Sales Enablement Soiree – Keynote: Selling into this Environment, Delivering the Right Message
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Shawnna Sumaoang: Welcome to the session on Selling into this Environment, Delivering the Right Message. Right now in today’s climate, it’s more important than ever that your sellers know how to deliver the right message with the right level of empathy, given everything that’s going on. I’m excited to have Spencer Wixom from Challenger join us today to talk to us about some of their latest research and how they’re helping reps deliver the right message at the right time.
With that, I’m going to hand it over to you, Spencer.
Spencer Wixom: Hi everyone. My name is Spence Wickson. I’m the Senior Vice President of Marketing and Sales Enablement at Challenger and I’m grateful to Sales Enablement PRO for giving me the opportunity to do this virtual mainstage today. And I’m also grateful to all of you for deciding to spend your time with me.
Before I get started with my presentation, I just want to say that we at Challenger hope all who are listening to this and those in your circle are safe and well. And we hope that we will all have a speedy recovery to this terrible social and economic situation.
What I want to talk to you about today and share with you is all about selling in this new environment. And delivering the right commercial message to customers as we all go through this COVID-19 situation.
Where I’d like to start is talking a little bit about what we call the sales velocity equation, and in particular, what has changed related to this equation, just in the last couple of weeks. So Challenger, for the last few weeks, has been doing periodic pulse surveys with our customers and other sales and marketing leaders in the market to try to understand better how this situation is affecting certain business metrics and the decisions that sales and marketing leaders are making.
Specific to the sales velocity equation, we asked recently how each of the components of that equation are affected. Let me remind you of what the components of that equation are. First of all, it’s the number of opportunities that you put into the pipeline, multiplied by the deal value of those opportunities, multiplied by the win rate of those opportunities, divided by the length of the sales cycle. Putting all of these elements together as factors in the same equation will tell you how much velocity or energy you have in your sales motion.
Now, here’s some interesting and quite concerning things that we saw in our most recent survey. First of all, among our respondents, the number of opportunities in the pipeline, 77% of those respondents told us they expected the number of opportunities in the pipeline to decrease as a result of this situation by more than 5%.
Secondly, if you look at average deal value or average deal size, 43% of this population told us their average deal value would decrease by 5% or more. 6% told us it would increase and 51% told us it would hold steady. So when you look at average deal value, the effect is not as great as that on the number of opportunities in pipeline but it is still significant.
Next, when you look at conversion or wind rate, a full 63% of our respondents said they would experience a 5% or greater decrease in conversion rate. 8% said an increase in conversion rate and 30% said it would hold steady. So again, similar to the number of opportunities in the pipeline, conversion rate is one to be concerned about.
And finally, when we look at the length of the sales cycle, this one was very interesting to us because it sort of jumped across the different scenarios. So 37%, a little over a third told us the length of the sales cycle would actually decrease, which was interesting to us. 22% said, hold steady and 41% said they would experience a 5% or greater increase in the length of the sales cycle.
Now, I think what you’ll see is the decrease in the length of the sales cycle is actually a function of having fewer opportunities in the pipeline and having a lower conversion rate. So you’re actually chasing fewer opportunities, all together, and being more selective of those opportunities. Which would then make it so that those opportunities were moving faster in the pipeline. But all the same, as you look across each of these four metrics, number of opportunities in the pipeline, the vast majority of sales and marketing leaders in our sample expected that to decline by 5% or greater.
Average deal value most likely will remain the same. A conversion rate, 63% expect a decrease in length of sales cycle, a good portion, will see an increase in that. Now, when all of these components come together to affect your sales velocity equation, you can see a significant effect on your forecasted revenue, particularly in Q2, but likely going throughout the rest of the year.
Now, the two things I want to focus on throughout the rest of this presentation are number one, How do we address this number of opportunities in pipeline decrease? How do we get more opportunities into the pipeline? And number two, how do we present the most compelling argument, the most compelling message possible to improve that conversion rate, as much as we possibly can?
