The surprising truth about what closes deals: Insights from 2.5m sales conversations | Matt Dixon (author of The Challenger Sale and The JOLT Effect)

We collected two and a half million sales calls and studied them with a machine learning platform at scale.

The big insight is that you're losing most of your sales deals not to competition, but to indecision.

And that indecision stems from their fear of failure. Dialing up the FOMO backfires 87% of the time. They're not afraid of missing out, they're.

Afraid of messing up. You just talk about how to actually leverage these insights to improve your sales process.

You have something, I think you call it the Jolt Method. Yeah, jolt them forward. So the first thing is we've got to judge their level of indecision. The second thing is we've got to offer a recommendation. the other thing is we've got to get them to start trusting us. We call it limit the exploration. And the T is we've got to de-risk the deal.

We got to take some risk off the table.

Great segue to the Challenger sale, which is basically this on steroids. Most sales people are trying to figure out what keeping the customer up at night.

The Challenger approach is about showing the customer what should be keeping them up at night. What's a risk that they don't know about, but you do. Holy moly. This is going to be the most action-packed high density podcast episode we've done. Today, my guest is Matt Dixon. Matt is one of the world's foremost experts in sales, known for his groundbreaking research into what makes the best salespeople different from everyone else. His first book, the Challenger Sale, was a 1 Wall Street Journal bestseller and has sold over a million copies worldwide. His most recent book, the Jolt Effect, builds on his lessons and insights and will change how you do sales. In our conversation, Matt breaks down what you're probably doing wrong in your sales process based on research into millions of sales conversations, and then how to tweak your process to be a lot more successful. This episode is for anyone that wants to improve their sales skills or improve the rate at which they close deals. With that, I bring you Matt Dixon. And if you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously.

Matt, thank you so much for being here.

Welcome to the podcast. It's great to be here. Thank you for the invitation, Lenny.

It's great to have you here.

So first of all, a huge thank you to April Dunford for connecting us. She's a huge fan of your work. She mentioned you a number of times on the podcast episode that she did.

She's great.

Yeah, she's very nice. She's amazing. Okay, so you basically spend your time researching salespeople. and digging into what makes the best salespeople different from all the rest. And then synthesizing these lessons into these really actionable pieces of advice so that anyone can become better at sales, which to me feels like a dream come true, even if I'm not a salesperson, even though many of us do sales part time, but especially if you're a salesperson. So first of all, just to give people a sense of the work that you do, can you just talk a bit about the research that went into the books that we're going to talk about. We're going to be focusing on the Challenger Sale and the Jolt Effect. What is the research they did?

Yeah, sure. So, they would just start with Challenger because that chronologically came first. So we actually started that research study in, I think it was in late 2008, actually, and we published the initial results to, at the time I was working for a company called CEB, which was acquired by Gartner Group in 2017. research organization and I was running the group that served business-to-business heads of sales around the world. We had five or 600 clients around the world and we launched that study in '08. We published the initial results to our clients in '09. We kept collecting some data and then we published the book in 2011. The book was published off a data set of 6,000 salespeople. So we did an in-depth survey with 6,000 salespeople as well as collected performance data on those 6,000 sellers. this was a, it was global, cross industry, different types of companies as well, product companies, services companies, large, small, slow growth, fast growth, you name it. Over time though, you know, that research has been ongoing. So we've collected data, I think to date on roughly a quarter million salespeople around the world that we continue to go back and not just validate the original findings, but look at how things are changing and do cuts of the data now that the data set's so big. So that was a survey based piece of research we did. The Jolt Effect, we started that research in 2020 actually. It was actually in March of 2020, which I think is a time that everybody remembers with probably mixed emotions, most of them bad. I think though, you remember March was a time when people were getting into Tiger King and baking sourdough bread at home. A few months later that got really old, but in the beginning it was kind of surprising and weird and this whole pandemic thing. But we actually thought, because we're huge nerds, that this would be an interesting time to do a sales research project. We had always been fascinated by what Professor Neil Rackham did back in the '70s and '80s in spin selling. And he and his research team sat in on 30-something thousand sales calls, physically sat in on these meetings and took notes. They're a team of psychologists to produce the research that went into spin selling. And so we always kind of aspire to get at the, if you will, at the coal face or where the rubber hits the road in sales, which is the sales conversation when that salesperson is sitting across from the customer. The problem with that is it's really hard to get people to pay for that kind of research into that kind of undertaking and then let alone getting invited into those meetings. Because a lot of the really critical sales meetings took place, of course, in the client's office until March of 2020 when that all changed and the entire sales process for every company on earth went to Zoom and Teams and Webex and other virtual platforms. And so we recruited several dozen companies across industry and around the world into a large global study, and we collected two and a half million sales calls and studied them with a machine learning platform at scale. So that was a very different kind of research project. And honestly, it's fun just as a researcher to look back on Challenger and the manual kind of survey-based approach and the interviews and all this stuff to fast forward to today. Being able to take advantage of large data sets and advanced technology to study.

You know, millions of sales conversations is pretty cool. Amazing. Okay. So the second book, the most recent book, the Jolt Effect is based on these two and a half million sales conversations. That's right. I love insights that come from tons of data. So this is most excellent. This episode is brought to you by Interpret. Interpret unifies all of your customer interactions from Gong calls, to Zendesk Tickets, to Twitter Threads, to App Store reviews, and makes it available for your product team. It's used by leading product orgs like Canva, Notion, Loom, Linear, and Descript to accurately integrate the voice of the customer into your product development process, helping you build best-in-class products. What makes Interpret special is its ability to build customer-specific adaptive AI models that provide the most granular and accurate categorization of all your customer feedback, and also connect customer feedback to revenue impact to help product leaders confidently prioritize things that will actually move the needle for your business. If you want a custom model built for your organization so that you can automate your feedback loops and prioritize your roadmap with confidence, get in touch with the team at interpret.com/lenny. That's E-N-T-E-R-P-R-E-T dot com slash Lenny. this episode is brought to you by Webflow. We're all friends here, so let's be real for a second. We all know that your website shouldn't be a static asset. It should be a dynamic part of your strategy that drives conversions. That's Business 101. But here's a number for you: 54% of leaders say web updates take too long. That's over half of you listening right now. That's where Webflow comes in. Their visual first platform allows you to build, launch, and optimize web pages fast. That means you can set ambitious business goals and your site can rise to the challenge. Learn how teams like Dropbox, IDEO, and Orange Theory trust Webflow to achieve their most ambitious goals today at webflow.com Let's dive into the insights from the Jolt Effect. So the way that I understand is the big insight is that you're losing most of your sales deals not to competition, but to indecision. Basically customers preferring to do nothing versus choosing something because they are afraid of making a mistake.

