Challenger Sales Method Archives | Challenger Inc Challenger Sales Thu, 20 Feb 2025 19:44:21 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.2 https://challengerinc.com/wp-content/uploads/2022/10/cropped-Challenger-favicon-48x48.jpg Challenger Sales Method Archives | Challenger Inc 32 32 How To Win Negotiations Like a Challenger https://challengerinc.com/blog/win-negotiations-like-challenger/ Thu, 19 Dec 2024 22:05:13 +0000 https://challengerinc.com/?post_type=blog&p=124768 No matter how enthusiastic the seller response from a workshop or kickoff, they won’t truly adopt the skills and behaviors that lead to higher performance without reinforcement.

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There’s no win more satisfying — and no loss more frustrating — than one you’ve spent months negotiating. Sales leaders know that the desire to close a deal can push even experienced sellers toward bottom-line-undermining discounts, unkeepable product promises, or ballooning scopes. Even the sellers who avoid these tempting traps might struggle with procurement, legal, and their ever-expanding list of paperwork requirements.

During Q4, negotiations are top-of-mind for every sales team. But the groundwork for successful negotiations in sales is laid long before the contract is signed. When they nail it, your sellers can avoid discounts and, dare we say it, perhaps even have a little fun?

In this article, we’ll address how Challengers approach negotiations differently, with the negotiation tactics your sellers need to win.

The role of preparation in negotiation

Challengers never walk into a sales conversation without a Commercial Insight, and that level of preparedness helps them prepare for negotiations, too. For one thing, preparation builds the confidence sellers need to negotiate effectively.

In our recent webinar, Negotiating Like a Challenger, Challenger’s Geoff Hendricks expanded on this idea.

“Sellers don’t naturally want a discount because it takes us further away from our own personal goal. But why does it happen? There’s a moment of fear that can take place when you’re looking at needing to make quota. At the same time, you know you have a deal towards the end of the stage, and you don’t want it to slip away. Simon Sinek actually found that you can turn that fear or that nervousness into excitement with proper preparation, training, and practice, because they’re [coming from] the same area of your brain.”

It takes adequate preparation for sellers to prevent late-stage value leaks. That kind of preparation might require your sellers to outline customer needs and priorities earlier in the sales process, including identifying what’s negotiable and what isn’t.

Quantify like a Challenger

To avoid late-stage negotiation stumbles, Challengers do a couple things differently. First, they constantly quantify value — starting with delivering a true Commercial Insight and using that information to emphasize the cost of delay, according to John Shea, Global Director of Sales Enablement at Databricks.

“On a day-by-day basis, we could actually quantify the impact of not taking action on the problem and not getting it over the line,” John said. “The discount is not really that effective or scalable or defensible of an urgency driver, in my experience.”

This calculation, called the Cost of Inaction (COI), brings the thread of the Commercial Insight through to negotiations in order to build a more urgent case for change. As John said, “If you’re not quantifying, you’re not challenging.”

How do you calculate the COI? Use this simple formula, detailed by our Head of Learning Design Lauren Graves in this short clip.

Be prescriptive

Next, Challengers are prescriptive. The prescription doesn’t even need to be correct. High-performing sellers offer the solution they think buyers need based on all the information at hand and then sit back and listen. Confident Challengers also use prescription to create Constructive Tension. They ask, “Where did I go wrong here?” Sellers can use this opportunity to probe key priorities and adjust based on those corrections.

“Be prescriptive,” John said. “Invite skepticism. That’s what confident Challengers do.”

When they recognize that buyers have realized the need to disrupt the status quo, they pivot to offering a solution — what we often call “Sizing the Pie.” The information they’ve gleaned throughout the sales process helps them build leverage during this phase, since they know customers’ pain points and their negotiables.

Build rapport with the right stakeholders

Once procurement enters the chat, sellers’ attention to multithreading and ability to identify Mobilizers is put to the test.

“If you’ve got one champion, you’ve got a problem,” John told our webinar audience.

With buying groups spending so little time — less than 17% of their buying time, spread across vendors — it’s essential for sellers to equip their Mobilizers to sell on their behalf. That might involve seeking out technical champions within your customer’s organization, or ensuring your Mobilizer can answer technical questions when you aren’t in the room.

This goes hand-in-hand with anticipating customer objections later in the negotiation cycle. Sometimes, it’s as simple as writing down the ultimate goal of the sale and understanding what is worth sacrificing in pursuit of that win; likewise, high-performing negotiators also know when the answer is a hard “no.”

As Geoff explained, it comes down to establishing value early in the sales process. Building value-based relationships with internal stakeholders empowers them to advocate on your behalf when procurement steps in with demands.

“Being a third-party facilitator of decision-making between your customer’s organization and your organization is a really powerful position to put yourself in,” Geoff said.

What high performers do differently in sales negotiations

As you assess what your team needs to close deals and prevent value leaks, remember that Challengers win by creating a better sales experience from the very first call. Likewise, high-performing negotiators don’t win in the final mile. Instead, they sell in a way that makes for smoother negotiations. Here’s how the difference between core performing and high performing negotiators might play out…

Core-performing negotiators

  • Bring a must-win attitude to the negotiation
  • Anticipate customer objections
  • Write out opening remarks
  • Repeatedly mention advantages of the proposed solution
  • Prepare to win a debate at the expense of the counterpart

High performing negotiators

  • Know where you need to win and can afford to lose
  • Retain a reputation for reasonableness
  • Anticipate customer objectives
  • Write out ultimate goals
  • Negotiate dealbreakers first, rather than easy items first
  • Never stop looking for more opportunities to create value

Small changes early in the sales process can help transform core performing negotiators (and sellers) into value-protecting high performers. That’s good news for your bottom line and for the sales experience, which Challengers know is the key ingredient for longstanding customer loyalty.

For more on negotiations, don’t miss the full replay of our on-demand webinar, “Negotiating Like a Challenger,” and tune into Winning The Challenger Sale each month as we dive deep into Challenger methodology with expert guests.

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How Aerogen Invested in Sellers Through Challenger Experience Training https://challengerinc.com/blog/aerogen-success-story/ Tue, 26 Nov 2024 23:01:14 +0000 https://challengerinc.com/?post_type=blog&p=124752 No matter how enthusiastic the seller response from a workshop or kickoff, they won’t truly adopt the skills and behaviors that lead to higher performance without reinforcement.

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Transitioning a company to a new selling style is no small undertaking. But for Aerogen, a global medical device company headquartered in Galway, Ireland, the individual successes of its international selling team made this undertaking worthwhile.

As Aerogen rapidly expands its business — aerosol drug delivery in acute care — the company remains connected by tangibly investing in employees and supporting their integrity and career growth alongside the organization’s own.

“Salespeople are keen to become trusted partners to their customers,” explained Jacqueline Lüttjohann, Global Commercial Training and Education Manager at Aerogen. “Many of our sellers have a professional background in intensive care or, in our case, as respiratory therapists, so they have excellent knowledge of medical topics. We saw an amazing opportunity to lead our teams to even greater performance by combining this expertise with the Challenger approach.”

aerogen experienced improved sales results with challenger

Over the course of their engagement with Challenger, People and Organizational Development Leader Laura Gilioli also described seeing improvements in individual seller performance and the development of a more empowered and connected workforce.

“I strongly believe that every investment in learning development is an investment in the future success of the organization,” Laura said. “It’s an investment in innovation, and it is an investment in our people engagement.”

