Tag Archives: The Challenger Sale

10 Things Start-up Owners need to know about Selling

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start-ups and sellingYou’ve done it. The months or years of toiling in your basement, garage, dorm room or tiny apartment have finally paid off. No more eating dry cereal or soup for dinner. No more working late in the evenings or weekends.

You have successfully created your first new product or service that you want to launch into the market. Your loyal employees who stuck by you are also thrilled. Your ship has finally arrived.

But wait a minute? You don’t know how to sell!

All those courses in computer science, coding, engineering or business never taught you the fundamentals of selling. Sure, maybe you watched a video or two of Zig Ziglar or some other great salesperson. Or you cracked open a sales book once or twice, or read some articles online. You may have even taken a workshop or two about selling. But beyond that, your knowledge of selling is weak.

You admit it. So now what?

Well, like most start-up owners, you decide it’s time to hire your first salesperson or two. But before you place employment ads, there are some things you need to know.

1). Do you really need a salesperson? Is your product really ready for the marketplace or do you still have some more beta testing to do? While no product is perfect, no salesperson wants to spend hours on the phone dealing with a constant stream of technical issues or complaints about bugs. Unless you are paying that salesperson well to be a glorified technical support person, you may need to go back to the drawing board.

For example, I recently spoke to a new business development manager at a Maryland start-up who complained to me that his company was having a high turnover of salespeople. Some would stay for only a few weeks or a couple of months and then leave. When I probed further, I discovered that his product was still being beta tested for the enterprise market. However, the good news is that his product was actually doing well in the consumer market, which didn’t require the same heavy technical demands as the enterprise clients. In fact, the product was receiving high ratings on Amazon and positive reviews from independent tech bloggers. I suggested to him that he immediately stop hiring salespeople until his product was more ready for the enterprise market. I also suggested that his company switch gears, and focus more on the consumer market since he was having greater success. Sure, maybe he wouldn’t generate as much revenue in the consumer market, but at least he would be receiving some cash flow and generating positive buzz.

By using public relations, partnerships, and affiliate marketing, I suggested his company could do quite well in the consumer market. Hopefully, that good well in the consumer market would spill over into the enterprise market once his market was ready.

2). Amateur or Pro, does it matter?  There is a running debate within the start-up community about whether your first couple of salespeople should be amateurs or pros. Some argue that hiring inexperienced salespeople are better because they are hungrier and will hustle more. The argument goes that if you hire an experienced salesperson, he will not be very motivated to sell; instead, he would only rely on his contacts rather than making a lot of cold or warm calls. However, others argue that your first couple of salespeople should be more experienced because they can quickly increase your sales by their expertise and knowledge. In addition, they can also establish a sales process that can be used later when more inexperienced salespeople are hired.

My response – unless you are selling a highly technical product or service that requires advanced training and education, trust your gut and hire the salesperson who will help you generate a lot of sales. Young or old, if they know how to sell, if they are willing to learn about your product and market, and if they are trainable or coachable, hire them and get them prepared to hit the ground running.

Having a diversity of salespeople from different ages and backgrounds can offer your company different perspectives on how to grow your sales.

You can’t always judge a salesperson by his age, the length of his resume or his previous sales results. Sometimes you just have to trust your gut.

3). True believers, are they the best? Some start-up owners feel that only true believers, the ones who really understand their mission or see their vision, should be your first hires. Really? Chances are you may be hiring a wolf in sheep’s clothing – a con artist who pretends to believe in the “cause” but will quickly bail out as soon as your company hits rough water.

Look, forget about hiring true believers. You are running a business, not a religion. Just hire good salespeople. Once they start selling, if your product or service is good as you think, they will eventually become true believers.

I once worked for a small tax research publishing company where I didn’t know anything about accounting. However, over time, I became impressed with our products because our clients really loved what we were selling. Then and only then, did I become a true believer.

4). Should you learn how to sell? Let’s face it – popular culture has not been kind to salespeople. The Glengarry Glen Ross movie and the Death of a Salesman play have done little to enhance the image of salespeople by depicting them as losers or con artists. I actually know people who won’t admit they sell for a living.

So what do you do for a living?

