o m pellin g te achin g m essa ges.

MAKE S U RE Y O UR T EA CHIN G P IT C H I S “ B O LD ”

We s e e a lo t o f c o m panie s s lip in to “ sa fe m ode” a s th ey d ev elo p th eir te achin g p itc hes. T hey

mig ht s ta rt w ith s o m eth in g i n sig htf u l a nd g enuin ely p ro vocati v e, b ut a s m ore a nd m ore p eo ple g et

th eir h and s o n i t i n te rn ally , i t g ets w ate re d d ow n to th e p oin t w here i t’ s m ore o f a s u ggesti o n th an

a p ro vocati o n.

A g re at to ol w e’v e s e en to e nsu re th at te achin g p itc hes d on’t l o se th eir e d ge a s th ey w ork th eir

way th ro ugh th e o rg aniz a ti o n is th e “ S A FE -B O LD F ra m ew ork ,” d ev elo ped b y N eil R ackham

and K PM G. T he fr a m ew ork fu ncti o ns a s a g ra d in g e xerc is e fo r e v alu ati n g th e str e ngth o f a

te achin g p itc h. T o q uo te N eil a nd K PM G, “ A s u ccessfu l te achin g p itc h m ust d o f o ur th in gs w ell.

Fir s t, i t m ust b e

big

. D one w ell, it w ill b e s e en b y th e c usto m er a s m ore e xp ansiv e a nd fa rth er-

re achin g th an a n o rd in ary id ea. S eco nd , it m ust b e

in nova tiv e

. It h as to p ush th e e nv elo pe w ith

new , o fte n u nte ste d a nd u niq ue a p pro aches. T hir d , it m ust b e

ris k y

. B ig id eas m ean th at w e a re

ask in g o ur o w n c o m panie s a nd o ur c usto m ers to ta ke a b ig r is k i n a d opti n g o ur i d ea. A nd l a stl y ,

it m ust b e

diffic u lt

. T he id ea its e lf m ust b e h ard to d o— eith er b ecause o f s c ale , u ncerta in ty , o r

politi c s— oth erw is e , w hy w ould a c usto m er h ir e y o u to f ix i t f o r th em ?”

The f r a m ew ork i s a s im ple to ol th at f o rc es y o u to g ra d e a p ote nti a l te achin g p itc h a lo ng th ese

fo ur d im ensio ns. T he b est id eas w ill s c o re c lo se r to th e “ B O LD ” e nd o f th e c o nti n uum — th ey

will b e b ig , th ey w ill o utp erfo rm ( fr o m a r is k in ess p ers p ecti v e), th ey w ill b e le ad in g-e d ge ( in

te rm s o f i n no vati o n), a nd th ey w ill b e d iffic ult to i m ple m ent f o r th e c usto m er. A t th e o th er e nd o f

th e sp ectr u m a re th e “ S A FE ” id eas, w hic h, in c o ntr a st, a re sm all, fe el e asily a chie v ab le (in te rm s o f r is k ), a re “ fo llo w er” i d eas ( v ers u s p ro gre ssiv e, i n no vati v e i d eas), a nd a re s e en a s e asy

to i m ple m ent.

The w ay N eil a nd th e K PM G te am e m plo yed th is to ol w as to a sk a g ro up o f K PM G c lie nt

ad vis e rs to b ra in sto rm a C halle nger p itc h to a c lie nt a nd th en p re se nt th at p itc h to a n a ud ie nce o f

in te rn al p eers , w ho in tu rn g ra d ed th e p itc h u sin g th e S A FE -B O LD fr a m ew ork . K PM G te lls u s

th at th is has no w b eco m e a p art o f th e in te rn al v ern acula r fo r th e o rg aniz a ti o n, w ith clie nt

ad vis e rs c auti o nin g p eers a gain st w ate rin g d ow n a nd “ m akin g to o S A FE ” th eir c usto m er p itc hes.

Sourc e: K PM G, N eil R ackham .

Fig ure 5 .2 .

T he S A FE -B O LD F ra m ew ork

Rem em ber, R ela ti o nsh ip B uild ers a re e v ery w here , n o t ju st in s a le s, a nd c hances a re p re tty

go od th at s o m ew here a lo ng th e lin e, a s e nio r-le v el R ela ti o nsh ip B uild er— mayb e s o m eb ody in

mark eti n g or co rp ora te co m munic ati o ns, m ayb e a se nio r lin e executi v e— will te m per th e

messa ge o f th e p itc h, fe arfu l th at it w ill c o m e a cro ss a s c o nfr o nta ti o nal o r u nse ttl in g to th e

custo m er.

One o f th e c la ssic R ela ti o nsh ip B uild er m odific ati o ns to a g re at te achin g p itc h is to p ull th e

“w ho w e a re a nd w hat w e d o” s lid es fr o m th e

back

o f th e p itc h d eck ( w here th ey b elo ng in a

pro per te achin g p itc h) a nd p ut th em in th e fr o nt o f th e d eck. R ela ti o nsh ip B uild ers fe el th e n eed

to e sta b lis h c re d ib ility u p fr o nt b y th ro w in g a ro und c o m pany s iz e a nd fa cto id s a nd e ngagin g in

so m e h ig h-p ro file c usto m er n am e-d ro ppin g. T hey a re u nco m fo rta b le le ad in g w ith in sig ht a nd

le tti n g th eir i n sig hts e sta b lis h c re d ib ility f o r th em .

As so on a s y o u’re n o t lo okin g, R ela ti o nsh ip B uild ers w ill ta ke o ut th eir b elt sa nd ers a nd

sm ooth o ut th e e d ges o f y o ur s h arp p itc h. T hey’ll s o fte n i t u nti l y o u b are ly r e co gniz e i t, p ush in g i t

to th e S A FE e nd o f th e c o nti n uum .

But b ein g a littl e unse ttl in g is th e p oin t o f a C halle nger ap pro ach: to b e p ro vocati v e, to

challe nge, a nd th ere fo re to b e s e en a s d iffe re nti a te d b y th e c usto m er. W ith o ut a n e d ge, y o u s o und

ju st lik e ev ery b ody els e . R em em ber, w hile R ela ti o nsh ip B uild ers se ek to re d uce o r d efu se

te nsio n, C halle ngers c o nstr u cti v ely u se te nsio n to th eir a d vanta ge.

