All Segments
The surprising truth about what closes deals: Insights from 2.5m sales conversations | Matt Dixon
33 segments available
Matt Dixon is one of the world’s foremost experts in sales and the author of The Challenger Sale, which sold over a million copies worldwide and was a #1 Amazon and Wall Street Journal bestseller. His most recent book, The JOLT Effect, focuses on overcoming customer indecision—one of the biggest challenges to closing deals. Outside of writing, Matt co-founded DCM Insights, a boutique consultancy helping organizations understand customer behavior, and is a frequent contributor to the Harvard Business Review, with more than 20 print and online articles to his credit. In our conversation, we discuss: • Why 40% to 60% of qualified sales opportunities are lost due to customer indecision • Why dialing up FOMO doesn’t work, and what to do instead • The “pings and echoes” technique to catch issues early • The JOLT method for overcoming indecision • Key lessons from The Challenger Sale • Practical examples of how to apply these principles to close more deals — Brought to you by: • Enterpret—Transform customer feedback into product growth: https://enterpret.com/lenny • Webflow—The web experience platform: https://webflow.com • Heap—Cross-platform product analytics that converts, engages, and retains customers: https://www.heap.io/lenny Find the transcript and references at: https://www.lennysnewsletter.com/p/close-more-deals-matt-dixon Where to find Matt Dixon: • LinkedIn: https://www.linkedin.com/in/matthewxdixon • Website: https://www.jolteffect.com/ Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Matt’s background (01:57) The research behind Matt’s books (06:08) Insights from The JOLT Effect (10:15) FOMO vs. FOMU (18:18) An example of selling software (26:04) The JOLT method Step 1: Judge their level of indecision (29:41) The “pings and echoes” technique (34:49) Step 2: Offer a recommendation (38:36) Step 3: Limit the exploration (41:43) Step 4: Take risk off the table (45:58) When to hit the pause button with a customer (47:27) Insights from The Challenger Sale (49:07) An example of a challenger sale (55:23) Where to find Matt Referenced: • A step-by-step guide to crafting a sales pitch that wins | April Dunford (author of Obviously Awesome and Sales Pitch): https://www.lennysnewsletter.com/p/a-step-by-step-guide-to-crafting • The Challenger Sale: Taking Control of the Customer Conversation: https://www.amazon.com/Challenger-Sale-Control-Customer-Conversation/dp/0670922854 • The JOLT Effect: How High Performers Overcome Customer Indecision: https://www.amazon.com/JOLT-Effect-Performers-Overcome-Indecision/dp/0593538102 • Gartner acquires CEB: https://www.gartner.com/en/about/acquisitions/history/ceb-acquisition • Tiger King on Netflix: https://www.netflix.com/title/81115994 • Why sourdough went viral: https://www.economist.com/1843/2020/08/04/why-sourdough-went-viral • Neil Rackham: https://en.wikipedia.org/wiki/Neil_Rackham • Status quo bias in decision-making: https://en.wikipedia.org/wiki/Status_quo_bias • Omission bias: https://thedecisionlab.com/biases/omission-bias • Gartner Magic Quadrant & Critical Capabilities: https://www.gartner.com/en/research/magic-quadrant • Dunning-Kruger effect: https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect • Stop Losing Sales to Customer Indecision: https://hbr.org/2022/06/stop-losing-sales-to-customer-indecision • Dentsply Sirona: https://www.dentsplysirona.com/ • “We happy?” Briefcase scene from Tarantino’s Pulp Fiction: https://www.youtube.com/watch?v=FGchDuOpbhE • Nupro Freedom Cordless Prophy System: https://www.dentsplysirona.com/en-us/discover/discover-by-category/preventive/hygiene-handpieces.html Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed.
Segments Timeline
The Indecision Epidemic in Sales
Matt Dixon reveals that a staggering 40% to 60% of qualified sales opportunities are lost not to competitors, but due to customer indecision. He explains that this indecision is often rooted in a fear of failure, and that traditional tactics like amplifying FOMO (Fear of Missing Out) are ineffective, backfiring 87% of the time. Instead, he introduces the JOLT method as a solution to help salespeople navigate this challenge.
"we collected 2 and 1 half million sales calls and studied them with a machine learning platform at scale the big Insight is that you're losing most of your sales deals not to competition but to indeci..."