One thing for sure we’re likely going to need to do, particularly in the short term, is we’re going to need to build buying groups. And by that I mean if you think about the traditional sales motion or buying journey that our customers go through, the first part they’re doing is they’re learning, they’re understanding their needs ,and they’re building consensus on their own. And a piece of research that we published a few years ago said that customers are most likely 57% of the way through that buying journey before they proactively reach out and engage with salespeople. After proactively reaching out and engaging with salespeople, they’ll work with those sales people to evaluate their options and ultimately come to a decision.
Now, what we have to consider, particularly in this environment, is these organic buying groups are likely not forming on their own. What does that mean? Well, that means we need to be engaging customers at the very beginning of that buying journey, helping to establish or build that buying group, rather than reacting to the established demand of that buying group having already formed. It’s an important thing for us to consider.
If we want to increase the number of opportunities we’re putting into our funnel and improve that conversion rate; we need to be finding a way to engage those buying groups early and create that demand, as opposed to react to established demand. So let’s talk about how we do that. The first thing we need to do is we need to get the attention of customers.
And to talk about getting attention, I wanted to share an interesting story from history that I think is quite fascinating. On December 18th, 1903, there was a particular headline in the New York times that read: “Senators demand facts on Panama”. Now, what’s interesting about this headline isn’t what it says, but more what it doesn’t say, because on just the day prior to December 18th, 1903, December 17th, 1903, the Wright brothers at Kitty Hawk, NC conducted the first man flight in history. One of the most incredible innovations in human history. Yet, the New York times didn’t write about it. And they didn’t write about it the next day after, nor the next week after, or multiple weeks after, or multiple months after.
It wasn’t until 1906, a full three years later, that the New York times started writing about the Wright Brothers innovation. Now, why is this? Why did they miss something so monumental in human history? Well it’s because they weren’t paying attention. At the time, in 1903, manned flight seemed so inconceivable, so unrealistic than it was when it was happening right under their nose; they weren’t paying attention to it.
And I would argue, likewise, in this environment, we may have incredible innovations. We may have incredible solutions and insights for our customers, but they will be so distracted by the difficulty and the frustration in this environment that we’ve got to help them pay attention.
If we don’t have their attention, we can’t bring this insight to them. We can’t bring these solutions to them. So how do we do this? Well, let me introduce to you a framework for thinking about, first of all, capturing that attention and then delivering that insight to customers. So, as I said before, we’ve got this buying journey that customers go through.
We need to get in early and we need to engage, form, and create these buying groups. And that starts by sparking attention. And I’m going to talk a little bit more about sparking attention and exactly what we should be thinking about when doing that. But after we sparked that attention, we need to introduce our insight.
We need to introduce that helpful information to the customer that makes them think differently about their business. And then ultimately we need to confront them, to create that constructive tension that’s going to motivate them to buy. Spark, Introduce, Confront. First, we spark that attention and then introducing the insight and confronting for tension is part of that commercial message or that commercial insight, and I’ll talk about that a little bit later.
So first of all, in the attention spark, what do we need to do to spark customer’s attention today? Well, I would argue the first thing is to keep that message simple and to connect that message with relevant, timely pain they are feeling today. And the definition of pain that I’m going to share with you is broader than the definition you might think. You’ll notice when I share it with you what I’m talking about. First of all, why do we need to keep it simple for customers? Because we have to, in the initial engagement with them, play to their intuition.
What do I mean by playing to intuition? Well, there are two systems in the brain. Daniel Kahneman wrote about this in his book, Thinking, Fast and Slow. There is a system that helps us universally understand this picture. Now, this person may be from a different culture, in a different part of the world than most who are listening and watching this presentation, but we all know what is being communicated here. We all instantly recognize this facial expression and understand what it’s trying to communicate to us.
At the same time, we all know that this is a math equation, but very few of us on the top of our heads can understand what this math equation is trying to communicate to us. These two things, the smile on the left hand side and the math equation on the right hand side, require different systems in our brains to analyze them.
System one is all about intuition. It is things we universally understand. It’s things we universally appreciate. We can appreciate them easily and quickly. The math equation requires mental effort. It requires the cognitive part of our brain to calculate it. We universally struggle with this. So what’s the point I’m trying to make here?
