Unless you’ve been living under a rock for the last 12 years (doesn’t sound so bad), then you’ve probably heard of the book (and methodology) The Challenger Sale by Mathew Dixon and Brent Adamson. Well Dixon is back, co-authoring a new book called The Jolt Effect along with Ted McKenna. We reached out to Mathew and he agreed to sit down for an interview, which ended up being one of our favorites so far. (note: this interview has been condensed for length and clarity).
Your first book, The Challenger Sale, became a sales publishing phenomenon. Why do you think it resonated so much with the sales community?
I think it resonated for two main two reasons . I think that The Challenger Sale kind of came in at a time when the market, and by the market I mean sales leaders and heads of sales, enablement, sales effectiveness etc. were looking for a better answer.
The first big trend was around solution selling. where you go in and diagnose customer needs, find out what's keeping the customer up at night, and then prescribe a solution - was generating lower win rates. Salespeople had mastered that approach, but it was yielding diminishing returns over time. Customers were growing tired of it.
The second big trend was the phenomenon of customers learning on their own. This had been happening for decades really, but I think it had reached a kind of crescendo right around 2011.
When we did the research. We actually found that customers are almost 60 percent of the way through their buying journey before they ever engage with a salesperson. When customers are learning on their own they don't see a lot of value in a sales person coming in and asking them questions like what keeps them up at night, and other classic solution selling approaches.
The reason is that they’ve already figured out the answer to that question, or they think they have. They’ve already researched vendor solutions.They’ve already benchmarked different suppliers.They’ve kind of put you in a box, and then they reach out to you and ask you to compete on price. They’ve already created a shortlist and want you to compete for their business.
When this is the case, the solution selling approach doesn't have a lot of resonance with customers, if they’ve already diagnosed their problem and understand the available solutions. They have already figured it out, or think they have, and have done a ton of research on their own.
At this point, what has a lot more effectiveness is coming in and showing them what should be keeping them up at night. In other words, what is the thing that they couldn't learn on their own? This is the core of the Challenger Approach.
The book came out right as those two things were kind of colliding: Customers are learning on their own and sales leaders are seeing a declining effectiveness of traditional sales approaches in light of these changes in customer buying behavior.
I think the only other thing I would say around this is it was a unique book because I don't think there had been a lot of rigorous research done in sales.
I think most of what's out there in sales is personal opinion – it's the land of conventional wisdom and hearsay, and past the folklore, and that kind of thing. And I think when we came out, and we brought real data and serious research and methodology to study this problem, people looked at it in a different way.
We're not salespeople, we’re researchers. But I think it kind of opened people's eyes, like maybe what we have been telling and preaching and telling salespeople to do and preaching for years and years, we should be talking about something else. So I think it was a different kind of take on a problem that most sales organizations were struggling with.
Tell us about your new book, The Jolt Effect.
For The Jolt Effect we studied two and a half million sales conversations.
We’ve long been admirers of Neil Rackham's work from the late 70s and early 80s - SPIN Selling. Professor Rackham and his team spent a decade traveling the world and physically sitting in on and taking notes on over 32,000 sales conversations.
And it was up to this point really the only remaining rigorous ethnographic study of actual sales conversations. This gave birth to the whole solution selling era.
We'd always aspired to do something like that, but we could never find anybody to pay for it and part of the problem was pre-pandemic: a lot of sales weren’t happening in a virtual setting. The important sales meetings as we all know, at least pre-pandemic, still happened in the client's office.
And so it was really hard to study those at scale without flying all over the world and sitting in on those sales meetings and again we couldn't find anybody willing to pay for our plane tickets, but in March of 2020 all that changed.
Sales became 100% virtual overnight and so that meant that all of the sales conversations in a sales cycle from the mundane ones, to the really critical ones were happening on virtual platforms. Which meant they could be recorded and studied using modern technology, natural language processing and machine learning.
So it was a moment in time that we could study sales at scale. We recruited several dozen companies, harvested data from those companies (two and a half million recorded sales calls), transcribed them using a transcription engine, and then studied them with machine learning.
A major focus of this book is customer indecision. Why is indecision such a deal-killer?
We found in our study that anywhere between 40-60% of the average salesperson's total opportunity set is actually lost to no decision. These are customers who go through the entire sales process only to end up doing nothing.
These are the prospects that ghost you. They start going radio silent. Eventually, you stop putting effort behind them and declare them as closed in the CRM system but tag them as ‘no decision’. So it's not that the customer bought from a competitor. It's that they chose to do nothing. It’s a huge productivity suck for the average salesperson.
But for the entire sales organization, if you think about all the time that's wasted with opportunities, where they just end up in that wasteland of no decision, it's really expensive for the average seller and team.
When a prospect is showing signs of ending up in a no decision wasteland, every salesperson has been taught that the reason that's happening is you haven't beaten their status quo, right?
And the way we’ve been taught to beat the status quo, is you dial up the fear of missing out (FOMO).
When you try to dial up the FOMO, you show them the pain of staying the same is worse than the pain of change. What we actually found is that this approach backfires way more often than it works out – there's an 84% probability that doing that actually increases the odds that the customer does nothing.