“Challenger really enables our sales team and gives them the tools and the confidence to manage complex sales, which allows them to go to customers and change their conversation with them and bring back fantastic results,” Laura said.

But don’t take our word for it. We asked sellers from across Aerogen’s global selling network to share their experience learning and using Challenger in the field. Hear directly from them how training has changed their success rates and careers.

What’s been the best part about Challenger training?

“Both the Challenger book and the Challenger learning modules were fantastic references, and I found the way that Aerogen applied the Challenger method extremely helpful as I could see how it applied in my current day-to-day. Overall, Challenger was the best ‘sales method’ experience I have gone through in my career, and it is the method I truly believe works.” — Parker McArdle, Account Manager, Northern United States

“Implementing the Challenger approach has been a game-changer for me, particularly in working with customers with complex needs and operating in competitive markets. By challenging their assumptions and providing Tailored Insights, I’ve been able to engage more deeply with decision-makers and position myself as a trusted advisor. This approach has allowed me to build stronger, more meaningful relationships and achieve better outcomes, especially with clients who value strategic thinking and long-term value. The Challenger methodology has enhanced my sales performance and significantly boosted my confidence and effectiveness in navigating complex sales environments.” — Debora Pannocchia Serrano, Clinical Specialist & Territory Manager, Spain

“My experience of working with Challenger has most definitely helped me see what type of seller I was before and has now changed how I approach the selling situation. Throughout my career, I have had the opportunity to practice many approaches, using the multiple sales courses I have attended, but this is the one that relates to me as a seller and one that I have truly adopted.” – Jonathan McAusland, Senior Clinical Account Manager, Northern Europe Clinical Education Lead

“First of all, I started off as the biggest skeptic, but then my mind changed. It started with the education program and its quality. I could directly recognize a completely different approach and loved the depth of the Insights and the science behind it. I overcame my inner skeptic and it was easy to adapt the learned content to the field meetings. I even reached one of my hardest to access accounts with a completely different strategy: working effectively with more stakeholders, overcoming issues, and getting to a new level of engagement with key stakeholder.” — Damian Sielmann, Business Development Manager, Germany

“The amount of data-driven information Challenger presented regarding current sales processes, customers, and buying experience was surprising and refreshing. It created a self-awareness that helped me adopt the Challenger methodology more consistently and abandon less successful behaviors.” — João Mendes Marques, Senior Territory Manager SEA + Commex Lead APAC

Before using Challenger, what was your experience selling?

“Selling has always been hard, and putting your story into words has been even harder. This can come through to the customer and can ultimately stop the selling journey in its path. The buying process was slow and less productive due to not identifying who the right people were and how they would aid the ultimate goal.” — Jonathan McAusland

“Before Challenger, I was a Hard Worker…[My] way of approaching customers was the same with all kinds of customers, regardless the type of customer. My sales were never that low, but I always thought I should be taking advantage of my market much more.” — Odai Al Sakran

“Prior to using Challenger, my sales approach was more conventional. I focused heavily on building relationships and addressing the specific needs customers shared with me. While this worked somewhat, I often found standing out in a competitive market, recognizing the customer profile, or implementing the curve difficult. My sales efforts felt more responsive than strategic.” — Debora Pannocchia Serrano

“Before Challenger, I was a self-motivated salesperson. I loved listening to sales content podcasts; I’ve read many books and have always been interested in the science behind the sales process, social science, the insights of communications, and the procedure of objection handling. Even though I’ve done a lot of training and guided coaching, I always felt there was a tiny gap to reach best practice. There was the feeling that I was missing a leader who enables me to reach the next step.” — Damian Sielmann

“Having always worked in complex sales environments and with a strong clinical background, I focused on being a reliable expert for my customers and ensuring that all issues were always addressed. I consistently delivered good results, however, looking back, I wish I had been exposed to Challenger earlier in my career. I could have been even more successful by helping customers to act, guiding them through the buying process, and Taking Control.” — João Mendes Marques

How has Challenger training changed your sales behavior or career?  

“My experience working with Challenger changed how I start conversations with customers and allowed me to properly identify the correct stakeholders in the buying process. It allowed me to tell the Aerogen story, challenge the customers’ thought processes, and guide them in the right direction to benefit all parties. Our time together is more productive, which helps customers to be more engaged and invested.” – Jonathan McAusland 

Since integrating the Challenger methodology into my sales approach, I’ve experienced a significant shift in my career and sales techniques. I’ve learned how to lead conversations by offering new Insights, challenging my customers’ thinking, and taking them through the process, which has helped me bring more value to every interaction. This change has resulted in better client engagement, stronger relationships, and successful outcomes. The Challenger approach has given me the confidence to be more proactive and assertive in my sales role, leading to better outcomes for my clients and my career.” — Debora Pannocchia Serrano

“My mind and understanding opened to more strategic thinking, and I developed more self-confidence to handle and deal with wide, more complex sales situations. It is much easier to understand the ambiguity of the market, and I feel well-prepared for the next chapter. I got better tools for meeting preparation and overall, it feels like we all became a Challenger organization, which makes everything a little bit easier and gives me a feeling of working at a “best in class” company!” – Damien Sielmann 

“Some of the changes I would also highlight that have been helping me to Reframe thinking is the in-depth customer research I do on their current state and, when we finally meet, understanding them better. I have recently had an incredible career opportunity at Aerogen following consistently positive commercial results, so… thank you, Challenger!” — João Mendes Marques 

Ready to create a culture of change that inspires your sellers? Contact Challenger to find the best fit for your team. 

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Enabling the Challenger: How Nuix Drives Sellers to Reach New Heights https://challengerinc.com/blog/nuix-sales-enablement-story/ Fri, 22 Nov 2024 21:06:55 +0000 https://challengerinc.com/?post_type=blog&p=124748 No matter how enthusiastic the seller response from a workshop or kickoff, they won’t truly adopt the skills and behaviors that lead to higher performance without reinforcement.

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We’ve often focused on the importance of reinforcement after introducing Challenger, with guidance on gaining buy-in, coaching, and increasing adoption. But as any effective coach knows, theory isn’t practice. This truth is particularly acute for our sales enablement colleagues. They know firsthand that the gulf between rolling out a new sales training program and getting sellers to eat, sleep, and breathe a new methodology couldn’t be wider.

That’s why we sat down with Greg Turner, Global Sales Enablement Specialist at Nuix, to find out how he and Nuix helped their sellers embrace Challenger sales training – and grew business in the process.

Challenger: What did sales enablement look like at Nuix before Challenger?

Greg: Our product is so obviously best at what it does that it can basically sell itself. That’s not to say that there wasn’t value added by salespeople because there was, but it wasn’t necessarily in the persuasive, decision-making category of outcomes that you want salespeople to make a difference with.

At the time, enablement focused on creating content support that the sales team would use around more practical things like licensing, customer service, training on the product itself. It’s a technically oriented product, and if you’re going to sell it to someone, they need to learn how to use it. So “sales enablement” was very often used as a term to denote resources given to a client to help them learn the product.

Challenger: What shifted at Nuix that led to bringing Challenger on board?

Greg: We were making a monumental shift in our product service offering. We traditionally sold a standalone piece of software that was very discrete…but we’d integrated that into a whole bunch of other tools that create an end-to-end workflow in an integrated Enterprise platform. And we knew that we weren’t going to be able to sell that in the way that we sold licenses [for our discrete product] because we now had complex value, not simple value or discrete value. You now have complex decision-making processes rather than discrete decision-making processes.