The point is, when we are doing ‘seeking attention’ messages initially with our customers. When we first engage them in conversation, do these attention seeking messages feel like a math problem? Complex language, language we’re using to try to make ourselves feel smart, trying to impress the customer with a lot of detail and a lot of things to consider.
Or is it a smile? Is it a simple, direct, clear message that the customer can universally understand. Again, as powerful as our commercial insight might be, if we don’t approach the customer initially with a message or pitch that appeals to their intuition, we’re never going to get their attention, particularly in the distracted environment we’re currently operating in.
Now, the other part of getting attention, it isn’t just being simple and clear, and playing to intuition. We also have to connect with emotional pain. We have to motivate them to want to listen to us more. And there are a number of emotional systems in the brain that we can connect to. All of these emotional systems have pain related to them.
And if you’re familiar with the work of Jaak Panksepp, the neurologist, you’ll understand the seven basic emotional systems. Jaak Panksepp is most famous, of course, for his work with animals and in particular tickling rats. But he identified seven basic emotional systems in the brain that all of us human beings, as well as other mammals, and other animals engage with.
So let’s talk about these seven emotional systems and let’s think about which of these systems make sense for us when we’re approaching customers to engage them. And the number one emotional system is rage. That’s the pain you feel from being slighted. I don’t think that is a good emotional system for us to engage customers with, particularly in this environment.
Panic, that feeling or that pain from lack of control. Fear, the pain from missing out. Lust, the pain from longing. Play, the pain from boredom. Care, the pain from concern for another person. And an interesting one, Seeking, or the pain from anticipation.
Now look, we are operating in a very emotionally charged environment right now. We have to think very carefully if we’re going to introduce pain or tension into our customers to get their attention. We have to be very careful about the type of pain, the type of emotional system that we’re playing to. My argument would be, we want to think about that seeking emotional system and the pain from anticipation.
What do I mean by that? I mean play to the customer’s curiosity. It’s the pain similar to sitting in a movie or a play and that pain that you feel wanting to understand or answer the basic question, “What happens next?” It’s emotional anticipation. You know you’re going to learn something that you don’t yet know. And that is the pain we want to play to in our messages.
We want customers to feel we have something to share with them. We have an idea, we have an insight, we have something for them that can be helpful, and we want them to feel that pain of anticipation to engage with it. Now, after we’ve sparked their attention, now is the time when we introduce commercial insight; and there are a couple of things I want to talk about around commercial insight in this presentation.
First of all, I want to distinguish it from thought leadership because it is very different, and in today’s environment it’s particularly important that we understand that difference. And secondly, I want to walk through the choreography for the delivery of that message and talk about how in today’s environment we can adjust, just slightly, each of the components of that choreography to help it better resonate with customers.
So let’s talk about thought leadership as it differs from insight. Now, this is what we call the Insight Egg. We’ve talked about this at Challenger for quite some time. You have general information, accepted information. These are a lot of those things out there. The noise, the news that everybody’s engaging with. Then you get inside the egg as you refine the type of information to what we call thought leadership. Thought leadership teaches customers something about what they could be doing in their business. It paints the picture of the city on the hill. Now, this is a good thing. Having thought leadership is a good thing. But what we have to consider is, why are we bringing thought leadership to the customer?
Is it for us to look better? Is it for us to look smarter? Is it for us to provide this perspective to the customer, or is it truly about the customer? Is it truly helpful to the customer in the current situation they’re in? That’s the key thing we have to think about and that is the differentiator.
In fact, there are two key differentiators between thought leadership and commercial insight. And let me share with you what those are, because that way you can really pressure test whether you’re bringing customers thought leadership or bringing them commercial insight. Commercial insight unteaches incorrect customer assumptions about their business, motivates action, and connects to your differentiated solution. Look at the first two there. Number one, it unteaches incorrect customer assumptions. It tells the customer something they don’t know about their current situation. And if there is one thing that is common among many different businesses right now, it is uncertainty. It’s not knowing what to do. It’s not knowing how to manage through or deal with this situation. And bringing that new perspective, bringing that insight to customers, is incredibly important to them. In fact, in some recent research we did, that was identified as the most important thing customers would like to see from salespeople is “Bring me something new”.