The question is why? And here's what we found: when you look at what drives no decision losses, it’s a customer's commitment to their status quo. They prefer what they're doing today, or they think it's good enough. They don't believe your solution is a more compelling alternative, or they don't believe it's a top priority for their business.
They're not concerned about missing out, what they're concerned about is messing up, so it's not the FOMO. It’s the fear of messing up (FOMU).
If you look at these two things, and we actually did the math, this is backed up by decades of social science research. What we find is that people, when they're looking at opportunities, are far more averse to opportunities that require action on their part that might lead to a bad outcome. They are okay with staying the course and not being personally responsible.
We’ve been teaching salespeople to increase the FOMO, but what they really need to do is decrease the FOMU for their prospects.
There are three specific ways we’ve found that customers are worried about messing up.
The first one is they're afraid of picking the wrong thing. We put lots of options in front of them as salespeople, and they're looking at all those options, and they're worried they're going to pick the wrong one.
The second thing is the customer being concerned that they haven't done enough research. They look at the market, your technology, and they feel hesitant. They may have never bought a solution like yours, and want to do more research. What will happen is they’ll endlessly consume content and end up in analysis paralysis.
The third sort of thing that they're worried about messing up is that they won't get what they're paying for. That specifically pertains to their fear that while you're projecting a great ROI on the purchase, or great cost savings, or top-line revenue growth, or market share increase - that they might not actually realize those benefits and that they have no guarantee from you as a vendor that they're going to get the returns that you're promising.
So those are the three things that we find customers are worried about messing up: I picked the wrong thing, I haven't done enough research, and I have no guarantee of success. Unless we as salespeople address those things, we are not going to solve the problem.
If you assume that a customer who's worrying about those things actually can be dealt with by just dangling a 10% discount in front of them, at the end of the day, when the customer is thinking about missing out on a 10% discount or potentially losing their job, it turns out they care a lot more about losing their job.
It's often not that they're committed to their status quo, but because they're worried about something else. As a salesperson, you have got to uncover that and deal with it.
What are some things sales reps can do to overcome customer indecision?
The JOLT method. JOLT is an acronym that stands for four behaviors, which we found in the two and a half million sales calls we’ve analyzed.
The first one we studied is that salespeople need to be able to Judge the level of customer indecision. The problem with indecision is it’s everywhere. We found that almost 90% of opportunities had customers with moderate-to-high levels of indecision. The problem with indecision is it's like carbon monoxide. We have no way of identifying it, customers don’t openly admit to being indecisive. Nobody raises their hand and says,‘I struggle to make decisions’.
How do you surface it? How do you get it on the table so you can deal with it? How likely is it that you are going to get them off the fence and get them to move forward? That's the J, it's a set of techniques that we identified that high performers used to ascertain how indecisive a customer is.
The O in JOLT is Offering a recommendation to customers. As we talked about before, they're worried about what to choose and when you throw a lot of options in front of customers, they worry about what to choose. It sounds exciting to the customer early on, but then they start to worry about it. Don’t put too many options where the customer has to decide what not to buy.
So what we know average sales people would do in those moments is they will go back and re-diagnose the customers' needs. We found the best salespeople will diagnose customer needs, but they shift from asking the customer what they want to buy to telling them what they should buy.
The L is Limiting the exploration. Customers left to our own devices will do research until the cows come home. They will never be satisfied, which is a real danger for salespeople. When the customer asks for another demo, another reference call, another whitepaper, it feels good because it feels like making progress. But what the best salespeople know is all you're doing is increasing the likelihood that the customer will get wrapped around the axle, and they will get analysis paralysis.
What you need to do is put a stop to their research. You can't tell them to stop doing research, but the way you do this is you get them to shift from trying to be an expert themselves to seeing you as an expert. There are two things you need to do to accomplish this.
First, you have got to instill the trust with the customer that you are not trying to oversell them or hide information from them. There is a credibility gap that naturally exists between customers and salespeople. So you have got to work to overcome that, and we found specific things that salespeople do and say in the sales conversation help. For example, saying something like “I know you're talking about the premium version of our solution but I actually think the basic version would be just fine for your needs,” or, “ I know you're talking about this integration but I’ve got to tell you that's a brand-new one for us, some of the early adopters have had a little bit of chop there, so I don't want to over-promise and under-deliver.”
The second thing you need to do is be in a position to be an expert in offering advice. You’ve got to show the customer that you are an expert on your product or solution – that typically means doing your own demos. Don’t lean on your product team or engineering team being on the call to answer the tough questions, this could make you look less important or well-versed in the product you’re talking about, which will lead to your customer not viewing you as an expert.
The T is Taking risk off the table. This is all about you de-risking the purchase for the customer. This can be as simple as offering an opt-out clause or a pro-rated refund opportunity, but it could also come down to a suggestion from the customer. You need to lower risk around the purchase decision, often a consideration added to the contract, that makes them feel like they're not jumping off a cliff without a safety net. Let them know that you have their back.
Those are the four behaviors. We like it because it's an acronym, it's memorable. But it also speaks to what's happening here: we're jolting our customers forward, we're getting them to move forward.
What is your favorite sales movie?
It's hard to pick just one but if I were to rattle off a few: Boiler Room, Glengarry Glen Ross, and the Wolf of Wall Street.
Now, I will say, I think all of those movies give salespeople a bad name, but they are hugely entertaining.