The surprising truth about what closes deals: Insights from 2.5m sales conversations | Matt Dixon

1. 0:00 – 1:57

   Matt’s background

   1. MDMatt Dixon0:00

      (instrumental music plays) We collected two and a half million sales calls and studied them with a machine learning platform at scale.

   2. LRLenny Rachitsky0:05

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

   3. MDMatt Dixon0:12

      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.

   4. LRLenny Rachitsky0:19

      Can 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.

   5. MDMatt Dixon0:25

      You gotta jolt them forward. So the first thing is we've got to judge their level of indecision. The second thing is we gotta offer a recommendation. The third thing is we've got to get them to start trusting us. We call it limit the exploration. And the key is we gotta de-risk the deal. We gotta take some risk off the table.

   6. LRLenny Rachitsky0:38

      Great segue to the Challenger Sale, which is basically this on steroids.

   7. MDMatt Dixon0:41

      Most salespeople are trying to figure out what's 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?

   8. LRLenny Rachitsky0:51

      Holy moly. This is going to be the most action-packed, high-density podcast episode we've done. (instrumental music plays) 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 number one 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. (instrumental music plays) Matt, thank you so much for being

2. 1:57 – 6:08

   The research behind Matt’s books

   1. LRLenny Rachitsky1:57

      here. Welcome to the podcast.

   2. MDMatt Dixon1:59

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

   3. LRLenny Rachitsky2:01

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

   4. MDMatt Dixon2:10

      Oh.

   5. LRLenny Rachitsky2:10

      ... that she did.

   6. MDMatt Dixon2:11

      She's great. Yeah, (laughs) she's very nice.

   7. LRLenny Rachitsky2:12

      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 that you did?

   8. MDMatt Dixon2:53

      Yeah, sure. Um, so, uh, maybe just start with, uh, Challenger because that chronologically came first. So we actually started that research study in, uh, I think it was in late 2008 actually and, um, we published the initial results to... At the time I was working for a company called CEB, which was acquired by Gartner Group, uh, in 2017, a research organization and, and I was running the group that served heads of sales, business to business heads of sales around the world. We had 500 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. Uh, the book was published off a dataset of 6,000 salespeople so we did an in-depth survey with, uh, 6,000 salespeople as well as collected performance data on those 6,000 sellers. Uh, this was... It was global, cross-industry, different types of, uh, companies as well, product companies, services companies, large, small, slow growth, fast growth, you name it. Over time though, you know, that, that research has been ongoing so we've collected da- uh, data, I think to date on roughly a quarter million salespeople around the world, uh, that we continue to go back and not just validate the original findings but look at how things are changing and, uh, do cuts of the data now that the dataset's so big. So that was a survey-based piece of research we did. Uh, The JOLT Effect, we started that research in, uh, 2020 actually. It was actually in March of 2020 which I think is a time that everybody remembers with probably mixed, mixed emotions, most of them bad. Um, I think, uh, the... Uh, you remember March was a time when people were getting into Tiger King and baking sourdough bread and be much... A few months later that got really old but in the beginning it was kind of, you know, surprising and weird and, you know, uh, this, this whole pandemic thing. But, um, we actually thought because we're huge nerds, um, that this would be an interesting time to do a sales, uh, research project. We had always been fascinated by, uh, 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, uh, on these meetings and took notes, their team of psychologists, to produce the research that went into SPIN Selling. And so we always kind of aspired to get at the, at kind of, if you will, at the coalface 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 and to... (laughs) You know, that kind of undertaking and, and then let alone getting invited into those meetings. So a lot of the real 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 the industry and around the world into a large global study. We collected two and a half million, uh, sales calls and studied them with an, uh, machine learning platform at scale. So that was a very different kind of research project and, you know, honestly it's, it's fun just as a researcher to look back on Challenger and, you know, the manual kind of survey-based approach and the interviews and all the stuff to fast-forward to, like, today being able to take advantage of large datasets and advanced technology to study, you know, millions of sales conversations is, is pretty cool.

   9. LRLenny Rachitsky6:06

      Amazing. Okay, so

3. 6:08 – 10:15

   Insights from The JOLT Effect

   1. LRLenny Rachitsky6:08

      the second book, the most recent book-

   2. MDMatt Dixon6:10

      Yeah.