But in conjunction with bringing them something new, we also have to motivate them to take action. We have to bring that tension in the message that gets them up off of their status quo and gets them attacking a new opportunity in their business. Also, importantly, for commercial insight, we don’t want to just teach customers for the sake of teaching them. We need to make that teaching connect to a solution we can actually provide them. So commercial insight as opposed to insight is connecting to a solution for the customer at the end of the message.
And what I’d like to do is walk through the components of that message with you now and explore each of the components. Now, you may be familiar with this choreography. It’s been around for quite some time. It has six key steps to it. We published this first in our book, The Challenger Sale, a number of years ago, and in fact, right at about the time of the global financial crisis. And at that time, this commercial choreography helped a lot of organizations find a way to engage with their customers; even in a difficult and uncertain environment where customers weren’t necessarily ready to buy, they weren’t forming buying groups, sellers didn’t have a chance to react to established demand. This choreography of a message allowed them to get in early and create that demand with customers.
But it is a purposeful choreography. Let me walk through each of its elements. First of all is the warmer, this of course comes off of the heels of that sparking attention, that simple message that resonates with that pain of anticipation, that pain of seeking; we need to then further warm up the customer by building that credibility about us. “We have worked with a lot of other companies in your industry. We’ve seen a lot of what’s going on. We have something we can share with you.” We’re warming up, building that credibility. Then we reframe the customer thinking about their status quo. That’s the unteaching, to teach them something new.
And then we bring a logical argument to magnify the importance of moving away from the status quo. This is how much your status quo is costing you in dollars and cents. We couple with that rational drowning and emotional impact: stories, anecdotes, case studies, (before and after case studies) to show that customer the emotional difference or the emotional change that’s needed. Then we demonstrate a new way forward and connect that new way forward to our solution.
That’s the choreography. It follows that narrative or that emotional arc that you can see there on the slide. But what I’d like to spend a couple of minutes exploring with you here are subtle ways in which we can make sure we adjust in tune each of the elements of this choreography to today’s environment.
First of all, in the warmer, I think it’s absolutely critical that that warmer be as clear, as crisp, as direct to intuition as it can be in today’s environment. As I’ve said earlier, customers are very distracted. They’re feeling a lot of emotional pain right now. We need to bring very clear, direct, simple, empathetic, and thoughtful messages as part of our warmer to build credibility with these customers and get them to want to pay attention to what we have to say.
Now, when it comes to the reframe, it’s very important when we’re reframing that we have an insight very well tuned to the customer’s current situation. We need to do our homework. We need to make sure that what we’re presenting to them aligns to priorities they have in their business. What we don’t want to do is to reframe their thinking and send them on fools errands that aren’t really aligned to what’s going to make their business better, what’s going to improve their business.
This is where we bring a lot of empathy, not only in the communication of our message, but in the research and in the tailoring of our message to make sure we are not, no matter what, wasting that customer’s time. Now when it comes to the rational drowning, here’s where we want to think about who is really making decisions in today’s environment.
And I would argue that the CFO has a much greater presence in those buying groups today than he or she had even just a couple of months ago. And that CFO is going to be keenly interested in the effects to profitability and the effects to cash flow on the business. So when we are reframing thinking and we are presenting an idea that that customer hasn’t thought of, and we’re trying to magnify the effect, the logical, rational effect of that change in status quo to the customer; we need to talk specifically about how it’s affecting profitability or how it’s affecting cash flow. And if we can talk specifically to those business metrics — we can engage CFOs and we can motivate them and their interest in taking action.
Now let’s talk about the emotional impact piece. What’s interesting about the emotional impact is the fact that just a few months ago, one of our biggest issues was building enough emotional resonance in the customer to get them to want to take action on something. We were at the end of the longest continuous recovery in history. Things were going really, really well for a lot of companies in a lot of areas and you had to really dig deep to find something that would motivate them to do something different, to move away from the status quo. That situation has completely changed.
