Competitive Intelligence: Analytics Show You How to Sell More

If your company uses market information to make decisions, you are almost certain to be familiar with the “Of these items, how important was…” or “Which of these would you consider to be first, second and third most important?” These questions result in a measurement of stated importance, or those things that are easily identified and verbalized as important.

While these data are easy to generate and generally seem reasonable at face value, there is evidence to show that decisions based solely on stated importance are subject to important limitations. Those areas of your company’s performance that are identified as most important often do not correlate well, if at all, with purchase decisions. Which means that your company can act on those performance areas identified as most important and yet, no measurable improvement be made from those efforts. In most companies, that is defined as poor ROI or “a waste of money.”

For example, through your research, you may identify a performance area with a relatively low performance score and might initially trigger discussion regarding ways to improve the performance. However, you wouldn’t want to do much about it if it had a low correlation to overall increases in market share. For instance, let’s consider this principle in a Win Loss setting. Suppose we had created an interview and included the measurement of professionalism of a sales force against a prospect’s likelihood of choosing a vendor. Whether the performance rating against the competition was positive or negative, it would be difficult for an executive to understand the impact that professionalism actually has on the company’s sales win ratio. It would be impossible to know how much a change in performance would affect that win ratio. If it turns out that the correlation to the sales win rate is high, the decision to put emphasis on increasing professionalism would be very easy and relatively risk-free. If the correlation were low, resources could be assigned to improve other parts of the sales process.

There is much evidence to indicate that responses on importance scales can be affected by other factors that distort the accuracy of the response, for example the need to please, social demands, cognitive dissonance, and generic importance, among others. In the entertainment industry, for example, television viewers using such scales will continually rate the value of news and information above sex or escapism. However, would anyone wish to predict, based upon these data, whether the ratings of the program Seinfeld will be lower than those of The PBS News Hour? Thus, there is a much deeper level of insight to be gained from deriving the information from the respondents’ answers rather than taking them at face value.

The quadrant below shows how actual data from our win loss studies has plotted on stated importance and derived importance:

Legend
• Stated importance is plotted on the Y-axis; it represents the average importance rating given by respondents for each influencer’s characteristic or attribute.
• Derived importance is plotted on the X-axis; it is obtained by assessing the company’s performance in each influencer and determining (through proprietary modeling techniques) the impact that each influencer had on the sales outcome. The higher the derived importance, the more impact that influencer has on the overall sales win ratio.

• Upper left quadrant—“Declared important”: This quadrant consists of items that are stated to be important, but which ultimately have little correlation to a respondent’s decision-making process.
• Upper right quadrant—“Key influencers”: This quadrant reflects attributes that the respondent both states as being important and which prove to be highly influential at a derived level.
• Lower right quadrant—“Hidden opportunities”: This quadrant consists of attributes that the respondent cannot readily identify at a stated level, but which do impact overall satisfaction at a derived level.
• Lower left quadrant—“Limited impact”: Attributes in this quadrant have both low stated importance and little influence on overall satisfaction.

Now, one caveat is in order here. Some performance areas may be ranked high in stated importance, but will be low in derived importance. This doesn’t mean that a company can cut back efforts in the areas of stated importance. They still have an effect on the sales process. When an attribute has a high stated importance, the data are saying that this is a performance area that can’t be neglected without adversely altering the win loss ratio, but significant improvement may not provide actual gains in the win loss ratio.

In the end, using the most sophisticated analytics tools to determine the key influencers will eventually provide the greatest strategic decision-making ability for your company. In so many cases, this approach has improved company performance so much more than “gut feeling,” reactive competitive intelligence programs, and stated importance measurements.

This is where Primary Intelligence makes its living; providing powerful predictive analytics to our clients in order to grow their market share. Perhaps, we should discuss how this might work for you. (cdalley@primary-intel.com, 801-838-9600 x5050)

Sales Reps and Management: Should You Listen to Your Prospects?