   3. LRLenny Rachitsky6:10

      ... The Jolt Effect, is based on these two and a half million sales conversations.

   4. MDMatt Dixon6:13

      That's right.

   5. LRLenny Rachitsky6:14

      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.com/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.

   6. MDMatt Dixon8:24

      Good summary. Yeah, (laughs) I was thinking that 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, I think, you know, we, uh, just to back up for a little bit, I, 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 pipeline, so 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 close/loss/no decision. That's actually... I think that number's actually on the rise, and especially in places like SaaS and in the broader tech sector over the past, uh, year and a half. But that's a really painful thing, right? If you think about a sale- as a salesperson that y- for 46% of your deals, you've got 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 evap- the opportunity evaporated on you, they ghosted you, they went radio silent. You don't know, really know what happened there. And so we, um, we decided to take this two and a half million sales call data set, which you could have used to answer lots of different questions, but we were really fascinated by this question. Maybe two, two questions. One is, why do customers make no decision? Like, because y- 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, the more important question is probably what do the very best salespeople do differently? What have they figured out to avoid that outcome?

   7. LRLenny Rachitsky10:13

      Cool, and we're going to talk about that latter

4. 10:15 – 18:18

   FOMO vs. FOMU

   1. LRLenny Rachitsky10:15

      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 then not make a decision at all?

   2. MDMatt Dixon10:24

      Y- So let, let me maybe take us a step back, uh, Lenny. Y- there was a reason we actually even asked that question that you just asked, and the reason was this. You know, when we looked at sales calls, if you think of a, uh, the typical s- 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'd never saw a need for a solution like yours, but that's their current state. Step two is we 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. That- we call that agreement on a vision. We 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, they execute the DocuSign, they sign on the line that is dotted and they send the contract back. It's a simple three-step process, and what we found in our analysis is one of the, 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, I... 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, relitigating concerns that they had, they had asked and you thought you would address much earlier, like, uh, what, what might go wrong, and is this really the right answer for us? And they... And these are things that are puzzling to salespeople because, like, 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, uh, 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's starting to get cold feet, it's because they still think either what they're doing today is good enough, what you are proposing isn't... not a very, uh, 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? Uh, uh, and, 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? We... uh, how excited you were and like..." Right? "Those- those benefits, like, you gotta pay for it." Like it's a, "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 (laughs) dialing up the fear, uncertainty, and doubt, and saying, "Lenny, you know, you told me about these problems in your, your business. You guys are really struggling right now. Um, by the way, did I mention we're working with all of your competitors and they're seeing tremendous benefits from our product and you're going to be left in the dust? And those problems you brought up with me, they're not going to solve themselves." So I'm trying to create that burning platform a little bit for the customer and, uh, 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 salespeople go to is the 10% discount that's only good this quarter, right? (laughs) So it's, it's like the price-driven urgency, like, uh, uh, 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, they 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 to no 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, en 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. A- and again, overcoming that inertia, uh, that not just individuals but organizations suffer from. Challengers are 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's Tale a little bit troubling to me, but we'll come back to that. But, uh, 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 to no decision? What drives that? And we found that actually there is... uh, 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 it's, 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, we dug into the psych research. We, we read probably 30 years of, of, um, cognitive psychology journal articles, many of them from, uh, Dutch universities, which I find very interesting. But (laughs) they're really very big into this stuff. You know, a lot of the Kahneman, Kahneman and Tversky work around, um, 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, is the fact that people don't want to be blamed for making decisions that lead to a loss. In the, 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, 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. Uh, 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 include in that definition of human beings are, um, deathly afraid of being personally blamed if things go wrong, the FOMU actually matters more than the FOMO. The FOMU is the fear of messing up or in the not safe for work version of your podcast I'd say FOFU but your listeners can figure out what that stands for on their own. But (laughs) this is really powerful for customer... for salespeople, right? To understand, look, if you are trying to scare your customer into action, you're going to miss out on these benefits, you're going to miss out on solving these problems, you're just going to pay more later if you don't say yes now. What you're, 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, you're making a great decision. I've got your back. This is gonna... Uh, you're gonna look like a hero, not like a fool. And that's really what The Jolt Effect is about. It's 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 gotta break status quo bias. If you don't do that, you're never gonna have an indecision problem, but even once you overcome the customer's indifference and their status quo bias, you got a second battle you've gotta fight which is you gotta instill the confidence and make them feel good about this, frankly, leap of faith they're about to take and their fear... You gotta deal with the fear that if something goes wrong, they're worried that they're gonna be blamed for it.