So, they brought me in to help us make that transition from selling licenses to selling value and systems. When I got to the company, the first thing I did ostensibly after I got my feet under the table was to build a program that would enable people to sell complex value. It was based on the principles of overcoming status quo and it got some traction in some parts of the world but not in others.

One of the executive vice presidents, the one for North America was tasked by the CEO with leading the charge for new business. He said, “We need to bring a methodology in from the outside and we are therefore going to buy Challenger.” We needed the validation of someone coming in from the outside.”

Challenger: What roadblocks did you encounter when rolling out Challenger?

Greg: So, what is Challenger about: changing people’s minds who have an entrenched position built around status quo? Well, what does that sound like?

“I’m a salesperson; I have an entrenched way of doing something. I’ve got 15 to 20 years’ sales experience behind me. I am going to do it the way that I have always done it. So, how do you overcome that? “Let me show you why it’s not working anymore. And then let me highlight the cost to you as an individual.”

I would do these sessions, and I would stand there, and I’d get resistance, and I’d say, guys, listen, it’s your target. It’s entirely up to you what you do with this but if I were in your shoes, I’d want to be making more money, and I’d also not want to have the fear of getting fired hanging over my head, which we all know is what will happen if we don’t turn business performance around a bit. It’s kind of the nuclear option, the last button you press, but it works.

Challenger: When did things really start to catch on with Challenger?

Greg: So, we introduced this term of becoming a Challenger company at the launch… it means that we are orchestrated as an organization around understanding the complex problems that our clients don’t understand as well as we do. And everyone has a part to play in contributing to that.

The salespeople’s job is to tell the story but everyone else has a role in deriving that story, so that we become an organization that says, “we help people solve complex problems around unstructured data. Oftentimes, the ones that they don’t even know about.” And that’s what being a Challenger company means.

It resonated. And so, from that point forward, everyone started to use this term “becoming a Challenger company” including the CEO and EVP. And that message has filtered through.

Challenger: What positive shifts did you see in your sales force after implementing Insight Design and Challenger overall?

Greg: Have you heard of the Johari Window?

The Johari Window model for sales enablement

The whole point of the Johari window is that you want to minimize the unconscious aspects and maximize the conscious aspects. So, the first step is to ask the salespeople to tell me about how they use Challenger, tell me about a win that you did, and tell me what you think made a difference. And so, in doing that I’m like, did you appreciate what you did there? What you’ve just told me is that you Reframed the thinking of a Mobilizer. Did you appreciate that? And they say, “Did I?” and I was like, yeah, you did. So, that’s that reduction, that’s the Johari Window closing out, that’s the unconscious competence becoming a conscious competence.

One good example of this is a deal that a salesperson landed with a national transportation company. I spent a lot of time with this salesperson because she struggled a bit with not owning this amazing thing she’d achieved in winning this deal. I asked her to tell me what she did. I said, well, let me show you how what you’ve done is a perfect example of Challenger selling. And that light went on. Not only did the light go on, but the confidence level just shot through the roof. She got it.

Now, she could own it. And by owning it, she can replicate it because she’s now consciously competent of that. It’s a $750,000 deal. If that goes to the course, it’s an $8 million deal.

Challenger What other success stories can you share?

Greg: We had a government sector client using our product for one purpose and spending $200,000 a year on it. The salesperson went in, and she did a whole Reframe: “You still think that your problem is about data warehousing. You’ve got a data warehousing need and you’re using [our discrete product] to solve your data warehousing need. The problem with that is that you still think that the ball game is data warehousing, and it’s really a breach. Yes, you need to warehouse all this data. But you’ve failed to appreciate that in warehousing all this data, you are making it a prime target for breach.”

“You’re so focused on making sure that you’ve got enough storage and enough protection around the storage, that you have no idea what’s inside that warehouse at all. And the number one rule of being able to successfully mitigate and manage a breach – and everyone gets breached at some point in their time – is the time with which you are able to respond. And the number one thing about that is knowing what was in there in the first place, and what’s being breached. And you’ve got no idea.”

And she went from $200,000 to $690,000 on that pitch.

Challenger: What’s your best advice for high-performing sales enablement leaders?

Greg: An important piece of Insight for any sales enablement person is that it’s the easiest thing in the world to say ‘that’s your job, not mine. You’re the sales guys. I’m not the sales guy. You’re supposed to be the experts in the product, not me.” But if you want a sales team to take you seriously, you need to be able to say, “I can do your job. I’m not going to do it, but I could.”

Next is that I think, fundamentally, we’re in the game of behavioral change. There’s so much Insight from the Challenger methodology, but I think you must win hearts before you win minds.

I think that’s at the heart of what the Challenger methodology is really about… people make decisions based on gut instinct. They don’t make them based on rational belief. And so, if you’re going to try and teach people to change the way that they function, you have to appeal to that emotional decision-making process, not the rational one.”

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Three Key Challenger Skills for Motivating Buyers https://challengerinc.com/blog/three-key-challenger-skills-motivating-buyers/ Fri, 15 Nov 2024 20:35:20 +0000 https://challengerinc.com/?post_type=blog&p=124742 No matter how enthusiastic the seller response from a workshop or kickoff, they won’t truly adopt the skills and behaviors that lead to higher performance without reinforcement.

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Every seller knows that sinking feeling: realizing a deal they thought was progressing apace has slid off the rails. Maybe your main contact suddenly went dark, or procurement appeared out of nowhere, or the window you thought you had before year-end suddenly closed up.

Unmotivated buyers can frustrate the most skilled sellers. Getting them moving once more can be nearly impossible. What gives?

Buying groups are growing, making it harder to pinpoint the right point of contact and more likely that an unknown stakeholder can step in to stall a deal. When we surveyed a large sample of B2B buyers in 2019, we saw the typical buying group increase incrementally every few years from 5.4 in 2009 to 6.8 to 10.2 to just under a dozen in 2019. Moreover, Gartner research shows buyers spend less time than ever with vendors, with 75% preferring an entirely rep-free buying experience.

Another looming factor is unspoken indecision. In 2020, research published by Matt Dixon and Ted McKenna in “The JOLT Effect” showed medium to high levels of indecision in as many as 89% of all deals. Shockingly, 40-60% of lost deals can be attributed to indecision.

While indecision is best battled by following The JOLT Effect playbook, sellers struggling broadly to motivate decision-makers can return to three key Challenger skills: identifying Mobilizers, honing Constructive Tension, and emphasizing the Cost of Inaction.

Leverage Mobilizers

One of the most troublesome missteps in a stalled sales journey comes earlier than you might think, way back when sellers are identifying their target buyer. In the “The Challenger Customer,” authors Matt Dixon, Brent Adamson, Pat Spencer, and Nick Toman interviewed 700 customer stakeholders across hundreds of organizations to determine who could most successfully drive action around a large-scale corporate purchase or initiative.

They uncovered seven distinct customer profile archetypes: The Go-Getter, The Teacher, The Skeptic (collectively known as “Mobilizers); The Friend, The Guide, and The Climber (Collectively known as “Talkers”); and Blockers (whose title speaks for itself).

The biggest revelation was that the most successful reps target the three profiles known as Mobilizers because they move their organizations toward consensus and build a framework for change.

Importantly, this doesn’t always make them the easiest profiles to work with. The Skeptic, for instance, may require more up-front convincing than the more easily-impressed Friend.

But, in the long run, only Mobilizers have the internal capacity to drive action and the know-how to help move a stalled deal forward. To avoid being stuck with an unhelpful Blocker or a useful but not drien Talker, high-performing reps target these profiles early and often. And they shouldn’t stop until they’ve found their organization’s Mobilizers.