“I, well, you know, I’m a new development person. I mean, I’m a new business opportunity person…I mean I develop new business.”

Whatever.

As a start-up owner, you may feel it’s better to hire a sales expert so that you can tend to other matters, like product development.

But if you don’t learn about sales, you run the risk of either hiring lazy salespeople, or worst, con artists who will take advantage of your naïve. Either way, you could lose a lot of money, time and prestige.

I once knew a small publishing company owner who admittedly knew nothing about sales or marketing. He never held a sales meeting. Never cracked open a book about selling. His marketing campaigns were from the Dark Ages. Instead, he hired a saleswoman who literally sat by the phone all day waiting for it to ring. She spent her three-year tenure at the company reading books. When a prospect did contact her, she went through the motions of qualifying him, scheduling a short demo, and offering a trial. Sometimes she would follow-up and sometimes she didn’t. With a large base salary, she had no incentive to work hard. Then one day, she quit. A more proactive and assertive salesman was hired. He ended up generating more new sales in 4 or 5 months than the previous saleswoman did in an entire year.

Why? Because he made cold and warm calls. Because he followed-up. Because a true salesperson can’t live on his base salary. In short, he knew how to sell.

The owner, realizing his mistake, now regretted not hiring a more proactive salesperson in the first place. All those potential sales slipped through his fingers because he didn’t take the time to understand the sales process and hire the right salesperson.

On the other hand, I knew another owner who not only took the time to understand sales but provided a small library of sales, marketing and business books for his sales team to read. He even watched videos about not only how to sell, but how to hire good salespeople.

But let’s say you are an extremely busy start-up owner and have little time to read about selling. Have no fear.

I would like to suggest two books you should read to get you quickly up to speed –

The Big Book of Sales, by Alan Gordon
The Ultimate Sales Machine: Turbocharge Your Business with Relentless Focus on 12 Key Strategies, by Chet Holmes

If you are ambitious and want to read more, HubSpot has created a list of the 20 Most Highly-Rated Sales Books of All Time.

Also, there are several excellent YouTube videos about selling that you can also watch.

And BTW, I know there is a lot of debate about which is the best sales process. Is it The Challenger Sale: Taking Control of the Customer Conversation, by Matthew Dixon and Brent Adamson, or could it be SPIN Selling, by Neil Rackman? Maybe you believe in Relationship Selling: The eight competencies of top sales producers, by Jim Cathcart.

Look, all three are good books. Read them. Consider their arguments. But at the end of the day, you will have to decide which sales process really works best for your sales team and your company.

5). Should you create a Quota system? As a start-up company, I wouldn’t worry too much about setting quotas for the one or two salespeople you have on staff. In the beginning, you are going to spend most of your time testing the market and seeing who is actually is buying your product or service – if, in fact, there is a real market. Sure, you can guess. Create a client profile of who you think will be a good customer. You can make some cold calls, send out some emails, and maybe send out some direct marketing pieces. But I would avoid creating any hard quotas for sales until you have a better feel of your market.

Rather than creating sales quotas, you may consider doing activity quotas. Activity quotas are when you expect salespeople to make x-number of phone calls per week or schedule x-number of demos or trials per week. On paper, this sounds like a great idea. However, be carefully that you are not forcing salespeople to do a lot of “make or busy work” – you want them to focus on selling, not dialing for bogus dollars.

carving up sales territories6). Should you carve up and create sales territories? If you had three or more salespeople, my answer would be yes. But if you only have two salespeople, and the entire country (if not the world) to cover, I would say no. However, as your sales team grows, in order to avoid duplication and hard feelings, setting up sales territories by geography or market segmentation may not be a bad idea.

Some companies prefer using the Round Robin method of distributing leads – where inbound leads are dole out on a rotating basis among the sales team.

Experiment. See what works. But no matter how you distribute leads, always focus on the end game – obtaining sales.