   3. LRLenny Rachitsky18:16

      We're gonna talk about this method

5. 18:18 – 26:04

   An example of selling software

   1. LRLenny Rachitsky18:18

      you developed for how to actually do all the things you're talking about. But first, to make this even more real, what I'm thinking about is, uh, an example. So may... Is a good example maybe a CRM, like a better CRM product? Say someone has Salesforce installed, and now they're like, "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?

   2. MDMatt Dixon18:52

      We encountered a, a ton of examples. It, it's so interesting. You mentioned, uh, startups, and I think sometimes... I was actually with a big enterprise software company, and I think, um, when, uh... 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-lb. gorilla, especially in a market like we're in right now." Because, you know, as the old adage goes, it wasn't IBM, but the old adage (laughs) is that nobody ever got fired for buying from IBM, right? This company is like the IBM of their space. They're the 800-lb. gorilla. They've got the brand strength, the reputation. They're the safe choice, right? And so this, this team felt kind of comfortable, uh, or comforted, I should say, by that fact, especially in a, a tight environment where it's a, it's a battle for deals and for mindshare and for, uh, 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, get the mindshare. 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, I cautioned these folks, and I said, "Now, remember, what are the things that drive fear of failure and indecision?" It turns out there are three big ones. The first one is, um, have I made the right choice? I know I want to work with this vendor, but did I configure the solution, 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, and f- their second fear of failure is that they're gonna learn something after the contract is signed that's gonna make the decision look like not such a great (laughs) decision. I'll give you a really (laughs) specific example about this. I spoke to a tech company not, uh, not too long ago, s- uh, maybe a month ago, and they landed their biggest deal of, 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 was a huge win, you know? They went out. They celebrated. It was just totally amazing. Big... Their first big enterprise win and their first seven-figure deal, and their first victory against some of these incumbents. Unfortunately, uh, about two weeks after they won this deal, the new Gartner 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, the client who signed the agreement, uh, the CTO, just got, like, crap rained on (laughs) them from everybody saying, "Did you see the Gartner Magic Quadrant? It looks like the company we just plunked down seven figures with was kind of seen as so-so by the Gartner analyst. Have we talked to these guys and those guys, and why aren't we going with the leaders?" And, you know, 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, and, uh, but I just... Life is too short, and we're probably gonna 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 was like, "They're gonna keep doing research 'cause they don't want to be surprised when some new piece of information comes to light." So, that's the second big fear of failure driver, or failure driver. The third one is that the customer's worried they're just not gonna see the ROI. They're not gonna get the full benefits. You know, you might pro- pro- um, project for them a 5X improvement in sales productivity. What if it comes in at 2 or 3X, and my name's on the agreement, and the CFO comes asking why we didn't get the benefits we thought? You know, in today's environment, that's not just egg on your face. You can get fired for that stuff. So, you know, this is, this is a client who's really looking for that vendor to have their back and to assure them that they're gonna see the benefits that are being projected and promised, uh, 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 risks 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 an... 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? There's w- You could fill a football stadium with all the coverage on you guys, and, you know, are you expe..." I mean, there is... Everybody's got an opinion about you because you are the 800-lb. gorilla, and everybody's worked with you before. Ver- 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. So, 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, 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 them. The investment is lower, and so there's a little bit less risk for the customer. So, d- you're not... You guys aren't immune just 'cause you're the big brand.

   3. LRLenny Rachitsky23:53

      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 she... 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 talked about.

   4. MDMatt Dixon24:12

      Yeah. I- I think she's... I think she's on point on that one. I mean, it's, it's a, uh, your customers are... Yeah, they're really, really afraid of this not panning out.And it, 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. Um, 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?

