Why Do Your Clients Buy? Sales Intelligence Will Tell You

In the last post, I showed you reasons why a company’s prospects did not buy from our prospect. Today, I’ll show the top reasons they purchased from anyone at all.

Below, you will see a chart of the most often mentioned reasons for selecting a vendor. While price/cost is still high on the chart, in a B2B setting, a significantly higher percentage were more interested in the ability of the solution (in this case, a technology offering) to meet their needs.

Notes to Consider
• Respondent companies were able to choose more than one reason
• Percentages don’t necessarily add to 100% due to an abbreviated list of most common responses
• The above-mentioned responses include wins and losses for our prospect

If I am involved in sales in any way, how much more encouragement do I need to make sure that my sales reps LISTEN to the clients, ASK probing questions of the prospects about their needs and then MAP my solution to as many as possible?

Once I have taken that step, I would look for intelligence on my competitors. I want to know how they are mapping their solution to those same needs. I want to take the purchase decision away from cost and other factors and straight into solving their problems as elegantly as possible. If you are able to build an individual value proposition on the things that matter most, you are likely to do much more with your pipeline in short order.

BTW, the above-mentioned results are simple to gather. Ask your clients and lost prospects. They’ll be happy to tell you how your competition performed. And, if you would like a cleaner, more consistent and reliable set of data, look into a 3rd-party vendor. Odds are, your results will provide an ROI story of multiples over the expense.

And, as usual, I’ll throw in my shameless marketing plug. Primary Intelligence is ready to serve your needs. We have done more sales intelligence work than anyone else. We’ll evaluate your business, suggest a plan and follow up with recommendations, training and change management. If you need answers, give me a call (801-838-9600 x5050, cdalley@primary-intel.com)

Why Does Your Sales Team Lose Opportunities? Ask the Prospects.

In a recent study for a prominent software company, Primary Intelligence talked to companies that recently evaluated their enterprise offering, but selected a competing vendor. Below, you’ll find a list of the most common reasons why the other vendor was selected:


Notes to Consider
• Respondent companies were able to choose more than one reason
• Percentages don’t necessarily add to 100% due to an abbreviated list of most common responses
• A series of interviews with clients that did choose this vendor indicated many positives

So, let’s understand these data for what they really are. The prospective clients were evaluating this company’s offering. Most likely, they had a pain or other bothersome business issue that caused them to seek a solution. The prospects needed something other than status quo to move forward.

The prospect is likely to solve their problem with one that eliminates the pain or removes obstacles. If your offering causes as much or more pain than it solves. They aren’t going to buy. Likewise, if your offering is better than status quo, but more painful or problematic than the competition’s, you are going to end up on the outside looking in. These are fundamental value equations.

We can look first at the top reason: Price. You would expect price to rank near the top when interviewing losses. Most of the time, our experience shows that price is really a way of saying, “I didn’t see the value in the offering.” In other words, if the solutions does what it is expected, value increases and price is less of an issue. After dozens of thousands of opportunity reviews, I would guide the reader toward the top 3-5 reasons other than price. (I’ll let you read and interpret the chart as you will.)

“So what,” you might ask. “Neat data. What do I do about it?”

Do something about it. Coordinate this competitive intelligence between sales, marketing and product development to create an evaluation scenario that eliminates the most prominent reasons and increases the odds that the next prospect will form a favorable perception of your offering.

Why study something if you’re not going to use it for change?