Listen, listen, listen. Is there a more basic sales skill? If you don’t understand your prospect, how can you possibly solve their need?

Of course, you can’t stop listening. If you turn off the voice of your prospect, you are committing sales suicide. Not very productive in my book.

But, is the voice of your prospect telling you everything you need to know? Practitioners of analytics would tell you, “No.” In fact, there are many examples of people saying one thing, but feeling another. In research, the following example illustrates this point:

“There is much evidence to indicate that responses on importance scales can be affected by other factors that distort the accuracy of the response, i.e., the need to please, social demands, cognitive dissonance, and generic importance among others. In the entertainment industry, for example, television viewers using such scales will continually rate the value of news and information above sex or escapism. However, would anyone wish to predict, based upon these data, whether the ratings of the program Seinfeld will be lower than those of The PBS News Hour? Thus, there is a much deeper level of insight to be gained from deriving the information from the respondents’ answers rather than taking them at face value."

So, how does this apply to sales? Perhaps in the one-to-one relationship building, listening directly to the client is the only avenue for information. But, when the collective voices of your clients speak, take a little time to couple their actions with their words to determine your sales performance areas that really matter.

The quadrant below shows how actual data from our win loss studies has plotted on stated importance and derived importance:

Legend
• Stated importance is plotted on the Y-axis; it represents the average importance rating given by respondents for each influencer’s characteristic or attribute.
• Derived importance is plotted on the X-axis; it is obtained by assessing the company’s performance in each influencer and determining (through proprietary modeling techniques) the impact that each influencer had on the sales outcome. The higher the derived importance, the more impact that influencer has on the overall sales win ratio.

• Upper left quadrant—“Declared important”: This quadrant consists of items that are stated to be important, but which ultimately have little correlation to a respondent’s decision-making process.
• Upper right quadrant—“Key influencers”: This quadrant reflects attributes that the respondent both states as being important and which prove to be highly influential at a derived level.
• Lower right quadrant—“Hidden opportunities”: This quadrant consists of attributes that the respondent cannot readily identify at a stated level, but which do impact overall satisfaction at a derived level.
• Lower left quadrant—“Limited impact”: Attributes in this quadrant have both low stated importance and little influence on overall satisfaction.

Now, one caveat is in order here. Some performance areas may be ranked high in stated importance, but will be low in derived importance. This doesn’t mean that a company can cut back efforts in the areas of stated importance. They still have an effect on the sales process. When an attribute has a high stated importance, the data are saying that this is a performance area that can’t be neglected without adversely altering the win loss ratio, but significant improvement may not provide actual gains in the win loss ratio.

In the end, using the most sophisticated analytics tools to determine the key influencers will eventually provide the greatest strategic decision-making ability for your company. In so many cases, this approach has improved company performance so much more than “gut feeling,” reactive competitive intelligence programs, and stated importance measurements.

This is where Primary Intelligence makes its living; providing powerful predictive analytics to our clients in order to grow their market share. Perhaps, we should discuss how this might work for you. (cdalley@primary-intel.com, 801-838-9600 x5050)

Use Competitive Intelligence to Determine Positioning in Sales and Marketing

In a standard win loss project, one of the exercises we at Primary Intelligence perform during the interview process is to allow the respondent (a recent decision-maker that evaluated our client) rank the top three company, product and sales performance areas. The result is often a chart that looks like the one below:

Quickly, our client was able to see how to rework the sales message to be more effective. They changed their talk from customization and implementation to technology, functionality and integration. They used those topics to build the value proposition and outmaneuver the competition on cost.

It should be noted that, in this case, our client was one of the higher-end vendors. If they addressed price in the first sentence, they rarely made it to value.

Interestingly, Technology was rarely rated as the #1 criteria, but it was the second most mentioned criteria in the list overall.

