Book – Challenger Customer

bookExcellent book for marketers!  I would recommend to buy a physical book, which can be easily reviewed later and shared with a colleague.  Audible version, which I purchased, is fantastic to listen while walking in a park (I listened twice), but not as convenient to take notes and share.

The book describes changing of the buying process (buying now includes more diverse groups of people) and sales/marketing strategies that can increase number of “high quality sales” – premium solutions rather than minimum options.

Surprising discovery: finding correct stakeholders boosts the probability of a successful sale by 4%, but positioning the solution for each individual stakeholder reduces the probability of a successful sale by 4% also.

4-percent

Tailoring to the needs of individual stakeholders more hurt the quality of the deal.

big-groups

What are the main points of disagreement in customer buying groups?

  1. problem definition
  2. solution identification
  3. supplier selection

cours-of-actions

Companies needs to concentrate on buyer group agreement on the solution regardless of a supplier.  Decision on the supplier is an easier one for a buyer group.

consensus

Example: 

Medical supply company used to sell their instruments to surgeons.  Now the company is selling to a group of surgeons, CFOs, hospital administrators, etc.  The question is not which supplier is chosen for the surgical instruments, but what needs to be done for the benefit of the business in general, including buying new surgical instruments or building a parking garage.

The disagreement in the buying group is most intense at 37% into the purchase (well before the company will start reaching to any suppliers at 57% into the purchase).

57-percent

Diverse buying groups would not easily agree on anything disruptive and ambitious.

Customer buying group profiles:

  • go-getter (interested in organizational improvement and known for getting results; will be interested in “how” and not “why”)
  • skeptic (focuses on “why” – weary of complicated projects, concerned that the costs will be higher and the benefit lower than expected – needs a lot of convincing)
  • friend (accessible, can connect with others, happy to talk, though may not get much done)
  • teacher (wants to understand the big picture “Blue Ocean Strategy” person)
  • guide (information dealer – will share internal processes of the organization, though may not get much done)
  • climber (focused on personal gain)
  • blocker (wants to avoid change for a variety of reasons – might designed existing solution or had been burned by suppliers in the past)

stakeholders-test

Top reps target customers who can build consensus and drive change, disregarding their title or budget authority.  They target “mobilizers” or “challenger customers” – go-getters, teachers, skeptics.  Average reps target guides, friends, and climbers.

stakeholders-value

What needs to happen for a successful sale?  The supplier needs to teach, tailor (for consensus buying decision), and take control.

Teaching (or, more likely un-teaching)

The organization needs to have “commercial insight” – generating commercial insight is an organizational capability rather than a skill of an individual sales rep.

commercial-insight

As teaching the most effective before the prospective buyer is contacting the sales rep of any supplier, a supplier can do it through marketing content.  The effective content that changes customer’s perspective does not have to be easily accessible or easy to find,  it does not have to have interesting facts or anecdotes, it does not have to be easy to understand.  The content does not have to have a smart perspective.

Effective content must:

  • teach customers something new and compelling about their business
  • provide a customer a compelling reason to change their course of actions

In general, the content needs to illustrate that the cost of inaction is greater than the cost of change.  Thought leadership is not an insight.  The insight provides an implicit message: “you are doing it wrong” – and a reaction – “I need to change my approach.”

32:52 – 39:20 – Explanation of the Commercial Insight (though the entire video is very entertaining and helpful for anybody working with content marketing).

A-B

Commercial insight content should take the customer from point A to point B.

  • A – current state
  • B – future state

Suppliers typically explain how good B is.  However, suppliers need to explain the “pain of staying with A” first.  The customer seeing adoption of B as “pain of change,” the supplier needs to show that “pain of same” is greater.

4 questions to build commercial insight:

  1. What are our sustainable unique strengths?
  2. Of those unique strengths, which ones are currently under-appreciated by our customers?
  3. What are the customers fail to understand about their business that leads them to under-appreciate our unique sustainable capability now?
  4. What would we need to teach the customer about their business, that leads them to value that capability more then they do now?  OR – how we can credibly break down their A and build their B?

Example:  Dentsply

The company produced light weight, cordless, ergonomically designed instruments.  Though the dentists agreed that the instruments were superior to what they used currently, they did not want to make an investment into “nice to have” instruments.  Dentsply (with the help of hiring a knowledgeable dentist and a consultancy) found a different positioning for the instruments.  They look at what was important for the dental practice in general – and found that absenteeism and turnover of dental hygienists is a significant problem.  Better instruments to keep hygienists from work-related strain could reduce their absenteeism and cost of operating a dental practice.