   5. LRLenny Rachitsky24:47

      Yeah. This is, uh, gotta be very frustrating for founders to listen to and be like, "Come on. Our product is so much better. What are you doing?" Uh, 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 it 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 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. It's a great segue to

6. 26:04 – 29:41

   The JOLT method Step 1: Judge their level of indecision

   1. LRLenny Rachitsky26:04

      talking about how to actually leverage these insights to improve your sales process. You have something, I think you call it the JOLT method.

   2. MDMatt Dixon26:10

      Yes.

   3. LRLenny Rachitsky26:11

      Awesome.

   4. MDMatt Dixon26:11

      Yeah.

   5. LRLenny Rachitsky26:11

      Let's get into it.

   6. MDMatt Dixon26:12

      Yeah. JOLT is an ... It's an acronym, so, um ... It just so happened it worked out that way, but I, I like it because it's memorable but it also speaks to what's happening, right? Our customer's stuck in their indecisive state. They want to buy from us, but they just can't 'cause they're worried about what might go wrong. You gotta jolt them forward.

   7. LRLenny Rachitsky26:26

      Mm-hmm.

   8. MDMatt Dixon26:26

      We gotta jolt them into action.

   9. LRLenny Rachitsky26:27

      Beautiful.

   10. MDMatt Dixon26:28

       So how do we do it? So the first thing is we've got to judge their level of indecision. The sec- so we gotta figure out what we're dealing with. The second thing is we've 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 it limit the exploration. And the T is we gotta de-risk the deal. We gotta take some risk off the table, and we gotta ... We establish that safety net for the customer so they feel like we've got their back. So let me talk about each of those. I'll, I'll start with the J 'cause, you know, uh, it's first. Um, but, (laughs) but also, I think the way I, I ... While it's kind of linear, I wouldn't ... I would encourage listeners, don't think about this as a process where it's like I do step one, two, three, four, J-O-L-T. Think of it as it starts with a 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 ... Oh, and then we gotta deal with T, then we gotta go back to the O 'cause it comes up again. So think of it as sort of the divining rod. So how do we figure out what's got the customer nervous? And, and this is a really, really, really tricky thing, because, um, 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 ... (laughs) You know, you, 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, um, and, and I think ma- most of your listeners will be familiar with this, everybody, especially customers, suffers, and senior executives especially, especially, suffer from what's called the Dunning-Kruger effect, which is they think they are better at things than they really are

   11. LRLenny Rachitsky27:54

       Mm-hmm.

   12. MDMatt Dixon27:54

       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'd recommend this, and you had 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%.

   13. LRLenny Rachitsky28:28

       Hmm.

   14. MDMatt Dixon28:28

       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. (laughs)

   15. LRLenny Rachitsky28:33

       (laughs)

   16. MDMatt Dixon28:33

       'Cause they, they're, they're making the decision, quite literally, on the dollars and cents and, and the ROI and, and, you know, 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, you know, wrapped up with fear of failure. And what's so tough about this is that it's not just Dunning-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 gonna perceive them if this purchase doesn't pan out, they don't like talking about it because it's embarrassing. You know, they don't want to talk about like, "God, I gotta tell you, like, this better pay off, 'cause it doesn't. I'm already on thin ice with my boss. She doesn't like me already. I ... This is gonna be the last straw," you know? (laughs) Nobody's gonna say that stuff. Um, and so, w- how do we get it on the table? Um, o- 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 'cause you can't decide what to order?" (laughs) Like, it's, you know, not great approaches with customers. You, you'll end the sale pretty quickly, 'cause again, your customers find that kind of offensive. Um, they'd like to think of themselves as decisive people. And so we found a technique.

7. 29:41 – 34:49

   The “pings and echoes” technique

   1. MDMatt Dixon29:41

      This is actually not in the book. We found it after we wrote the book, called pings and echoes, uh, that high performers use. So think of, like, the, 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, 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, um, what ... 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, uh, 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. I've shown 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. A- and look, I probably made this worse. We're very proud of what we do. I want to show you the art of, paint the art of the possible, but I'm also, I also know if we're going to do business together, you've told me right out, 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 then, 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, I, we don't know, and we have liked everything you've 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's the, what are the things we can do without and we can maybe add later on down the road?" Or you might get the customer who 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." And said, "Let me share that with you now. However, what I'm really concerned about is once we get this kind of specced out and figured and priced, I'm going to take it to the CFO 'cause 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 going to 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, 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, 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, uh, that we point to, and that's going to 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, I don't, I don't actually know that we're going to get what we're paying for here, and we'll, we screw this stuff up every day of the week and twice on Sunday, and I don't think it's gonna be any 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, on that journey, if that makes sense.

