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Prospects don't need to be educated about a product or service anymore.
When they get on a call with a sales rep, they won't need to be told about the product's features or your competitor's pricing.
They know what they want, and they know how much they're willing to pay for it.
As a result, sales reps have to be able to engage in far more complex discussions with the prospect. Sales teams need to develop a better understanding of the prospect's business so they can showcase their authority and test the prospect's opinions.
Or, in other words, sales reps should adopt the Challenger sales model because it has the power to place salespeople firmly in control of the sales process and give them the tools they need to close deals in today's competitive environment.
Want to learn more?
Then let's start with:
What Is the Challenger Sales Model?
The Challenger sales model encourages salespeople to adopt a more authoritative, educational, and combative approach to the sales process. Sales reps take a direct and educational approach, challenging the prospect's preconceived notions to build trust, improve the prospect's buying experience, and close more deals. The concept comes from Brent Adamson's and Matthew Dixon's book The Challenger Sales.
The two authors of this book researched countless sales reps and divided them into five broad categories:
The Hard Worker
The Relationship Builder
The Lone Wolf
The Problem Solver
Out of the five types, the Challenger sales reps are by far the most effective, especially in complex sales situations.
That's because Challenger sales reps are essentially teachers. They identify the prospect's various misconceptions - whether about the product or about the pain point - and tackle them by educating the prospect and changing their opinion, which helps establish their authority in the process.
But the Challenger sales model requires a light touch. Sales reps who go into the sales pitch with guns blazing and arrogantly lecture their prospects won't go so well.
Challenger sales reps have to be cautious and discreet in how they approach the prospect. They can't start lecturing the prospect about their business process, claiming to understand it better than the prospect.
What they can do, however, is offer useful information that slowly brings the prospect around to their way of thinking.
That's why the Challengers sales model works on the three Ts principle:
The 3 Benefits of the Challenger Sales Methodology
The challenger sales model helps improve salespeople's ability to close the deal.
The Challenger sales methodology:
- Delivers insight
- Offers better sales experience
- Removes pricing constraints
Now let's take a closer look at each one.
1. Delivers insight
The Challenger sales methodology, when executed correctly, educates your prospect.
It provides them with information they've never heard before, perspectives they've never considered, and exposes them to opinions and practices they haven't tried before.
And that has significant advantages. Among others, the challenger sales model:
- Establishes the sales rep's authority
- Creates an objective, trustworthy view
- Helps sales reps stand apart from the competition
- Delivers real value to the prospect
- Helps build long-lasting relationships
2. Offers better sales experience
Too many customers are used to a sales experience where the salesperson repeats the monologue about the product's features and benefits.
In other words, things the prospect already knows.
With that approach, the prospect has a bad sales experience because the salesperson doesn't deliver any value and leaves the prospect alone on an island, forced to make a decision and hope for the best.
The Challenger sales model, on the other hand, offers your prospects a better sales experience because it delivers real value. Prospects get:
- Crucial information
- A new perspective on their challenges
- An opportunity to engage in a dialogue about the product and the general market
- A sales pitch that is tailored to their needs
3. Removes pricing constraints
Pricing constraints are the most common objection prospects have, and they're definitely the hardest objections for sales reps to navigate.
The Challenger sales model is one of the best methods of dealing with this issue because it relies on the sales rep's understanding of the prospect's business.
That understanding gives them a lot of arguments to overcome the prospect's objections about the price.
Challenger sales reps can point to the cost of maintaining the status quo. The product or service they sell may represent an investment, but it probably costs less than slowly falling behind the competition and losing market share.
Or, instead of taking the negative approach, they can focus on the ROI of the product. If the prospect sees the purchase as an investment instead of an expense, they become far more willing to go through with the deal.
And finally, a Challenger sales rep who truly understands the prospect can focus on the specific, everyday benefits they will enjoy while doing their job.
For example, a Challenger sales rep selling a CRM might tell their prospect that with automatic dialing, they'll never have to manually dial a phone number again. Or they might stress how much time they'll save daily if they automate their tasks and start scheduling emails in advance.
The 5-step Challenger Sales Process
Here's a quick overview of the five steps in the Challenger sales process:
- Research the prospect
- Reframe the conversation
- Use emotions
- Educate the prospect
- The solution
And here are the details:
Step #1: Research the prospect
The basis of the Challenger sales model is a detailed understanding of your prospect's business.
