Unpacking Challenger Customer Insights
The CEB book Challenger Customer, released in September 2015, will continue to garner support for its many insights. They provide important considerations for all B2B marketing and selling professionals, especially sales executives.
Despite a breezy writing style, there are many dense sections. A level one reading risks missing several important but deeper implications for an organization’s go-to-market and content strategy. I’ve discovered this from conversations with colleagues and clients who have read the book.
This post is not a book review. It assumes you have read CEB’s Challenger Customer.
I will highlight key Challenger Customer insights and suggest important implications, considerations, risks and required actions that I (and colleagues) missed the first couple of times we read the book.
These ideas can have a significant impact on execution efficacy and outcomes for those who attempt to leverage CEB insights. We all have a lot at stake in getting these concepts right if we choose to adopt them. But this is not a riskless proposition.
For B2B sellers in this digital era that is characterized by online, self-educating buyers, it’s cliché to talk about the empowered buyer changing the buying dynamics.
Unfortunately, sellers have been slower to adapt. Heck, to find the right methods to adapt to. Challenger Customer offers this potential.
As background, and to level set, the CEB premise includes:
- B2B selling is fundamentally a change management activity (for many sales people this will be a big insight)
- Buyers have a strong bias against change — especially if the problem and solution approach isn’t already identified, and a project and buying team isn’t established.
- In B2B, groups buy more than individual people. Some familiarity with Groupthink principles are beneficial here.
- Sales problems are due in part to dysfunctional buying. The inability of large (5.4 average people on B2B decision teams), diverse, and disconnected buying team members (among many other negative factors) inhibit buying decision consensus. This explains “no decision” as such a serious problem for sales organizations.
- A combination of buyer belief systems (see Mental Models below) and self-education sets up a new sales requirement to “unteach” buyers.
- Developing compelling Commercial Insights is the recommended mechanism to address this reality.
The primary Challenger Customer insights I’ll focus on in this and subsequent posts are:
- Commercial Insight (and how to create them)
- Mental Models (and how to use them)
- How to “Break Down The ‘A’”
- How to “Build Up the ‘B’”
- Implications for Sales (including Mobilizers, Talkers, Coaching, Facilitation and Using Content for “Collective Learning” and to Sell)
- Implications for Marketing and Content Strategy
CEB asserts that developing Commercial Insight is the critical first step to sell using the Challenger approach. Commercial Insights are required to dislodge buyer thinking and behavior that produces their acceptance of the status quo. CEB calls this the way to “break down the buyer’s ‘A’.”
The first “A” that needs to break is our own thinking about thought leadership. Undoing current actions is important, and this will also be difficult.
“Thought leadership can really get a supplier in trouble. Not only because this is the kind of content most suppliers are creating, but because it’s the one most suppliers aspire to create. Virtually every marketer will tell you, their company strives to be a “thought leader” in their industry.”
“Building (commercial) insight is an organizational capability, not an individual sales person skill.”
An important understanding is, your Commercial Insights must “lead to your unique, sustainable strengths.”
Marketing must step up to take the lead here. Be vigilant about the starting orientation of both individuals and groups for this work. The best results are produced by maintaining an “outside-in” perspective. Despite customer-centric rhetoric, there is a natural tendency for individuals, and especially groups, to regress to an inside out perspective.
Developing Commercial Insight
One of the weakest areas of the book is CEB’s recommended approach for creating Commercial Insights. This approach elevates the risk just mentioned by suggesting you start by asking:
- “What are our sustainable, unique strengths?
- Of those unique strengths, which ones are currently underappreciated by customers?
- What is it that the customer fails to fully understand about their business that leads them to underappreciate our unique, sustainable capability now? (Insight opportunity 1)
- What would we have to teach that customer about their business that would lead them to value that capability more than they do now?”
Starting from your “sustainable, unique strengths” doesn’t change your team’s natural orientation to inside out thinking. As a result, you risk missing important insights, or developing weaker insights.
Nevertheless, if you can’t define “sustainable, unique strengths,” you will have difficulty defining compelling Commercial Insights. We have more suggestions for you below.
Problem-Cause Value Model
We have long applied the “Problem-Cause Value Model” for this work. Asking this sequence of questions will give you more points from which to discover insights. It also lowers a vendor-centric orientation that we have learned limits insight discovery:
- What business problems do your products, services or “solutions” address?
- What are ALL the possible causes of those problems? (Access to insight opportunity 1)
- Which important causes to do you primarily address?
- What is the business impact of the buyer’s problems? (Quantify each for insight opportunity 2)
- What capabilities are required to address those causes, in order to impact the problem? (Insight opportunity 3, ideally assigning a cost specifically to each cause, providing input to your “problem calculator” as well as education-oriented sales content)
- What is the customer missing at each level? (Insight opportunity 4)
- What does the customer need to know or believe in order to value those capabilities? (Identifies areas to “unteach” as source for content and mental model conversation)
When you use this approach you will discover additional ways to define your “unique, sustainable strengths.”
We like thinking of strengths as capabilities. Most capabilities are “table stakes” required to participate in any business. Make sure everyone is clear about these. You want sales people to acknowledge, but not dwell on these in conversations with buyers. Many organizations are, in reality, selling “me too” products, especially from buyer perspectives. This makes identifying unique, sustainable strengths difficult.
We suggest three other ways to find or define higher value capabilities:
- Better — important capabilities to address problem causes that you do better than competitors. You have a good story for this, and can prove it.
- Best Combinations — groups of important capabilities that make you unique. Specific competitors may be able to match to individual capabilities, but not the important combinations that you provide and best resolve causes.
- Out Articulate — important capabilities that competitors don’t explain, prove or promote effectively. This is often a good source for a differentiating and winning strategy.