7). Should you use a Customer Relationship Management (CRM) tool? My answer is yes. Using Excel spreadsheets or Post-it Notes isn’t going to cut it for you. While Salesforce.com is considered the dominant CRM in the market, as a start-up, you may not afford to purchase it. There are other CRMs that do cater to start-ups and small businesses for free or at a reasonable price, including –

Close.io
Contactually
Act!
Insightly
Pipedrive
PipelineDeals

To get a full listing of CRMs and obtain independent reviews, please check out Capterra, a Northern Virginia based company that helps businesses and nonprofit organizations find software.  Not only does Capterra provide reviews, but you also receive product details, deployment, vendor contact information, and features checklist. You can even request a free consultation with a Capterra customer service rep to find the right match for you. They also publish interesting blogs and infographics that you can download.

My final advice is this – buy the best CRM you can afford. In the long run, a good CRM will save your sales team a lot of time and money. Take your time. Do your research. I recommend that you consider at least three CRMs before making a final buying decision. You may want to contact other start-up owners and compare notes with them.

8). Are the Yellow Pages a good source of sales leads? Unless you’re living in the 1980s, my answer is No. As a start-up, you are probably on a tight budget. However, there are several inexpensive or free lead generation sources you can use including –

Data.com (formerly Jigsaw)
LinkedIn
Twitter
Industry newsletters and blogs
Business websites
List of clients from your competitor’s website (yes, I know this is sneaky, but if your competitors are going to publish their clients, you might as well call them. Who knows, some of them may be upset with their existing vendor).
Google Alerts
Networking events
ZoomInfo

RedJester created a list of 23 lead generation tools you may want to consider.

Also, check out Neha Jewalikar’s article on the “7 Must-Have Lead Generation Tools for Marketers” in Radius.

As you grow, don’t forget to take advantage of inbound phone calls or emails, referrals, and trade shows.

No lead generation tool is perfect. You will always have bad contact information. When I receive a new lead, one of the first things I do is check the contact on LinkedIn. While not everyone keeps their LinkedIn profile up-to-date, it’s usually a good way to verify if you have a good lead.

sales pipeline9). What are your expectations? You really need to keep your expectations within reason. For example, in most cases, it takes a good salesperson at least three months to build a pipeline from scratch – that means straight cold calling with no referrals or no inbound leads. And even if a salesperson is lucky enough to receive some inbound leads from your website or word of mouth, converting that lead into a customer can take weeks or months. I’ve worked at sales jobs where the sales cycle can last anywhere from a few months to two years. I know of some salespeople who spent five years closing a sale.

It really depends on what you are selling and the type of industry you are in.

And when it comes to cold calling, it’s not unusual to make at least 6 to 8 attempts before you reach the decision-maker. I know some salespeople who have told me it will take them at least 12 attempts before they reach the key person at a company or organization.

And yes, there are ways you can help shorten the sales cycle, like providing good CRM, generating good qualified sales leads, and offering great marketing solutions. Remember – your salespeople are serving on the front lines. Like any good soldier, they need your support.

10). Are Salespeople miracle workers? Do you still believe in the tooth fairy? If your product or service is crap, the best salespeople in the world aren’t going to help you.  While it’s expected that any new product or service will be shaky during the first couple of years, if what you are offering is completely bad, salespeople are not going to save you. Sure, they may use hard sell or strong-arm tactics in the beginning to generate sales, but in the long run, you are going to fall flat on your face. Selling is a team effort – the product, development, shipping, marketing, and administrative teams all have to work together with the sales team to ensure success. In today’s economy, and this is especially true for a start-up, all employees are salespeople.

Summary:

Selling is tough. But for a start-up, it’s even more difficult because you are facing several obstacles – tight cash flow, little brand or no name recognition, shoestring budget, and an ever-evolving change of plans or directions. You have to be agile, smart and focused.

You have to face the fact that some salespeople you hire won’t cut it or just don’t like working for a start-up. It’s nothing personal. It happens to the best of us.

When it comes to hiring salespeople for a start-up, you need to be brutally honest. If the hours are long, tell them. If the compensation package is low, tell them. If your resources are limited, tell them.

But also tell them this – that you worked your ass off for months, if not years, to create a product or service that will benefit thousands of people. That you truly believe in what you are doing is not a pipe dream. That you really believe your product or service could change the world for the better. That you are committed to improving your company. And if they hang on, the ride will get rough, but the rewards may be great.

Note: If you like this post, please check out my book – Advice for New Salespeople: Tips to Help your Sales Career for more help.