Good summary. Yeah, if you're busy, like you said it more succinctly, I've been doing this for a while now and you said it way more succinctly than I can. I think, you know, we just to back up for a little bit. I think the one of the data points I always start with when I present the research on the Jolt Effect is that our analysis showed that anywhere between 40 and 60% of the average salesperson's qualified pipelines. These aren't just leads, you know, sometimes bad leads that are thrown over to us by marketing. These are qualified opportunities. These are, you know, people we've met with, customers we've pursued, we've engaged. They're in the sales process. 40 to 60% of them will be ultimately marked as closed, lost, no decision. That's actually, I think that number is actually on the rise, especially in places like SAS and in the broader tech sector over the past year and a half. But that's a really painful thing, right? If you think about a sale as a salesperson, that for 46% of your deals, you're going to spend a lot of time, energy, resources, a lot of your company's money and their time and resources pursuing these opportunities where you eventually just get ghosted and you don't really know what happened. Just like the customer of the opportunity evaporated on you, they ghosted you, they went radio silent. You don't really know what happened there. And so we decided to take this 2.5 million sales call dataset, which you could have used to answer lots of different questions, but we were really fascinated by this question, maybe two questions. One is, why do customers make no decision? Because you understand it's frustrating as a salesperson, but it's also puzzling for customers to do that. They go through the entire process to evaluate a solution, and many of those customers say, yeah, I want to buy And then they ghost the salesperson and it's just, it's so puzzling. Like why would they waste their own time evaluating a solution and then doing nothing? Then the more important question is probably what are the very best salespeople do differently? What have they figured out to avoid that outcome? Cool.

And we're gonna talk about that latter part. To help people understand why, because it sounds like, okay, I guess this happens, but help people understand why this happens. Like why are people nervous to make a mistake and not make a decision at all?

So let me maybe take us a step back. There was a reason we actually even asked that question that you just asked and the reason the reason was this, you know, when we looked at sales calls, if you think of a typical sales process or buying journey, it kind of moves through three phases. Phase number one is the customer in their status quo. It's what they do today, right? They use your competitor's product, maybe they do use a homegrown solution, maybe they never saw a need for a solution like yours, but that's their current state. Step two is we've got to get them to agree that the current state is no longer acceptable and they've got to move forward in a new and different way. We call that agreement on a vision. We've got to get their intent. to move forward and to change. And then step number three is you got to get them to buy something, right? So that's the action step where they execute the DocuSign, they sign on the line that is dotted and they send the contract back. It's simple three-step process. And what we found in our analysis is one of the big places where a lot of deals fall out of that process is between intent and action. So it's after the point where the customer says, yeah, Lenny, this sounds great. I'm sold. Let's talk. but before the point where that actually deal gets sold. A lot of deals kind of go sideways in that moment. And the way this comes across in sales calls is that customers start, if you will, re-litigating concerns that they had asked and you thought you had addressed much earlier, like, what might go wrong? And is this really the right answer for us? And these are things that are puzzling to salespeople because it feels like this thing is slipping through my fingers, like right before my eyes. I thought we had this closed. I thought you said you wanted to move forward. And now you're asking questions that we addressed three months ago. What's going on? And so what salespeople tend to do because they've grown up in a world where they've been told the only reason the customer hesitates is because you haven't put to bed their status quo bias. So we all know all human beings, not just customers, but perhaps especially customers, are guilty of status quo bias, meaning we are prone to laziness and doing nothing. because it's easier, it's inertia, right? It's easier to just keep doing more of the same than to change behavior. Change is really hard. And salespeople have been taught that the status quo is their biggest competitor. And if the customer is starting to get cold feet, it's because they still think either what they're doing today is good enough, what you are proposing is not a very compelling enough reason to change, or maybe it's just not a top priority for them or their organization. It's got to be one of those reasons. So what salespeople have been armed to do is go out and dial up the FOMO. Right. And kind of make the customer sweat a little bit. So the first thing they do is they say, you know, Lenny, remember the demos and the proof of concept trial? How excited you were and like those benefits, like you got to pay for it. Like it's, you're not going to get all those great benefits for your organization unless you sign the agreement. If that doesn't work, I'll try to kind of scare you into action by dialing up the fear, uncertainty and doubt and saying, Lenny, you know, you told me about these problems in your business. You guys are really struggling right now. by the way, Jed mentioned we're working with all of your competitors and they're seeing tremendous benefits from our product and you're gonna be left in the dust. And those problems you brought up with me, they're not gonna solve themselves. So I'm trying to create that burning platform a little bit for the customer and get them to realize the cost of their inaction. Like there is a cost to doing nothing. And if those two things don't work, what most sales people go to is the 10% discount that's only good this quarter, right? So it's like the price driven urgency, like maybe this will be the thing you need to just get you over the finish line. What we were so surprised by, which led us to the question you asked, Lenny, was that 87% of the time when salespeople do that dial up the FOMO in those moments, especially with a customer who says that they're ready to move forward, but they start to backpedal and waffle and waiver and become hesitant, dialing up the FOMO backfires 87% of the time. In other words, it increases the odds the deal will be lost to no decision. If it weren't for that finding, we never would have even bothered asking the question about like, why do people end up why do we lose deals in a decision? Why do customers make no decision? But this was really puzzling because it flew in the face of everything we talked about, including, you know, in Challenger, to be totally candid, we talk about how Challengers are exceptional at breaking the customer status quo bias by showing them the pain of same is worse than the pain of change. And again, overcoming that inertia that not just individuals, but organizations suffer from. Challenger is really good at that. And so here we see that the tactics that you might associate with challenging actually kind of backfire, which was, as the author of the Challenger Sale, a little bit troubling to me, but we'll come back to that. But I think what we realized was we got it right, but we got it kind of half right. And so we went back into the data and we asked a slightly different question, which is why are deals lost and no decision? What drives that? And we found that actually there are a lot of deals that are lost because the customer does actually prefer their status quo. So that is status quo bias. Like they believe what they're going to say is good enough, what you're talking about is not a compelling enough reason to change or this is not a top priority. Those are all status quo preference reasons. But it turns out those are only 44% of the no decision losses. 56% of no decision losses are customers who are, who want to buy but can't buy because they're stuck in this no man's land of indecision. And that indecision itself stems from their fear of failure, which you put your finger on earlier, and this is the part I found so fascinating. So we dug into the psych research. We read probably 30 years of cognitive psychology journal articles, many of them from Dutch universities, which I find very interesting, but apparently very big into this stuff. A lot of the work around loss aversion and prospect theory, et cetera. And one of the big findings we came across is that there's actually a more powerful human bias, even more powerful than status quo bias, that rears its ugly head and causes indecision. And that is called the omission bias. The omission bias is, if you get down to it, is the fact that people don't want to be blamed for making decisions that lead to a loss. In the human mind, there are two types of loss that we think about. We all like to avoid loss, but not all loss is created equal. There are losses that happen when we do nothing, and then there are losses that happen because we did something. So we made a decision, we picked a vendor, We executed a contract and then something bad happened. And it turns out that in the human mind, people are okay with missing out. They are not okay with messing up and being blamed. And this is really powerful. It's even more powerful than status quo bias, as I said. And so the shorthand for salespeople is this dialing up the FOMO can be very effective to overcome status quo bias. But knowing that every human being, including all of your customers, who I'd include in that definition of human beings, are definitely afraid of being personally blamed if things go wrong. The FOMO actually matters more than the FOMO. The FOMO is the fear of messing up or in the not safe for work version of your podcast, I'd say FOMO, but your listeners can figure out what that stands for on their own. But this is really powerful for customer, for salespeople, right? To understand, look, if you are trying to scare your customer into action, you're gonna miss out on these benefits, you're gonna miss out on solving these problems, you're just gonna pay more later if you don't say yes now. what you're really doing is using scare tactics, but you're trying to scare somebody who's already afraid. The problem is they're not afraid of the thing you think they're afraid of. They're not afraid of missing out. They're afraid of messing up. And so we've got to address that as salespeople. We've got to help instill the confidence in the customer that you're making a great decision. I've got your back. This is gonna all, you're gonna look like a hero, not like a fool. And that's really what the Jolt Effect is about, is about how the very best salespeople execute that. So it wasn't that we were wrong with Challenger, it's just the story was kind of incomplete. You got to break status quo bias. If you don't do that, you're never going to have an indecision problem. But even once you overcome the customer's indifference in their status quo bias, you got a second battle you've got to fight, which is you've got to instill the confidence and make them feel good about this frankly leap of faith they're about to take. And their fear, you got to deal.

