The JOLT Effect (book summary)

The JOLT Effect by Matthew Dixon and Ted McKenna

INTRODUCTION Stuck

• In our research, we found that anywhere between 40 percent and 60 percent of deals today end up stalled in “no decision” limbo.
• Customers are much less worried about missing out (omission) than they are about messing up (commission).
• Where overcoming the status quo is about dialing up the fear of not purchasing, overcoming indecision is about dialing down the fear of purchasing.

CHAPTER ONE The Inaction Paradox

• Across all of the deals we studied, we found that only 44 percent of deals that end up lost to inaction are due to the customer’s preference for the status quo
• 56 percent of the time, the customer expresses a desire to abandon their status quo and move forward in a new way with the vendor’s solution but, for one reason or another, is unwilling or unable to make a decision and commit.
• People actually feel more regret when bad things result from their actions (commission bias) as opposed to when bad things happen as a result of their inactions (omission bias).
• Even in a complex B2B purchase, there’s always one person who chairs the buying committee, one person who makes the final decision, and one person who signs the agreement.
• There are three reasons a customer might experience indecision:
  • (1) they are worried about choosing the wrong option
  • (2) they are concerned that they haven’t done enough homework
  • (3) they fear they won’t get what they’re paying for
• “I need to think about it some more “— proved to be more highly correlated with lost deals than any other.
• When sellers attempt to “relitigate” the status quo with customers who’ve already expressed purchase intent, it generates a negative impact on sales outcomes 84 percent of the time.
• Defeating the status quo may be all about showing the customer how they will succeed with your solution, but overcoming indecision is all about proving to the customer that they won’t fail by purchasing your solution.

CHAPTER TWO The JOLT Effect

• As the status quo is defeated and starts to recede, it is replaced by a second, more menacing foe: the customer’s own indecision, which is driven by a set of errors they are desperate to avoid committing.
• The JOLT method:
  • (J)udging the indecision:  While it’s long been known that high performers qualify opportunities based on externally observable criteria (e.g., use case fit, industry attractiveness, company dynamics), our research reveals that they also qualify opportunities based on less observable but nonetheless critical criteria based on the customer’s own ability to make decisions. Put another way, they qualify not just on ability to buy but also on ability to decide.
  • (O)ffer your recommendation: The approach most salespeople take is to rely on needs diagnosis. High performers know that customers who are indecisive are looking for guidance, not more choice. Rather than asking confused customers what they want, they instead tell them what they should buy.
  • (L)imiting the exploration: Where average performers see themselves as purveyors of information for customers — indulging every request they have for more information, be that an additional white paper, another demo, or one more reference call — high performers seem to know that no amount of additional information will ever satisfy the customer’s desire for more and that it is ultimately impossible for customers to consume all of the information out there to inform a purchase decision. High performers limit the exploration by controlling the flow of information, anticipating needs and addressing unstated objections, and practicing radical candor when customers dig in and insist on superfluous amounts of information.
  • (T)ake risk off the table.: When faced with customers who start to fret about outcome uncertainty — whether they will get the benefits they hope for — our data shows that average performers tend to counter this concern by directing the customers’ attention away from what they might lose by making the purchase and back toward what they stand to lose by not making the purchase.  To overcome the customer’s outcome uncertainty, high performers focus not on scaring the customer into buying but on coming up with creative solutions that limit downside risk (e.g., opt-outs, refund and change clauses, additional professional services support, contract carve-outs).