I have more ideas on making the most out of competitive intelligence, sales intelligence, market intelligence. Let’s chat if you have a few minutes (801-838-9600 x5050, cdalley@primary-intel.com)

Competitive Intelligence Newsletter - Living Inside the Prospect's Head

The newsletter is out again. We would enjoy feedback. If you want to subscribe, simply use the subscription option on the individual article pages (accessed by clicking on each of the links below)

Cover Story
Experts Corner: Living Inside the Prospect's Head
By Glen Remy, Primary Intelligence Inc.
Memo to sales: Company X is strongly in the market for our product. Their current contract with Competitor Y will expire in four months and they are highly likely to evaluate alternate programs. Their biggest unmet needs are integration with current programs, individual configurability... (For more, click here)

BlogCentral
Competitive Intelligence and Too Much Data!
In a recent study by Advertising Age, middle managers aired their opinions about the effectiveness of Competitive Intelligence and identified specific problems that cause intelligence in general to be ignored. (For more, click here)

The A-List Archive
3rd-party Review of Keane's Sale into Alliance Hospital
Originally Published in December 2004.Alliance Hospital, a small, physician-run facility in Odessa, Texas, needed to replace its inadequate information and billing system. Because the hospital was losing revenue, and because it did not have a large IT staff, Alliance sought a solution that would meet its needs while still being quick and easy to implement.(For more, click here)

Can You Predict Your Future Win Rate? (Part 2 of 2)

In my last post, I said that a SWOT analysis leaves a strategic decision-maker with a problem. You may be able to identify some competitive weaknesses (compared with a specific competitor or in the marketplace in general), but you don’t have any way of gauging what would happen to your market share if the weaknesses were improved.

And, you can’t tell whether continuing to improve the strengths would provide a bigger competitive benefit to your company’s efforts.

So, if a competitive intelligence professional spends all of their time studying the market and the end results is a list of strengths and weaknesses (with no predictive analytics or direction), how much value does that person provide?

I guess that I should be clear that a SWOT analysis is not useless. There is tactical value in a SWOT. You can figure out what to say today with a SWOT, but you can’t make strategic decisions based on a SWOT. There is still too much guesswork.

So what? Replace the SWOT with Impact-based Competitive Intelligence. For instance, Primary Intelligence does this all the time. To determine competitive strengths and weaknesses, we:

1-Interview recent wins and losses where your company competed head-to-head with specific competitors.
2-Measure your competitive performance in 20-30 specific decision influencers
3-Determine strengths and weaknesses (Not the gap score in the table below. Positive gaps indicate weaknesses. Negative gaps indicate strengths)
4-Use predictive analytics to determine the influencers that, it improved, would result in the greatest increases in market share. (Impact column, explained below)

Impact identifies your expected improvement in market share. For instance, in this example (a real-world example taken from one of our clients), if you were to improve your company’s performance in Product Knowledge by one point (In other words, if you improved the 7.7 rating to an 8.7), you would expect your win rate and market share to increase by the impact score of 5.7% (at the 90% confidence level).

And, Product Knowledge is already a competitive strength. Overall, you outperform the competition by 5% in this area. The key may be to make this competitive advantage more consistent throughout the company.

In other words, there are influencers that would provide 2x, 3x and 4x the results of others if improvement were made in those specific areas. This could result in gains of millions or billions of unexpected dollars, based on some potentially simple improvements in the right areas.

This approach takes a lot of the guesswork out of the equation. No espionage required. And, yet, the company makes the biggest gains in increasing its client base.

Now, this approach does not satisfy all Competitive Intelligence needs, but it sure does take the OPPORTUNITY column of the SWOT table to a completely different level.

I am happy to talk about this approach with you. Let me know what you think about how this would fit your organization. (cdalley@primary-intel.com, 801-838-9600 x5050)

Can You Predict Your Future Win Rate? (Part 1 of 2)

A very typical request we receive at Primary Intelligence is for a SWOT analysis. Our clients want to know the strengths, weaknesses, opportunities and threats presented by a competitor or group of competitors in a marketplace.

Of course, this SWOT analysis has a place, but its value is more tactical than strategic. Sales guys should have access to a SWOT, but I don’t know that executives should make decisions based off of this kind of information.

The problem that I see with the SWOT analysis is the fact that a company will know where its current strengths and weaknesses may be, but doesn’t have any insight into the areas of change that will bring about the biggest improvement in win rates, market share and defeating the competition.