The Challenger Sale, Good or Bad Advice? Part 4

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the challenger saleThe Challenger Sale: Taking Control of the Customer Conversation.
Is it good or bad advice?

As you may recall, in Part 1 of this post, I offered the pro side of the book. In Part 2, I offered the con side, and in part 3, offered some of the mixed views about the publication.

Let’s examine some of the major criticism of the book in more detail –

1). The authors Matthew Dixon and Brent Adamson are not salespeople.

House Speaker Sam Rayburn once said of Secretary of Defense, Robert McNamara, “I just wish he had just one time run for dog catcher.”

While it would be great if sales researchers had once been salespeople, it doesn’t mean that you should dismiss their findings or advice because they have never sold. It’s like saying that you should disregard the findings or advice from astronomers because they never flew in outer space. The fact that an astronomer has never been an astronaut doesn’t mean he still can’t publish research about our Solar System. The job of a researcher is just that – do research. You can either agree or disagree with their conclusions. That’s your right.

But sometimes you need an “outsider” to see things that others don’t see. We are so caught up in our careers and daily lives, it’s hard for us to see the forest from the trees. It takes a good researcher to stand back, observe, conduct surveys and point out things that we simply didn’t notice before.

The Challenger Sale authors conducted a diagnostic survey of more than 6,000 sales professionals in more than 90 companies worldwide. The survey included every sales model category under the sun, including hunters, farmers, field and inside sales reps, key account and broad-based reps, and direct and indirect sellers.

Putting in place a set of controls and variables, and disregarding things like personality, the survey focused one thing – “Of all the things a sales rep could (italics from the authors) do well, which ones actually matter most for sales performance?”

While I’m not an expert on surveys, it appears the authors did a pretty thorough and extensive job.


2). The authors are just repackaging old ideas.

I don’t know if the authors are repackaging old ideas or not. Certainly, the idea of understanding your industry or tailoring your sales presentation to your clients are not new concepts. I’ve used those concepts myself long before I read the book. But sometimes it takes someone to tie all of those ideas together into one book before everyone “gets it” and can apply it to their careers.

And frankly, repackaging old ideas is not new. For example, when Thomas Jefferson wrote the Declaration of Independence, he admitted that most of the ideas were not his own. Most historians agree that Jefferson received ideas from the Virginia Declaration of Rights, the English Declaration of Rights, the works of John Locke, Jean Jacques Burlamaqui, among others. What is new is that Jefferson put those ideas together and created one of the greatest documents in U.S. history.

Or closer to our industry, does anyone really think that Dale Carnegie was the first one to figure out How to Win Friends & Influence People? Of course not. Many of the ideas outlined in his book were around long before he wrote it. But Carnegie was the first one to pull those ideas together to write a bestselling book that still remains a classic today.

While I don’t compare “The Challenger Sale” to the Declaration of Independence or to “How to Win Friends & Influence People,” what the authors have done is take a lot of ideas that have been floating around in the sales community, put them together into a great book, and backed it up with solid research. And research is the keyword here. The book is not based on speculation. It’s based on a careful study of thousands of salespeople in various industries worldwide.

3). You can’t teach “The Challenger Sale” approach.

Nonsense. Of course, you can. While some may be natural salespeople, most people can learn new sales techniques and concepts. Sure, it takes time, practice, patience and a little coaching. But it can be done. To say that you can’t teach someone how to sell is like saying you can’t teach someone how to read or write.

The Challenger Sale4). Relationships are important. 

The biggest misconception about the book is about relationships. The authors do believe that relationships are important. The difference is that they believe good relationships are more the result and not the cause of successful sales. In other words, customers are not looking for a salesperson to be their friend – they are seeking an advisor. They are searching for someone to teach them and offer insights to improve their business and make more money. The traditional glad-hander or back-slapping salesperson has given way to the salesperson who teaches and leads customers in the right direction.

5). Putting “The Challenger Sale” in practice.

Example: When I joined a small health club several years ago, I was introduced to a personal trainer who was going to offer me a “free” consultation. Rather than come to me as a teacher, he tried to build an immediate relationship with me – he acted like we were long-lost friends. He was too enthusiastic, too desperate, too needy, and frankly, just too creepy for me. I left the health club after a few days because the guy was too annoying to deal with.