CHAPTER THREE Judge the Indecision

• There are three sources of customer indecision: valuation problems, lack of information, and outcome uncertainty.
• When it comes to valuation problems, reps should ask themselves:
  • Does the customer quickly point to options and configurations that they prefer or do they seem to want it all (e.g., “This all looks compelling to me“)?
  •  Does the customer continue to press on differences between various packages and configurations (e.g., “Can you explain again the difference between…?“)?
  • Does the customer ever openly express confusion about which option to go with (e.g., “We’re stuck between this option and that one“)?
  • Does the customer get distracted by new discoveries such as features and options they didn’t know about before (e.g., “We didn’t realize you had this capability. Can you tell us more?“)?
• Lack of information: Here, reps should ask themselves:
  • Does the customer ask for more of any sort of input (demos, reference calls, conversations with solutions engineers or subject matter experts, etc.) than the typical customer?
  • Does the customer ever delay in the name of collecting more information?
  • Does the customer ever say they’re feeling overwhelmed by all of the information out there?
  • Does the customer express concern about “being in the dark “or “still far up the learning curve“?
• Outcome uncertainty: Here, reps should ask themselves:
  • Does the customer press you for ROI projections (and revisions of those projections)?
  • Does the customer reference other investments that they’ve been burned on in the past?
  • Does the customer talk about how big a risk or investment your solution is relative to other things they’ve done in the past?
  • Does the customer ask for guarantees or assurance of results?
  • Does the customer express skepticism about outcome achievability?
• A simple four-step process that can be used by any salesperson to assess a customer’s indecisiveness
  • Step one is understanding how the customer searches for and consumes information. Some customers have a higher comfort level with ambiguity than others,
  • Second, we need to look at how the customer evaluates alternatives. Is their evaluation process logical and structured or is it frenetic and hard to pin down?
  • Third, we need to look for signs that tell us whether the customer is willing to settle for “good enough” or whether they won’t be satisfied unless everything about our product perfectly suits their needs.
  • Finally, when the customer starts to hesitate, backpedal, and waver, salespeople need to be able to “read the tea leaves” and interpret the indecision signals that different types of delay provide.
• Doing research doesn’t, in and of itself, mean that a customer is indecisive. Instead, what high performers look for is the amount of information the customer requires to feel confident and the way in which they seek that information
• The second “tell “high performers look for when determining if a customer is comfortable with ambiguity is what behavior psychologists call “backtracking.” This is when customers seem to be making progress through their buying process but then, suddenly, new information presents itself and the customer starts to move in reverse.
• Another step in the customer’s buying process that can present telling signals of indecisiveness is the way in which customers evaluate alternatives. When comparing different providers and options, is able to do so in a logical and structured way
• “A warning sign for me,” one star rep told us, “is when customers struggle to explain how they created their short list of vendors they’re talking to. They typically won’t tell me who else they’re talking to, but they should be able to tell me what the ‘must have’ criteria were that they used to filter down to a smaller number of providers — as well as which criteria were deemed less important.
• All customers delay. But, not all delays are created equal. There are, in fact, two inherently different types of delay: procrastination and decision avoidance.  How do sellers spot the difference between a customer who is procrastinating and a customer who is avoiding making a decision altogether? High performers told us that they can spot the difference simply in the way the customer delays. To quote one rep we interviewed, “It’s one thing for a customer to cancel a call scheduled for this week and ask if we can push [it] out to next week… but it’s another thing entirely when the customer tells me ‘now’s not the right time’ or ‘priorities are shifting’ and then asks if we can pick up the dialogue next month, next quarter or next year.
• If the customer agrees to get colleagues involved in the decision-making process, it can provide verification of positive intent and forward momentum.
• Time pressure is another exacerbating factor that can increase the propensity of a customer to get stuck.

• As a rule of thumb, opportunities that score more than twenty-two points total are candidates for disqualification
• Salespeople need to gauge not just a customer’s ability to buy but also their ability to decide.

CHAPTER FOUR Offer Your Recommendation

• The more options we put in front of the customer, the more they tend to hit the pause button
• Everybody’s decisive when it doesn’t count. But actually acting entails a lot of risk.
• The early stage of the sale might be largely about convincing the customer how to avoid loss that stems from their inactions, the back half of the sale is all about how to avoid loss that stems from their actions.
• High performers purposefully eliminate options from consideration by making a recommendation to the customer about what they should buy.  “Here’s what you need.”  We found that win rates jump from 18 percent to 44 percent when reps used this one skill
• As soon as high performers sensed indecision and uncertainty start to creep in, they immediately offered some [proactive] guidance to help narrow the playing field of options and thereby move the customer closer to the finish line.
• More powerful than making a general recommendation, however, was when the rep offered his or her personal recommendation. We call this behavior “advocacy.”
• We found these star reps saying to their customers, “Here’s what I would do if I were you…”
• By and large, average performers meet the customer’s indecision about what they should buy not with a recommendation but with more questions: “What’s important to you?,“ “What are you looking for in a solution?”
• In call after call, we found average performers missing cues that the customer just wanted somebody to tell them what they should buy and instill the confidence they needed to move forward.