Do you have this kind of visibility into your sales and marketing messages? If not, let’s do a couple of post-sales analyses free for you. Give me a call and let’s set something up. (Chris, 801-838-9600 x5050, cdalley@primary-intel.com)

Competitive Intelligence - A Quantitative Evaluation of Your Sales Team's Performance

Every sales manager uses a grading system of some type for individual sales reps and the collective sales team. One of the most interesting measurements we have found is based on feedback from outside the organization. At Primary Intelligence, we let the prospects tell you how you are doing as a company. If the measurements are gathered consistently from enough sales opportunities, we have the ability to show you the strengths and weaknesses of your sales team in up to 30 different performance areas.

The table below shows a sample report from an actual client. The measurements are based on 30 opportunities where our client won and 30 where the prospect chose a competing vendor. (Click on the image below to enlarge)


It is important to note that these measurements are most effective for planning changes to tactics. Strategic insight would be better displayed through Primary Intelligence’s predictive analytics. You can email me about the analytics or read back through some older posts for more info.

Anyway, when reviewing scores like those above, the positives are your current competitive strengths and the negatives represent your overall weaknesses.

As a VP of sales, I would use this competitive/sales intelligence to show that overall, we need to emphasize our industry experience. I would also recommend that the company implement a program that helps sales reps understand the business of their prospects. These are both fairly simple to solve, require very little money, and have nothing to do with price.

Primary Intelligence could also bring some training to the table to develop the improvement plans and increase sales team effectiveness in these two areas of sales performance weakness.

Do you know what your prospects think of your performance? Maybe, it is time to ask. We can help you. We’ll show you how to do it and we’ll provide an end-to-end solution if you need one. I can give you details (cdalley@primary-intel.com, 801-838-9600 x5050)

How Does Your Software Match Up with Client Needs?

In an evaluation of CRM/SFA vendors, we interviewed a company that needed more flexibility than its existing vendor could provide.

What was the compelling event that caused your organization to seek a
solution?
“It wasn’t a specific event. [Our current SFA vendor] does not allow us to perform necessary functions like categorize our customers by past purchases or by equipment they own that we’ve sold. It is unfriendly in allowing us to do campaigns. It is not possible to integrate it seamlessly with our ERP solution. It does not allow for workflows to be organized. That’s a small snippet, but it’s really a glorified contact management solution.”

When it came down to evaluating products, SellMore* was the better match for this company, even though SellMore’s solution was newer to the market and not as integrated with common ERP offerings as other, more seasoned competitors:

What were the primary reasons you did not select Salesmaster?
“I don’t like their interface. You have to go through too many windows, and Salesmaster is the opposite of SellMore. Our financial people really liked Salesmaster, and the reason is that in ERP—ERP is the financial software side—you do things one way because there are best practices in finance. On our side—marketing and sales and customer service—we do things in our own way. It’s completely unique to our company, and it has to be that way. Every six months or so, we’re making major changes. We have to have a flexible solution. Salesmaster is designed to be a static solution, and it’s very difficult to change. They say you can change anything, but you need a programmer. It’s also difficult to host—I need somebody who is an Salesmaster expert, and we don’t have one. We’d have to hire people for that, whereas I do have people who are experts in SQL Server, which is what SellMore runs on. I really didn’t like the interface because it was too cumbersome and difficult, and we had to teach our people to work around the software rather than getting the software to work around our people.”

What would you do if you were Salesmaster? How would this feedback change the way you identify your ideal prospects? How would you qualify leads? Does hearing this client perception of your solution change the way you approach the rest of the leads in your pipeline?

If you said “yes” to any of these questions, you are the kind of sales rep that effectively uses sales intelligence. And, that means that you are probably more effective than your counterparts.

Maybe, Primary Intelligence can take your sales intelligence initiatives to a higher level. Let’s chat and see if there is anything we can do to make your sales job easier. (cdalley@primary-intel.com, 801-838-9600 x5050)


* Company names changes to protect the identity of our clients and competing vendors.