Now, how would things have been different if the personal trainer had applied “The Challenger Sale” approach on me? While “The Challenger Sale” focuses on the needs of companies, I thought it would be more interesting to apply this concept focusing on one person. Let’s take a closer look –

Warmer – “I know what you are going through. I’ve worked with a lot of clients in this gym, and I know the challenges you are facing to lose weight and become more physically fit. A lot of people come to this gym exercising, but they quickly get frustrated and leave because they are not seeing any immediate results.”

(Rather than try to be my buddy, the personal trainer is establishing himself as an expert).

Reframe – “Contrary to popular belief, you don’t have to exercise for a long period of time every day. In fact, studies have shown that if you just exercise 30 minutes a day, that will help you reduce your weight and help you live longer.”

(The personal trainer is offering me a unique insight into an exercise that catches me off guard. Like most people, I always thought you had to exercise for hours each day to become physically fit).

The Challenger SaleRational Drowning – “I know you think that using a personal trainer is expensive. But given the amount of money, you already spent on ineffective diets, and exercise equipment that you are rarely using at home, having a personal trainer is a good return on your investment.”

(Here the personal trainer is making a good case for ROI – return on investment).

Emotional impact – “It’s one thing to set goals, but it can be difficult to achieve them. I’ve seen people come and go to this gym without using a personal trainer, but they never accomplished their goals of losing weight. But I think you’re different. You understand the challenge before you and I believe you see a real opportunity to get back in shape. The fact that you came to this gym tells me that you are committed to change.”

(Here the personal trainers are making an emotional connection. He convinces me that I have a problem, and I need to take action to lose my weight).

A New Way – “By investing just 30 minutes a day with me for the next couple of months, I can help you lose weight and become more physically fit. You will save money because you won’t get as sick as often. You will also become more productive at work because you will feel more energized and be less stressful. You will also be able to sleep better at night.”

(Here the personal trainer is offering me a solution – one that I’m beginning to see and may accept).

Your Solution – “Unlike other gyms that just throw you on the gym floor and let you sink or swim, I’m here to give you personal support every step of the way. I’m very flexible in how I work with my clients. I don’t force you to do the same boring exercise routines every day. Instead, I offer a variety of exercises that are challenging, but exciting at the same time. Under my program, you will have so much fun exercising that you will be surprised how much healthier you will be within just a couple of months.”

the challenger sale(Sold. Sure, I could look at other gyms. But the personal trainer demonstrated that he’s an expert, he offered me some unique perspective about exercise, he understands my health and financial concerns, and he’s providing me a clear solution. In the weeks ahead, we will develop a professional relationship based on his insights, expertise and help; not based on some phony pretense of being my best friend).

Is “The Challenger Sale” the right approach for every industry? I don’t know. You know your industry and customers better than I do. But when more than 54% of the Challenger Salespeople are closing complex sales better than the Relationship salespeople, it has to make you stop and think.

Reading “The Challenger Sale” has made me realize where I made mistakes in some of my previous sales. I’ve been a combination Relationship Builder/Hard Worker salesperson. Now, I believe if I had adopted “The Challenger Sale” approach, I could have reduced my sales cycle, upgraded more sales, and even gain better respect from some of my clients.

I only read “The Challenger Sale” once. This is the type of book you need to re-read several times to better understand it. I recommend that you read the book. Watch some of the YouTube presentations on it. Keep an open mind. You be the judge. Let me know what you think.

The Challenger Sale, Good or Bad Advice? Part 3

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In part 1 of the post, I provided videos from those who support The Challenger Sale: Taking Control of the Customer Conversation. In part 2, I presented the opposite point of view. In this post, I provide videos from others who are taking a mixed position in the book.

Andy Boyd from 3M’s industrial sales team likes the Challenger Sale concept. While the Challenger Sale approach works well for the top 13% of salespeople, he argues that the majority of salespeople are having a tough time adopting it. Mr. Boyd believes in order to use the Challenger Sale more effectively, you need to first make a connection and build trust with your clients through storytelling. If this is not done, then salespeople risk over challenging their clients and losing the sale. In short, he argues you need to combine both the Challenger Sale approach and storytelling to get the best results.

