Today’s interview is with Matt Dixon, the Wall Street Journal bestselling author of three of the most important business books of the past decade: The Challenger Sale, The Effortless Experience and The Challenger Customer. Matt joins me today to talk about his new book (The Jolt Effect: How High Performers Overcome Customer Indecision – co-authored with Ted McKenna), how they conducted their research, what they found out, how indecision is the biggest barrier to sales and decision-making in general and how a JOLT playbook could help.
This interview follows on from my recent interview – Customer experience isn’t about experience at all. It is about relationships – Interview with James Dodkins of Pega – and is number 442 in the series of interviews with authors and business leaders that are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.
Here’s the highlights of my chat with Matt:
- Matt’s new book (co-authored with Ted McKenna) is called The Jolt Effect: How High Performers Overcome Customer Indecision.
- We worked with several dozen companies and collected about 2.5 million recorded sales conversations from more transactional sales but also to very complex B2B solution sales.
- We transcribed all the call data and studied it using machine learning.
- What do you do when more and more people show up at the buying committee as your deal size goes up?
- The problem we’ve been tracking for the last few years, which I think is going to get a lot worse in the coming few years, is the problem of customer indecision.
- This is focused on the customer who goes through the entire sales process and does nothing. And, it usually ends up with the salesperson getting ghosted or the customer stops showing up for demos and zoom calls and they offer only curt responses or no response to emails, texts, etcetera. After a while the sales rep says, this is closed, lost. There was no decision. Nothing happened.
- Our research shows that anywhere between 40 and 60% of all deals are actually lost to the customer doing nothing.
- While, 40 to 60% of deals in your pipeline are just in this wasteland, the interesting thing is that this is a problem primarily of average performing salespeople.
- The biggest swing variable in the data is the average conversion rate.
- Across all the sales 26% was the average win rate. But, for high performing sales people the average win rate was closer to 60%.
- The biggest explainer as to why this group finished so far ahead of the other was how those star sales people dealt with what we call those cold feet moments in the sales conversation.
- However, sales people are very familiar with this and it happens a huge percentage of the time: 87% of customers display either moderate levels of those behaviors or high levels of those behaviors.
- But, the high performers have figured out a way to to get those folks across the line.
- The approach they use is actually, in many respects, the exact opposite of what the average performers pursue.
- Their approach is rooted in what the customer is going through.
- The conventional wisdom has been if the customer gets cold feet at any point in the sales process, there’s only one logical explanation, and that’s because you didn’t beat the customer status quo.
- However what we found is preference for the status quo turns out to account for about it’s less than half of all the losses to no decision.
- The bigger chunk of losses to no decision is not because they think what they do today is good enough. It’s not because they don’t believe you that your solution is superior. It’s not that they don’t believe that the change journey is worth it. It’s that they’re worried about making a big mistake.
- Every indecisive customer for the average salesperson looks like a nail and they have this one hammer and they just beat them to death.
- We found in the research that this actually backfires more often than not. In fact, there’s an 84% probability that they’ll actually make the customer more indecisive. Why? Because chances are the customers not preferring the status quo, They’re struggling with one of these other things. And when you just use fear to try to scare the customer into action, you just give them more to be worried about and they end up doing nothing.
- Digging int the science of human psychology, cognitive psychology and behavioral economics research tells us that humans avoid loss more than they want to maximize gain.
- But there are two types of loss. The first one is an error of omission. That’s a loss that occurs when we do nothing when we don’t take action. Then there’s an error of commission which is loss that occurs from action.
- Every single human on earth would prefer an error of omission to an error of commission.
- We don’t want to be personally culpable or responsible for for doing something that leads to a loss which is why these customers kind of sit on the fence and do nothing.
- The JOLT playbook we write about in the book is all about dialing down the fear of purchasing to overcome the status quo but then focusing on overcoming the fear of messing up.
- The JOLT Effect provides tried-and-true advice to overcome customer indecision, such as:
- Judging the level of customer indecision. Indecision is driven by specific human, psychological factors that pop up in specific ways within purchases. The best sellers use these drivers as a way to qualify and forecast based on the buyer’s ability to decide.
- Offering a personal recommendation. Indecisive buyers—feeling overwhelmed by choices—struggle to make tradeoffs as decisions progress. The best sellers use specific techniques to guide buyers towards the best options.
- Limiting purchase exploration. Indecisive buyers easily fall prey to analysis paralysis. High performers who limit the exploration effectively close off “rat holes” customers head down which can eat up time and introduce delays in the purchase process.
- Taking risk off the table. Hesitant buyers are gripped by uncertainty about promises made during the sales process. JOLT sellers employ creative methods for reducing perceived risk, building momentum towards decisions.
- When you’re dealing with a decisive customer, everybody is good at sales.
- With a decisive customer an average performer will convert 39% of the time. However, your high performers will convert almost 70% of the time.
- With moderately indecisive customers, the average performer converts at 26%. But, high performers convert at 58%.
- With the deeply, deeply, deeply indecisive recalcitrant kind of blocks of ice around their feet kind of customers really cannot move forward. Those deeply indecisive customers, things really fall apart for the average performer. They convert only at 6% but the high performers still convert at 31%.
- This is not just a sales story. It applies to all aspects of business which require decisions to be made or when someone has to ‘buy’ something.
- Check out jolteffect.com for more resources.
- As we head into this downturn, you’ll find the average companies will cut training and development and all the easy things but the smart companies will double down on those things and they’ll realize that that these folks are the key to delivering a great customer experience and building a loyal customer base and forestalling churn.
- Matt’s Punk CX words: Effortless, No Assumptions
- Punk XL brands: Delta Airlines, Verizon
Matthew Dixon is the Wall Street Journal bestselling author of three of the most important business books of the past decade: The Challenger Sale, The Effortless Experience and The Challenger Customer. He is also a frequent contributor to Harvard Business Review on sales and customer experience. He is a founding partner of DCM Insights, a boutique consultancy focused on using data and research-backed frameworks to help companies attract, retain, and grow their customers. Previously, he has held numerous global leadership roles at organizations like Tethr, Korn Ferry Hay Group, as well as the research firm CEB (now Gartner). He is a sought-after speaker and advisor to management teams around the world, including many of those in the Fortune 500.
Check out Matt’s website, the book’s website (www.jolteffect.com) and grab a copy of the book here.
Finally, say Hi to Matt on Twitter @matthewxdixon and do connect with him on LinkedIn here.
Photo by Max Bender on Unsplash