With the fear that if something goes wrong, they're worried that they're going to be blamed for it. We're going to talk about this method you developed for how to actually do all the things you're talking about. First, to make this even more real, what I'm thinking about is an example. So is a good example, maybe a CRM, like a better CRM product, say someone has Salesforce installed and now they're like, hey, there's probably something better out there, we should probably evaluate. And then I'm thinking from the perspective of a startup trying to build a better CRM, there's always this advice, you have to be 10 times better for anyone to pay any attention. And I think that feeds into exactly what you're showing is like, it needs to be so much better that this fear is, reduced. Can you just talk about maybe an example, whether it's that one or a different one to make this more concrete?

We encountered a ton of examples. It's so interesting you mentioned startups. And I think sometimes I was actually with a big enterprise software company and I think when, and I presented this research to some of their sales leaders. And one of the folks in the room said, I'm really glad we are who we are, that we are the 800 pound gorilla. , especially in a market like we're in right now, because, you know, it was the old adage goes, it wasn't IBM, but the old adage is that nobody ever got fired for buying from IBM, right? This company is like the IBM of their space. They're the 800 pound gorilla. They've got the brand strength, the reputation. They're the safe choice, right? And so this, this team felt kind of comfortable, or comforted, I should say, by that fact, especially in a tight environment where it's a, it's a battle for deals and for mindshare and for, for wins out there in the market right now, especially in tech. And what I said is you've got to remember though that may be true. And I would argue, and I think you're right that for a startup, yeah, you've got to be 10 times better to get that mind share. It may be even better than that to get somebody to take a leap of faith with you. And so there is inherent risk in going with the unproven player. But I cautioned these folks and I said, now remember, what are the things that drive fear of failure in indecision? It turns out there are three big ones. The first one is, Have I made the right choice? I know I want to work with this vendor, but did I configure the solution of the proposal the right way? The right contract length, the right implementation, the right use cases, the right integrations, all that professional services or DIY, all those big questions. The second thing that customers worry about in their second fear of failure is that they're going to learn something after the contract is signed that's going to make the decision look like not such a great decision. I'll give you a really specific example about this. I spoke to a tech company not too long ago, maybe a month ago, and they landed their biggest deal of their existence. It was an early stage company, seven figure deal, game changer for this organization, and they beat out some big established competitors. This is a huge win. They went out, they celebrated. It was just totally amazing. Their first big enterprise win and their first seven figure deal and their first victory against some of these incumbents. Unfortunately, about two weeks after they won this deal, the new Gardner Magic Quadrant on their space came out and they were shown to be kind of, eh, right? They weren't the leader, but they were sort of middle of the pack. And all of a sudden, the client who signed the agreement, the CTO, just got like crap rained on from everybody saying, did you see the Gardner Magic Quadrant? It looks like the company we just plunked down seven figures with was kind of seen as so-so by the gardener analyst. Have we talked to these guys and those guys and why aren't we going with the leaders and blah, blah, blah? They ended up backing out of the contract because the CTO said, I can't, I'm spending every day talking to all the other key stakeholders trying to convince them that, yes, we did all of our due diligence. But I just, life is too short and we're probably going to end up going with one of the big players. We're sorry. I mean, that's such a painful story, right? But that's the customer who's like, they're going to keep doing research. because they don't want to be surprised when some new piece of information comes to light. So it's the second big fear failure driver or failure driver. The third one is that the customer is worried they're just not going to see the ROI. They're not going to get the full benefits. You know, you might project for them a 5x improvement in sales productivity. What if it comes in at two or three x and my name's on the agreement and the CFO comes asking why we didn't get the benefits we thought? You know, today's environment, that's not just egg on your face. You could get fired for that stuff. So this is the client who's really looking for that vendor to have their back and to assure them that they're going to see the benefits that are being projected and promised through the sale. So what I said to this big enterprise tech company was, look, you guys, yes, it's tough to be a startup right now, early stage company, there's a lot of risk there, but who's offering more choices? Them or you guys? You guys have a partner ecosystem. You have like 20 different cloud products. You've bought like seven companies in the past three years. you have a cornucopia of options, which adds to the buyer's anxiety that they haven't chosen the right thing. Second, do you think there's more written about you guys or about them? You could fill a football stadium with all the coverage on you guys and, you know, are you, I mean, there is, everybody's got an opinion about you because you are the 800 pound girl and everybody's worked with you before and they have opinions good and bad and people want to leave no stone unturned. And then lastly, turns out you guys are a lot more expensive because you're trying to move from selling simple products like these ankle biters out there, these startups into selling big enterprise solutions. You guys are selling like not seven figure deals, eight figure deals, nine figure deals to your customers. That increases the customer's anxiety that I really have to see return on this. And so you in many respects are getting whipsawed by these factors in a way that the startups are not because they're not, they don't have as many choices, right? They don't, there's not as much coverage about that. The investment is lower. And so there's a little bit less risk for the customer. So you're not, you guys aren't immune.