So w hat d oes C om merc ia l T eachin g l o ok l ik e a nd f e el l ik e i n r e ality ? N ow th at w e’v e l a id o ut th e

th eo ry o f th e a p pro ach, w e c an s e e i t i n a cti o n a t tw o r e al c o m panie s: W . W . G ra in ger, I n c., a nd A DP Deale r S erv ic es. CO M MER CIA L T EA C H IN G C ASE S T U DY # 1: W . W . G RAIN G ER , I N C.,

AN D T H E P O W ER O F P LA N NIN G T H E U NPLA N NED

W . W . G ra in ger, I n c., b ase d i n L ake F ore st, I llin o is , i s a $ 7 b illio n d is tr ib uto r o f m ain te nance, r e p air,

a nd o pera ti o ns (M RO ) eq uip m ent and su p plie s, se rv in g nearly tw o m illio n co m panie s p rim arily

a cro ss th e U nite d S ta te s a nd C anad a. G ra in ger p ro vid es o ne-s to p sh o ppin g fo r th e w id e ra nge o f

e q uip m ent c o m panie s n eed to k eep th eir fa ciliti e s, p la nts , a nd o ffic es ru nnin g s a fe ly , s m ooth ly , a nd

e ffic ie ntl y . A ll to ld , th e c o m pany sto cks se v era l h und re d th o usa nd d iffe re nt p ro ducts — fr o m to ols ,

p um ps, and sa fe ty su p plie s to ele ctr ic al eq uip m ent and ja nito ria l su p plie s— whic h th ey deliv er

t h ro ugh b ra nches, a h eav ily tr a ffic ked e -s to re , a nd o f c o urs e th e fa m ous G ra in ger p ro duct c ata lo g.

M uch o f i ts s a le s v olu m e i s d riv en b y b oth i n sid e a nd f ie ld -b ase d s a le s r e p s w ork in g w ith c usto m ers

t o e sta b lis h l o ng-te rm c usto m er p urc hase a gre em ents .

As p ow erfu l a s G ra in ger’s b ro ad p ro duct p ortf o lio c an b e i n s e rv in g c usto m ers ’ m any a nd d iv ers e

n eed s, th e c o m pany’s im pre ssiv e s c o pe c an b e o verw helm in g. F aced w ith s u ch a d aunti n g a rra y o f

c ho ic es, o ver th e y ears , so m e c usto m ers h av e slip ped in to b uyin g in d iv id ual p ro ducts re acti v ely ,

b ase d s im ply o n p ast p urc hase p atte rn s a nd o pportu nis ti c n eed , r a th er th an ta kin g th e ti m e to s it d ow n

w ith G ra in ger a nd c o nsid er h o w to m anage th eir o vera ll M RO s p end m ore w is e ly , d esp ite th e fa ct

t h at m any c o m panie s’ to ta l M RO s p end c an e asily re ach in to th e te ns o f m illio ns o f d olla rs . In th e

v ie w o f m any c usto m ers , it’ s ju st a b unch o f h am mers , g lo ves, lig ht b ulb s, p um ps, a nd g enera to rs .

“ W e’v e g o t m ore i m porta nt th in gs to d o,” th e th in kin g g o es, “ th an s p end o ur ti m e w orry in g a b out

th at

s tu ff.” T he r e su lt f o r G ra in ger? O ver ti m e, m any c usto m ers h ad c o m e to th in k o f G ra in ger m ere ly a s a

t r a nsa cti o nal s u p plie r r a th er th an a s tr a te gic p artn er. N eed a h am mer? G o to G ra in ger. N eed a p um p?

G o to G ra in ger. N eed b usin ess a d vic e o n c o m peti n g m ore e ffe cti v ely ? N ot s o m uch. It s im ply n ev er

o ccurre d to m any c usto m ers th at G ra in ger m ig ht b e a b le to h elp w ith a nyth in g b eyo nd g re at p ro ducts

a t g re at p ric es. S o w hen it c am e ti m e fo r th o se c usto m ers to r e new th eir c o ntr a cts , th at’ s w hat th ey

w ante d to ta lk a b out: p ric e.

Now , y o u c o uld a rg ue th at th ere a re c erta in ly w ors e p ro ble m s to h av e th an c usto m ers w ho th in k

a b out y o u p rim arily a s th e c o m pany w ith g re at p ro ducts a t g re at p ric es. B ut i f y o ur p rim ary g o al a s a

b usin ess is to d riv e d eep er c usto m er re la ti o nsh ip s th ro ugh b ro ad er, m ore s tr a te gic “ so lu ti o ns,” it’ s

a ctu ally a pre tty to ugh pla ce to be. It’ s hard to driv e org anic gro w th and deep en custo m er

r e la ti o nsh ip s w hen y o ur c usto m ers th in k o f y o u b y a nd la rg e a s a tr a nsa cti o nal s u p plie r o f r e la ti v ely

u nim porta nt p ro ducts . I n th e e nd , y o u b eco m e r e le gate d to th e c usto m er’s f a ciliti e s m anagem ent te am ,

o r w ors e , p ro cure m ent, w here y o u w in d u p h agglin g o ver s h o rt- te rm p ric in g ra th er th an lo ng-te rm

v alu e c re ati o n.

So G ra in ger h ad a p ro ble m . A s D eb ra O le r, G ra in ger’s v ic e p re sid ent a nd g enera l m anager o f

G ra in ger B ra nd , p ut i t, i f th e c o m pany w as g o in g to e sta b lis h i ts e lf a s a tr u e s o lu ti o ns p ro vid er i n th e

m in d s o f its c usto m ers , it h ad to c hange th e w ay th o se c usto m ers th o ught a b out th e c o m pany. T hey

n eed ed to b uild a c o nv in cin g s to ry , n o t a b out h o w G ra in ger c an s e ll y o u m ore h am mers , b ut a b out

h o w i t c an h elp y o u i m pro ve y o ur b otto m l in e b y s a v in g y o u m oney.