“Don’t lead with what makes you unique – lead to what makes you unique.”

Un-teaching – the supplier explains that hygienist absenteeism cost more to dental practice than dentists realized.

Example: Xerox

School districts were printing a lot, but in black and white.  How to position color printers (better margins) at the time of shrinking school budgets?

Understanding customers broadly – not only IT who buys tech, but superintendents, lead teachers, etc.  Xerox focused on student performance rather than printer performance, and discovered that vibrant color improved focus and retention in students.  As Xerox printers of that category were low cost on the market (unique competitive advantage), the supplier was able to focus the customer’s attention on the improving students performance with color materials, rather than “buying printers.”

Commercial Insight sparks a new kind of conversation with customers—one that doesn’t start with you or your latest “solution.” It lets you start by teaching the customer something new about themselves. Below, one Xerox business unit that provides solutions to the K-12 education marketplace flipped the script from feature-centric customer interactions to Commercial Insight-led customer interactions.

xerox

Content

All content should lead to the commercial insight.  Spark > Introduce > Confront

Spark – a counter-intuitive fact (possible in a sales tweet)

content-leads-to-insight

Customer testimonials can be centered on A too.  For example a customer can talk about discovering that the company’s approach cost more than they realized, galvanizing the other stakeholders, and eventually solving the problem.

drivers-changing-behaviour

Example: Smart Technologies 

Who is the most important person for the collaboration software decision?  Facilities?  CIO?  The answer was  – a person who sees the benefit of it in the organization and can champion the case by connecting other stakeholders.  The company targets this persona.

Lead scoring can be adjusted from sale readiness to mental model disruption.

When a commercial insight is ready, who should be approached with this information?  Bad contact in the organization might be worse than no contact at all, as new ideas can be associated with the reputation (unfavorable) of that person.  It is important to connect with a mobilizer, who can play different role in the buying decision.

Possible concern – climber.  If a person talks about personal benefit the solution can bring rather than group or organizational benefit, the person might be a “climber.”  The colleagues of this person already recognized it, and the new idea coming from this individual might not be perceived positively.

Taking control of customer buying process – helping the customer to create a functional buying group.  Important role of group learning.

Getting customer buying group to learn before buying results in 2/3  increase in probability of buying a premium solution.  It also boosts probability of buying additional future offering by 23%.

Collective learning is not getting stakeholders into one room, but getting them interact with each other in a certain way.  Facilitation of customer buying group  debate became more important than presentation.

Important: finding the common languages between different functions of the buying group and use common messaging.

Example: Sisco 

Sisco realized that a new executive is participating in technology purchasing decisions – the CMO.  Sisco used social listening to understand what aspects of technology are important for CMOs and how are they discussed in the industry.  Then, these conversations were compared to conversations generated by (and targeted to) CIOs.  When the common ground was discovered and messaging that addresses concern of both functions was created, the messaging has been tested in social media also – what was picked up and which terminology has been used.

Mobilizers need to be equipped with tools to help build the consensus in the organization – how to talk to other functions about the category of the solutions in general.  

The content can come from existing sales materials, but it needs to be vendor-neutral.

Examples are Marketo and SkillSoft.   

skillsoftMarketo provides a comprehensive guide explaining Marketing Automation solutions in general with instructions for marketers how to discuss this type of solutions with sales and IT, which arms the mobilizers with materials to use at the early stages of the sales cycle.  

SkillSoft created an un-gated guide explaining elearning that can be used by mobilizers and very useful by itself.  The guide has multiple links for additional, gated, content, which helps the company to generate leads.

Social selling

How do top sales reps engage with the potential customers early if the customers contact the organization at 57% of sales cycle, when the type of the solution has already been determined?  These sales reps go where prospects learn… including social media groups and became facilitators of learning, without mentioning their own solution.

Collective learning decreases probability of encountering a blocker by 20%.   There is 35% increase of probability of high quality sale, if collective learning is happening in a stakeholder group that has a blocker. In general, blockers reduce probability of a high quality deal by 47%.

Companies need to shift to supporting the customers’ purchase process. Rather than “How to help our sales people better sell…” the companies need to think “How our sales teams can help our customers better buy.”  Shifting forecasting from sales activities to “customer versifiers” increased accuracy of sales forecast of one organization by 70%.

Explanation major concepts – more from the sales side.

More useful materials on the topic are available on CEB page dedicated to the book.

Excellent book!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s