Just because you're the big brand. You're doing a great job making it clear why it's so nerve wracking to buy new software. There's just so many things that could hurt you as a person at a company. April Dunford, I think this is borrowed from your language that she talks about how it's actually more stressful these days to buy software than to sell software.

Because of all these things you've talked about. Yeah, I think she's on point on that. It's a, your customers are, yeah, they're really, really afraid of this not panning out. And it was so interesting and your salespeople can think of so many different occasions where the purchase, buying your product just made all the sense in the world for the customer. It would make things so much better, it would solve such big problems for them. They're so dissatisfied with their current approach. It's just a no brainer and the customer will look at that and they will agree with you and they still won't make a decision because of the what ifs, right?

Yeah, this has gotta be very frustrating for founders to listen to and be like, come on, our product is so much better. What are you doing? But I think this explains a lot of the challenges they're probably having. This episode is brought to you by Heap, the product analytics solution that shows you everything users do on your digital product, website, mobile product, or other digital services. We all know a great digital experience when we see it. It's intuitive, it anticipates your needs, and makes it easy for you to do your job. If you're trying to build that kind of experience for your users, you need up-to-date, reliable information about what your users do in your product and why they do it. Want to know how your users behave across platforms? What keeps them coming back? What they're doing that you're not even aware of? Well, I have we have some great news for you. Heap captures all of this user activity for you automatically and then gives you definitive answers to all your questions about user behavior in seconds, not weeks. With Heap, it's easy to prioritize the product investments that improve conversion, engagement, and retention. Visit heap.io/lenny to get started with a demo. That's h-e-a-p.io/lenny. Lenny. It's a great segue to talking about how to actually leverage these insights to improve your sales process. You have something, I think you call it the Jolt Method. Yes.

Awesome. Let's get into that. The Jolt is an acronym. So it just so happened it worked out that way. But I like it because it's memorable, but it also speaks to what's happening.

Right?

Our customers stuck in their indecisive state, they want to buy from us, but they just can't because they're worried about.

What might go wrong.