To d o th at, G ra in ger f ir s t h ad to s o lv e a n e v en b ig ger c halle nge. T he r e al p ro ble m w asn ’t s o m uch

t h at c usto m ers fa ile d to th in k a b out G ra in ger s tr a te gic ally , b ut th at th ey fa ile d to th in k o f th eir o w n

M RO s p end s tr a te gic ally . I t’ s h ard to b e p erc eiv ed a s a n i m porta nt p artn er w hen y o ur c usto m ers th in k

o f y o u a s o nly to uchin g a n u nim porta nt p art o f th e b usin ess. So lo ng b efo re G ra in ger c o uld c hange c usto m ers ’ m in d s a b out h o w th ey th o ught a b out it, th ey fir s t

had to c hange c usto m ers ’ m in d s a b out h o w th ey th o ught a b out

th em se lv es

. T hey h ad to s h o w th em th at

th e m illio ns o f d olla rs th ey s p end e v ery y ear i n M RO p urc hase s i s n o t o nly a s iz a b le i n v estm ent, b ut

more im porta nt, o ne th at, if m anaged p ro perly , co uld sa v e th em m illio ns o f d olla rs . In d eed , in

tr a ckin g c usto m ers ’ p urc hase h ab its fo r s e v era l y ears , G ra in ger h ad d is c o vere d th at m ost c o m panie s

were p urc hasin g M RO p ro ducts e xtr e m ely in effic ie ntl y , a nd th o se h ab its w ere c o sti n g th em m illio ns

of d olla rs th at th ey h ad n o id ea th ey c o uld b e s a v in g. In o th er w ord s, G ra in ger h ad d is c o vere d a n

opportu nity to te ach c usto m ers s o m eth in g n ew a b out th eir b usin ess— a w ay to r e th in k M RO s p end —

th at c o uld fr e e u p h uge a m ounts o f c ash th ey c o uld th en u se o n m uch m ore im porta nt th in gs th an

ham mers . I n te rm s o f i n sig ht, th ey h ad a s la m d unk.

In te rm s o f C om merc ia l T eachin g, h o w ev er, G ra in ger n eed ed th e o th er c ru cia l p ie ce o f th e s to ry .

Befo re te achin g c usto m ers h o w to s a v e m illio ns o f d olla rs b y th in kin g d iffe re ntl y a b out th eir M RO

sp end , G ra in ger h ad to m ake s u re th at th is i n sig ht n atu ra lly l e d c usto m ers to p re fe r G ra in ger o ver th e

wid e r a nge o f a lte rn ati v e M RO s u p plie rs . T o d o th at, D eb a nd th e te am f ir s t h ad to a nsw er th e s in gle

questi o n, “ W hy s h o uld o ur c usto m ers b uy fr o m u s o ver a nyo ne e ls e ?” A s it tu rn ed o ut, th at q uesti o n

wasn ’t n early a s e asy to a nsw er a s th ey’d a nti c ip ate d . A s D eb te lls it, o ne c o lle ague s u ggeste d , fo r

exam ple , th at th ey to ut th eir m assiv e p ro duct l in e a s tr u ly d iffe re nti a ti n g. W here up on D eb a sk ed , “ D o

no ne o f o ur c o m peti to rs o ffe r a w id e r a nge o f p ro ducts ? ”

“N o,” th e a nsw er c am e b ack, “ th ere a re a fe w g uys o ut th ere th at h av e a p re tty w id e ra nge o f

pro ducts a s w ell— at l e ast f o r s o m e o f th e c ate go rie s w e s e rv e.”

“T hat w on’t w ork , th en. W hat e ls e i s th ere ?” a sk ed D eb .

“W ell, w e’v e g o t s to re s a ll o ver th e c o untr y . W here v er y o u a re , y o u c an f in d a G ra in ger b ra nch.”

“S o c usto m ers c an’t m eet th eir M RO n eed s th ro ugh o th er r e ta il o utl e ts ? ” D eb a sk ed .

“N o, th ere a re o th er c o m panie s o ut th ere w ith s to re s . . .”

“T hat’ s n o t i t e ith er, th en. W hat e ls e ?”

And a ro und th ey w ent, l o okin g f o r th e s e t o f c ap ab iliti e s th at tr u ly s e t G ra in ger a p art. A nd f r a nkly ,

it p ro ved to b e m uch h ard er th an m ost o n th e te am w ould h av e th o ught. A s D eb p ut i t, “ F or a w hile , i t

re ally to ok u s to a d ark p la ce. A fte r a ll, w hat

were

w e b ette r a t th an a nyo ne e ls e ? W ere w e r e ally a ny

diffe re nt? ”

It’ s a d iffic ult q uesti o n f o r m ost c o m panie s. W hen y o u s it d ow n to r e ally d efin e th e s p ecific s e t o f

cap ab iliti e s th at se ts y o u a p art, o nce y o u c ro ss o ff “ in no vati v e,” “ custo m er-fo cuse d ,” “ so lu ti o ns-

orie nte d ,” “m ark et le ad er,” “gre at peo ple ,” “tr u ste d ,” and “ric h his to ry ” fr o m yo ur lis t, m any

executi v es l a nd i n th e s a m e d ark p la ce G ra in ger d id . A nd n o w y o u’v e g o t to r o ll u p y o ur s le ev es a nd

se t a b out th e h ard w ork o f i d enti fy in g r e al c ap ab iliti e s th at o nly y o u c an o ffe r. F or G ra in ger, th at k in d

of c la rity c am e o nly a fte r a la rg e n um ber o f le ad er-le d c usto m er in te rv ie w s, a g re at d eal o f m ark et

re se arc h, so m e ro bust data analy sis of custo m er sp end in g te nd encie s, and a num ber of cro ss-

fu ncti o nal b ra in sto rm in g s e ssio ns d esig ned to c ap tu re a s c o m ple te a p ic tu re o f m ark et p erc ep ti o ns a s

possib le .

