“We know enough about our customers and frankly customer research is an expense we would rather spend elsewhere.” I completely get it, but then why is your company’s growth slowing and why does your business seem to be plateauing?
“Our sales team is struggling, we might need better reps, more reps and we’re not sure if they are telling the full story a customer needs to hear.” – CEO and the Vice President of Sales/Marketing from an industrial manufacturer
“We are dealing with more competitors than we faced in past years so it’s really hard market today.” – Vice President of Product Development for a specialty SAAS company
“Our pricing is hurting us, we’re losing on price.” Vice President of Sales for technology company
“Our marketing budget is not enough and we need to ramp up our social activities, be more digital and sell direct.” – Vice President of Marketing Consumer Product Company
“Our company and its people are not on the same page and we need better communications.”–President of a hard goods manufacturing company
I have had the good fortune of listening to and interviewing numerous people, across diverse industries, with distinctly different roles, giving an answer for why their company is faltering or not reaching the growth goals they set forth. In “almost” every case their answer reflects their vantage point and “rarely” do they express a lack of customer knowledge as a reason for their stagnation. This is interesting because there is unequivocally a link between knowing what customers value and your ability to sell to them what they need… which of course drives your growth, if you do it right.
When I pose the thought of whether they have enough customer knowledge allowing them to position their “entire company” to meet these customers’ needs, I get another set of responses.
“Research is expensive and it always tells us what we already know, which means it doesn’t give us an answer of what we need to do and frankly a customer isn’t going to tell us what they want, that’s our job.” –CEO of a technology company
“We get tons of data about what our customers are clicking on, what they are buying and liking, that allows us to change our campaigns to reflect what they want, plus we have our NPS (net promoter score).” –VP of Digital Marketing for a financial services company
“We validate our branding and advertising concepts before any major release and with that insight can determine the best message and image to convey.”–Chief Marketing Officer mid-sized food manufacturer
“We hear what customers are unhappy with and trouble shoot their problem, so we have a good idea of how to address issues as they arise.” – VP of Customer Service from a technology company
“I speak to my customers monthly and have a good pulse on what to sell to them, I have all I need to know and frankly my numbers reflect it. I can’t speak to the other rep’s situations.” –Sales Associate from a technology company
Okay…so customer insight is about
Except for number 5 which is the same as living under a rock, obtaining and using customer knowledge provides all these wonderful benefits. However, when looked at individually as these people do, they automatically limit the benefits to their needs alone.
While these individuals may not reflect how your business uses and SHARES customer knowledge, they could reflect how some people within your business see its purpose. This is where the disconnect occurs and often hurts things that are meant to drive your growth such as upselling to customers, acquiring new prospects, expanding existing markets, and identifying new markets. The problem is these people alone, have a singular goal and while it might help what their trying to do, their efforts are very much like a first-person narrative which only gives you the plot from their vantage.
Obtaining Customer Knowledge is not a single-story line that has a sole purpose. If done correctly and looked at with a broad view, it can help every part of an organization and shape how a company grows its business. For it to have real value, it must become a multi-purpose initiative that will benefit every department. Regardless of whether you are an internal operator or external sales associate, everyone benefits from knowing what is important to the customers and markets a company serves and pursues.
Here is how it plays out across a company…
1. Marketing teams use it to shape and ensure the message, mediums, and tactics used to build awareness are relevant and create desire for what the company sells. (it often starts with them as Market Research typically falls within the marketing team).
But when there is a product issue or opportunity to create…
2. Product teams use it to identify new solutions, improve existing product issues, and identify new market segments to introduce solutions that grow additional revenue streams.
and when the gate keepers of customers are struggling to close a deal…
3. Sales teams obtain a deeper understanding of the buyers’ motivations, barriers they may have to overcome, opportunities to up-sell, and gain perspective from other sales associates to avoid chasing a lost cause.
and when opportunities drive success and require the right people to keep growing the business…
4. Human resources (yes H.R.) learns what types of people they need to recruit based on customer requirements and personality fits that in B2B businesses are critical as relationships often drive customer growth.
and most importantly when growth must also be profitable…
5. Operations learns what products will be in greater demand and which ones might slowly die off so they can be proactive to fulfill supply lines, anticipate changes to their manufacturing needs, and prepare for a pivot if the organization must dramatically change course.
oh yeah then there is these guys…
6. The Executive Team will have a clear picture of how to lead their organization to meet the needs of the customers, that gives their business purpose and allow them to fend off competitors to overcome growth stagnation. They also will ensure customer knowledge is applied to the above in an orchestrated manner.
Acquiring customer knowledge can be an unnecessary, inflated expense (what?) when it is used as a one-off to solve a single objective. So, for that executive who said its expensive, if your doing it that way…yeah it is.
But when applied and used across the entire organization to make more than just validation decisions, the economies of scale that come from executing it, are pennies compared to the priceless benefits it will yield to drive growth for a business and direct everyone in your organization.
In this highly competitive world where turning a prospect into a customer is both difficult and costly, the insight you can obtain from talking to them post decision is invaluable. While it might be tempting to move on when a prospect says no thank you and continue your pursuit or onboard a new customer quickly, the discussion you can have with them about their decision can guide many strategic decisions moving forward.
This information can shape future sales efforts, inform on product enhancements, guide marketing strategies, and offer clarity on customer service requirements. Most importantly it informs you on what the customer who bought from you valued and what the prospect who said no did not. This post decision interview is also known as Win/Loss Analysis.