Meet Matt Dixon: Sales Expert
In this segment, Matt Dixon shares his background as a leading sales researcher and author of 'The Challenger Sale' and 'The JOLT Effect.' He discusses how his research into salespeople's behaviors has shaped his understanding of what differentiates top performers from the rest. This introduction sets the stage for deeper insights into sales strategies and methodologies.
"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 sales people different from everyone else his first boo..."
Research Foundations: The Challenger Sale
Matt explains the extensive research behind 'The Challenger Sale,' which began in 2008 with a study of 6,000 salespeople. He highlights the evolution of this research, which now encompasses data from over a quarter million salespeople globally. This foundational work informs his latest insights into overcoming customer indecision.
"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 d..."
The JOLT Effect: A New Era of Sales Research
Dixon discusses the launch of 'The JOLT Effect' research project in March 2020, coinciding with the shift to virtual sales meetings due to the pandemic. He describes how this unique opportunity allowed for the collection of 2.5 million sales calls, analyzed using machine learning, to uncover new insights into customer behavior and decision-making.
"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 wi..."
Understanding Customer Indecision
In this segment, Matt outlines the critical insight from his research: customers often prefer to do nothing rather than make a decision due to fear of making a mistake. He emphasizes the importance of understanding this behavior to improve sales outcomes and reduce the number of deals that fall through.
"a researcher to look back on Challenger and you know the manual kind of survey based approach and the interviews and all this stuff to fast forward to like today being able to take advantage of large ..."
The Sales Process: From Intent to Action
Matt breaks down the typical sales process into three phases: the customer's current state, agreement on a vision for change, and the final action of purchasing. He highlights that many deals fail between the intent to buy and the actual purchase, often due to resurfacing concerns that were previously addressed.
"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 road map with confidence get in touch with the..."
The Role of Status Quo Bias
Dixon discusses the concept of status quo bias, explaining how it affects customer decision-making. He notes that customers often hesitate to change due to a natural inclination towards maintaining their current situation, which complicates the sales process and leads to indecision.
"way more speckly 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 ou..."
The Three Phases of the Sales Process
Matt Dixon outlines the three critical phases of the sales process: the customer's current state, the need for change, and the action of purchasing. He emphasizes that many deals fall through between the customer's intent to buy and the actual purchase, often due to resurfacing concerns that were previously addressed. Understanding this gap is crucial for sales professionals aiming to close deals effectively.
"at all so let me maybe take us a step back L there was a reason we actually even asked as that question that you just asked and the reason was this you know when we looked at sales calls if you think ..."
The Backfire of FOMO in Sales
Dixon reveals a surprising finding: dialing up the fear of missing out (FOMO) backfires 87% of the time when customers express hesitation after showing intent to buy. He discusses how traditional sales tactics aimed at overcoming status quo bias can inadvertently increase the likelihood of losing deals to indecision, highlighting the need for a new approach.
"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 perhap..."
Understanding Omission Bias
In this segment, Matt Dixon introduces the concept of omission bias, a powerful psychological factor that contributes to customer indecision. He explains how customers fear being blamed for making a wrong decision, which can lead to inaction. This insight is crucial for salespeople to understand as they navigate the complexities of customer decision-making.
"that finding we never would have even bothered asking the question about like why do people end up why do we lose deals in decision why do customers make no decision but this was really puzzling becau..."
The Fear of Messing Up
Dixon discusses the importance of addressing the fear of messing up in the sales process. He explains that customers are more afraid of making a decision that leads to a loss than they are of missing out on an opportunity. This fear must be acknowledged and mitigated by salespeople to instill confidence in their customers and facilitate decision-making.
"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 in the human mind there are two types of loss th..."
Real-World Example of Indecision
Matt shares a compelling real-world example of a tech company that lost a significant deal due to customer indecision influenced by external factors, such as a negative Gartner Magic Quadrant report. This case illustrates the challenges startups face in overcoming customer fears and the importance of building trust and confidence in their solutions.
"fear you got to deal with the fear that if something goes wrong they're worried that they're going to be blamed for it we're going to talk about this method you developed for how to actually do all th..."
Understanding Buyer Anxiety
Dixon discusses how buyer anxiety is exacerbated for larger companies due to their extensive options and higher stakes. He explains that while startups may present less risk, established companies face scrutiny and pressure to justify their decisions, making the buying process more stressful. This segment emphasizes the emotional factors influencing customer decisions.