Here is his video –

Geoff James, a sales columnist, and author feels that much of the material in The Challenger Sale book is a repackaging of other information that has been written already. While he doesn’t dismiss the research in the book, he argues that you can’t replicate the skills of other top salespeople.

Here is his video below –

The Challenger Sale, Good or Bad Advice? Part 2

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In part 1 of this post, I presented the pro side of the chief argument of The Challenger Sale: Taking Control of the Customer Conversation–  the Challenger salesperson does a much better job of selling than the Relationship salesperson. In part 2 of this post, I will present the con side.

Brian Burns is the author of The Maverick Selling Method: Simplifying The Complex Sale. Mr. Burns is one of the harshest critics of The Challenger Sale. In his videos below, he argues that you can’t trust research conducted by people who have never sold, and flatly states that the Challenger Sale does not work. Beyond his videos, I couldn’t find anything in writing from Mr. Burns that he adds to his arguments from his videos.

Here are his videos –

Another Critical Take on “The Challenger Sale” –

Linda Richardson, author, and sales trainer, in her blog “Challenger’s Missing Link,” believes the book has contributed to “underscoring the need for salespeople to take advantage of research and data available to them.” Ms. Richardson argues that the book is inspiring Marketing Departments to provide better knowledge sharing to help sales teams engage and add more value to customers.

However, Ms. Richardson says that the missing link in the book is the “validation of the customer’s perspective through questioning and dialogue.” While salespeople may know about an industry than most customers, she says you still need to know how customers think, and what’s important to them before you can sell to them.

Ms. Richardson argues that a salesperson must combine knowledge “with even stronger dialogue skills to become a true thought partner with their customer and build long-term relationships and close more deals – which is still the name of the game.”

The Challenger Sale, Good or Bad Advice? Part 1

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One of the most controversial sales books to come out in recent years is The Challenger Sale: Taking Control of the Customer Conversation by Matthew Dixon and Brent Adamson.

In a nutshell, the authors argue that the key to successful selling isn’t relationship building as we know it, but challenging your clients to make a buying decision. This is done by finding clients who can act quickly, delivering insight, teaching something new, tailoring your message, and taking control of the sales process.


Based on a study of thousands of sales professionals, the authors found there are 5 categories of salespeople – Relationship Builders, Hard Workers, Lone Wolves, Reactive Problem Solver, and Challengers.

Of the five categories, the Challengers consistently come out on top in exceeding their sales goals compared to the other types of salespeople. This is especially true in long and complex sales cycles.

In this first post, I will present videos taking the pro side of the Challenger argument. In the second post, I will offer you the con side of the argument. In the third post, I will offer you a mixed point of view. In my final post, I will offer you my opinions about the book.

Below is a video from Perry Holley about the Challenger Sale. Mr. Holley admits that he has been mostly a Relationship salesperson. However, he now agrees that the Challenger approach is better. He points out that of the five categories mentioned above, the Challenger salesperson was 40% more successful than the Relationship salesperson. The key difference is that while the Relationship salesperson focuses on relieving tension with clients and being in the customer’s comfort zone, the Challenger salesperson focuses on using insight to create constructive tension in the sales process, and pushes the customer out of his comfort zone. Without tension, Mr. Holley argues, clients may not upgrade your services, or just issue an RFP (request for proposal) and see what other vendors have to offer.

In short, it is better to be respected than liked as a salesperson.

Here is his video –

Below is a video from InsideSales.com with Matthew Dixon discussing his book in detail. He argues that customers today are savvier in making buying decisions because of the wealth of information online. Thus, they don’t need to rely on salespeople as much as they use to. That being the case, what customers are seeking today from salespeople are those who can offer value by providing them unique perspectives on the marketplace, helping them avoid making mistakes, educating them on the best solutions, and making it easy for them to buy from you. Customer loyalty is based on the idea that what is important is not what we sell, but how we sell it. The Challenger sees relationships as a means to an end, and that they are actually better relationship builders than the Relationship salespeople because the relationships are founded on insight not on being agreeable.

What I found most interesting is that in a highly complex sale, the Challenger is 54% more likely to close a sale vs. just 4% by the Relationship Builder.

Here is the video below –