In th e e nd , a ll o f th at w ork l e d G ra in ger to tw o i m porta nt c o nclu sio ns. F ir s t, m ost c o m panie s w ere

sp end in g fa r to o m uch o n p urc hasin g M RO p ro ducts e v ery y ear, b ecause th ey fa ile d to a p pre cia te

ho w certa in buyin g behav io rs w ere co sti n g th em huge am ounts of m oney. S eco nd , w hile oth er

su p plie rs m ig ht c arry a w id e ra nge o f p ro ducts o r m ain ta in a c o nv enie nt n etw ork o f re ta il o utl e ts ,

only G ra in ger d id it a ll, a nd o n a s c ale th at a llo w ed c usto m ers p artn ere d w ith G ra in ger to e lim in ate

th o se co sts by av oid in g unnecessa ry or “cauti o nary ” M RO purc hase s. W hate v er yo u need ed ,

where v er y o u n eed ed i t, w henev er y o u n eed ed i t, G ra in ger c o uld p ro vid e i t, s o y o u d id n’t h av e to b uy it “ ju st in c ase .” In o th er w ord s, G ra in ger’s d is ti n cti v e

co m bin atio n

o f c ap ab iliti e s p ut th e c o m pany

in a u niq ue p ositi o n to h elp c usto m ers f r e e u p s u rp ris in g a m ounts o f o pera ti n g e xp ense , a nd p ro vid ed

a p ow erfu l o pportu nity to s h ift c usto m ers ’ v ie w o f G ra in ger fr o m tr a nsa cti o nal s u p plie r to s tr a te gic

partn er.

Gra in ger th en to ok th o se i n sig hts a nd b uilt th em i n to a c o nv ers a ti o n ti tl e d “ T he P ow er o f P la nnin g

th e U np la nned ,” a w orld -c la ss e xam ple o f a C om merc ia l T eachin g c o nv ers a ti o n. T his is th e k in d o f

co nte nt o rg aniz a ti o ns n eed to p ro vid e th e f r o ntl in e s a le s f o rc e i n o rd er to m ake C om merc ia l T eachin g

work b eyo nd th e s ta r-p erfo rm in g C halle nger r e p s. I n f a ct, G ra in ger r e p s b rin g th e “ P ow er o f P la nnin g

th e U np la nned ” d eck i n to a lm ost e v ery s a le s c all b ecause i t a b so lu te ly h its th e h eart o f th e c o m pany’s

diffe re nti a te d v alu e p ro positi o n. F or G ra in ger, th e g o al o f th is c o nv ers a ti o n i s to c hange th e w ay th at

custo m ers th in k a b out th e c o m pany. B ut to g et th em th ere , th e G ra in ger r e p f ir s t n eed s to g et c usto m ers

to c hange th e w ay th ey th in k a b out th eir o w n M RO s p end . T hat’ s h o w th e c o nv ers a ti o n i s s e t u p f r o m

th e very begin nin g— as a co nv ers a ti o n ab out th e custo m er’s M RO sp end , no t ab out G ra in ger’s

cap ab iliti e s.

So a s y o u m ig ht im agin e, th e G ra in ger s a le s r e p r e q uests th e m eeti n g in th e fir s t p la ce in o rd er to

sh are s o m e im porta nt in sig hts G ra in ger h as le arn ed a b out h o w m ost c o m panie s c o uld s a v e a lo t o f

money s im ply b y th in kin g d iffe re ntl y a b out h o w th ey m anage th eir M RO s p end . I n f a ct, ta ke a l o ok a t

th e a gend a f o r th e s a le s c all:

Fro m th e v ery s ta rt o f th e c o nv ers a ti o n, e v ery th in g i s s q uare ly f o cuse d o n th e c usto m er. R em em ber,

custo m ers w ant to ta lk ab out

th eir

b usin ess, no t

yo ur

so lu ti o n, and th at’ s exactl y ho w G ra in ger

positi o ns th e m eeti n g. F ir s t a nd fo re m ost, th e a gend a is la id o ut a s a “ get” fo r th e c usto m er, n o t a

“giv e.” It’ s G ra in ger sa yin g, “ W e’re h ere to h elp y o u th in k sm arte r a b out a p art o f y o ur b usin ess

where w e h av e d eep e xp erti s e .” T hat’ s th e p ositi o nin g; n o w w e’re r e ad y to g o . F ir s t s to p, s te p 1 , th e

Warm er:

The W arm er s ta rts w ith th e c usto m er’s c halle nges. S o th e o penin g i s , “ W e k no w y o u f a ce a h o st o f

challe nges e v ery d ay, s u ch a s p ro ducti o n lin e is su es, w ork ers ’ c o m p c o sts , m ain te nance a nd s a fe ty

is su es. E sp ecia lly th o se c halle nges th at a re c riti c al to k eep in g y o ur b usin ess o pen a nd r u nnin g e v ery

sin gle d ay.” A fte r r e v ie w in g a c o up le i s su es a nd p ro vid in g s o m e g enera l c o lo r f r o m o th er c o m panie s,

th e r e p th en a sk s th e c usto m er to s e le ct f o r d is c ussio n o ne o r tw o th at a re p arti c ula rly p re ssin g i n th eir

org aniz a ti o n.

The id ea is to g et th e c usto m er p ulle d in to th e c o nv ers a ti o n rig ht a w ay a nd ta lk in g a b out th eir

challe nges r e la ti v e to w hat G ra in ger h as a lr e ad y s e en a t o th er c o m panie s. G ra in ger h as f o und th at th is

one p age c an l e ad to a n i n cre d ib ly r o bust a nd v alu ab le c o nv ers a ti o n— all b ecause th e r e p l e d w ith a

hyp oth esis o f c usto m er n eed r a th er th an a n o pen-e nd ed q uesti o n to “ d is c o ver” c usto m er n eed .

Done w ell, a t th is p oin t th e c o nv ers a ti o n fe els le ss lik e a s a le s p re se nta ti o n a nd m ore lik e tw o

co lle agues c o m mis e ra ti n g a b out c o m mon c halle nges. I t’ s a c o nnecti o n b orn o f s h are d e xp erie nce a nd

a g re at w ay to s ta rt a c o nv ers a ti o n.