"failure driver or failure driver the third one is that the customers worried they're just not going to see the ROI they're not going to get the full benefits you know you might Pro um project for them..."
The Stress of Buying Software
Matt Dixon references April Dunford's insights on the increasing stress of purchasing software compared to selling it. He highlights how customers are often overwhelmed by choices and the fear of making a poor decision, which can lead to indecision even when the product is clearly beneficial.
"company April Dunford I think she I think this is barred 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 ..."
Introducing the JOLT Method
Dixon introduces the JOLT method, an acronym for a sales strategy designed to help customers overcome indecision. He explains the steps involved: judging the level of indecision, offering recommendations, limiting exploration, and taking risks off the table. This method aims to provide a structured approach to guiding customers toward making confident decisions.
"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 intuit..."
Detecting Indecision: The JOLT Approach
In this segment, Dixon elaborates on the first step of the JOLT method: judging the customer's level of indecision. He discusses the Dunning-Kruger effect, where customers often overestimate their decisiveness, and shares strategies for uncovering their true feelings about the purchase. This insight is crucial for salespeople to address customer concerns effectively.
"is it the O and then we gotta deal with t then we gotta go back to the O because 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 an..."
Using Pings and Echoes to Gauge Concerns
Dixon introduces the 'pings and echoes' technique, a method for salespeople to detect customer concerns without directly confronting them. He compares this approach to sonar used by ships to identify submarines, emphasizing the importance of articulating potential worries in a way that encourages customers to share their true feelings about the decision.
"Echoes 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 usin..."
Calibrating Customer Needs
In this segment, Matt Dixon discusses how salespeople can help customers clarify their needs during the decision-making process. He emphasizes the importance of asking customers if they are clear on what they want in a proposal, which can reveal whether they are overwhelmed by choices or uncertain about the value of the product. This approach aims to facilitate a more productive conversation and helps salespeople understand the customer's perspective.
"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..."
Understanding Customer Concerns
Matt Dixon elaborates on the importance of understanding customer concerns regarding ROI and decision-making. He explains how salespeople can address these concerns by discussing the believability of outcomes and managing downside risks. By framing the conversation around common customer anxieties, salespeople can build trust and guide customers towards making informed decisions.
"so it's again it's not designed to embarrass the customer designed to get this on the table so it can be recognized and dealt with and contextualized you're not you're totally normal everybody struggl..."
The Dangers of Too Many Options
In this segment, Matt Dixon warns about the pitfalls of overwhelming customers with too many options. He explains that while options can be beneficial early in the sales process, they can lead to analysis paralysis and indecision later on. Salespeople should focus on narrowing down choices to help customers feel more confident in their decisions, shifting from a diagnostic approach to one that includes recommendations.
"on what I think is holding you got it so it's just like at this point many customers have this question and that maybe comes from the thing that you think is probably blocking them I think that's perf..."
The Delegation Effect in Sales
Matt Dixon discusses the 'delegation effect' in sales, where customers feel more secure in their decisions when they share the burden of choice with the salesperson. He uses the analogy of a restaurant experience to illustrate how effective recommendations can alleviate customer anxiety. By guiding customers towards specific options, salespeople can foster trust and increase the likelihood of closing deals.
"because they don't want to be seen as like I told you to do a but you're like I don't want to do that I want to do B and now I feel like we're at odds and so they worry about that and so sales people ..."
Building Trust with Transparency
In this segment, Matt Dixon emphasizes the importance of building trust through transparency in sales conversations. He advises salespeople to be honest about their product's limitations and to acknowledge competitors' strengths. This approach not only helps customers feel more secure in their decisions but also positions the salesperson as a trusted advisor rather than just a seller.
"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 th..."
Building Trust and Demonstrating Expertise
Matt emphasizes the importance of building trust with customers by being brutally transparent about product capabilities and limitations. He shares that great salespeople openly acknowledge when their product may not be the best fit, which helps to establish credibility. Additionally, he highlights the need for salespeople to demonstrate their expertise to guide customers effectively, rather than merely delegating to technical experts.
"sounds like a platitude but we found in the analysis there are specific things that sales great sales people do very early on they are brutally transparent with customers about like hey I know you wer..."