   2. LRLenny Rachitsky33:12

      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. I think the question, the way you phrased it, are, are you and your team clear on what would be in or out of this proposal?

   3. MDMatt Dixon33:31

      Yeah, and, and that's, that's just a, uh, 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? You're just worried that like I, you just aren't going to be able to accomplish that. So that ping might sound very different. It might be, "You know, hey, we've been, we've been having a discussion about like, you, you, we've been, you've been asking for multiple terms of the ROI calculation and changing parameters and really trying to make it bulletproof, but, you know, a lot of customers, uh, struggle with that a little bit because that, 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? And let's have a conversation about that so I can, uh, set the proper expectations so you feel really confident going to the CFO and, and lobbying for investment here." You know, so, so that ping could go in, uh, but it's based on what I think is holding you up.

   4. LRLenny Rachitsky34:28

      Got it. So it's just-

   5. MDMatt Dixon34:29

      Yeah.

   6. LRLenny Rachitsky34:29

      ... like, it's, at this point, many customers have this question and that-

   7. MDMatt Dixon34:33

      Yes, yeah.

   8. LRLenny Rachitsky34:33

      ... maybe comes from the thing that you think is probably blocking them.

   9. MDMatt Dixon34:35

      It, it, the, yeah, I think that's perfect language. At this point most, 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.

   10. LRLenny Rachitsky34:46

       Awesome.

   11. MDMatt Dixon34:47

       You know?

   12. LRLenny Rachitsky34:47

       Okay, cool. Let's go to step

8. 34:49 – 38:36

   Step 2: Offer a recommendation

   1. LRLenny Rachitsky34:49

      two. Uh, offering your recommendation.

   2. MDMatt Dixon34:50

      Sure, the O. Yeah, so this, this was, uh, right with that example we talked about before, you know, options are, options are really a double-edged sword. It, it, what we know from the research is that options are great early on. So if you're meeting at the trade show and the customers are swinging by your booth or you're doing a first demo or first hit, like, 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 (laughs) and 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 it leads to a lot of bad outcomes. It leads to the customer not making a decision at all 'cause they don't want to make the wrong decision. I want, 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, and hey, Lenny, we're gonna, we're gonna have to scrap that agreement and start over because I don't think we configured this the right way. So, um, uh, we have to be, we have to, there's a time and a place to offer options, and 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. And 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 wanna 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, it's the customer's choice. The customer's always right. Let me just guide them, but they're the ones who should make this decision," but sometimes the customer can't, and they don't know enough about these decisions. Like, we know this stuff 'cause 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 with the middle one, 'cause I really think that's going to be the best for you in the first year, and then we can expand from there." The, here's an analogy. I, I'll often tell people to think about the last time they went to a fancy restaurant and they looked at a menu with, like, some expensive entrees. And everything looked delicious, right? But they didn't know what to order, so you ask the waitperson what they recommend. How helpful is it if that r- waitperson 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 waitpeople 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, uh, 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, on the shoulders of the decider, that burden is now shared. Now think about it, if you order the dish the waitperson recommended and you don't like it, whose fault is it? Well, technically it's your fault, 'cause you ordered it. But y- it's also kind of their fault, 'cause 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, is actually very reassuring and comforting to them, and it increases the odds of getting some kind of decision from them.

   3. LRLenny Rachitsky38:34

      Amazing. This is a

9. 38:36 – 41:43

   Step 3: Limit the exploration

   1. LRLenny Rachitsky38:36

      great segue to the challenger sale, which we're gonna 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.

