SAP and The Challenger Sales Methodology
Sales | Nov 21, 2018 | 3 min read
Our team has spent a few very enjoyable years implementing the Challenger concept in SAP. The following post is a summary of the article "Die Erneuerung des Vertriebs" about that transformation, originally published in Harvard Business Manager.
In the past, SAP predominantly sold conventional business software to help with enterprise resource planning and supply chain management. But over the last decade, SAP’s business has changed markedly, and its products now help companies develop digital ways of doing business.
This means customers’ requirements have also changed. SAP’s salespeople can no longer rely on finding a challenge or problem that they can then match to a software solution. Rather, customers expect SAP’s sales staff to have in-depth knowledge of their sector, industry challenges, business processes, and relevant key performance indicators.
In response to this shift in what’s expected of sales reps, CEB published The Challenger Sale, which showed that there is a specific type of salesperson that is good at selling complex products and pushing customers to move out of their comfort zone. This salesperson is called “the Challenger,” and their selling approach tends to center on three main steps: they clearly lay out the risks and new opportunities for the customer’s business, teach them something new about their operating environment or how to capitalize on it, and develop tailor-made business strategies using their customers’ products and their own knowledge.
CEB data also underlines the success of this approach. There are 4.5 times as many top salespeople in the Challenger group than in any other group, and their close rates are on average 14 percent higher than those of other types of salespeople. Supported by CEB, SAP conducted an analysis of their sales staff and found that around half of them were not fulfilling their potential—simply because of the way they worked.
Four Step Global Training Program
SAP decided at the end of 2012 to retrain 5,500 sales staff members worldwide to use the Challenger model of selling within three years and then developed a four-step global training program.
Therefore, SAP designed all its training material and events to highlight how relevant it was to reps’ personal work. From concrete, real-life examples, participants discovered how to gain more time to do their actual job, how to sell at higher contract values, and how to close more sales.
One of the key tasks throughout the project was communicating at various levels to ensure sales staff and managers understood the purpose of the training and to keep senior managers informed about progress.
Good communication was particularly important when things did not run smoothly. Salespeople often did not want to sacrifice their time for training, even when their managers told them to. At times, the team running the training stepped in and imposed penalties via regional managers. For example, if sales staff in a particular region did not give advance notice when canceling participation in a workshop, they had to bear the costs themselves.
Although rolling out the training session across SAP was the main requirement for the continuous development team, the entire program could only be considered a success if there was hard evidence that it helped improve sales.
What pleased SAP the most was that 95 percent of course participants said they would approach their customers differently from now on, and the sales data shows this was not just an empty promise. For example, those who had been part of the training session closed 26 percent more deals than before they were trained (the win rate), and those who had been part of the training program generated 26 percent more sales opportunities (pipeline) on average (by way of comparison, salespeople without training made just 9 percent).