The Challenger Channel

By Ken Phelan
Posted in Training
On May 17, 2016

The Challenger Channel

I was at a conference a couple of weeks ago where a speaker talked about The Challenger Customer by Brent Adamson. She encouraged us to read it and of course, I did. The book has several great insights about the current B2B selling environment and since that’s what Gotham does for a living I found it very interesting. Two of the author’s key insights are:

  • Customers are more consensus driven than ever. On average there will be 5.4 decision makers at each customer for each purchase.
  • Customers are doing more homework before talking to suppliers. The average customer will be 57% through the sales cycle before contacting a supplier. That means that by the time a customer reaches out, most of the product selection, evaluation, and value definition is already done.

As the book processes these issues the author recommends that successful B2B suppliers will be prepared to add more value in the sales process with a larger number of contacts at the client. Many B2B salespeople have a process to find internal champions who are friendly and open to having meetings. Going forward it’s also important to find contacts that can help form consensus within the 5.4 decision makers. This type of contact, who the book refers to as Mobilizers, will often be more difficult customers. They aren’t necessarily higher titled individuals. They are influencers who are generally not open to having their time wasted by yet another free lunch with no valuable agenda.

Which brings us to the core of the books message, who is the “Challenger Customer”? The Challenger Customer is a customer who challenges us on our value proposition. They’re not going to be easy. They’re going to demand credible proof of value. The successful supplier will in turn challenge the customer’s perceptions on value. If the decision is already made and you just want to show up, tell a few jokes, talk about the ball game last night and get an order, are you really helping the customer? If you can’t tell the customer something he doesn’t already know, don’t bother.

Interestingly, the conference mentioned earlier was a reseller conference. This manufacturer had invited its top resellers to this conference to update them on product lines and sales strategies. They brought this book forward to illuminate their thinking about the marketplace. Surprisingly, they saw no correlation between the problem they were describing and the room full of people they were describing it to. As they’re describing this problem to me, I was thinking, well isn’t that what your value added reseller (VAR) community is for?

As a manufacturer, you’re kind of stuck seeing the sales process as a specific campaign. So starting at 57% is a problem. As a VAR you have an ongoing relationship with your customers talking them through issues all the time. You should be early stage with everything.

As a manufacturer, you’re looking to identify the key decision makers and form relationships with them. As a VAR, you’ve been working with the client for years and probably know most everybody. 5.4 contacts? With some of Gotham’s larger customers, we have dozens and dozens of people that we have relationships with.

As a manufacturer, you have to earn your place at the table with insight and credibility. You have to somehow show up ready to be insightful and creditable with a customer you’re meeting for the first time. And that credible insight can’t just be about your product, it needs to be about the customer and their industry. Credible insight regarding how your product will work in their specific situation. A VAR who has a long term customer relationship has shown a history of insight and credibility through prolonged interaction and engagements. They also come with deep knowledge of the customer’s business.

Not all customers are created equal, though. I had customer once tell me that with 15 minutes and a browser he could pretty much learn more about any given product than the salesperson coming to sell him that product. If you’ve got that kind of arrogance, you’re probably not looking for insight from any vendor.

All channel partners are different too. Staying in touch with multiple contacts over the long haul at a client is an expensive proposition. Many channel players focus on cost effectiveness and simply provide a means of fulfillment at the lowest possible margin. Not a terrible plan but certainly not one filled with insight and credibility.

And finally, not all manufacturers need this kind of process. If you’ve been selling the same thing for years, your product is likely well understood by the market place. At this point you’re probably responding to a lot of RFPs and focusing on providing the lowest possible cost product instead of differentiating it. Why pay the extra margin for VARs?

Obviously, as a VAR, I’m not an unbiased data source. But, reading the book, I think the VAR way of doing things just might be winning out.



Ken Phelan

Ken Phelan

Ken is one of Gotham’s founders and its Chief Technology Officer, responsible for all internal and external technology and consulting operations for the firm. A recognized authority on technology and operations, Ken has been widely quoted in the technical press, and is a frequent presenter at various technology conferences. Ken is the Chairman of the Wall Street Thin Client Advisory Council.