   2. MDMatt Dixon38:45

      The last two. So L is about, you know, this customer who's doing endless amounts of research. Every salesperson's seen this customer. Like, they're never happy with the number of reference calls, or the, you know, um, 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, 'cause 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 who, on LinkedIn they talk to. And so, what salespeople need to do to stop that, uh, you gotta understand I think why customers do that. It's, they don't want to be surprised. That is the, 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 know? Uh, you're not gonna do, you're not being introduced to any of the customers who hate you. You're only getting introduced to the customers who love you and we know are going to say great things about us. So, eh, that's what the customer thinks, right? That is what, uh, is in the customer's mind. And so 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. And 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 gotta be honest, it's, you know, we get mixed reviews on that. Uh, 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's 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, i- it buys from a competitor. You just want to help them get to a great decision. So that's step number one, is, is building that trust. And step number two is, you gotta demonstrate some expertise. And, and what we see in so many sales interactions, especially in tech, is that salespeople will show up with the crown card of experts, the subject matter experts, the solutions engineers, the, the product people, the executive sponsors, and then they will just punt to these people.

   3. LRLenny Rachitsky40:59

      Mm-hmm.

   4. MDMatt Dixon41:00

      And what happens in that moment is, is dangerous for the salesperson. The customer, it sounds like they're loving it, right? They're loving that, um, talking to people who really know their stuff. But what's also happening in that moment is the c- salesperson's 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 gotta 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 than the customer. And you do have to demonstrate that expertise. And so those are the keys to getting the customer to stop trying to be an expert and start trusting you as

10. 41:43 – 45:58

    Step 4: Take risk off the table

    1. MDMatt Dixon41:43

       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 s- uh, resetting the company's expectations. Average salespeople 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's in our industry, amazing. Like, that's a slam dunk business case for us. And the average salesperson's thinking like, "If you're excited about that, I'm not gonna talk you out of it. 'Cause that means you're gonna be excited to take in the CFO and excited to sign the agreement and get going." What great salespeople do though is they know that while they'll stand by those claims, those case studies, those proof points, they try to kind of underpromise and overdeliver-

    2. LRLenny Rachitsky42:25

       Mm-hmm.

    3. MDMatt Dixon42:25

       ... and they might say something along the lines of, "You know, Lenny, ab- absolutely, that is, that is a great case. I was involved in that sale. But what you 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 happened that way. And so what I'd rather we do is build your business case around a five X 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 gonna do better than that based on what I know about your organization. Easily, six, seven, eight, nine percent, maybe even 10, but what I don't want you to do is walking in and promising 10 X improvement sales productivity if we finish the year and we're at seven X, and the CFO's now asking hard questions when, in absolute terms, she should be thrilled with seven X, 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 sh- wh- shapes and forms these can take, everything from, um, 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 moni- 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, uh, adding in professional services support, but 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, it's not just 'cause 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, like, I know you guys want to DIY. This is one of the great things about our solution. You totally can. You get all the, the training support, all the videos. You got e- 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, uh, the outcomes that you promised to your boss. So, so let's set, set it 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, uh, for instance. So, you know, there's lots of different things we can do to create that safety net 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.

    4. LRLenny Rachitsky45:05

       Amazing. And all of this, especially this last step, is coming from they're probably not going to decide on anything, that that's what you're fighting, is help them-

    5. MDMatt Dixon45:13

       That's right. That's right.

    6. LRLenny Rachitsky45:13

       ... be less worried about messing up.

    7. MDMatt Dixon45:15

       Yeah. That's right.

    8. LRLenny Rachitsky45:16

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

    9. MDMatt Dixon45:25

       We... Our data set cut across, um... I think that, uh, it, it might just be that SaaS is the place where we're seeing the most indecision these days. (laughs)

    10. LRLenny Rachitsky45:33

        Mm-hmm.

    11. MDMatt Dixon45:33

        So, um, you know... But, um, it, it's, uh, it does not suggest it's kind of an easy target, but, uh, 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, uh, businesses that cut across. So this was a... This was pretty pre- This was prevalent and consistent across industries, so...

    12. LRLenny Rachitsky45:56

        So with the under promising/over-delivering,

11. 45:58 – 47:27

    When to hit the pause button with a customer

    1. LRLenny Rachitsky45:58

       I think that's especially powerful for where most companies want to get to, is, uh, 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-

    2. MDMatt Dixon46:14

       Absolutely, yeah.

    3. LRLenny Rachitsky46:15

       ... it's not delivering what we thought.

    4. MDMatt Dixon46:16

       Yep.