You gotta jolt them forward. We gotta jolt them into action. Beautiful. so how do we do it? So the first thing is we've got to judge their level of indecision. The sex, so we gotta figure out what we're dealing with. The second thing is we got to offer a recommendation. The third thing is we've got to get them to stop doing endless research and start trusting us and limiting, we call limit the exploration. And the T is we've got to de-risk the deal. We got to take some risk off the table. And we gotta, we establish that safety net for the customers. They feel like we've got their back. So then we talk about each of those. I'll start with the J because, you know, it's first, but, but also. I think the way I, while it's kind of linear, I would encourage listeners, don't think about this as a process where it's like I do step 1, 2, 3, 4, J O L T. Think of it as it starts with the J and the J tells you what the next step is. Is it the T? Is it the L? Is it the O? Is it the O and then we got to deal with the T, then we got to go back to the O because it comes up again. So think of it as sort of the dividing rod. So how do we figure out what's got the customer nervous? And this is a really, really, really tricky thing. because, and I've likened indecision to like the carbon monoxide poisoning of sales. It's everywhere, but it's odorless, it's tasteless, you can't, you know, but you need a carbon monoxide detector and that's what the J is. So how do we get fear of failure on the table? And the problem with this is that, and I think most of your listeners will be familiar with this, everybody, especially customers suffers, and senior executives especially, especially suffer from what's called the Dun and Kruger effect, which is they think they are better at things than they really are. and decisiveness is one of those things that buyers will think they will say they think they're decisive. In fact, if you surveyed your customers, not that they recommend this, and you add 100 of them, if they consider themselves to be decisive folks, like 99 out of 100 will say, absolutely, yes, I make the tough calls. I manage from the gut. You know, I live on the edge as an executive, making those big calls. But the research tells a very different story. It turns out that 87% of buyers in our two and a half million sales calls we studied either showed moderate or high levels of indecision. The folks who are not worried about fear of failure were 13%. So yeah, those people do exist. And by the way, if you find one of those people, you should sell them everything as soon as possible. They're making the decision quite literally on the dollars and cents and the ROI and whether it makes sense for their business. It's a rational decision for them. But for the rest, they're dealing with a lot of emotion and that emotion is all wrapped up with fear of failure. And what's so tough about this is that it's not just Dunn and Kruger, like we think we're more decisive than we really are. Even if your customer knows that they're indecisive or they're worried about failing or how their boss is going to perceive them if this purchase doesn't pan out, they don't like talking about it because it's embarrassing. They don't want to talk about like, God, I gotta tell you, this better pay off because it doesn't. I'm already on thin ice with my boss. She doesn't like me already. This is going to be the last straw. Nobody's going to say that stuff. And so how do we get on the table? One of the things we don't think works particularly well are kind of classic open-ended questions like, Lenny, do you find when you go to the Cheesecake Factory, do you leave satisfied or hungry? Because you can't decide what to order. Like it's either not great approaches with customers, you'll end the sale pretty quickly. Because again, your customers find that kind of offensive. They'd like to think of themselves as decisive people. And so we found a technique, this is actually not in the book, we found it after we wrote the book, called pings and echoes that high performers use. So think of like the way a surface ship might detect a submarine in the water using sonar. They send a ping out into the water and they're listening, if you will, using sonar for the reflection back. And the reflection tells them, is it a friendly submarine, an enemy submarine? Is it just a whale? Is it heading towards us, away from us? At what speed? Are they about to torpedo us? All that good stuff. And we want to do the same thing in sales. So, The way this works is that a salesperson will try to articulate, but in a non, not to out the customer, but to get confirmation or refutation, if you will, that what they've articulated is actually a concern for their buyer. So hypothetically, let's imagine we're talking about a purchase and we've had a lot of great conversations, showing you a lot of demos. You guys have liked everything we've shown. We showed you partner options. We showed you different configurations. We did POC over here. We did a pilot over there. you know, you guys are just eating it all up, but I'm kind of getting the sneaking feeling that you guys actually don't know what you want. And we've shown you a lot, and we've probably made that problem worse. And so what I might say to you is, you know, Lenny, I'm just curious if we could calibrate here for just a moment. And there's a reason I'm asking this, which is a lot of the customers at this point in our process of working together, they get almost overwhelmed with all the options. And look, I probably made this worse. We're very proud of what we do. I want to show you the art, paint the art of the possible. But I'm also, I also know if we're going to do business together, you told me right up, right away, budgets are limited and you don't have, you can't have it all. So you've got to decide what's nice to have and what's need to have. I'm just curious, are you and your team clear on what would be in and out of the proposal? And what the, what's going to happen is one of two things. One, you might say, or, or a few things you might say. You know what? No, we don't know. And we have liked everything he's shown us, but as you said, we can't have it all. So we'd be really curious to know what do other companies like us start with? You know, how do we get going? What are the things we can do without and we can maybe add later on down the road? Or you might get the customer says, no, no, no. We were just being polite. There's a lot of stuff you showed us that we're not actually that interested in. It's cool, but it's just not for us. We are very clear on what we want. So let me share that with you now. However, what I'm really concerned about is once we get this kind of specced out and configured and priced, I'm going to take it to the CFO because I've got to get her approval on this. And I can't build our business case on the claim you guys make about improving sales productivity by 10% because she'll laugh me out of her office. And so help me get grounded in what's a believable outcome for us, right? So that I can sell it and I can be confident we're gonna actually hit it. So it's, again, it's not designed to embarrass the customer. It's designed to get this on the table so it can be recognized and dealt with and contextualized. You're not, you're totally normal. Everybody struggles with this. You know, there's a lot of stuff we throw in front of people and they, you know, it ends up doing some harm. They don't know what to pick. Let me be of service and value to you. And so that's the first thing that we point to. And that's gonna tell us, okay, is it a choice problem? They don't, they're overwhelmed. They don't know what to choose, like that example we just used. Is it that they're just doing endless research and they feel like they haven't really come down the learning curve yet around this purchase? Or is it, no, I don't actually know that we're going to get what we're paying for here. And we screw this stuff up every day of the week and twice on Sunday, and I don't think it's going to be different, and then I'm going to get blamed. So help me manage the downside risk.

But it tells us kind of where to go next on that journey, if that makes sense. Yeah, awesome. So the advice there is basically get a sense of how clear they are internally on knowing exactly what they want that'll help them make a decision. So there's kind of this like moment of, okay, let's just help me understand the question the way you phrased it. Are you and your team clear on what would be in or out of this proposal? Yeah.

And that's just a one example. That's if I hypothesize that you're really struggling with what to choose. Now, my hypothesis might be, you know what you want, you've done plenty of research, but you're really worried about the ROI, right? And you're just worried like, you just aren't going to be able to accomplish that. So that ping might sound very different. It might be, you know, we've been having a discussion about like, you've been asking for multiple turns of the ROI calculation and changing parameters and really trying to make it bulletproof. But, you know, a lot of customers struggle with that a little bit because that's a big thing. You're putting your name against that. And so maybe we should have a conversation about whether that's a concern for you. Is there a believability gap? Is there an execution gap you're worried about on your side or on our side? Let's have a conversation about that so I can set the proper expectations so you feel really confident going to the CFO and lobbying for investment here. So that ping could go in, but it's based on what I think is holding you up.

Got it. So it's just like at this point, many customers have this question and that maybe comes from the thing that you think is probably blocking them.

Yeah, I think that's perfect language. At this point, most customers like you are thinking about this or they're kind of worried about that or they're getting a little anxious about this. Let's have a conversation about it.

Awesome. Okay, cool.