And so, they must artificially try to do it. And I think you can force your way to succeeding. But I think the problem that you get into if you take that approach is there’s probably something you really are wired to do that, A., you’d be a lot better at, and, B., you’d be a lot happier doing…

… [In those cases, it’s up to managers] to guide them into something else. That doesn’t mean you have to fire them. They might be a great asset for your company. They’re just in the wrong job.”

Wield Constructive Tension

We say that how you sell matters more than what you sell. The original Challenger research (and our subsequent research, conducted in 2019) showed that the sales experience drives 53% customer loyalty. That’s more than brand, reputation, service, quality, and price combined.

Challengers create that desired experience by Teaching, Tailoring, Taking Control and using Constructive Tension. Among these skills, we hear that Constructive Tension is the hardest to get right. More Challenger clients (97%) ask for extra help with this skill than any other we teach.

In case you need to brush up on your “Four T’s,” Constructive Tension is a productive force used to compel a customer to act. It’s used strategically and empathetically to examine conventional ways of thinking, explore assumptions, probe for answers, and deliver a Commercial Insight.

Many sellers shy away from Constructive Tension because they mistake it for something they must create between themselves and the buyer. But when it comes to motivating change, Constructive Tension is queen. The best-performing sellers intentionally create and expertly wield Constructive Tension to help customers realize they need to make a change. This skill is about creating tension within the buyers themselves.

That tension tells buyers that they shouldn’t settle for the status quo – and helps them move forward.

For more on how John Round, SVP of Commercial Fleet Sales at Wheels, deploys this skill to draw buyers in instead of pushing them away, check out this clip from our recent Winning The Challenger Sale webinar, “Motivating Buyers to Act.”

Clarify the Cost of Inaction

Sometimes, even successful Mobilizers and solid Constructive Tension can’t save a deal from a misunderstanding of the business case for change. In these cases, sellers can get deals back on track by emphasizing a customer’s Cost of Inaction (COI). Where traditional return on investment (ROI) calculations focus on future savings, COI helps customers understand what they lose right now if they don’t make a change. This framing works precisely because it drives urgency.

How important is emphasizing the cost of inaction? As John shared on our recent webinar, it’s one of the two essential components he looks for in on-track deals.

“If I was to get hit by a truck tomorrow, my team should be able to get through a deal if they know who the Mobilizer is and they can figure out the Cost of Inaction,” John said.

But that’s more than a calculation. Before jumping into a solution (what we call the New Way) Challengers can use the Cost of Inaction to aid in the Rational Drowning portion of the Challenger choreography.

“It’s really being able to explain a good story about what the current state is costing the company, the individual, daily,” John said.

For a simple formula you can use to calculate the Cost of Inaction, check out this clip from our on-demand webinar, “Creating Buyer Urgency amid Indecision and Uncertainty.”

Uncover the true reasons stalling your deals

Moving stalled deals forward is often a matter of addressing the root cause behind the lack of urgency, such as ballooning buying groups or misunderstanding the repercussions of standing still. By double-checking that they’ve identified the right Mobilizer, deploying Constructive Tension, and clarifying the cost of inaction, your sellers can start pushing deals forward before it’s too late.

For more tactical Challenger insights from guests like John Round, explore our latest on-demand and upcoming live Winning The Challenger Sale webinars.

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How Prospect Theory Drives Sales Experiences https://challengerinc.com/blog/prospect-theory-drives-sales-experiences/ Tue, 23 Apr 2024 16:32:07 +0000 https://challengerinc.com/?post_type=blog&p=124266 The post How Prospect Theory Drives Sales Experiences appeared first on Challenger Inc.

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Last month, I achieved a new personal best at the gym: I hip-thrusted 130kg (that’s nearly 300 lbs for our American readers). To put it into context, that’s more than 2.5 times my weight (so there you go…now you know how much I weigh). I wouldn’t have gotten this far if my conventional way of thinking hadn’t been disrupted and someone hadn’t delivered a powerful Insight that made me feel some Constructive Tension!

I know what you’re thinking: wow, you’re strong! But you’re also probably wondering, “What’s that got to do with Challenger?” We’ll get to that. But for now, let’s focus on Prospect Theory.

As humans, we want to reduce tension, keep relationships amicable, and show the benefits of doing something — what we at Challenger like to call “the gains.” The Nobel Prize-winning Prospect Theory model, developed by Kahneman and Tversky, shows that the human tendency toward reducing tension is a less effective motivator than loss aversion. Loss aversion is a cognitive bias that describes why, for individuals, the pain of losing is psychologically twice as powerful as the pleasure of gaining. In short, the pain of losing money (or any other valuable item) is more significant than the pleasure of gaining an equal amount.

a graphic showing the prospect theory model

Or as John Legend recently put it:

When you prepare for a conversation with a prospect or client aimed at changing their current way of working, it is imperative that you include the negative consequences of sticking to the status quo. This is what I tell my clients every day, and yet it remains a difficult concept for many sellers. Companies then exacerbate this problem by ignoring Prospect Theory entirely and spending a lot of time teaching reps how to sell the company’s products and solutions rather than understanding customers’ problems and identifying solutions. For this reason, training and ongoing reinforcement is key. Irrespective of the industry, country, or region that your organization operates in , research shows that delivering a sales experience that challenges the status quo and helps the customer think differently will win more business.

But let me take a step back and remind you that I’m currently hip-thrusting 130kg. And to get to this achievement, I experienced firsthand what I tell my clients every day…

It all started a year ago: I grew tired of my workout routine and wanted to increase my strength as I felt I had plateaued. I am not new to strength training and nutrition, but I was eager for a new perspective – I read articles, watched videos, tried different exercises, and still felt stagnated. I have always been reluctant to spend money on a personal trainer ; but was willing to talk to some and see if it was worth it.

I did my research and narrowed down the three I wanted to talk to that specialized in strength building. All of them asked me the same questions: my goals, my current routine and lifestyle, my eating habits. I had some nice conversations and gained a few tips; but ultimately, they proved to me that my status quo was good enough and that with some tweaks, I could continue building strength. I didn’t choose any of them. One might say I chose nothing over something (like 40-60% of B2B buyers these days).

One key learning of Prospect Theory is that when people are presented with opportunities for gain, it naturally triggers risk aversion. For me, when the trainers made their positive suggestions, to be honest I was automatically triggered to be risk averse — and do nothing — as many buyers often do.

Then one day a new trainer approached me. I nearly told her, “no thanks”, but before I could, she said “I noticed you have abdominal separation like many of my female clients. They often have it from pregnancy. Is that the case with you?” No PT had ever spotted this, much less pointed it out so boldly. I felt a little self-conscious, even defensive. We started chatting, and she shared with me something I was completely unaware of about my current trajectory: If I continued to do heavy lifting as I was, I would weaken my core, my back would suffer, and eventually I could severely injure myself, therefore taking me away of exercise for a while. Clearly this would prevent me from achieving my goals. She shared a story of how it happened to herself as a new mother, painting a picture I could use as a frame of reference and lending power to her case for change. And then she shared that strength gaining with abdominal separation was her speciality.

That trainer perfectly executed the Challenger choreography, and I perfectly executed a buyers’ journey and committed to six months of personal training and to achieve my goal. In essence, she delivered a Commercial Insight by:

  1. Considering her customers’ status quo and highlighting what the gap was – in this case, a literal abdominal one! (Warmer and Reframe)
  2. Intensifying the consequences by showing the cost of staying the same and humanizing the problem with storytelling (Rational Drowning and Emotional Impact)
  3. Identifying a new approach that was unique to her solution (New Way and Your Solution).