The top sellers spend an average of 6 hours per week researching their prospects because they need to establish their credibility from the start.
Learning about the prospect means answering some basic questions like:
- What is the biggest problem your customer faces right now?
- What is a misconception they have about that problem?
- What's standing in the way of solving it?
A sales rep who can answer these questions will have a much easier time figuring out where their product or service fits into the larger picture.
Step #2: Reframe the conversation
This is where the 'challenger' part of the challenger sales model comes into play - the sales reps need to challenge an established belief the prospect holds.
They have to invite the prospect to look at a problem from a different perspective.
For example, let's say that the prospect has had limited success in their sales department because all their leads are generated in-house. They also believe that outsourcing lead generation doesn't work.
That's the kind of misguided belief Challenger sales reps pounce on - they're quick to point out that outsourcing lead generation gets 43% better results than in-house lead generation.
It's this kind of new information that reframes the conversation.
Step #3: Leverage emotions
95% of our purchase decision-making takes place in our subconscious minds.
That's why leaning on the prospect's emotions can be an effective way to complete the sale.
Sales reps can utilize the prospect's fears, for example.
Relating a story about a company that found itself in a similar situation and the consequences it suffered because it didn't solve its main problem is one tactic challenger sales reps might employ.
Another tactic is the fear of missing out - challenger sales reps can explain that the prospect's competitors have already adopted the product or service and are already enjoying its benefits.
But this step also requires a light touch. Using the prospect's emotions can quickly come across as manipulative.
Sales reps shouldn't say: "You know your main competitor, the person you hate most in the world? Well, they've adopted [product], so you better do the same if you don't want to lose market share!"
However, it sounds far different. if they say: "You should probably know that over 40% of the [industry] has already adopted some form of this product."
Step #4: Educate the prospect
By reframing the conversation, the sales rep has opened the prospect's mind to fresh perspectives. By introducing emotion into the picture, they've sparked a desire to know more.
That's why in this fourth step, the Challenger sales rep delivers valuable information to the prospect by explaining how they can solve their pain point.
They can achieve this by:
- Sharing a case study, a whitepaper, or a helpful blog
- Customer testimonials
- Podcasts or videos
- Consulting the prospect about their challenges and showcasing their expertise
Until this point, the product or service they sell shouldn't even be mentioned. This is the final step in the process of changing the prospect's opinion about the topic.
It has to be concluded correctly before the sales rep can finally move on to…
Step #5: The solution
After the previous three steps, the sales rep has primed the prospect for the solution they're offering.
If the sales rep positions themselves correctly, their product or service will answer all of the prospect's needs.
In the final step, the sales rep should explain how the product or service they're selling is the best solution for the prospect's problems and deal with any objections they may have.
Ready to get going?
You're almost there.
But before jumping in and testing this 5-step process on your next sales call, you should stick around and spend the next five minutes reading a few:
- Tips and tricks
- Example questions
- Case studies
3 Challenger Sales Model Tips
1. Identify an opportunity
When the Challenger sales rep first gets in touch with a prospect, they should have only one thing in mind - finding the prospect's problem or misconception.
The prospect's misconceptions are the windows of opportunity that sales reps can use to reframe the conversation and establish their authority.
Challenger sales reps should ask penetrating questions as often as possible to identify them.
2. Change perceptions
After discovering the problem or the misconception, work on bringing the prospect to your way of thinking.
Facts, statistics, case studies - any proof you need to demonstrate that the prospect has a misguided belief about their problem can help you achieve that goal.
If the sales rep fails to change the prospect's perceptions, then the sales probably won't go through either.
3. Be careful when you're challenging
There's a thin line between a Challenger sales rep whose fresh perspective is intriguing and interesting and a sales rep who is just insulting. Which side of the line the sales rep lands on mostly depends on their skill. They have to adopt the right tone for each prospect based on their character and temperament.
With some prospects, sales reps might get away with pushing harder than with others.
Then there's also the question of whether or not the sales rep has an existing relationship with the company.
Research shows that using the Challenger sales model with your existing customers increases your chance of losing them to your competitors by 10-16%.
3 Challenger Sales Questions To Use on Your Next Call
1. Can you tell me how you're currently performing this [process]?
This is a typical question asked by a sales rep looking to discover the prospect's problems or misconceptions.