Resetting Customer Expectations
In this segment, Matt discusses the strategy of resetting customer expectations to avoid disappointment. He advises salespeople to under-promise and over-deliver, using realistic metrics to build a business case. By doing so, they can ensure that customers feel satisfied with the outcomes, even if they are not as high as initially hoped. This approach helps to create a safety net for customers, reducing their fear of making a poor decision.
"risk off the table two keys to doing that I think the first one happens really early actually and that is uh resetting the customer expectations average salespeople love when they get an inbound lead ..."
Creating Safety Nets for Customers
Matt outlines various strategies for creating safety nets for customers during the sales process. He suggests involving implementation and customer success teams early to outline the roadmap post-signature, which instills confidence in customers. Additionally, he discusses the importance of offering professional services as a form of insurance, ensuring that customers feel supported throughout their journey.
"asking hard questions when in absolute terms she should be thrilled with 7x right so let's make sure we set ourselves up for Success the other thing you got to do though is establish some safety net o..."
The Importance of Under-Promising
In this segment, Matt highlights the significance of under-promising and over-delivering in B2B sales, particularly in the SaaS industry. He explains that this approach can lead to higher net revenue retention and customer satisfaction. By setting realistic expectations, salespeople can help customers feel pleasantly surprised by the results, fostering long-term relationships.
"doesn't feel like they're jumping out of an airplane by themselves but you are the tandem skydiving instructor that's going to guide them safely to the ground amazing and all of this especially this l..."
Hitting the Pause Button
Matt advises salespeople to hit the pause button when customers exhibit indecision, rather than resorting to fear-based tactics like FOMO. He explains that understanding whether a customer is indifferent or indecisive is crucial for addressing their concerns effectively. This reflective approach can help salespeople navigate late-stage hesitations and facilitate better decision-making.
"amazing okay any last piece of wisdom to leave listeners with around the jolt effect before we move on to the Challenger sale I you know the only thing I would um I would would suggest is that for any..."
The Challenger Approach to Sales
Matt Dixon explains the Challenger sales approach, emphasizing the importance of showing customers what should keep them up at night rather than just diagnosing their current concerns. He highlights how salespeople can leverage their broader market insights to provide unique value and provoke thought in their customers, ultimately leading to better sales outcomes.
"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 solutio..."
The Breakthrough of the XP 9000
Dixon shares a compelling case study from the dental supply company Dentsply, which developed the XP 9000, the world's first lightweight cordless dental wand. He describes how the initial sales approach failed due to price objections, leading to a strategic pivot that focused on the ergonomic benefits and the cost of injuries associated with traditional equipment, ultimately reframing the sales conversation.
"share of of a Challenger sale type of sale yeah I there's a in we wrote a sequel of the Challenger sale called The Challenger customer and in that book we talk about a case from a company called DP uh..."
Understanding the Cost of Injuries
In this segment, Matt discusses the significant impact of repetitive motion injuries on dental hygienists and how Dentsply used this insight to reshape their sales pitch. By addressing the hidden costs of absenteeism and turnover, they created a compelling reason for dental practices to invest in their innovative product, the XP 9000.
"and then the first thing they would ask is how much is it so and when they told them it costs like three times more than the current oldfashioned wands are using with the heavy cord it they would gent..."
Leading with Insights
Dixon emphasizes the importance of starting sales conversations with insights that customers may not be aware of. He explains how this approach not only highlights the unique benefits of a product but also helps customers understand the broader implications of their purchasing decisions, ultimately guiding them towards a solution that addresses their business challenges.
"shoulder surgery not with exorbitant uh Health uh benefits claims and workers comp uh claims and so they came in and and they revised their sales pitch so now when they come into the dental office the..."
The Core of a Challenger Conversation
In this concluding segment, Matt outlines the essential components of a Challenger conversation, focusing on the need to differentiate from competitors and provide compelling reasons for customers to choose your solution. He stresses the importance of understanding the unique value proposition and the conditions that would lead customers to pay a premium for that value.
"9000 drill from dly so the key lesson from this book and I know we don't have a ton of time to into it is start with an Insight they may not be aware of give them a sense of where the things are going..."
Connecting with Matt Dixon
Matt Dixon shares how listeners can connect with him and learn more about his work, including his books and the JOLT Effect methodology. He encourages engagement through LinkedIn and highlights the availability of free resources to help sales professionals implement the concepts discussed in the podcast.
"kind of the that's the core components if you will of a Challenger conversation amazing okay Matt I promised I let you out of here in time so final questions weing folks find your books if they want t..."