The Infinitely Small Nuances of Sales Meetings

In a recent sales opportunity interviewed by Primary Intelligence, we found that a point as small as the introduction process should not be discounted. (For more on this sales opportunity, please see my post from 5/9/2007

Do you have any comments regarding the vendors’ in-person presentations?
“They were very good. It was a very tough decision. The presentations when they came in here were just fine; when we went into their facilities, things were just set up differently.

“At Trilight, we went in and we sat and chatted, but we also walked around more and met the person that we would be working with in each area there. It was like a round robin tour. At Manifesto, we did do a tour of their facility, but all of the meeting basically took place in one room. We could ask questions of the experts and they would come and go. Sometimes when you're walking around it's hard to focus because there's so much going on.

“When we did the tour with Trilight, we knew where we were going, but I don't think we realized what was coming next. When we were at Manifesto, we had an agenda, and we went through it. In hindsight, Trilight’s way seems to be a little more efficient, with Tracy answering all the questions, but I think that's where the team got the feeling that Tracy had all the knowledge, not her team.”

The most important thing here is that Trilight had information that would have told them that a sit-down meeting would be more beneficial, but the value of that information was discounted to the point that they made the wrong decision. Ultimately, this mistake essentially cost them a very large bit of business.

If you want to know the right moves to make, you need to talk to Primary Intelligence. Helping sales teams sell more is what we do. (cdalley@primary-intel.com, 801-838-9600 x5050)

Even When You Win, You May Learn Something Critical to your Sales Process

In an recent sales post-mortem review, we found a case of a company that successfully sold additional product into an existing account. The sales opportunity was competitive, but the incumbent won, which was not unexpected. In fact, the client had very good things to say about the incumbent vendor:

What were the primary reasons you selected FlashNet*?
“We selected FlashNet for their New/Existing Account program, the return on investment over a five-year period, their long-standing relationship with our organization, and their commitment to service.

We’ve been working with FlashNet for four years. We’ve had a lot of success with FlashNet taking care of us as a customer, making sure were happy and that the account works smoothly. It’s very easy to work with FlashNet.”

Now, the client spoke well of the competitor. The situation was a close win for the incumbent, and the losing vendor should probably keep its eyes open for opportunities to get its foot back in the door.

But, let’s look at some feedback that the winning vendor discovered about the way its prospects and clients perceive the purchase process. I think that this feedback needs to be understood at the highest levels before it turns into too much friction for incoming clients:

Additional comments (FlashNet):
Overall cost: “The cost per unit that we currently have with FlashNet is fairly low from a market perspective. When we purchased in bulk, we found that in one case it almost increased in cost per unit, which shouldn’t happen. When you see a sticker price on a car, you know that’s for retail. When you say you’re going to buy 40 cars, you shouldn’t be paying more than retail for each one, so I was dissatisfied with that.

“That’s how their sales management works. The salesperson that is assigned to me can only offer us up to a certain level himself. Then that has to go to his sales manager who can only authorize up to, say, $100,000. That means they have to take it to their vice president of sales who can authorize anything at that point. The problem is, when you make a single purchase order of over $500,000 worth of equipment, the salesperson you’ve already negotiated with over a long period of time to give margin to has their hands tied. They can’t make recommendations for the decision and neither can the sales manager.

“So the vice presidents get involved and look at the margins, and because the margins have already been so shrunk, they hold the line. Unfortunately, not only does that represent them poorly, it increases the time for decision making and it doesn’t really help—especially when you’re looking to place a fair and reasonable order for half a million dollar’s worth of equipment. I don’t want to argue about half a percent; give me $5,000. That’s kind of how things work. You expect to see a discount from mark-and-base orders, and that doesn’t happen with FlashNet.”

If the prospects can’t purchase in a way that makes sense to them, some will leave. Fortunately, there was a bunch of goodwill built up in the existing relationship that carried the sale through. But, if loyal clients feel this way, what are the new prospects going to do when they can’t find a satisfactory way to deal with FlashNet?

This is the kind of competitive intelligence that a company should perform on itself to make sure that processes, policies, guidelines, message and all that stuff are up to snuff.