The question is only the opening shot of a conversation that will deliver a treasure trove of information to the sales rep.
Yes, the prospect will explain how they're performing a specific process, and the sales rep might immediately think of a solution to improve it.
But that's not enough - hearing about how the prospect handles a process and then immediately launching into a lecture on how to improve is a recipe for failure.
No, the sales rep should wait a little longer. Because if the prospect explains how they're performing the process, then it probably won't take long before they explain why they're performing it that way.
And that's the opportunity the sales rep has been looking for.
2. How have you tried to address this [pain point]?
Sales reps should ask this question for two reasons:
- To learn how many times the prospect has tried to solve the problem in the past
- If the prospect has tried the solution you're offering before
For a sales rep who wants to establish their authority, the easiest way to shoot themselves in the foot is to suggest a solution they've tried before, especially with prospects who've tried a dozen different possible solutions and have become disillusioned with all sales pitches.
3. What are the consequences of this [pain point]?
On one level, sales reps should ask this question to learn more about the prospect's business. Understanding how a problem affects their business processes and their bottom line is always useful.
But this question can also serve you well in the third step of the Challenger sales model - leverage emotions.
With this question, the sales rep can get the prospect to consider the consequences of inaction before they start educating them about how to solve the problem.
Challenger Sales Model Examples
Xerox is an American company that sells print and digital document products and services.
In 2011, the company began implementing the Challenger sales model.
The reason behind the change was simple: their salespeople were facing increasingly complex customer interactions. Understanding the facts and the numbers wasn't enough anymore.
The company began coaching its managers and sales reps and encouraging Challenger sales model behaviors.
That completely changed their sales pitch. Before adopting the Challenger sales model, their argument sounded like this: "Our leading-edge, cartridge-free technology produces 90% less waste than laser."
But after they discovered that their clients were mostly focused on student performance, their pitch changed and became: "I'd like to talk to you about the impact of color on student performance."
The results? Xerox saw a 17% increase in sales.
Arco is one of the UK's leading distributors of workplace safety products and services.
Due to the number of low-priced alternatives that began to flood the market, the company found itself in a position where it had to adjust its sales pitch to attract customers who no longer saw the need for premium products.
The company discovered that the executives of many companies were buying cheap Personal Protective Equipment (PPE) that met regulatory requirements. But the company also discovered that the products weren't safe despite meeting industry standards.
Arco then decided to build a Challenger sales pitch around this discovery.
Before the Challenger sales model, their sales pitch focused on the quality of their products. After adopting the Challenger sales methodology, their pitch sounded like this:
"Independent lab testing found that 40% of non-metallic footwear and 30% of rigger gloves failed re-testing despite carrying the official CE mark. Simply trusting these markings and choosing these products increases your company's liability and puts employees at serious risk."
Their changed approach led to:
- 44% higher number of site conversions than the B2B benchmark
- Invitation by the government to help shape the future of H&S in the UK
- Winning the International B2B Marketing Award for Thought Leadership in 2018
Challenger Sales Model FAQs
"What are the 3 T's in the Challenger sales model?"
Teach, Tailor, and Take control:
- Teach: Bring new information to the client and challenge their perspective
- Tailor: Adjust the sales pitch to the individual prospect based on their specific pain points and needs
- Take control: Establish your authority, reframe the prospect's perspective, and take control of the sales process
"What is a sales methodology?"
A sales methodology is a standardized approach a salesperson uses to interact with the prospect, pitch products or services, and improve their ability to close the deal. The first attempt at a professional sales methodology occurred in the 1970s with the Professional Selling Skills (PSS) framework, and new methodologies have continued to emerge ever since.
"What is the 53% opportunity in Challenger sales?"
This idea is based on a sales study which discovered that 53% of the customer's loyalty was based on the sales experience. The Challenger sales model is uniquely positioned to take advantage of this fact due to its focus on improving the customer experience.
Final Thoughts on the Challenger Sales Model
The Challenger sales model isn't a one-size-fits-all solution, and it isn't a methodology that's appropriate for every customer and every situation.
The Challenger sales model does, however, represent a strategy that can be enormously effective in the right circumstances. For that reason, sales reps should master the skills required to execute this sales methodology.
With that knowledge in their pocket, they will be ready to take advantage of any opportunity when it presents itself.
If you'd like to learn more, visit our website or check out this article on the 7 Most Effective Startup Sales Strategies.