Let's go to step two, offering your recommendations. Sure. Oh, yeah. So this was right with that example we talked about before. Options are really a double-edged sword. What we know from the research is that options are great early on. So if you're meeting at the trade show and the customer's swinging by your booth or you're doing a first demo or first hit, Let a thousand flowers bloom. But if you want the customer to actually make a decision, you've got to get the weed whacker out and like cull it down to a manageable set of choices. And the science is very clear on this, that too many choices at some point will overwhelm the customer and at least a lot of bad outcomes. It leads to the customer not making a decision at all because they don't want to make the wrong decision. I want to work with you, but you put so many options in front of us, like, I don't want to be blamed if I choose the wrong one. And it leads to things like post decision dysfunction, which is I thought I made the right decisions, but now I'm learning more and people are asking hard questions and maybe I need to go revisit this and hey, Lenny, we're gonna have to scrap that agreement and start over because I don't think we can figure this right way. So we have to be, there's a time and place to offer options, there's a time and place to narrow choices up. The simple guidance here for salespeople is that you've got to shift your posture from asking the customer what they want and just diagnosing their needs to actually recommending to them what they should do. Salespeople get a little bit anxious about this, I find, because they don't want to be seen as like, I told you to do A, but you're like, I don't want to do that. I want to do B, and now I feel like we're at odds. And so they worry about that. And so salespeople have grown up in this world that like, it's the customer's choice. The customer's always right. Let me just guide them, but they're the ones should make this decision. But sometimes the customer can't. And they don't know enough about these decisions. Like we know the stuff because we eat, sleep, and breathe it every day as salespeople. We work in this industry. They don't. And so we are in a much better position to be able to guide them toward like, you know what? You don't really need X, Y and Z. You can leave that out of the proposal. Companies like you, they get started in this way. Let me put three options in front of you. I would go the middle one because I really think that's going to be the best for you in the first year. And then we can expand from there. Here's an analogy. I'll often tell people to think about the last time they went to a fancy restaurant and they looked at a menu with some expensive entrees and everything looked delicious, right? but they didn't know what to order. So you ask the wait person what they recommend. How helpful is it if that wait person says to you, well, what are you in the mood to eat tonight? Like, it's no help at all, right? You're no closer to a decision. They basically just dump the problem back on your lap. But what great way people do is they say, you know, if you want my opinion, I love this dish. And I'd probably say it's our most popular. We sell out of it every night. We've still got it, so you're in luck. It's a lot of food, though. It's a big portion. If you're in the mood for something lighter, there's a vegetarian option. It doesn't get as much play on Yelp, but I love this one. It's absolutely delicious. It's one of our kind of dark horse favorites, if you will. But remember, everything we make here is delicious. So if you don't like those choices, you're not going to go wrong with any of them. But those are just my favorites. Now, what happens in that moment is what psychologists call the delegation effect, which is rather than the burden of a bad decision being solely on the shoulders of the decider, that burden is now shared. Now think about it. If you order the dish the way person recommended and you don't like it, whose fault is it? Well, Technically, it's your fault because you ordered it, but it's also kind of their fault because they recommended it. And so you feel like there's some safety in getting that recommendation, that endorsement. It's a really simple example, but it works in complex sales as well. Customers are looking for somebody to share in the risk and the burden of making a bad decision and having that, you know, partner who's guiding them toward what they should care about and what they shouldn't care about, what they should consider and what they should take out of the proposal. is actually very reassuring and comforting them and increases the odds of getting some kind of decision from them.

Amazing. This is a great segue to the Challenger Sale, which we're going to talk about. But let's get through the last two steps and then we'll talk about the Challenger Sale, which is basically this on.

Steroids, this idea on steroids. The last two, so L is about, you know, this customer who's doing endless amounts of research. Every salesperson has seen this customer, like they're never happy with the number of reference calls or the, you know, the amount of research they've done. They want to talk to more and more people. They're just in information overload mode and, or what you, we might call analysis paralysis mode, because at some point they're just, they're never satisfied with, they always feel like all the answers will be in the next white paper they read or the, the next reference call they do or the next person on LinkedIn they talk to. And so what salespeople need to do to stop that, you got to understand, I think, why customers do that. It's, they don't want to be surprised. that is the main reason, but they also don't trust the salesperson to be forthcoming. So they believe the salesperson is paid to sell them more than they need, to put one over on them, hide the dirty laundry, only talk about the things that work in the platform, not the things that don't work. You're not going to introduce any of the customers who hate you. You're only going to introduce the customers who love you, and we know we're going to say great things about us. So that's what the customer thinks, right? That is what is in the customer's mind. You've got to actually shift, get the customer to stop trying to be an expert and start trusting you as an expert. And there are two keys to that. The first one is you've got to establish some trust. I know that sounds like a platitude, but we found in the analysis there are specific things that sales, great salespeople do very early on. They are brutally transparent with customers about like, Hey, I know you were interested in this capability. I got to be honest, it's, you know, we get mixed reviews on that. It's kind of an early capability for us. We're still trying to iron out the kinks. or I know you are interested in this use case, but I have to be honest, we're actually not the best in the market at that. Our competitor is much better at that than we are. You know, so these kinds of moments show the customer that you're not here to put one over on them. You're here to get them to a great decision. It kind of makes no difference to the salesperson whether the customer buys from them, doesn't buy from them, it buys from a competitor. You just want to help them get to a great decision. So that's step number one is building that trust. And step number two is you got to demonstrate some expertise. And what we see in so many sales interactions, especially in tech, is that salespeople will show up with the clown car of experts, the subject matter experts, the solutions engineers, the product people, the executive sponsors, and then they will just.

Punt to these people.