Yet w hile th e G ra in ger r e p m ay h av e b uilt a c o nnecti o n a t th is p oin t, h e o r s h e h asn ’t a ctu ally ta ught

th e c usto m er a nyth in g n ew . T hat h ap pens i n s te p 2 , th e R efr a m e.

To c hange th e w ay c usto m ers th in k a b out th eir M RO s p end , G ra in ger s ta rts b y b re akin g th at s p end

in to its ty p ic al c ate go rie s: to ols , s a fe ty , lig hti n g, ja nito ria l, a nd s o o n. F or m any c o m panie s th e to ta l

sp end in a ny

one

o f th ese c ate go rie s c an e asily r e p re se nt h und re d s o f th o usa nd s o f d olla rs o r m ore ,

dep end in g o n th e c o m pany’s s iz e . T his w ill a ll l o ok v ery f a m ilia r to th e c usto m er.

How ev er, w hat’ s

not

f a m ilia r to c usto m ers i s a c o m ple te ly d iffe re nt w ay to th in k a b out th is s p end .

Usin g a re la ti v ely str a ig htf o rw ard g ra p hic , th e re p sh ifts th e c usto m er’s p ers p ecti v e fr o m v erti c al

pro duct c ate go rie s to h o riz o nta l p urc hase te nd encie s: fr o m

what

th ey b uy to

how

th ey b uy. T hey d o

th at b y i n tr o ducin g th e i d ea o f “ p la nned ” v ers u s “ unp la nned ” p urc hase s.

The r e p e xp la in s, “ P la nned p urc hase s a re p ro ducts a nd p arts th at y o u b uy v ery fr e q uentl y , u su ally

on a r e gula r c ycle a nd b ud gete d f o r i n a d vance.

Un

pla nned p urc hase s, o n th e o th er h and , a re p ro ducts

and re p air p arts th at y o u b uy a t th e la st m in ute , u su ally in re sp onse to so m e u nfo re se en n eed o r

pro ble m .” T he d is ti n cti o n’s im porta nt, b ecause w hat c o m panie s d on’t re aliz e is h o w th e u np la nned

part o f M RO sp end — th e se em in gly o ne-o ff, in no cuo us p urc ha se s o f a n e xtr a h am mer h ere , o r a

re p la cem ent p um p th ere — can a d d u p to a h uge a m ount in a ny g iv en y ear a nd a ctu ally h av e s tr a te gic

co nse q uences fo r a c o m pany. G ra in ger h as d ete rm in ed fr o m its re se arc h th at a fu ll 4 0 p erc ent o f a

ty p ic al co m pany’s M RO sp end is fo r unp la nned purc hase s. W hen yo u ad d th at up acro ss all

cate go rie s o f M RO sp end c o m bin ed , u np la nned p urc hase sp end is b ig ger th an a ny o ne in d iv id ual

pro duct c ate go ry , r e p re se nti n g m illio ns o f d olla rs i n l a st m in ute , o ne-o ff s p end in g.

Noti c e, th e re p h asn ’t y et b uilt th e fu ll b usin ess c ase fo r w hy th e d is ti n cti o n m atte rs — th at’ s s ti ll

co m in g— but a t th is p oin t h e o r s h e h as a t l e ast p iq ued th e c usto m er’s i n te re st. T hey’re c urio us to h ear

more . A fte r a ll, y o u’v e ju st to ld th em th at th eir s e co nd b ig gest c ate go ry o f M RO s p end — unp la nned

purc hase s— is o ne th ey’v e n ev er e v en th o ught to tr a ck b efo re . N ow th ey’re w ond erin g w hat th at m ig ht

mean fo r th eir b usin ess. R em em ber, th e litm us te st fo r th e R efr a m e is s im ply to g et y o ur c usto m er to

sa y, “ H uh, I’ d n ev er r e ally th o ught a b out it th at w ay b efo re ,” a nd th is s h ift in p ers p ecti v e fr o m w hat

th ey b uy to h o w th ey b uy i s a g re at e xam ple o f h o w to d o th at w ell.

Now th e re p is re ad y to b uild a s o lid b usin ess c ase fo r w hy it m atte rs . O n to s te p 3 , R ati o nal

Dro w nin g.

Usin g d ata f r o m i ts o w n a naly sis o f s e v era l y ears ’ w orth o f c usto m er s p end d ata , G ra in ger u se s th e

next s e v era l s lid es to b uild o ut th e s to ry o f th e o fte n o verlo oked , b ut v ery re al c o st o f u np la nned

purc hase s. “ In fa ct,” th e G ra in ger r e p c o nti n ues, “ it’ s p ro bab ly w ors e th an y o u th in k. A h uge n um ber

of th e p urc hase s y o u m ake a re n’t ju st u np la nned — th ey’re in fr e q uent. M ost y o u m ake o nly o nce. Y et

each o ne r e q uir e s a d diti o nal ti m e, e ffo rt, p eo ple , a nd m oney to c o m ple te .”

This i s G ra in ger u sin g th eir e xp erti s e to te ach th e c usto m er s o m eth in g a b out th eir b usin ess. F or th e

custo m er, it’ s v alu ab le in sig ht. F or G ra in ger, it’ s a n e ffe cti v e m eans to tu rn in te re st in to a cti o n b y

build in g a ra ti o nal b usin ess c ase th at m akes th e c usto m er fe el re al d is c o m fo rt a ro und a p ro ble m

th ey’d nev er re aliz e d th ey had . If G ra in ger has a lo ng-s ta nd in g re la ti o nsh ip w ith a parti c ula r

custo m er, th e r e p w ill o fte n r e v ie w th eir p urc hase h is to ry w ith th e c o m pany to e nsu re th e s to ry is a s

co m pellin g a s p ossib le . I t’ s h ard to s a y y o u’re d iffe re nt w hen y o u’re l o okin g a t y o ur v ery o w n d ata .

So w hat’ s th e i m pact o f a ll o f th ese u np la nned p urc hase s? W ell, i t’ s p re tty d ra m ati c .