Using the Problem-Cause-Impact-Capabilities approach also helps to structure sales conversations, sequence messages, and even design content. Think of Commercial Insight as a way to “set up” your strong capabilities.
A test for your Commercial Insights is they:
- Are unique (the insights)
- Lead to your “unique, differentiated strengths”
- Break down the buyer’s current thinking and beliefs about their problem (the “A”) because they …
- Create surprise, an epiphany, especially of the “cost” of their current state, thinking and actions, because they introduce something new they either didn’t know, or they under-appreciated
- Identify areas for “unteaching” (provide valuable input to sales conversations and content strategy)
- Work with buyers because they produce a compelling reason to change
Build Out Mental Models
“The front end of (developing a Commercial Insight) undoubtedly requires a very different way of thinking about customers. The key to Commercial Insight isn’t a story about the supplier at all. It’s a story about the customer and how they’ve missed something materially important to the performance of their business. What’s (needed) is a significantly more refined view of how customers perceive themselves. That set of beliefs is something we like to call a ‘mental model.’”
Mental Models define the “frame” of buyers. It is “how they perceive themselves.” They are a central tool to reframe how buyers assign value to your differentiation points.
“The only way to get customers to think differently about you is to first get them to think differently about themselves. One can’t change the way a customer thinks of themselves if they don’t even know how that customer thinks of themselves in the first place.”
The concept and use of Mental Models may not be that familiar to people. But this is such a central component of this approach you simply must spend time on this with marketing and sales people.
An important Challenger Customer point is the role of buyer beliefs in decision making. In our 15 years creating sales playbooks and developing ideal customer profiles, we have stressed that “beliefs trump features.”
CEB mental models extend the use of buyer beliefs. They identify and map key buyer business drivers along with associated beliefs.
Our recommendation is to consider beliefs and mental models on several levels:
- Generic Industry Level — In a manner similar to buyer personas, generic, industry level mental models identify key business drivers as a starting foundation
- Specific Buyer — this foundation guides mental model and belief mapping for specific buyers
- Individual Buying Team Members — in conversations this provides a filter to help sales people understand specific individuals
Using Mental Models, buyers see that you understand them and their business. It also provides a checkpoint for any diversion from generic maps. This provides sellers better understanding of specific organizations and the individuals they are working with.
When your sales people initially use Mental Model based conversations they may be surprised to experience buyers acknowledging the “obvious reality” they are presenting. But the “so what?” response is actually what you’re looking for. Teach sales people that this is the necessary “set up” for the “insight pitch.”
“The best suppliers engage their customers in a discussion of the customer’s current beliefs. And in that discussion, they systematically break down their customer’s current mental model, show them how it’s flawed or incomplete, and then articulate in very clear terms why a move the customer assumes would be too costly or too painful is actually less costly or painful than their current status quo.”
I’ll discuss this idea more in the Challenger Customer Implications for Sales post.
Commercial Insights must lead to unique, sustainable strengths. But the ultimate goal is to find and communicate differentiated value that results in successful customer acquisition and profitable revenue.
Mental Models are not the same as Value Models. Challenger Customer is weak in connecting Commercial Insight to customer Value Models.
While value is a central point of everything, without effective, explicit Value Models, results in this area are usually weak. Just look at the current state and angst of “value propositions” for evidence of this.
Here is a simple framework for defining buyer Value Models. Notice how they build on much of what has been discussed to this point.
- Buyer Business Goals
- Strategy to achieve business goals
- Problems-Causes that limit strategy execution
- Impact (“cost”) of the problem — if this isn’t clear and compelling, the buying decision essentially ends. The elements below assume a decision to change from status quo
- Capabilities required to address the causes
- Identification of which capabilities buyers currently possess or can easily (cheaply) acquire (as an add-on to work from an existing supplier for example), and which they must acquire — either internally or from a new provider
- The cost of acquiring those capabilities, internally and from third parties
- The cost and risk or those newly acquired capabilities (i.e. ramp up time, lower competency, productivity and efficiency)
- The cost of acquiring those capabilities from you — all forms of cost
- The Value of the solution
- The differentiated value of working with you, especially compared with hiring internal or external capabilities.
This Value Model defines what buyers need in order to understand your value to them. Commercial Insight is an essential start, to address the critical “why change” question. Combined with the Problem-Cause model it sets up the need for critical capabilities. But the Value Model maps out the remaining steps sellers must work buyers through.
Please note, buyers attribute a significant proportion of the value they experience to the initiative itself. This could be as much as 80-90% in the mind of buyers. Your sales people are not credible when they try to attribute this value to you and your products and services.
This is why it’s important to clearly define and prove your differentiated value factors.
But it’s also why buyers will attribute some portion of the initiative value to the supplier who introduces them to the Commercial Insight that defines the initiative. This is what is meant by the expression, “how you sell is more important than what you sell” for influencing buyer decisions.
Commercial Insight Summary Points
- When developing Commercial Insights, we like to ask the question: “What is it buyers don’t know they don’t know?“
- Commercial Insights are not limited to one. You may have a couple of insights for each product, service or solution offering.
- There’s a tendency to think of these as “silver bullets.” Ideally, of course, but in reality they may not be that strong.
- Like silver bullet product features, these insights will not last forever. Develop the ability to continually create Commercial Insights.
- The first selling goal is to get buyers to quantify the cost of their problem, their status quo, their “A”. Until this is accomplished, presenting the value of your solution is pre-mature, ineffective, and most likely creates a poor experience for buyers.
- This work requires a veridical approach. (Look it up.) Your “unique, sustainable strengths” must pass the “So What” test, from a buyer’s perspective.
In the next post I will look at the Challenger Customer Implications for Sales, and how to deliver Commercial Insight to “break down the ‘A’” and “build up the ‘B’.”