Challenging buyers to disrupt their status quo, change, and choose you. This strategy, as popularized by the Challenger Sales Model, is one of the most recognized sales training methods today.
But where did it come from? And is it effective for every selling and buying situation?
What is the Challenger Sales Model?
The Challenger sales model is based on the idea that your sales reps can teach your customers something new about their company. Salespeople engage in disruptive two-way conversations with customers, provoking buyers to move away from their status quo approach and choose your solution.
Challenger is one of several sales training models inspired by Geoffrey Moore’s original idea of Provocation-based Selling, as popularized by his HBR article, In a Downturn, Provoke Your Customers. In his article, Moore argues that salespeople must help customers “see their competitive challenges in a new light that makes addressing specific painful problems unmistakably urgent.”
Written in 2009, Moore’s provocative methodology was a startling revelation for many companies who were desperately trying to understand how to salvage their business during the “Great Recession.” A decade later, Challenger remains a popular adaptation of Moore’s methodology, encouraging sales teams to develop three essential skills:
- Teach customers something new and valuable about how to compete in their market.
- Tailor their sales pitch to resonate with the decision-makers’ specific issues and get buy-in from the entire organization.
- Take control of the discussions around pricing by focusing on value and applying pressure to persuade buyers to close.
Provoking buyers with an urgent imperative may have persuaded them to open their wallets and take action in the midst of an economic downturn. But is this approach still relevant ten years later?
What the Challenger Sales Model Gets Wrong
The economy has fundamentally transformed over the last decade since Moore’s article. Most companies have moved away from a one-time sale of products and services to subscription-based business models. Today, the vast majority of a business’ revenue (analysts estimate an average of 70-80 percent) comes from existing customers.
Provoking your prospects and leading with unexpected insights are effective tactics when you’re trying to convince your buyer to change their status quo. But research shows that using a provocative, challenging message with existing customers—when you’re trying to renew or expand business with them—will actually backfire, increasing your risk of losing them to your competitors by at least 10-16 percent.
This begs the question: If challenging your existing customers isn’t effective; what is?
3 Sales Strategies for Customer Expansion
The Challenger sales and training model doesn’t account for the unique pressures and demands of generating revenue through customer expansion. The buyer psychology is different, so your stories and skills need to be different. You need to shift your approach to include these sales strategies for keeping and growing revenue with your existing customers.
1. Know when to reinforce the status quo
There’s nothing inherently wrong with using a provocative message or introducing Unconsidered Needs to disrupt your buyer’s status quo. But this messaging approach only works when you’re an outsider trying to acquire new customers. Status Quo Bias is your competitive advantage when convincing customers to renew or pay more for your solutions, and it’s foundational to your all-important upsell conversations.
2. Train your team for situational fluency
Situational fluency means being able to engage differently with prospects versus customers, knowing how to adjust for the different decision moments across the customer lifecycle. Unfortunately, most Marketing and Sales teams take a one-size-fits-all approach to every encounter. Instead, you need stories and skills specifically designed for customer expansion conversations to maximize your company’s ability to keep and grow your business.
3. Work closely with Customer Success
Renewals and upsells require unique alignment between Marketing, Sales, and Customer Success organizations. All three teams play an important role in winning critical commercial moments with your existing customers. The right messaging, content, and skills training will greatly improve your ability to align these departments for better retention and expansion results.
Think Beyond the Challenger Sales Model
There’s no doubt that challenging your buyer to take decisive action works in specific sales situations. But you don’t want to provoke your hard-won customers so much that you accidentally open the door for your competition. Research suggests that the Challenger model may only be effective for new logo acquisition—just 20-30 percent of the customer journey.
Check out our e-book, To Challenge or Not to Challenge, to discover research-backed insights into when you should (and shouldn’t) challenge your buyer’s status quo.
Only with Corporate Visions do you get tested and proven sales messaging and training approaches for enabling buyers to choose you—on both the acquisition and the expansion sides of the customer lifecycle. Contact us to learn more.