Most companies put expectations on sales teams to figure out how to sell to the prospect. It is their job to make it work as their compensation comes from their efforts. Although they are not alone in the process, as marketing gives them the support through awareness campaigns, lead generation strategies and other means, they tend to be the ones who receive the final verdict and report back on the outcome.
Some use this information to change their next pitch, but often beyond updating the broader team, conversations with the customer or prospect about their decisions tend to stop. The problem is that even when a prospect or customer gives a topline reason there is always more information to be learned. Therefore, the post decision interview is not about how well sales did, but uncovering broader company insights.
These interviews shed light on every aspect that influenced the purchase. They can offer context to opportunities a company has yet to capitalize with new prospects or foretell of issues that may affect the company in the future. By finding out what is behind the decision and asking probing questions about that specific reason, far greater context and definition is learned.
Now some might say that a prospect who declines has no interest in continuing any form of engagement, especially if there is little possibility they will buy from you in the future. This is a common belief especially in channels like software, that once a platform is acquired retention period tends to last a whole because of the integration. Therefore, a future sale seems very unlikely, unless your company has something different to sell. While the likelihood of them buying from your company may not occur in the future, if asked they will out of respect give their feedback and time on their decision. Of course, you must preface the request that you are not looking to sell them, but instead learn from their decision to help improve your company and bring great solutions to market.
It is better to have someone other than a sale’s associate conducts the post decision interview. This is not because the sales associate is incapable, but they have a different connection to the prospect that can create bias feedback. Prospects can be less transparent with a sales associate as they recall how much energy and time was spent trying to win their business and could hold back critical information that maybe less than positive. Someone within marketing, product development, operations or a third-party outside the company can be effective conducting this interview and removing the potential for bias feedback. Again, these interviews are not for scoring sales efforts or the team, but to give invaluable insight and enhance future actions to help the sales team close more deals, marketing communicate the best message, product development to give the right features and customer service to ensure a great experience.
Post Decision Interviews (Win/Loss Analysis) if done often can be an extremely useful and cost-effective way to get current market intelligence that can put your company ahead of the competition.
To learn more about Win/Loss Analysis review our workshop and see if your company fits the criteria to build a program.
Before this debate begins or before you read further and you are thinking “No @#$%!?” to the title, the line between these two terms has blurred in many organizations. You need both… but there is a difference.
In many cases, they have blurred so much that MARCOM is driving and costing organizations dollars without always having a clear idea of:
However, if you believe these terms are interchangeable or you use the term marketing to define outbound activities, keep reading, it may be worth your time and more importantly help your bottom line budget. If you are a Small to Midsized Company with limited resources, I encourage you to read this because it may provide insights on why your MARCOM dollars are not having the intended effect.
Many companies profess they have marketing departments, where at closer look the departments’ primary focus is managing and producing outbound communication activities. This by the way is MARCOM (Marketing Communications). Companies allocate budgets every year for advertising, tradeshows, sales materials, and digital tactics because the belief is these efforts produce revenue… and they do but can also have the opposite effect on profitability.
They add significant costs to the bottom line, may not produce the results promised and are often the first on the cutting room floor when a company is in decline. For the record, it is a bad idea to cut from an area that supposedly builds awareness, engages customers and drives sales, which is one way to get you out of a decline. So, for efficiency people, who come in looking to streamline a company to improve profits, make sure it is not at the expense of the departments who drive growth.
Do not get me wrong, “cut fat” but not to the point where you effect your ability to be competitive.
This leads me to marketing… Which is often the missing link when the efficiency guys start pointing out how much budget MARCOM is spending and yet the company sales are not performing as desired.
Marketing Strategy is more than the promotions and the creative tactics that drive interest.
1. It is the due-diligence conducted that ensures your company, product or service selects the best market to fit what you sell.
2. It is the knowledge of whom the right customer segment is to engage, what their unique needs are and how to tailor solutions to be relevant to these customers.
3. It is making the decision whether you are going to adjust your price to take a leadership position or establish a true point differentiation through your products and services to create customer demands your competitors cannot meet.
4. It is watching your competitors and those who have yet to breach your market so you can anticipate their move and pivot to secure your customers before they do.
Marketing is strategy in its purest sense and when done correctly guides your product development, sales teams and MARCOM efforts so they drive revenue as intended by the budgets allocated to them.
Often marketing strategy is seen as time consuming and replaced by MARCOM because companies make decisions based on what they can see, what is tangible. They look at their website, the advertising campaign run last quarter the social media posts and quickly form opinions “internally” whether they are good or not. When they under perform, teams immediately swap agencies and others start shifting tactics hoping these changes will make the difference… sometimes they do, often they do not.
Both Marketing Strategy and MARCOM are vital to a company’s growth but one must lead and the other follows. If there is an imbalance between both, the organization will suffer. If a company dismisses the need for MARCOM thinking that relationships and referrals alone will keep the business afloat, decline is only a matter of time. If a company is putting all its efforts into MARCOM and spending minimal time on marketing strategies, there a significant chance these efforts will cost more than they should to acquire customers or worse… fail.
You may debate everything you just read… but are you certain the money you are allocating each year in your “Marketing Budget” is giving you the return it should.
If any of this resonates with you, visit our Growth Challenges page it will give you insight into what might be in the way of your company’s success.