She helped me avoid loss — and mitigated my fears — to lead me out of decision by indecision.

a graphic showing the pain of staying the same and a new way forward

At Challenger, we support organizations in refining their go-to-market strategy by helping them build the right message, for the right stakeholders, at the right time. We can’t promise you gym gains like mine — but we can show you how to use Prospect Theory, Reframes, and the Challenger choreography to show your customers a new way and your solution.

If you’d like to discuss how to develop commercial insights that disrupt the status quo for your customers, get in touch!

The post How Prospect Theory Drives Sales Experiences appeared first on Challenger Inc.

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Tactics for Dialing Up Constructive Tension https://challengerinc.com/blog/tactics-for-dialing-up-constructive-tension/ Tue, 16 Apr 2024 20:46:33 +0000 https://challengerinc.com/?post_type=blog&p=124230 The post Tactics for Dialing Up Constructive Tension appeared first on Challenger Inc.

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Let’s start with a familiar scenario. You’re choosing an operating system for your enterprise company. Your two options are both great companies with strong products and offer prices that work for you. So, what makes you choose one over the other?

When CEB (now Gartner) conducted a widescale study of approximately 5,000 individuals aimed at determining what exactly they look for in B2B suppliers and solution providers, what they found changed the way we look at sales. They revealed that buyers believe a high-quality product, a great brand, and reasonable pricing are merely table stakes. The only dimension where buyers truly perceived a difference was in the sales process. At 53% of the loyalty equation, this factor drives more customer engagement and loyalty than brand, reputation, service, quality, and price combined. The fact is that how you sell matters much more than what you sell.

What exactly do buyers expect during that sales process? Our 2019 B2B Buyer Study identified “demonstrating unique insight,” “helping me come to a decision,” and “understanding and addressing different stakeholder needs” as the top seller skills. In a 2024 study, LinkedIn and Ipsos validated these findings, noting that buyers most wanted sellers to “demonstrate a clear understanding of [their] business needs,” and “demonstrate a clear understanding of [their] industry/competitors.”

Challengers win because they create a better sales experience using a distinct set of skills: Teaching, Tailoring, and Taking Control of the sale. Through the entire sales process, they deploy an important fourth skill, known as Constructive Tension. Among these skills, we hear that Constructive Tension is the hardest to get right. More Challenger clients (97%) ask for extra help with this skill than any other we teach.

Let’s dig into how Challengers use Constructive Tension throughout the sales process to change the way buyers think about their problems and move them away from the status quo.

How Constructive Tension Helps Sellers Create a Better Sales Experience

In “The Challenger Sale,” authors Matt Dixon and Brent Adamson profiled sellers and found that star performers came from one dominant category: the Challenger. Of all the high performers in the study, nearly 40% were Challengers. The Challenger sales methodology is built around the behaviors that set these sellers apart. They found that Challengers consistently and frequently build Constructive Tension while Teaching, Tailoring, and Taking Control. They push their customers to think differently — even if they don’t immediately see eye-to-eye. Yet for those learning Challenger methodology, this skill can be particularly opaque.

Constructive Tension Is:

  • A productive force used to compel a customer to take action
  • Used strategically and empathetically to examine conventional ways of thinking, explore assumptions, probe for answers, and navigate your Commercial Insight choreography
  • Created throughout the sales cycle
  • A learned skill

Constructive Tension Is Not:

The best-performing sellers use Constructive Tension with the other Challenger skills to help customers realize they need to make a change. It isn’t about creating tension between the seller and the buyer but within the buyers themselves – a tension that tells them that the status quo isn’t good enough.

Getting Constructive Tension Right

Constructive Tension helps create the sales experience buyers want, but we know many sellers don’t use this correctly across the sales process, deploy it as frequently as they ought to, or tap into it early enough. In our recent webinar, 41% of sales leaders told us their sellers worry Constructive Tension will hurt buyer relationships, and another 34% just don’t know how to do it. Many wait too late, creating Constructive Tension for the first time during negotiation and missing the opportunity to use it during their Commercial Teaching, where it’s most impactful.

a graphic showing what keeps your sellers from using constructive tension as frequently as other skills
a graphic showing a bar chart with the title

Here are a few tactics you can use to get Constructive Tension right:

Ask Powerful Questions

Questions create a dialogue with your buyer and help you to surface additional information. Not all questions, though, are created equal. Closed questions, those beginning with “is” or “are” or “have,” allow for incomplete responses. When you lead with these, you risk buyers responding with “yes” or “no,” effectively ending the back-and-forth. Even worse, they could perceive these as leading questions. To use Constructive Tension credibly in your Commercial Teaching, instead, opt for open-ended questions that require your buyer’s thoughtfulness.

This approach helps you develop trust and allows for an open response and helps surfaces additional information to use throughout the sales process. For example, instead of asking, “Are you happy with how much you’re spending right now?” ask, “What would happen if you continued losing money each quarter on this service?”
This approach requires research and prep but leads to a more productive conversation.

Investigate assumptions

When you use Powerful Questions to create Constructive Tension, you force your clients to consider their status quo. At that point, you can begin to uncover what’s unstated by your buyer by digging into their own assumptions about their business. You want them to ask themselves, “Am I approaching this business problem correctly, or am I putting myself and my organization at risk by not considering a new way?”
Use examples from other companies — both successes and failures — to illustrate their assumptions’ underlying problems. The goal is to highlight an unrecognized, misunderstood, or underappreciated problem or pain point. This investigation can help you identify a gap in the current state that’s in need of a reframing.

Use silence

Stop talking — really. When you ask a Powerful Question designed to investigate an assumption, you must give your buyer time to think and process. Strategically using silence is an extremely effective way to dial up tension. Just make sure you’re using it constructively, not awkwardly. Dive deeper into silence with this short clip from our on-demand Winning The Challenger Sale webinar.

Practice dialing tension up and down

What happens if you go too far in your quest to create Constructive Tension? Challengers aren’t afraid to overstep because they know how to read the Dial of Tension and pull things back when they’ve gone too far. Similarly, they know how to read that there isn’t enough tension to bring about change. Think about tension as a spectrum, with Constructive Tension sitting squarely between “too little” and “too much.”

a graphic showing constructive tension on a dial with no tension, constructive tension, too much tension

Challengers gauge the tension in the room by looking for body language, signals of interest, and even signs of frustration or anger. When they sense too much tension, they use strategies such as naming the tension, refocusing on a shared goal, or summarizing to help shift the conversation and continue moving forward. These strategies take practice, but they’re the marks of a truly skilled Challenger.

Constructive Tension Isn’t the Villain. It’s the Hero.

It’s easy to think of tension as a villain, but Constructive Tension is a hero. By creating tension within the customer, this force actively moves them away from the status quo and towards change. Constructive Tension requires practice and planning, but like all Challenger skills, it’s possible — and arguably essential to Challenger selling — to learn how to get it right.

For a deeper dive into Constructive Tension, don’t miss our on-demand Winning The Challenger Sale Webinar, Crush Constructive Tension in Commercial Teaching.

The post Tactics for Dialing Up Constructive Tension appeared first on Challenger Inc.

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Beyond Borders: Debunking Myths About Challenger in International Markets https://challengerinc.com/blog/challenger-for-international-sales/ Thu, 07 Mar 2024 22:54:38 +0000 https://challengerinc.com/?post_type=blog&p=124138 The post Beyond Borders: Debunking Myths About Challenger in International Markets appeared first on Challenger Inc.