Now there are a number of different issues all weighing down on this customer, all bringing a lot of emotional pain to them, and we have to recognize that. It’s not in many cases a matter of building the emotional quotient, the emotional tension; but more managing that tension constructively and perhaps channeling it in a particular direction, and perhaps reducing it if it’s overbearing.
So we have to think about completely managing that tension or that emotion differently when we’re bringing emotional anecdotes or stories to the customer. Now, on the new way forward, here’s something we need to consider. There is a difference between a good idea and a good idea in theory. We want to bring good ideas that customers can actually activate in the current environment.
Do they have the resources? Do they have the manpower? What do they need to actually make this solution that we’re suggesting happen. And we need to bring that guidance with us to help them understand how they can actually get what we’re suggesting done. And then ultimately we connect this to our solution.
So you can see the choreography here is solid ground. It is an effective, empathetic, and insightful way to engage customers and help them find ways to improve their business, which is what we should be all about as salespeople in the current environment. But there are subtle ways we can tune each of the steps of this choreography to make sure it resonates with customers today and it motivates them to take action.
I want to just now summarize what I’ve presented to you. So first of all, it is critically important in this environment that we do bring tailored insight to the current situation and that we think about getting in early and building those buying groups with customers. We’re not going to have established buying groups that we can react to, like we did just a few months ago.
We need to bring that case that builds the buying group, coalesces it together, and we support that buying group going through what will probably be a difficult buying journey; with new stakeholders, a lot more presence from procurement and finance, very careful about the investment of funds. But in order to even get any of this started, we can’t challenge their thinking, we can’t bring them that new empathetic teaching and insight if we can’t spark their attention.
That is the first step. We’ve got to find a way to cut through the noise, cut through the distractions, and get their attention. And as I said before, we need an attention spark in our initial messaging in those first phone calls and emails, where we’re first trying to engage with that customer. We’ve got to keep it simple and speak to their intuitions. Speak to that system one in their brain where they’ll universally and naturally understand what we’re trying to communicate and we have got to connect to emotional pain that will motivate them to pay attention.
And I recommend you think about that pain from seeking that pain of anticipation of “this person has something to teach me I yet don’t know”. Now, once we get that attention, we have to introduce the insight and remember the insight is all about being different than thought leadership. It’s not about how much I know in presenting that new idea for you, that new city on a hill. it’s all about knowing your business, being empathetic to your business in unteaching your status quo, showing you a different direction in your current environment.
That’s all about insight, different than thought leadership. And then we follow that choreography to reframe their thinking, provide them rational and emotional arguments for shifting to a new way that ultimately connects to our solution. These are foundational principles. That choreography, it goes all the way back to the ethos and the pathos and the logos that Aristotle talked about in his Modes of Persuasion. It’s solid ground now. We just need to make sure we’re tuning it to today’s environment.
I’ve had a wonderful time sharing some of these concepts with you. I hope I’ve given you some ideas and some inspiration for sparking customers’ attention and introducing insight. It’s the most important thing we as salespeople can do.
We at Challenger, we’re doing a lot right now to bring interesting insight and ideas to the market. We hope that you’ll join us in this dialogue of ideas. You can get a lot of this information at our website. We’re constantly posting updates to our research with sales and marketing leaders and other perspectives on our blog.
We invite you to subscribe to that and read that. Also, everything about us you’ll find on LinkedIn. Please follow us on LinkedIn as part of our LinkedIn group. And if you have any particular questions for me, I am always available and would love to engage with you either on LinkedIn or you’re more than welcome to email me directly.
There is a lot of good information about the challenge or concepts in our books and about particularly how to engage customers in a complex environment. Just like the environment. We’re now in environments that are very uncertain. I want to thank Sales Enablement PRO, for the opportunity to share some of these ideas and I wish you all the best.
My hope is even in this very difficult and uncertain time that you can find some success and some light with your customers. All the best to all of you. Thank you.
Shawnna Sumaoang: Thank you so much for that presentation. With that to our audience, we’d like to open it up for Q and A. Please type any questions you have in the chat panel below and we’ll be sure to address those.
Again, thank you for joining us today.