    5. LRLenny Rachitsky46:16

       Amazing. Okay. Any last piece of wisdom to leave listeners with around The JOLT Effect before we move on to The Challenger Sale?

    6. MDMatt Dixon46:25

       I... You know, the only thing I would, um, I would suggest is that for anybody... I mean, uh, 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 from almost every salesperson out there... This happened, like, in our analysis, 75% of salespeople we studied would immediately go out to dialing up the FoMO. Like, they'd go back to doing that. Like, "You're not going to get these benefits. You're going to be, you know, stuck in this, 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's already convinced that the status quo is suboptimal and they've al- you've already got the intent that you're basically, again, you're, you're s- 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.

    7. LRLenny Rachitsky47:26

       Amazing. I know

12. 47:27 – 49:07

    Insights from The Challenger Sale

    1. LRLenny Rachitsky47:27

       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 to talk about Challenger Sale.

    2. MDMatt Dixon47:33

       For sure.

    3. LRLenny Rachitsky47:33

       First of all, how many copies of this book have you sold at this point? (laughs)

    4. MDMatt Dixon47:37

       Oh, I think it's about a million, uh, around the world.

    5. LRLenny Rachitsky47:39

       Holy moly.

    6. MDMatt Dixon47:39

       Yeah. So it's, (laughs) it's a lot.

    7. LRLenny Rachitsky47:41

       That's insane.

    8. MDMatt Dixon47:41

       Yeah.

    9. LRLenny Rachitsky47:41

       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.

    10. MDMatt Dixon47:59

        Yeah, very well said. I think one of the-

    11. LRLenny Rachitsky48:01

        Awesome.

    12. MDMatt Dixon48:01

        Um, just like the, the FoMO, FoMU kind of shorthand, here's a shorthand I'd give to salespeople, is like the most, 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, uh, 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... You know, or I say you're gonna talk to, like, 10 of that customer in a week than... That you... Or 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, of the world. It's about, uh, leading to your unique benefits. All right? So you're, what you're really trying to do is kind of create a fire and then be the only person in town who sells the fire extinguisher that'll put it out.

    13. LRLenny Rachitsky49:05

        Is there an example you could share of, of a

13. 49:07 – 55:23

    An example of a challenger sale

    1. LRLenny Rachitsky49:07

       challenger sale type of sale?

    2. MDMatt Dixon49:08

       Yeah. I, there's a, in, we wrote a sequel to The Challenger Sale called The Challenger Customer. And in that book, we talk about a case from a company called DENTSPLY. Uh, DENTSPLY, as the name would suggest, uh, manufacturers, uh, produces dental supplies, right? (laughs)

    3. LRLenny Rachitsky49:21

       Mm-hmm.

    4. MDMatt Dixon49:21

       So they sell equipment and product into dental practices and dental offices. And, uh, years ago, DENTSPLY had developed, you, 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 Waterpik or the, unfortunately, maybe the dentist's 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. Uh, DENTSPLY had developed the world's first lightweight ergonomic cordless-

    5. LRLenny Rachitsky49:56

       Hmm.

    6. MDMatt Dixon49:57

       ... wand that drill bits could be attached to, you know, uh, cleaning, cleaning implements, et cetera. And it was a total breakthrough. They actually, when they unveiled it, it was pretty interesting, they gave, well, you remember the scene in, uh, Pulp Fiction where they open the briefcase and then it emanates like-

    7. LRLenny Rachitsky50:10

       Mm-hmm.

    8. MDMatt Dixon50:10

       ... a light emits from it? (laughs)

    9. LRLenny Rachitsky50:12

       Mm-hmm.

    10. MDMatt Dixon50:12

        So they gave all their salespeople like this little aluminum briefcase thing with this eggshell foam and a co- and a, a, uh, wand in there. I can't remember what it's called. Let's call it the XP9000 wand. (laughs) 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, it had blue lighting inside-

    11. LRLenny Rachitsky50:30

        Wow.

    12. MDMatt Dixon50:30

        ... and it was really cool, the reveal. And they'd take it out and they give it to the dentist or the, the head of the dental office and they would hold it and be like, "Wow, like it's so much lighter and it's ergonomic and yeah, this thing is cordless. It's amazing. It's a revolution." And then the first thing they would ask is, "How much is it?"