CHAPTER FIVE Limit the Exploration

• Our analysis of sales conversations reveals three skills that high-performing salespeople use to limit the exploration:
  • owning the flow of information
  • anticipating needs and objections
  • practicing radical candor.
• High performers in our study were far less likely to cede control of the conversation to others inside their own organizations. Specifically, we found that top sellers relied less on subject matter experts like solution engineers, product leaders, and customer success managers in their calls than did average performers, who tended to bring in subject matter experts much earlier.
• Second, we found that when high performers did bring in other experts, the percentage of time they allowed those experts to speak during sales calls was orders of magnitude lower than on similar calls run by average performers.
• Third, we found that, early on in the sales process, high performers were more proactive than their peers in suggesting additional reading and sources of information the customer should consult to help them come down the learning curve — and, importantly, these were often not their company’s own marketing materials or thought leadership content.
• One high performer said that the most important thing a new salesperson can do is invest the time to develop expertise on their company’s products, those of their competitors, and the market as a whole.
• New reps just need to remember that our customers aren’t looking for us to teach them how to do their jobs, they’re looking for us to help them be smart consumers of a technology they don’t know much about.”
• A lot of explicit objections simply go uncontested — something that is an absolute conversion rate killer
• High performers are always on the hunt for signs of “implicit non-acceptance“— that is, when a change in tone or a slight pause on the part of the customer tells them that something is amiss and the customer’s not buying it.
• High performers showed a remarkable lack of trepidation in opening the Pandora’s box of customer concerns, fears, and objections.
• High performers were unafraid to probe when they sensed customer hesitation — knowing that an unstated objection has just as much potential for derailing a sale as a stated one.
• “There’s nothing more confidence-giving than when a salesperson says, ‘I’m guessing you’re wondering about X’ or ‘You know, one of the common concerns I hear at this point is Y.’
• Salespeople who practice radical candor are focused on what’s best for their customers and aren’t afraid to tell them when they’re headed in the wrong direction.
• High performers look to understand what’s driving the customer’s request — knowing that there is likely some sort of implicit objection, some form of uncertainty driving the request, and that these requests for additional information are more of a delay tactic than anything else.
• If you hear from our customer that they achieved the results you’re hoping to, is that going to be enough for us to get this deal done or are there other things that are giving you pause about this decision?
• Where average sellers waited to speak until spoken to, high performers looked to proactively find ways to share their experience and knowledge with the customer.
• In our analysis, sales reps who won deals talked for 58 percent of the time, on average. In lost deals, reps spoke for 52 percent of the time.
• High performers, unlike their average-performing colleagues, are quite comfortable interrupting the customer and talking over them when they feel it is important to get the conversation back on track.
• Cooperative overlapping occurs when the listener starts talking along with the speaker, not to cut them off but rather to validate or show they’re engaged in what the other person is saying.
• No silence time (less than 8 percent of the call) and too much silence time (more than 30 percent of the call) result in lower conversion rates The optimal amount of silence time is between 8 percent and 17 percent of the call, and is associated with win rates of 30 percent.
• We found that the combination of rep silence followed by the rep expressing confusion is a toxic combination in terms of win rates.

CHAPTER SIX Take Risk Off the Table

• The seller’s last-ditch effort when faced with outcome uncertainty is almost always to try to scare the customer into buying. Where average sellers lean on FUD techniques to try to scare the customer into buying, high performers know that the real reason the customer is struggling to make a decision isn’t because they might miss an opportunity to win. It’s because they might make a decision that causes them to lose.
• We were able to isolate three key techniques that high-performing sellers use to de-risk the purchase decision
  • The first is setting expectations. High performers focus less on “maximum impact“ — that is, what is theoretically possible — and more on setting realistic, “believable impact“ expectations early on.  Always better to underpromise and overdeliver. High-performing reps proactively suggesting to customers that they start smaller than perhaps even the customer wants. The best reps sell more over time and build stronger customer relationships by starting small, not by going as big as they can right out of the gates.
  • High performers understand that offering the customer a safety net is far more effective than pushing the customer toward the ledge.
    • In the transactional sales calls in our study, this often came in the form of reps making sure customers knew they had a cancellation window, that they could change their plan or subscription at a later date, or that there was a money-back guarantee.
    • In complex B2B sales, reps offer downside risk protection One technique we saw in several calls was creating detailed project plans before the deal closed — with owners, milestones, target metrics, and so on — something that helps show the customer that the rep and her organization know exactly how customers get value out of their offerings. Top sellers often started hammering these out well in advance of signature.
    • Why not carve out the work for this particular business unit under a separate one-year agreement that the customer was free to cancel at any time?
  • We also found that top reps relied on professional services support as a way to offer a form of purchase insurance to the customer. “Our top reps understand that the bigger concern customers have is not getting the value they expect, and recommending that they add a professional services component to the contract gives them the confidence that they won’t be alone on the journey ”