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Editor’s Note: Though regular readers will note that most Challenger articles follow the conventions of U.S. English, we feel the spirit of this post dictates we maintain the original U.K English in which it was written. This article is by Veronica Coli, Challenger’s senior director of client success, based in the U.K. 

Since the publication of its namesake book in 2011, the Challenger Sales Methodology has been adopted by thousands of organisations worldwide. Thirteen years into helping organisations implement Challenger, I find it still courts controversy as a methodology in international sales circles. I often hear sellers say “Challenger was made for an American audience; it does not work outside of America.”

For one thing, the skeptics tend to think that Challenger vocabulary and colloquialisms won’t translate to international audiences. I also hear the misconception that some of the more “challenging” concepts in Challenger methodology, such as Creating Constructive Tension, only work in the context of Americans’ very direct style of business communication.

The reality is that Challenger teachings can adapt to fit any culture — and can even help sellers expand into new markets with time-tested skills. Let’s debunk the idea that “Challenger is only for Americans” once and for all by unpacking some of the more common myths.

Myth #1: Most Challenger programmes are implemented in the U.S.

Challenger offers training to clients across the world. In fact, of the organizations who partnered with us to implement Challenger methodology in their sales organizations, over 40% come from outside of the US. That doesn’t include the U.S.-based organizations with whom we partner on implementations in offices around the world.

Myth #2 – Asian and European markets differ too much from the U.S.

While it’s true that “The Challenger Sale” grew out of research conducted by CEB (now Gartner) among American sellers,  the Challenger Sales Methodology has grown and evolved internationally as CEB’s research on high-performing sellers began to spread across European and Asian markets. And, as you might expect, CEB’s original research revealed some interesting distinctions.

For instance, in Asia, we found that nearly one in two salespeople were Hard Workers (as opposed to 21% in the U.S.). The Hard Worker profile adeptly reacts to demand and converting customers who indicate a clear intent to buy. Due to underpenetrated markets, most deals in Asia have been fairly transactional, which historically favoured Hard Workers. However, while the Hard Worker is the most prevalent seller profile in Asia, Hard Workers are significantly more likely to also be core performers.

As we know, Challenger sellers perform best in complex sales. Given the trend toward greater sales complexity in all industries and markets in Asia, the Challenger is the best profile to seek when hiring and upskilling.

a chart showing distribution of high and core performers in asia by profile

As we know, Challenger sellers perform best in complex sales. Given the trend toward greater sales complexity in all industries and markets in Asia, the Challenger is the best profile to seek when hiring and upskilling.

distribution of higher performers in asia by profile

As we supported an increasing amount of organisations implementing the methodology across Europe and Asia, our findings continued to validate the original study. This proved that not only was B2B-buying dysfunction and aversion to risk just the same in international markets, but also that high performing sellers in those markets exhibited the same skills as Challengers — and won more often — than their peers. For this reason, I would argue that failing to understand why the Challenger wins in diverse cultural landscapes is a risk most businesses can’t afford.

There are, however, some nuances and “rules for the road” to consider so you can ensure cultural fit and avoid the risk of rejection.

That leads me to Myth #3.

Myth #3 – Challenger is too assertive for some cultures

At its core, the Challenger Sales Methodology rejects the traditional notion of sales as primarily driven by relationships. Instead, it advocates for sales professionals to become educators who offer valuable insights and perspectives to reshape customers’ thinking. The methodology outlines five profiles of sales reps, with the Challenger profile emerging as the most effective in driving high-performing sales teams.

Challengers excel at deeply understanding their customers’ businesses, uncovering hidden needs, and bringing disruptive insights that reshape customers’ perspectives. By doing so, they establish themselves as trusted advisors rather than mere vendors, driving not just transactions but long-term partnerships.

Of course, Challengers working in diverse markets must take cultural sensitivity into account. This is where understanding local customs, communication styles, and business practices is essential for success. By leveraging insights into regional trends, industry-specific challenges, and competitive landscapes, sales professionals can bring tailored insights at the right moment and in the right way. This requires flexibility in communication styles and a willingness to adapt to different cultural norms.

Luckily, Challengers naturally exhibit this flexibility and adaptability in spades. One of the strengths of the Challenger Sales Methodology lies in its ability to read local market dynamics and customer preferences.

  • In Europe, where we place an emphasis on relationship-building in business dealings, those giving Challenger only a surface-level review might balk. When we dive deeper, we see that the methodology does not diminish the importance of relationships. It instead encourages sellers to bring a new or distinct perspective to those relationships, making them of added value. This perspective shift helps convince European audiences of Challenger’s utility. Understanding regional differences is paramount here, too. For instance, the assertive business culture of Germany differs quite a bit from the more relationship-focused dynamics of Southern Europe.
  • In contrast, Asian markets, known for their emphasis on hierarchy and respect for authority, require a more nuanced approach. Challengers must navigate these differences delicately, focusing on building trust and credibility over time. Patience, humility, and a genuine interest in understanding the client’s perspective become extremely important for Challengers working in this context.

The bottom line: Sellers must adapt strategies to local contexts.

Does the Challenger Sales Methodology work for international sales?

Regardless of geographical location, the underlying principles of the Challenger Sales Methodology remain consistent: a focus on value creation and insights that make the customer think differently. By demonstrating a deep understanding of customers’ needs and providing insights that challenge conventional thinking, sales professionals can position themselves as indispensable partners in their clients’ success.

At Challenger, the Client Success team excels at implementing programmes tailored to the individual organisations and their regional rollouts. Over the years, we configured the following approaches to successfully localize our client engagement experience:

  • Engage local leadership early and share details (what / why / when)
  • Understand each of the local markets included in the full scope
  • Work with facilitators to determine local and relevant examples
  • Organise calls with the facilitators
  • Local facilitators emphasize the collaborative nature of the Challenger skills and selling approach in the classroom. They teach participants that Challengers embrace collaboration by bringing intriguing information that benefits the customer in a manner that helps them to think critically about the topic – and act.

Challenger supports sellers working in diverse markets around the world by helping them change how they sell. Explore our success stories to learn more.

To summarise

The Challenger Sales methodology isn’t just for Americans or American companies. It works across all kinds of cultures when sellers show a commitment to navigating varying communication styles, relationship dynamics, and rules of business etiquette. If businesses embrace cultural diversity and tweak their implementation journeys accordingly, they can successfully unlock new growth opportunities in markets all over the world.

Veronica Coli is senior director, client success, at Challenger. She is based in London and loves leading tailored implementation journeys with our most strategic accounts, seeing customer results, and sharing learnings across cultures and regions.

The post Beyond Borders: Debunking Myths About Challenger in International Markets appeared first on Challenger Inc.

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Want Account Growth? Make Your Business Indispensable https://challengerinc.com/blog/grow-accounts-by-being-indispensable/ Wed, 01 Nov 2023 17:37:11 +0000 https://challengerinc.com/?post_type=blog&p=123860 The post Want Account Growth? Make Your Business Indispensable appeared first on Challenger Inc.

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Today’s market is complex and unpredictable, but one thing is certain — retention matters more now than ever before. By embracing the role of a trusted advisor and focusing on overall profitability over top-line growth, sales leaders can navigate the rollercoaster days ahead.

Andee Harris sits down with Marinus Maris, industry veteran and VP of international sales at Challenger. Marinus provides a unique perspective on the current landscape of sales culture, skills, and growth strategies. Drawing inspiration from his journey, Marinus provides details into the necessary shift toward profitable growth and the art of building and retaining customer loyalty.