Below, you will see an example of a Strength/Weakness evaluation based on data from recent sales opportunities. Half of the data come from new business that was won and the other 50% come from opportunities that were lost to competitors: (click on the image to see a bigger version)

The data are sorted from biggest negative competitive gap (weakness) at the top to the biggest positive competitive gap (strength) at the bottom. The scores are based on a 1-10 scale where 1 is Poor and 10 is excellent.

If you were to make strategic changes in your company based on the data in this table, you would probably look at the weaknesses and evaluate the most effective ways to close the competitive gap.

But, would this make a difference? What would happen if you were to increase your performance in Overall Solution Cost or Understanding Needs by ten percent? (A 10% improvement would mean that you increase your score of 8.1 to 9.1) How much would your win rate increase? Would making improvements in your weaknesses correlate with a stronger competitive preference, or would you be pulling the wrong levers and pouring time and money down the drain?

Traditional intelligence looks at Strengths and Weaknesses
• Should you “fix” weaknesses or accentuate strengths?
• Strength/Weaknesses don’t always correlate with decision making.
• Where is your opportunity to increase win rates and market share?

In my experience, efforts to improve the biggest weaknesses rarely result in an overall improvement in market share and competitive sales wins. In other words, odds are good that most companies are wasting time and money by using SWOTs for strategic planning.

In my next post, I’ll show you a new way to prioritize your strategic plans, based on a more intelligent form of Competitive Intelligence and performance evaluation.

If you need more info on this topic, let me know (cdalley@primary-intel.com, 801.838.9600 x5050)

Effectiveness to Greatness - Making the Leap

I just read an article titled, “Dr. Stephen R. Covey Interview, Going from Effectiveness to Greatness, Featuring Jay Abraham.” This conversation seemed to offer a lot of nuggets in a few pages.

The article is not specifically written for competitive intelligence professionals. In fact, at times, it is geared toward the entrepreneur and small business owner, but I’ll share a couple of excerpts from the article in today’s blog. If you want to read the article in its entirety, click here.

In summary, Dr. Covey takes his principles of “7 Habits of Highly Effective People” and promotes a way of thinking and being that moves from effectiveness to greatness. For example:

JAY ABRAHAM: Define Greatness in the organization
DR. COVEY: Well, I would say that a great organization would be one that has sustainable impact on all of its stakeholders for good. That includes the whole supply chain, obviously the customers… And the culture would be extremely empowered to use a lot of initiative in making great things happen. And also, I think another characteristic would be that the people are constantly growing and improving their skills, their knowledge base, and their capacities to become even greater in the future. I think one of the biggest problems is sustainability -- that many people are like cotton candy. It tastes good, and then within a short period of time it just is worthless, essentially, and nothing happens. But to make it sustainable, to me, is one of the great keys.

JAY ABRAHAM: What changes or shifts would you recommend they make to convert their enterprise from tactical, reactive, episodic, to strategic, enduring, and basically a geometric growth machine?
DR. COVEY: I would say a couple of things. One would be I would make sure that I surround myself with people who are different than me -- who think differently, who challenge -- so that you can get the spirit of synergy in producing a strategic plan that everyone gets emotionally connected to. And I would try to get them very involved in this development of this strategic plan so that they really have a clear sense of what the most important goals are, and also what the values are. Because if you have commonality on the values which never change, then you apply those values in getting synergy and developing strategic goals and plans to achieve those goals. Then you’ve tapped into as much wisdom as possible.

JAY ABRAHAM: you talk a lot about the difference between proactivity and reactivity. Can you share…proactive things that great leaders do continuously, predictably, that average, ordinary business owners don’t seem to understand?
DR. COVEY: Well, I would say one proactive thing is that they decide what their mission is, and what their values are in the context of a larger vision. And I think that most reactive people tend to just kind of live out old programs that have been given to them by other people and by other models that they’ve had. I think another thing is that they start investing in people and in the building of high-trust relationships, where the reactive people kind of hope that trust will result. They don’t proactively nourish the relationship.