While m ost c o m panie s w ork w ith a s m all n um ber o f s u p plie rs fo r p la nned p urc hase s, th ey o fte n

hav e h und re d s o f s u p plie rs f o r u np la nned p urc hase s, b ecause e v ery i te m i s p urc hase d f r o m w hic hev er

su p plie r c an g et i t to y o u r ig ht a w ay. A nd th e c o st o f s p re ad in g 4 0 p erc ent o f y o ur M RO s p end a cro ss

th at m any d iffe re nt s u p plie rs c an b e h uge, a s th ere ’s n o l e v era ge th ere . E very i te m i s p urc hase d a t th e

la st m in ute a t f u ll r e ta il.

Even w ors e th an th e a d diti o nal

dir e ct

c o sts o f u np la nned p urc hase s, h o w ev er, a re th e u nse en b ut

dra m ati c ally h ig h

in dir e ct

c o sts .

The re al c o st o f u np la nned p urc hase s c o m es fr o m a ll o f th e n ecessa ry b ut ty p ic ally o verlo oked

pro cess c o sts a sso cia te d w ith b uyin g s o m eth in g y o u h ad n’t p la nned f o r. Y ou’v e g o t to ta ke th e ti m e to

fin d th e p art, g enera te a n in v oic e, c all th e s u p plie r, p la ce th e o rd er, in v ento ry w hate v er y o u b ought,

and th en ru n p ap erw ork a nd p aym ent o n th e p urc hase . A ll to ld , a ny s in gle u np la nned p urc hase c an

in v olv e f iv e to te n d iffe re nt p eo ple a cro ss y o ur c o m pany a nd i n cur h uge a m ounts o f u nse en c o st w hen

yo u a d d u p a ll th e ti m e, e ffo rt, p ap erw ork , a nd p eo ple n ecessa ry to b uy it. M ore o fte n th an n o t th e

very a ct o f b uyin g a n u np la nned i te m i s v astl y m ore e xp ensiv e th an th e i te m i ts e lf.

At th is p oin t, th e custo m er is lik ely b egin nin g to fe el a littl e sic k ab out all th ese unp la nned

purc hase s. T his is h ap penin g e v ery d ay in th eir o rg aniz a ti o n, a nd th ey’v e n ev er re ally th o ught o f it

th is w ay b efo re . T hey’re th in kin g, “ G re at, th at h am mer I b ought la st w eek fo r $ 17 a ctu ally c o st m e

$11 7! I f I m ulti p ly th at b y 4 0 p erc ent o f m y to ta l M RO s p end , h o w a m I e v en s ta yin g i n b usin ess? ” I t’ s

meant to b e a r e al g ut p unch— a r a ti o nal a rg um ent d esig ned to e v oke a n e m oti o nal r e acti o n.

But ju st in c ase th e c usto m er is s ti ll s k ep ti c al o f th e p ro ble m a t th is p oin t, G ra in ger tu rn s th e d ia l

one m ore ti m e. T he c o nv ers a ti o n n o w m oves to s te p 4 , E m oti o nal I m pact. N ow th ey m ake i t p ers o nal.

To e nsu re th at th e c usto m er tr u ly s e es th em se lv es in th e s to ry G ra in ger is te llin g, G ra in ger u se s a

slid e th ey lik e to c all th e “ P ain C hain ” to illu str a te h o w n early e v ery c o m pany a cts w hen s o m eth in g

im porta nt b re aks d ow n th at th ey n eed to r e p la ce i n a h urry .

Let’ s sa y th at a h ard -to -fin d c o il o n th e tw enty -y ear-o ld a ir -c o nd iti o nin g sy ste m in y o ur C EO ’s

offic e g o es o ut i n m id su m mer. W ell, i t’ s h o t, a nd i t’ s y o ur C EO , s o c le arly y o u’v e g o t to g et th e th in g

fix ed a s s o on a s p ossib le . S o w hat d o y o u d o?

The fir s t th in g y o u lik ely d o is c all o ne o f y o ur g o -to s u p plie rs fo r p la nned p urc hase s. S ure ly th ey

can h elp . B ut a fte r tw enty m in ute s o n h o ld , y o u le arn th at th ey’v e ju st s o ld o ut o f th e p art a nd w on’t

hav e a ny m ore f o r a t l e ast tw o w eeks. S o y o u tr y a no th er s u p plie r y o u’v e w ork ed w ith o nce o r tw ic e

in th e p ast, b ut th ey d on’t c arry th e p art a t a ll. A fte r tw enty m in ute s o n h o ld , a th ir d s u p plie r te lls y o u

th at a cco rd in g to th eir i n v ento ry s y ste m th ey s h o uld h av e tw o i n s to ck, b ut th ey c an’t f in d th em o n th e

sh elf b ack i n th e w are ho use . N ow y o u’re g etti n g f r u str a te d . T w o h o urs o n th e p ho ne— mostl y l is te nin g

to re ally b ad a d ult c o nte m pora ry m usic — and y o u’v e g o t n o th in g b ut b ad n ew s to re p ort to y o ur

in cre asin gly i m pati e nt— and s w eaty — CEO .

Feelin g a littl e d esp era te , y o u c all th e fo urth a nd fin al s u p plie r in th e g re ate r m etr o polita n a re a.

They’re a ll th e w ay a cro ss to w n, b ut th at c ease d to m atte r a b out n in ety m in ute s a go . G re at! T hey’v e

go t th e p art! S o y o u p ull tw o g uys o ff th e p ro ducti o n l in e, p ut th e h asti ly g enera te d p ap erw ork i n th eir

hand s, a nd s e nd th em a cro ss to w n in r u sh -h o ur tr a ffic to p ic k u p th e p art. A n h o ur a nd a h alf la te r,

when th ey g et th ere , th ey c all y o u u p a nd s a y, “ H ey, b oss, th ey’v e a ctu ally g o t th re e o f th ese th in gs.

You w ant th at w e s h o uld b uy a no th er o ne, ju st to b e s a fe ?” W ell, y o u n ev er w ant to g o th ro ugh

th is

again , s o y o u te ll th em , “ Ju st b uy a ll th re e a nd g et b ack h ere a s f a st a s y o u c an!”