Marinus and Andee break down:

  • Why focusing on profitability is the new norm in sales
  • How sellers can leverage customer improvement for profitable growth
  • Strategies that prioritize profitable customer segments for long-term growth

Listen to “#94: Want Account Growth? Make Your Business Indispensable” on Spreaker.

Not ready to listen right now? Head over to your preferred podcast platform and like/download the episode.

Why focusing on profitability is the new norm in sales

We’ve seen sales leaders react to volatile economic conditions by moving their focus from top-line growth to profitable growth. Focusing on profitable growth includes accountability for efficiency alongside effectiveness — how do sales reps apply that strategy in the long term?

“The sales teams doing this really well are not focusing on the idea of sales,” Marinus says. “First and foremost, they’re focusing on customer creation and retention, which is a little bit of a different ballgame.”

The sales world focuses on selling; in the sphere of customer creation and retention, the focus is solving specific customer problems. The difference lies in the mindset. To problem solve, it takes: 

  • Genuine curiosity
  • Storytelling
  • Proactive account planning

Sellers typically ask “How do I sell more of this product/service?” When the focus shifts to retention, the key question becomes “What problems need to be solved within this organization, and what can I teach them about these problems that they might not understand?”

Taking on an advisor role is far more beneficial in the long run than settling for a quick sale. To be an effective advisor, a rep must understand every facet of the customer’s problem areas and goals.

How sellers can leverage customer improvement for profitable growth

When companies consistently meet a buyer’s needs at the right time, and with the right outcomes, they will almost undoubtedly choose to stay in that customer relationship. 

“The metric you want your customers to have in their mind is, ‘I can’t live without this person because what they’re bringing to me is insightful,’” Marinus says.

One critical element for providing insightful advice? Focus on customer improvement — offer new perspectives on issues, help them look around the corner, and open their eyes to new possibilities and solutions.

“It’s far more profitable to go after your existing base,” Marinus continues. “One of the expressions that we use in the team here is that the customers you want are like the customers you already have.”

What are the commonalities across those customers? Where is the common ground for high-spending accounts? What is the total addressable market within each of those accounts?

“Really start to think about, ‘Where’s the ICP here? Does it exist? Do we have champions in certain accounts?’ When you start to take those into account, you start to see your Champion League of accounts, your division one and your division two of accounts you want to be going after.”

Mobilizers — aka Champions — are essential for account growth and retention. Identifying who will help champion positive business results throughout the organization can spread into more leads in the relevant pool. Working together yields the most rewards.

Strategies that prioritize profitable customer segments for long-term growth

Without an on-their-game Account Director, even the best-suited customers can struggle to achieve their goals. It takes a dedicated leader to retain customers and maintain customer improvement.

“The best account directors are asking for accountability, which is to say, ‘I want to be able to build this amount of pipeline, I want to be able to ask for this many referrals, I want to make sure I’m doing this quality follow up,’ or so on and so forth, ‘I need your help to hold me accountable to these things,’” Marinus says. 

When everyone understands the objectives and has clear steps forward, that clarity transfers to customers, helping them to overcome challenges and leading to positive growth.

Want to learn more about how to effectively and efficiently problem-solve for customers? Listen to the full episode of Winning the Challenger Sale where Marinus reveals more about the art of building and retaining customer loyalty, working as a team, leveraging mobilizers, and more.

To hear this episode, and many more like it, you can subscribe to the Winning The Challenger Sale podcast on our website, Apple Podcasts, Spotify, or just search for it in your favorite podcast player.

The post Want Account Growth? Make Your Business Indispensable appeared first on Challenger Inc.

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How to Perform Win/Loss Ratio Calculations & Why You Should https://challengerinc.com/blog/win-loss-ratio-calculation/ Fri, 21 Jul 2023 16:26:32 +0000 https://challengerinc.com/?post_type=blog&p=123650 If you work in sales, we don’t need to tell you that conducting regular lost sales analysis is an essential part of doing business. Win and loss reports provide valuable insights into team performance and help sales leaders identify areas for improvement that can guide strategic decision-making.

The post How to Perform Win/Loss Ratio Calculations & Why You Should appeared first on Challenger Inc.

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If you work in sales, we don’t need to tell you that conducting regular win loss sales analysis is an essential part of doing business. Win and loss reports provide valuable insights into team performance and help sales leaders identify areas for improvement that can guide strategic decision-making. But, exactly what is a win/loss report, what should one include, and what is the most beneficial win/loss ratio formula for zeroing in on the metrics that matter most?  

In this handy guide, we’ll discuss the value of performing win/loss ratio calculations and provide a step-by-step guide on how to conduct your own. 

What is a Win/Loss Report?

In short, a win vs. loss report is a document outlining the number of deals won versus lost by your sales team, indicating their success rate in closing deals and converting potential customers into paying customers. Of course, in the bigger picture, there’s much more to it than that. 

The best win/loss ratio calculations also consider prospect and customer sentiment and identify patterns that provide insight into what works — and more importantly, what doesn’t — so you can make the right improvements. To be successful, you’ll need to carefully scrutinize the details of all the deals you’ve won and lost. Analysis of these numbers will help you reveal:

  • How your products and services are perceived
  • The effectiveness of your sales strategies
  • Gaps in sales training and product messaging
  • Whether your unique selling proposition aligns with prospect needs
  • Competitor products and features that are jeopardizing sales
  • Product development opportunities
  • Customer satisfaction levels

Before we delve further into the details of win/loss ratio calculation, it helps to have a firm grasp on the basics. So, let’s review the basic terms and win/loss ratio formulas. 

Win Rate

A win report tells you how many prospects you’ve turned into paying customers:

Won opportunities ÷ total opportunities = win rate

Win/Loss Ratio

A win vs. loss ratio report measures how many deals you’ve won and lost in a given time frame, excluding deals that are still open in your sales funnel: 

Won opportunities ÷ lost opportunities = win/loss ratio 

The Value of Win/Loss Ratio Calculations

Companies that conduct detailed win/loss reporting witness revenue increases of 15% – 30% and up to 50% improvement in win rates. However, thorough analysis of win and loss data provides you with way more than bottom-line statistics. Effective win/loss analysis questions why deals were won and lost and what prevented prospects from moving through your sales funnel.

There are different takeaways for each department within your organization: 

Sales

Win/loss data can help you uncover areas of strength and weakness at individual, team, and organizational levels. The reasons behind wins and losses can be leveraged to foster new learning opportunities for your sales reps, enhance team cohesiveness, and improve the entire sales process to win more future deals. 

Marketing

Detailed win/loss reports highlight aspects of your brand that potential customers appreciate and highlight areas of weaknesses. Marketing teams can use this information to fine-tune messaging, adjust campaigns, and create better content that showcases your company’s strengths and unique selling points.

Product Development

Data-rich insights from win/loss ratio calculations equip business leaders with the information they need to make better product decisions and investments. Knowing what works, what doesn’t (and why!), and what makes your customers happy is essential in designing new products and product features.

Where Win/Loss Calculations Can Go Wrong

Win/loss calculations provide significant value in evaluating your overall sales performance. In some cases, however, this calculation alone does not have enough data to provide actionable information for sales teams and leaders to adjust their sales process accordingly. Understanding the ratio of deals that you win and observing the trends is the first step, but the missing link in this data is the “why.”