Another one is they really get invested in the growth and development of people – for instance, the very thing we’re doing here. If they’re learning things from this, they would want to immediately share this with the people around them that might have an interest so that they create a kind of a learning ethic -- not just a hard work ethic, but a learning ethic-- so that people say, “Boy, he’s really interested in my growth and development, and in my career.

I think another one is they set up empowerment agreements with people so that they don’t have to hover over, check up, follow through, and kind of micro-manage people according to the way they normally would clone someone. But they realize that every personality is different, will often take a different tack. But as long as there is a common agreement on the overall strategic purpose and goals, that’s the important thing. And therefore, you allow other people to express themselves.

Reactive people tend to be firefighters that are impulsively running to and fro and trying to solve problems. They almost get addicted to urgency, rather than being addicted to focusing on that which is important, the Pareto Principle, where 80% of the results come from the 20% of the key activities that produce those results. And I think that what I call “Quadrant Two” -- that which is important but not urgent -- is the basic thrust of proactive people…

Most people are drowned by the urgent, and the important often gets neglected because the urgent acts on you. It’s right in front of you. It’s pressing. It’s like a ringing phone. And they get so addicted to it they almost feel guilty if they focus on long term, strategic thinking and listening in depth to other people because they’re frantic. They’re just driven by action and by constantly wanting to make things happen. They don’t take time to reflect, and to gain a deeper understanding of what the real needs are, and to also deeply understand another person and to find out what their voice is... what is unique about that person…that they have certain talents and passion. They don’t do that. They talk more than they listen. They should realize they have two ears and one mouth, and use them accordingly.

(copyright 2006 All Rights Reserved, www.abraham.com)

I know that this post contains a large chunk of information that might not seem applicable at first, but take a look at your position.

-Are you providing information, services or solutions that will make your company more competitive from the strategic and tactical levels?
-Does your department (and those with whom you interact) position itself to be effective (at the least) and potentially great? Does your organization support this type of thinking and growth?
-Are you drowned by the urgent without having time to work on the important?
-Do you have balance in your life that allows you to be great in the most important things?

Print this document. Mark it up with your notes. And, if you are a self-improvement geek, date your notes. Then, next time you read it and mark it up some more, compare the parts that were important during the first read to those that impress you the second time around. You might learn something about the changing priorities and perspectives in your life.

Anyway, I’ll return to the Competitive Intelligence topic in the next post. Thanks for today’s indulgence.

And, if you find a nugget of info that means something to you, place a comment or contact me (cdalley@primary-intel.com, 801-838-9600 x5050)

New Sales Effectiveness Best Practices Study

CSO Insights recent survey of over 1,300 companies worldwide showed that increasing sales effectiveness was the top objective for Chief Sales Officers (CSOs) for 2007 as they look to hit their revenue targets. But what exactly does sales effectiveness look like? Is it hiring more reps or different reps? Is it more or better training for our sales teams? Is CRM a way to increase effectiveness or is it a distraction for sales reps? And what role does marketing play in optimizing the performance of sales teams?

To help answer questions like these, CSO Insights is doing a follow-on study to determine what sales strategies and tactics are really improving sales effectiveness, and also how consistently are sales organizations adopting these best practices.

If you will take 15 minutes to share your experiences regarding what is working or not working in regards to increasing the sales effectiveness of your sales force, CSO Insights will send you a copy of the aggregated study analysis when it is compiled. To take part in this online survey just click on the following link:

CLICK HERE

As an added benefit, immediately after you complete the survey you will be able to download CSO Insights’ latest analysis on Proactive Sales Intelligence.

If you have any questions about this study or concerns about confidentiality feel free to contact Jim Dickie, Managing Partner, CSO Insights (303) 530 6930 or jim.dickie@csoinsights.com. CSO Insights is an independent research and benchmarking firm and holds respondents’ answers in strictest confidence. I encourage you to participate in the 2007 Sales Effectiveness Best Practices survey or direct it to the appropriate person on your staff to do so.