And what happens in that moment is dangerous for the salesperson. The customer, it sounds like they're loving it, right? They're loving that I'm talking to people who really know their stuff. But what's also happening in that moment is the salesperson is actively getting delegated down to the person they sound like. And if they don't sound like any more than a glorified MC or coordinator, then that's kind of all the customer will perceive them as. So what right or ability would you have to guide the customer on what to choose if you've offered no value or expertise? You've got to at least show you don't have to be as deep as the product people are. You're not going to be you're a salesperson, you're not a product person, but you do have to be deeper on it than the customer. And you do have to demonstrate that expertise. And so those are the keys again, the customer to stop trying to be an expert and start trusting you as their expert. And then the T is taking risk off the table. Two keys to doing that. I think the first one happens really early actually, and that is resetting the customer's expectations. Average sales people love when they get an inbound lead from a customer who says, Hey, I saw that case study on your website of the customer who got the 10x improvement in sales productivity. and we want that. Like that sounds great. And that that company is in our industry, amazing, like that's a slam dunk business case for us. And the average salesperson is thinking like, if you're excited about that, I'm not going to talk you out of it because that means you're going to be excited to take in the CFO and excited to sign the agreement and get going. What great salespeople do, though, was they know that while they'll stand by those claims, those case studies, those proof points, they try to kind of under promise and over deliver. And they might say something along the lines of, you know, Lenny, absolutely. That is, that is a great case. I was involved in that sale. But we also need to understand is everything went perfectly. They resourced it to the hilt. They had no integration issues, no hiccups. It was beautiful and seamless. And I don't think you and I can think of many technology implementations that happen that way. And so what I'd rather we do is build your business case around a 5x improvement in sales productivity because we see that at least that in 100% of our implementations. And then let's set up to over deliver against that because I think we're going to do better than that based on what I know about your organization. Easily 6, 7, 8, 9%, maybe even 10. But I don't want you just walking in and promising 10x improvement in sales productivity. If we finish the year and we're at 7x and the CFO is now asking her questions when in absolute terms she should be thrilled with 7x, right? So let's make sure we set ourselves up for success. The other thing you've got to do though is establish some safety net options. So There are lots of different shapes and forms these can take. Everything from, you know, before the deal is closed, pulling the implementation team onto the call, or the customer success team, or the account management team. So we can start road mapping, hey, as soon as we get signature, here's how we're going to spend our next six months together to make sure you guys are getting all the value you expect, if not more. Here's what we got to do. Here are the stage gates. Here are the owners. Here are the metrics we're going to monitor. Here's how often we're going to connect with each other. instills a lot of confidence with the customer because it feels like, oh, you guys have done this before, right? You've been there, you've done that, you've helped other customers like me get value. Everything from that kind of stuff to adding in professional services support, especially like you think about a tech purchase. I'm not saying give it away for free, but you will find that high performing salespeople will also add on professional services. But it's not just because they're selling more, which they are, because they're high performing salespeople. It's the way they position that. They usually position it as an insurance policy. Hey, Lenny, I know you guys want to DIY. This is one of the great things about our solution. You totally can. You get all the training support, all the videos, you got all the enablement content you need. But I know this is a big priority for you and I think it would be really smart to carve out a slug of professional services hours. That way our A team is lined up in case anything slips. And if it does, we get you back up on track. Because the last thing we want is for you guys to be upset that you're losing ground and you're not going to deliver on the outcomes that you promised to your boss. So, So let's set that up. So there's lots of different ways we can create those. Opt-out clauses in some industries are an option, not very common in B2B, but in some cases you can offer those or specialized contract carve outs, for instance. So there's lots of different things we can do to create that safety out where the customer doesn't feel like they're jumping out of an airplane by themselves.

But you are the tandem skydiving instructor that's going to guide them safely to the ground. Amazing. And all of this, especially this last step, is coming from They are probably not going to decide on anything that that's what you're fighting is help them.

That's right.

Be less worried about messing up.

Yeah, that's right.

I especially love this point about under promising and over delivering because so much of, and most of this is B2B SaaS software that you're working with, right? Like B2B SaaS companies.

We are data set cut across. I think that it might just be that SaaS is the place where we're seeing the most indecision these days. You know, but It does not suggest it's kind of an easy target, but it is rife with indecision these days. And unfortunately, I think it's also rife with a lot of these missteps that salespeople make that actually make things worse. But we had data from manufacturing firms, services, businesses that cut across. So this was prevalent and consistent across industries.

So with the under promising over delivering, I think that's especially powerful for Where most companies want to get to is net revenue retention being higher than 100%, where you can expand larger within the org and it makes sense to help them set up base feel like, wow, this is so much better than we even thought it was going to be versus- Absolutely, yeah. It's not delivering what we thought. Amazing. Okay. Any last piece of wisdom to leave listeners with around the Jolt effect before we move on to the Challenger Sale?

You know, the only thing I would suggest is that for anybody, I mean, I think a Just Do It is this, is that you should hit the pause button when the customer, because the customers we all know are going to get cold feet, often late stage, and it can be very frustrating. And the knee jerk reaction for almost every salesperson out there, this happened like in our analysis, 75% of sales people we studied would immediately go out to dialing up the phone, like to go back to doing that. Like you're not going to get these benefits. You're going to be, you know, stuck in this terrible state of affairs you're in right now, dial up the cost of inaction, or let's try to use some price base or other like delivery window based urgency driver to get the customer to move forward. But just remember that if the customer is already convinced that the status quo is suboptimal and they've already got the intent that you're basically, again, you're using fear on top of a customer, you know, selling into a customer who's already afraid and you're actually making it worse. So hitting the pause button and just reflecting a little bit on what's really going on here. Is it that they're indifferent or is it that they're indecisive?

And those are actually two very different things. Amazing. I know you have a meeting in 10 minutes. So we're gonna, this is gonna be the most action-packed high density podcast episode we've done. We got 10 minutes talking about Challenger Sale. First of all, how many copies of.

This book have you sold at this point?

I think it's about a million.

Yeah, so it's a lot.

Okay, so it's a legendary book in the world of sales. I imagine many people have heard of it, at least some people know the teachings. Let's spend a little time there. If I were to summarize the big insight of the book, basically it's the best salespeople challenge their prospects thinking and teach them about the market and what they should be doing versus just helping them get what they want.

Yeah, very well said. I think one of the, just like the FOMO, FOMU kind of shorthand, here's a shorthand I'd give to salespeople is that most salespeople are trying to figure out what's keeping the customer up at night, right? It's classic solution selling needs, diagnosis, et cetera. The Challenger approach is about showing the customer what should be keeping them up at night. What is the thing you know that they need to know? What is the way that other customers are using your solution to generate returns and benefit for their organization? What's the risk that they don't know about, but you do? Because by the way, you're going to talk to, you know, 10 times more customers than they, or I say you're going to talk to like 10 of that customer in a week than, you know, 10 times more than in a week than they will all year. So you are a window into the outside world for them. And that's what challengers really understand. It's not free consulting though, because if you remember from the Challenger sale, it's not just about bringing these provocative ideas that reframe the customer's understanding of the world, it's about leading to your unique benefits. So what you're really trying to do is create a fire and then be the only person in town who sells the fire extinguisher that'll put it out.