This is why it’s essential to capture in-flight buyer feedback throughout the sales process. When combined with win/loss calculations, ongoing buyer insights give sales leaders a clearer understanding of why a deal may be headed for the danger zone or can reassure sellers they are on the right track.

An effective feedback approach comprises four steps:

  1. Collecting Data: Traditional feedback tools often focus on gathering data only after the end of a deal. This compromises the integrity of the data; there’s little incentive for a buyer who walked away to respond. Further, by capturing data in flight, sellers and buyers alike can benefit from feedback that allows them to make progress. Capturing feedback at multiple stages of the buying process allows sellers to gain insight into how the buyer responds and adjust their approach accordingly.
  2. Analyzing Data: Identifying patterns and trends in win/loss data uncovers valuable insights that drive increased sales and revenue, such as finding ways to shorten sales cycles or driving clarity around milestones.
  3. Sharing Insights: Sharing insights and best practices with your sales team can significantly improve performance. For example, if you identify that 90% of buyers don’t communicate when they encounter problems, you can work on strategies to integrate more effective check-ins and follow-ups. 
  4. Taking Action: Improving the overall sales experience is a top priority because research shows 73% of consumers say customer experience outweighs than price in business decisions. Therefore, implementing changes to improve the sales process can increase your win rate and the size of every deal.

Sales leaders can leverage this data to:

  • Assess the competitive landscape 
  • Leverage sentiment analysis
  • Determine the impact of specific topics on overall buyer satisfaction
  • Evaluate trends in sales performance over time
  • Analyze sellers’ skills and identify coaching opportunities
  • Flag and address churn risks
  • Adjust strategies in real time before deals are lost

Step-by-Step Guide to Win/Loss Ratio Calculations

Creating a win/loss analysis template might appear simple at first glance. After all, you already have a heap of win/loss data on your CRM somewhere. So how hard can it be to bundle it all together?

In practice running your own win/loss analysis can be confusing — and incredibly time intensive. If you’re researching how to perform a win/loss analysis here are the steps you’ll need to work through.

Step 1: Define Parameters

The first step is to define what constitutes a win and loss. In addition to recording whether a sale was closed, other priority metrics could include:

  • The size of the deal
  • The type of product or service sold
  • The length of the sales cycle

Step 2: Calculate Your Current Win vs. Loss Ratio

To make a realistic and measurable plan for future improvements, you first need to know where you stand now. Using the win/loss ratio formula above, you can work out your win rate and win/loss ratio relatively easily, provided you have accurate data on the following:

  • Total number of opportunities
  • Number of won opportunities
  • Number of lost opportunities

It also helps to know the number of open opportunities still in the sales funnel, although this isn’t necessarily essential for calculating a win report or win/loss ratio report. 

Step 3: Outline Goals

Before you start conducting research to gather data, you need to decide what information you need, so goal setting is essential. Some examples of common sales goals include:

  • Strengthening value propositions 
  • Improving the effectiveness of existing sales strategies
  • Improving the features and benefits of products and services
  • Developing a better understanding of buyer behaviors
  • Identifying gaps in customer service
  • Reducing churn rate
  • Getting ideas for new products and services

Step 4: Write a List of Questions

Compile a list of questions to help uncover information pertinent to your goals. The themes and topics you cover will likely be wide-ranging. You might consider asking people:

  • What attracted them to your products and services
  • How well you catered to their needs
  • What they liked most and least about the sales process
  • How they gauge your industry reputation in relation to competitors
  • Which other companies they considered
  • Whether they would recommend your products and services
  • If their buyer experience met their expectations
  • The primary reasons for choosing/not choosing your company

Step 5: Gather Data

Gathering data manually without intelligent software can feel like a Herculean task. And in many ways, it is. There are several logistical considerations to factor in before you even begin asking your questions. You’ll need to think about:

  • How many people need to give feedback – Not everyone will want to take part, so you’ll need to ask more people than you need to ensure an adequate volume of data. 
  • Which prospects and customers to approach – You’ll need feedback on a fair split of won and lost opportunities.
  • How you’ll collect the data – Online form submission vs. phone/in-person interviews, etc. 
  • Where any in-person interviews will be held – As well as how long they’ll be, and who will be the interviewer.
  • Whether you offer incentives for participation.

Step 6: Compile Your Win/Loss Report

You’ll need to conduct in-depth statistical analysis if you’re to derive meaningful data points and be able to act on the findings. The results of your win/loss ratio calculations should be presented in a single document that’s easy to share between sales, marketing, product development, customer service, and customer success teams.

Turn Insights into Action with Challenger’s Sales Methodology

An effective win/loss analysis does more than track ratios—it reveals key insights that help sales leaders refine strategies, improve team performance, and increase win rates. By analyzing patterns and capturing in-flight buyer feedback, organizations can make data-driven decisions that drive real-time improvements in sales execution. Done right, win/loss analysis becomes a powerful tool for boosting revenue and strengthening competitive positioning.

At Challenger, we help sales teams go beyond the numbers and translate win/loss insights into actionable strategies that drive consistent success. Our proven sales methodology equips sellers with the skills to challenge customer thinking, tailor their messaging, and take control of the sales conversation—so they’re not just tracking their win rate, but actively improving it.

Ready to turn your win/loss analysis into a roadmap for more closed deals? Contact us to talk about how Challenger can help your team win more often.

The post How to Perform Win/Loss Ratio Calculations & Why You Should appeared first on Challenger Inc.

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Commercial Teaching: More Than Just An Early-Stage Strategy https://challengerinc.com/blog/commercial-teaching-more-than-just-an-early-stage-strategy/ Tue, 25 May 2021 19:37:21 +0000 https://challengerinc.com/?p=10083 In our most recent Winning the Challenger Sales Webinar, we went deep on “Discovery” calls and shared some tips for how to leverage “high-gain” questions.  […]

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In our most recent Winning the Challenger Sales Webinar, we went deep on “Discovery” calls and shared some tips for how to leverage “high-gain” questions.  A high-gain question is an open-ended question that does two things:  

(1) Unlocks information prospects typically don’t share with salespeople (i.e., the true goal of “discovery”) and  

(2) teaches the prospect about a blind spot in their business (i.e., similar to the Socratic method). They’re not easy; they take planning and practice to do well.

I’ll go deeper on discovery calls in a later blog, but I first want to outline a critical consideration “discovery”.  

For Challengers, a successful discovery call looks like this:  

  • They demonstrate credibility by revealing research conducted in advance 
  • They share a strong hypothesis around the customer pain point they plan to expose  
  • They ask high gain questions that turn into “teaching opportunities” and provide the prospect an engaging or “aha” moment where they reconsider status quo  

The discovery call represents the first and most obvious “teaching opportunity” in what will hopefully progress into a qualified opportunity and ultimately a “closed-won” deal.   

But the important point to consider is that the job of a “commercial teacher” and the process of discovery is just beginning in the initial discovery call. In fact, there are many discovery and teaching opportunities that arise throughout a sales process/buying journey.

If you’re making the most of “teaching opportunities” throughout the funnel, you continually discover more about your prospects’ motivations, and find strong footholds to reframe their perspective. This is evident in their reactions.

Commercial teaching is not simply a choreography for first sales calls and early-stage conversations, although it works very well in those situations. It’s a tool for teaching and discovery used throughout the sales process/buying journey. We’ll be exploring this idea in early June.

Join us on June 3rd as we dive deep into the next sales moment that matters on the next episode of Winning the Challenger Sale: The “Teaching Opportunity” .

Access the replays of Season 2 Winning the Challenger Sale episodes.

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