You u se o ne p art to r e p air th e a ir c o nd iti o ner, a nd y o u p ut th e o th er tw o in th e b ack c o rn er o f th e

ware ho use o n a s h elf G ra in ger l ik es to c all th e “ P arts O rp hanage” w here th ey j u st s it a nd g ath er d ust.

You p ro bab ly w on’t n eed th em n ext y ear. O r th e y ear a fte r th at. A nd w hen y o u fin ally d o, th e w ho le

sy ste m i s l ik ely o bso le te a nd n eed s to b e r e p la ced a nyw ay. B ut i f y o u th in k a b out i t, n o t o nly a re th o se

parts th at y o u’ll n ev er u se , b ut m ore im porta nt, th at’ s v alu ab le c ash y o u’v e ju st ti e d u p in in v ento ry

th at y o u d on’t a ctu ally n eed , s im ply b ecause y o u n ev er w ant to h av e to g o th ro ugh th e p ain o f h av in g

to b uy th at p art a gain . A nd th at’ s c ash y o u c o uld b e u sin g fo r fa r m ore im porta nt th in gs th at y o u

actu ally

do

n eed . Dra m ati c ? Y es. B ut G ra in ger’s s to ry is c o m ple te ly b elie v ab le a nd c re d ib le . T hat’ s b ecause it’ s

base d o n r e al c usto m er b ehav io r ( th is is w here a ll th o se c usto m er in te rv ie w s r e ally p ay o ff ) . M ore

im porta nt, h o w ev er, it’ s d ra m ati c fo r a re aso n. T he sto ry is in te nti o nally d esig ned to g enera te a n

em oti o nal r e sp onse f r o m c usto m ers . T hey n eed to s e e th em se lv es i n th e p ic tu re y o u’re p ain ti n g. T hey

sh o uld fe el th e p ain a s if it w ere th eir s to ry y o u w ere te llin g. A s o ne c usto m er p ut it w hen th ey s a w

th e P ain C hain , “ W ow , y o u k no w u s to o w ell! W e p la y a s ta rrin g r o le i n th at m ovie e v ery s in gle d ay!”

And th at’ s th e p oin t. T o g et th e c usto m er to “ o w n” th e s to ry , e nsu re th at th ey s e e u np la nned p urc hase s

as a p ro ble m th at a b so lu te ly a p plie s to th em .

Now th e tr a nsiti o n i n to s te p 5 , w here G ra in ger c an p ain t th e p ic tu re o f a N ew W ay.

To g et to th e a ctu al s o lu ti o n, G ra in ger tr a nsiti o ns fr o m th e p ers o nal to th e o rg aniz a ti o nal: “ N ow ,

th at’ s th e p ro ble m w ith j u st o ne u np la nned p urc hase i n o ne c ate go ry . T he k ic ker i s , y o u d o th at a gain

and a gain a cro ss e v ery c ate go ry o f M RO s p end . S o e v en if y o u w ere a b le to g et y o ur h and s a ro und

unp la nned p urc hase s in o ne c ate go ry , th e la rg er p ro ble m is s ti ll th ere . A nd n o c o m pany is s tr u ctu re d

to e ffe cti v ely m anage th is s p end a cro ss e v ery c ate go ry .

“B ut im agin e if y o u c o uld . T he p ro ble m re p re se nts a h uge o pportu nity if y o u c an g et y o ur h and s

aro und it. U np la nned p urc hase s re p re se nt a huge am ount o f unnecessa ry sp end and unnecessa ry

in v ento ry c o sts . I t’ s m oney y o u c o uld b e s p end in g o n m ore i m porta nt th in gs. A nd th at’ s a p ro ble m th at

Gra in ger— giv en i ts s p ecific c ap ab ility s e t— is u niq uely p ositi o ned to s o lv e f o r y o u.”

At th is p oin t, th e c o nv ers a ti o n tu rn s to h o w G ra in ger c an h elp . F in ally , w e’re r e ad y to s ta rt ta lk in g

ab out G ra in ger’s s o lu ti o n. If y o u’re a n e xis ti n g c usto m er, th ey’v e g o t y o ur a ctu al d ata a nd c an s ta rt

map pin g o ut a p la n. If th ey d on’t w ork w ith yo u m uch, th ey use th is co nv ers a ti o n to su ggest a

dia gno sti c o f y o ur u np la nned p urc hase s. E ith er w ay, a ll o f th e h ard w ork th at D eb a nd th e te am d id

earlie r to m ap o ut G ra in ger’s u niq ue b enefits is n o w la id o ut, s p ecific ally in te rm s o f h o w th ey h elp

custo m ers s o lv e th e u np la nned p urc hase c halle nge th at G ra in ger h as j u st ta ught th em th ey h av e.

It’ s a n a b so lu te ly fa nta sti c e xam ple o f C om merc ia l T eachin g b ecause th e h eart a nd so ul o f th e

co nv ers a ti o n is a s e t o f in sig hts d esig ned to h elp c usto m ers o pera te m ore p ro fita b ly . T hat s a id , d id

yo u s e e w here G ra in ger a nd i ts c ap ab iliti e s f ir s t c o m e u p i n th e c o nv ers a ti o n? N ot u nti l th e v ery e nd . There ’s n o m enti o n o f G ra in ger’s c ap ab iliti e s, s to re s, W eb s ite s, h is to ry , s iz e , p ro duct c ata lo g, e tc .,

anyw here

a cro ss th e fir s t tw o-th ir d s o f th is c o nv ers a ti o n. T hat’ s b ecause th is is n ’t a sto ry a b out

Gra in ger; i t’ s a s to ry a b out th e

cu sto m er

a nd h o w th ey c an p ut m oney b ack i n to th eir o pera ti n g b ud get

th at th ey d id n’t ev en re aliz e th ey w ere w asti n g. F ro m th e custo m er’s p ers p ecti v e, th e fa ct th at

Gra in ger h as a s o lu ti o n to th e p ro ble m is m ore a h ap py c o in cid ence. F or th em , th e r e al v alu e o f th e

in te ra cti o n i s th e q uality o f G ra in ger’s i n sig ht.