Is there an example you could share of a Challenger Sale type of sale?

Yeah, we wrote a sequel to Challenger Sale called the Challenger Customer. And in that book, we talk about a case from a company called Dentsply. Dentsply, as the name would suggest, manufacturers produces dental supplies, right? So they sell equipment and product into dental practices and dental offices. And years ago, Dentsply had developed, we all know, I think your listeners can all relate to this, when you go to the dentist and the hygienist is, you know, polishing your teeth or they're using the water pick or the, unfortunately, maybe the dentist is using the drill. And that wand has a very heavy, like, power cord that's attached to it and it's attached to this power base and and that it feeds water through there and electrical current and all those things. Densply had developed the world's first lightweight, ergonomic, cordless wand that drill bits could be attached to, you know, cleaning implements, et cetera. And it was a total breakthrough. They actually, when they unveiled it, it was pretty interesting. They gave, you remember the scene in Pulp Fiction where they open the briefcase and it emanates like a light emits from it. So they gave all their salespeople like this little aluminum briefcase thing with this eggshell foam and a A wand in there. I can't remember what it's called. It's called the XP 9000 wand. But it had one demo wand in there and they would go around to dental offices and be like, ah, and it was lit, literally like light had blue lighting inside and it was really cool, the reveal. And they'd take it out and they'd give it to the dentist or the head of the dental office and they would hold it and be like, what? Like it's so much lighter and it's ergonomic and this thing is cordless. It's amazing. It's a revolution. And then the first thing they would ask is, how much is it? So, and when they told them it costs like three times more than the current old fashioned wands are using with the heavy cord, they would gently put it back in the briefcase, close the briefcase, say, can you give me a price on new drill bits or new like polishing attachments? And so they, they couldn't get anybody to want to pay for this thing that was much more expensive than the old one. So they did a lot of work and they figured out they, they knew that this was unique. They knew this is a unique product. Nobody else in the market made this. They're the only supplier who had figured this out. Total innovation. But they hadn't given the customer a reason to want to pay a premium for that innovation until they figured out the connection between the equipment that hygienists use and absenteeism and workers' comp. It turns out that one of the biggest professions that where you get carpal tunnel syndrome, shoulder and neck and lower back injuries is being a dental hygienist. And the reason is that they're standing holding that heavy wand, being dragged down by that heavy cord at an awkward angle all day long. So that's why dental offices really struggle to keep hygienists showing up, not, you know, not calling in sick, not out for months at a time for reconstructive shoulder surgery, not with exorbitant health benefits claims and workers' comp claims. And so they came in and they revised their sales pitch. And now when they come into the dental office, they sit down and they say, you know, I'd like to talk to you about your hygienist workforce. Are you guys seeing higher turnover? Have you seen any absenteeism due to carpal or lower back or neck or shoulder injuries? What are you guys doing about that? What's the cost to your business? And they get the dentist talking and the way they start talking about it is not just the insurance and workers' comp costs, it's stuff like When my hygienists get injured, and this is a repetitive motion business and job, and when they get injured and they call in sick, I've got to reschedule all these cleanings and all these appointments, and that's a bunch of upset customers who end up then going to the practice down the street or saying bad things about me on Google reviews or what have you. So there's all kinds of ripple effects for the dentist. The cost of losing a hygienist is massive, and the market for hiring them is very, very tight. So what Densify does is start the conversation there, and then they say, you know, one of the things that we figured out is the primary based on our own independent research, though one of the primary drivers of all these bad outcomes, absenteeism, repetitive motion injuries, is related to the equipment that hygienists use. It's because they're holding that old-fashioned heavy wand attached to that big heavy power cable at an awkward angle doing repetitive motion all day. But what if you could solve for that? What if that was no longer a problem? The dentist says, well, how would you solve for that? There's no other technology. That's what we got. We've had the same equipment for 30 years. Let me show you the new XP 9000. It's the world's first cordless, lightweight, ergonomic drill. And we can show you that it is far preferred by hygienists because they don't get injured as often because it's much easier to hold and it doesn't put stress on the joints. and kind of pinch points, if you will, where hygienists tend to experience these injuries. So it's a simple example, but you see again, they're still selling a fancy wand, right? But before they were leading with it, let me show you this and talk about the features and benefits, and that led to how much does it cost? Now they're leading to it. They're starting with an insight and giving the customer a reason to care about solving this business problem. And it turns out the only way to solve it is buying this XP 9000 drill from Den Supply.

So the key lesson from this book, and I know we don't have a ton of time to dig into it, is start with an insight they may not be aware of, give them a sense of where the things are going, help them learn something about the future and the problems that they need to know about that they may not be aware of, and then how transition to here is how we can solve that for you. Yeah, that's exactly right.

And make sure those connections are really tight, right? Getting this right starts with answering the question, why should the customer buy from you instead of your competitor? And it's not because you're more customer-centric or more innovative, impossible to prove, your competitors claim the same thing. It's not that you're the leading global solution provider of whatever you sell. It starts with the product or the way you deliver the product or something about your service delivery that only your company does. You are only capable, nobody else can touch with the barge pole. And then the second question is, what would have to be true for the customer to want to pay us for that? To pay a premium ideally. And that's kind of the That's the core components, if you will, of a.

Challenge or a conversation. Amazing. Okay, Matt, I promised I'd let you out of here in time. So final questions. Working folks, find your books if they want to dig in further.

And how can listeners be useful to you? Well, I thank you for the offer. I love being connected with folks who heard me on shows like this one. So if you heard me on the podcast, Hey, John, Lenny show, shoot me a LinkedIn invite. I'm pretty active there. I love being connected with folks. So please reach out to me. If you want to learn more about Jolt Effect, so we do a lot of workshops and training around that methodology, visit jolteffect.com, there's a ton of, there's also a lot of free tools on there that you can download that help you put some of these concepts into practice with your sales teams or if you're an individual seller. And then of course the books are available everywhere, good books are sold, which I think is on the internet these days.

Amazing. Matt, Thank you so much for being here.

Thanks, Lenny.

It was a blast.

Thank you.

Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com See you in the next episode.