CHAPTER SEVEN Becoming a “Buyer’s Agent”

• The only reason today’s customers have reached out to a salesperson — when they have many options to purchase on their own, without a seller’s involvement — is because they are struggling to buy and they need help.
• The customer may understand why they should buy but still require a lot of help with what to buy, how to buy, and even when to buy.
• In our study of sales calls, we identified several techniques used by high performers that help overcome the agency dilemma
  • One of the most impactful was suggesting that the customer not “overbuy “where they don’t need to.
  • Another technique for building trust and overcoming the agency dilemma is offering positive feedback on a competitor’s offer or even outright recommending a competitor’s product or service as a better fit for the client’s needs.  “That is a great price for that plan and I wouldn’t blame you for taking it. We do offer better coverage and we think we provide superior customer service, which is why our price is a little higher. ”
• Too often, average performers claim that their company’s product can do anything and everything the customer is asking for — which is a surefire way to generate customer skepticism
• The best reps are comfortable indicating where capabilities aren’t fully developed or are future road map items.
• A small but impactful way to build trust and credibility is when reps openly admit they don’t know the answer to a question.
• [Go for the close]: “I’d like to get you on the calendar for implementation and onboarding. Should we go ahead and get things rolling?

CHAPTER EIGHT Beyond Win Rates: JOLT-ing Customer Loyalty

• When it comes to the post-sale experience, excessive friction and unwanted effort can create customer disloyalty.
• Customers who express hesitancy and who need to be wrestled across the finish line are often the same customers who later recant their decisions — invoking cancellation clauses and asking to be let out of their agreements.

CHAPTER NINE How Much Is Indecision Costing You?

• In our study, the average percentage of deals lost to “no decision” was anywhere between 40 percent and 60 percent, depending on the organization
• The other consideration in establishing a “hard deck” for deals lost to indecision is establishing sales cycle times by deal type and customer segment.
• CRM data can be leveraged to assess the overall indecision rate is by looking at interaction frequency.
• Deals that have interactions happening at wider and wider gaps as time progresses are more likely to end up lost or in no-decision-land.
• The real payoff from good coaching lies among the middle 60 percent — your core performers. For this group, the best-quality coaching can improve performance by up to 19 percent.
• Deals that are lost because the customer says no — whether, for instance, the product isn’t a great fit, a competitor has offered a more compelling proposal, or the buying committee couldn’t reach consensus — is a fundamentally different problem to solve than deals in which the customer says yes but still doesn’t buy.
• Sales organizations should tune their sales hiring criteria to start screening for JOLT-ready reps.
• On our website, www.jolteffect.com, we’ve provided a sample call-auditing tool that managers can use to score a rep on their use of JOLT techniques on an individual sales call or with a specific opportunity

CHAPTER TEN Applying JOLT in Different Sales Environments

• The first thing great JOLT sellers do is make sure the inbound caller is in fact a viable buyer.
• In our data, typically 60 – 75 percent of inbound sales calls or chats were with customers who expressed clear intent to purchase right at the beginning of the conversation.
• Unlike their high-performing peers, average-performing sales reps spend significant time trying to help customers looking to resolve service issues.
• Brands that sell in more transactional settings often hand salespeople certain tools that allay risk. Money-back guarantees, try-before-you-buy offers, free trial periods, and flexible payment terms put in the hands of a salesperson can be a powerful mechanism for overcoming outcome uncertainty.
• Knowing just how badly high levels of indecision kill deals, JOLT sellers actively monitor for cold feet and aren’t afraid to cut bait based purely on signs of customer indecision.
• When we studied demo-centric calls, we found that top sellers were far more likely than average performers to stop their demos to gauge customer reaction to what they’re being shown and dig more deeply if they spotted any signs of hesitation, confusion, or uncertainty on the customer’s part.
• Adding a services element, whereby that supplier is now contractually obligated to be with the buyer in lockstep across portions of the journey, can allay concerns of outcome uncertainty and, ultimately, help the customer to not feel so alone in the decision.

CHAPTER ELEVEN Building the JOLT-Capable Sales Force

• The best JOLT sellers understand their job shifts at some point from one of persuasion to one of motivation.
• Former customers are immediately seen as subject matter experts by prospective customers.
• Ask candidates to provide details around their typical approach when a buyer appears to have gotten cold feet in late stages. Prompt them to share stories — from their business or personal lives — about how they motivated somebody else to take action even when that person was indecisive.