Custo m ers c o m e a w ay fr o m th is c o nv ers a ti o n th in kin g v ery d iffe re ntl y n o t o nly a b out th eir M RO

sp end , b ut als o ab out th e ro le G ra in ger can p la y in sig nific antl y re d ucin g th at sp end o ver ti m e.

Gra in ger is n o lo nger th e p la ce to b uy $ 17 h am mers , b ut r a th er th e p artn er to w ork w ith in o rd er to

av oid b uyin g $ 11 7 h am mers . B y p la cin g G ra in ger’s u niq ue s tr e ngth s i n c o nte xt— at th e e nd o f a h ig hly

cre d ib le te achin g pitc h— th e co m pany co m ple te ly changes custo m ers ’ dis p ositi o n to w ard th eir

offe rin g. B ut to g et th ere , th ere h as to b e a flo w to th e p itc h, a s p ecific “ cho re o gra p hy.” A nd th at’ s

re ally th e fu nd am enta l sh ift o f C om merc ia l T eachin g. It’ s a m ove fr o m le ad in g

with

yo ur uniq ue

str e ngth s to o ne w here c are fu lly c o nstr u cte d te achin g i n te ra cti o ns v ery d elib era te ly l e ad th e c usto m er

to

y o ur u niq ue s tr e ngth s. Y our s o lu ti o n is n ’t th e s u b je ct o f y o ur te achin g b ut th e n atu ra l o utg ro w th o f

yo ur te achin g. R em em ber, f r o m th e c usto m er’s p ers p ecti v e, th e r e al v alu e o f th e i n te ra cti o n i s n ’t w hat

yo u s e ll, i t’ s th e q uality o f th e i n sig ht y o u p ro vid e a s p art o f th e s a le s i n te ra cti o n i ts e lf. CO M MER CIA L T EA C H IN G C ASE S T U DY # 2: A D P D EA LER S E R VIC ES’

PR O FIT C LIN IC S E M IN AR S

ADP D eale r S erv ic es, a d iv is io n o f A uto m ati c D ata P ro cessin g, i s a l e ad in g p ro vid er o f e nte rp ris e

s o ftw are to car, tr u ck, and oth er kin d s of vehic le deale rs h ip s aro und th e w orld . W hen K ev in

H end ric k, th en th e h ead o f s a le s fo r A DP, fir s t s a w o ur w ork o n C om merc ia l T eachin g in 2 008, th e

c o m pany w as f a cin g a r e al p ro ble m . W hile th e e co no m y w as s ti ll i n r e la ti v ely s tr o ng s h ap e, th e te am

a t D eale r S erv ic es w as a lr e ad y tr a ckin g a n um ber o f e arly w arn in g s ig ns in th e a uto m oti v e in d ustr y

t h at d id n’t b ode w ell fo r th e n ear fu tu re . N ot o nly h ad r e ta il c ar s a le s d eclin ed s te ad ily fo r th e la st

t h re e y ears , b ut m ore tr o ub lin g, th e U .S . c ar in d ustr y w as fa cin g a sig nific ant o verp opula ti o n o f

d eale rs h ip s, th e n um ber o f w hic h, i n r e sp onse to s h rin kin g d em and , w as n o w d ra m ati c ally d eclin in g.

U lti m ate ly , a cro ss th e th re e y ears f r o m 2 007 to 2 010 th e n um ber o f n ew a nd u se d a uto d eale rs h ip s i n

t h e U .S . d ecre ase d f r o m 2 1,2 00 to 1 8,4 60. N ow , i f y o u’re a p ro vid er o f e nte rp ris e s o ftw are s o lu ti o ns

t o a uto d eale rs h ip s, th in k fo r a m in ute a b out w hat th o se n um bers m ean. In th e c o urs e o f ju st a fe w

s h o rt y ears , th e c o m pany w as fa cin g a 1 5 p erc ent d eclin e o f its to ta l a d dre ssa b le m ark et in a k ey

m ark et s e gm ent a s p ote nti a l c usto m ers s im ply v anis h ed .

Tougher s ti ll, a s p art o f a p ub lic ly tr a d ed c o m pany, A DP D eale r S erv ic es w as n atu ra lly l o okin g to

p ost s tr o ng o rg anic g ro w th o ver th at s a m e p erio d. B ut h o w i n th e w orld d o y o u g ro w a c o m pany i n a

d eclin in g m ark et? T hat’ s in cre d ib ly diffic ult. R eally , yo u hav e only one cho ic e: A ggre ssiv ely

i n cre ase m ark et s h are w hile v ig o ro usly p re v enti n g c usto m er d efe cti o n. In th is w orld , if y o u’re g o in g

t o w in n ew b usin ess, y o u’re g o in g to h av e to ta ke i t a w ay f r o m s o m eo ne e ls e .

But th at w asn ’t g o in g to b e e asy. W hile d is lo dgin g a n i n cum bent s u p plie r i s a lw ays a c halle nge, th e

c o m pany w as sim ulta neo usly battl in g a ris e in sm all co m peti to rs , each co m peti n g aggre ssiv ely

a gain st o nly a sp ecific p ie ce o f D eale r S erv ic es’ b ro ad er cap ab ility se t. A s an in d ustr y -le ad in g

s u p plie r, A DP o ffe re d a u niq ue v alu e p ro positi o n e nco m passin g te chno lo gy s o lu ti o ns f o r e v ery a sp ect

o f a n a uto m oti v e d eale rs h ip , in clu d in g d ig ita l m ark eti n g, v ehic le s a le s, s e rv ic e s a le s, a nd e v en p arts

s o lu ti o ns. S m all c o m peti to rs , o n th e o th er h and , fo cuse d o n o nly o ne p ie ce o f th at p uzzle , s u ch a s

s o ftw are d esig ned to r u n ju st th e s e rv ic e c ente r, o r ju st th e s a le s o ffic e. T hese v end ors a p pro ached

c usto m ers w ith a v ery d iffe re nt k in d o f m essa ge, e m phasiz in g v ast p ote nti a l s a v in gs b y b uyin g “ o nly