    13. LRLenny Rachitsky50:46

        (laughs)

    14. MDMatt Dixon50:46

        So (laughs) and when they told them it costs like three times more than the current-

    15. LRLenny Rachitsky50:51

        Mm-hmm.

    16. MDMatt Dixon50:51

        ... old-fashioned wands they're using with the heavy cord, it, 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, (laughs) polishing, uh, 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 was a unique product. Nobody else in the market made this. They were the only supplier who had, who had figured this out. Total innovation. But they haven't, 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, uh, absenteeism and workers' comp. It turns out that one of the biggest professions that where you get carpal tunnel syndrome, uh, shoulder and neck and lower back, uh, injuries is, uh, 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. Uh, 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 soldier, uh, shoulder surgery, not with exorbitant, uh, health, uh, benefits claims and workers' comp, uh, claims. And so they came in and, and, uh, they revised their sales pitch. So now when they come into the dental office, they sit down and they say, "You know, I'd like to talk to you about, um, your hygienist, uh, workforce. Uh, 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, and the way they start talking about it is not just the, the insurance and workers' comp cost. It's stuff like, "You know, when my hygienists get injured, and this is pretty, it's 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, on Google reviews," or what have you. So there's all kinds of ripple effects, uh, for the dentist. The cost of, of, of losing a hygienist is massive, uh, and the market for hiring them is very, very tight. So what, uh, DENTSPLY does is start the conversation there. And then they say, "You know, one of the things that we figured out is that primary, based on our own independent research, that one of the primary drivers of all these bad outcomes, absenteeism, uh, uh, repetitive motion injuries, is, uh, 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?" And the dentist says, "Well, how would you solve for that? There's no other technology. That, that's what we got. We've had the same equipment for 30 years." "Let me show you the new XP9000. It's the world, 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 s- 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 ex- you know, how much does it cost? Now they're leading to it. They're starting with an insight about and, 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 XP9000-

    17. LRLenny Rachitsky54:21

        Mm-hmm.

    18. MDMatt Dixon54:21

        ... drill from DENTSPLY.

    19. LRLenny Rachitsky54:22

        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 the, an insight they may not be aware of. Give them a sense of where the things are going. Help them learn something about in 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.

    20. MDMatt Dixon54:40

        Yeah. That's exactly right. And make sure those connections are really tight, right?

    21. LRLenny Rachitsky54:43

        Mm-hmm.

    22. MDMatt Dixon54:44

        Th- 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 of. Nobody else can touch with a 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, that's kind of the, that's the core components, if you will, of a challenger conversation.

    23. LRLenny Rachitsky55:21

        Amazing. Okay. Matt, I promised

14. 55:23 – 56:38

    Where to find Matt

    1. LRLenny Rachitsky55:23

       I'd let you out of here in time. So final questions. Where can folks find your books if they want to dig in further? And how can listeners be useful to you?

    2. MDMatt Dixon55:32

       Well, I thank, I thank you for the offer. I, I love be- you know, I love being connected with folks who heard me on shows like this one. So if you heard me on the podcast, "Hey, I heard you on Lenny's show," shoot me a LinkedIn invite. I'm pretty active there. Uh, love being connected with folks, so please reach out to me. If, if you want to learn more about, uh, Jolt Effect, so we do a lot of workshops and training around that, uh, that, uh, methodology, visit jolteffect.com. There's a ton of, there's also a lot of free tools on there that you can download, uh, that help you t- put some of these concepts into practice with your sales teams, um, or if you're an individual seller. Uh, and then of course the books are, the books are available everywhere good books are sold, which I think is on the internet these days. (laughs)

    3. LRLenny Rachitsky56:08

       (laughs)

    4. MDMatt Dixon56:09

       So.

    5. LRLenny Rachitsky56:09

       Amazing. Matt, thank you so much-

    6. MDMatt Dixon56:11

       Thanks, Lenny.

    7. LRLenny Rachitsky56:12

       ... for being here.

    8. MDMatt Dixon56:12

       It was, it was a blast. Thank you.

    9. LRLenny Rachitsky56:14

       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.

Episode duration: 56:38