If you need a little help getting these kinds of feedback mechanisms in place or if you want to bounce some ideas off of me, let’s chat. (cdalley@primary-intel.com, 801-838-9600)


*Names changed to maintain confidentiality.

For VP Sales Only

Some say that knowledge is power. We at Primary Intelligence believe that the right kind of knowledge is exponentially powerful.

An example of our intelligence and feedback we provide is listed below. In this example, our client is Tenscon, a software solutions provider. Now, we have changed the names to maintain confidentiality, but our customer list includes companies such as Microsoft, Avaya, Symantec and EDS are the kinds that tend to do very good work with us.

The table below shows "Tenscon's" competitive advantage against 4 competitors (again, names have been changed to maintain confidentiality, but the results are real).

The results show some competitive advantages in the company and sales, but the product has some significant weaknesses against Sistemic and Howein Partners:

Overall, Tenscon had generally higher performance ratings than the competition, especially in the company and service drivers. However, several ratings for the sales team were lower than those of the competition as a whole, indicating that some improvement in these areas may be needed.

An analysis of the responses from clients yields the following key findings concerning Tenscon’s performance:

-Tenscon was seen as a strong and solid company, but was not generally seen as an innovator. As a senior vice president from Dillent explained, “I don’t think they showed as much innovation in their solution. I think they took a much more conservative approach, a much more introverted approach rather than an innovative approach.” The CIO from ABC Aerolineas echoed this sentiment by saying, “We have some applications that we expected to be technologically advanced, but what they offered us was delayed during the delivery process. By this I mean that some applications were not as innovative as we expected them to be.”

-Some clients were concerned that Tenscon was not offering a unified solution, but rather a set of pre-packaged offerings. For instance, a respondent from ABC Aerolineas said that the initial Tenscon team did “have a real understanding of our model, and they just trying to sell us stand-alone systems. This was the idea. The idea was a cost-effective strategy, and people from Tenscon did not understand our model, our strategy, the market, or our needs. They just about systems and stand-alone processes.” A representative from Flentic Crendall explained, “One of
complexities of [Tenscon] is it is five separate businesses that have been swept into one company. It’s trying get them to work as one company with one approach. don’t think that there was a perfect solution.”

-While a majority (66 percent) of clients believed that Tenscon put the right people in front of them, there were some concerns that decision makers were not involved in the negotiation process. A vice president at JNPD expressed this sentiment, saying, “As some of these things escalate, or we run across impasses, there might be opportunities in the future that if we were
able to talk directly to the true decision makers, then it might expedite the process.” A senior vice president from Fiserv also said, “It took a while to get the right representatives from the healthcare side and from the financial side [of Tenscon] to be on our team.”

-Understanding the clients’ needs and business requirements was a theme throughout the interviews, and an area where respondents believed Tenscon could improve. Tenscon’s ratings in this area were slightly lower than the average for other bidding companies, indicating an area of advantage for Tenscon’s competitors. As the CIO of Coles Meyer explained, “Sometimes I was worried [that they gave] affirmative answers without really understanding what the issues were. At
times I felt they didn’t understand how big and complicated the work was going to be. ‘Let’s make the sale and then afterwards worry about how we are going to deliver it.’ There was a lack of business and delivery knowledge with the up front sales team. With other vendors we don’t experience that.”

If you have any ideas of how to make these data come to life in your organization, drop me a line. (801.838.9600 x5050, cdalley@primary-intel.com)

The Stronger Company Loses (Part 2)

Continuing the thought from yesterday, a German manufacturer of automobiles was re-evaluating its IT support provider. During the sales process, it evaluated two providers and rated the newcomer more favorably than the incumbent in company-related criteria.

Below, you will see the quantitative ratings for both teams as related to SOLUTION and SALES TEAM:

In the next post, I'll provide some of the comments that were the cruz of this deal. But, in the meantime, post a comment letting me know who you think won this deal based on the performance comparison in the charts above.