Thursday, September 29, 2016
“How did we lose that deal?!” or “Why did our competitor win over us?” are common questions asked by sales leaders to their sales reps. They are fair questions, and questions that business leaders need the absolute truth to in order win the next deal.
When a salesperson asks the decision maker reasons why he lost (or won) the deal, the truth is most likely disguised or simply not shared. In fact, salespeople only know the exact truth as to why a decision was made 40% of the time. When Anova conducts win / loss interviews as a third party researcher, we make it a point to ask, “What were the top three reasons for your decision to choose the winning provider?” With this, Anova uncovers the unvarnished truth.
When this question is aggregated at the end of a program, a story emerges. Our analysis tells our clients what they did well when they won and where competitors overmatched them in loss situations. What do all of these stories from a year’s worth of win / loss programs tell us about decision attributes? We decided to take a look at that very question.
In order to draw distinctions between the types of clients, we grouped companies together into two buckets- those in Mature markets and those in Growth markets. Clients who compete in industries where there is a relatively stable competitive landscape and division of market share were labeled as Mature (such as financial services and niche technology vendors). Companies selling in markets where innovation and new entrants often create a dynamic competitive landscape were labeled as Growth (many enterprise software and healthcare companies fell into this category).
When we look at the aggregate data, several key trends begin to show. The top five attributes in terms of differential between Mature and Growth markets were Price, Prior Relationship, Brand, Service, and Sales. The percentage of time each of those attributes were mentioned as a reason for choosing a provider can be seen in the table below:
There are a few different insights this research is telling us. Namely, there are real differences between the two industry types. If one were to rank the attributes in each market separately, price, brand and service are the three most important decision criteria in Mature industries, but price, sales, and brand have the most influence over decisions in Growth markets. Price is the most frequently mentioned attribute in each market and also has the widest disparity in mentions, signaling a difference in how influential costs can be.
Each of these attributes is worth more insight in and of itself. In the next five blogs, we will dive into each attribute with more detail and analysis. Since Price / Cost is the top attribute mentioned in both Mature and Growth markets, we will begin here.
Check back in the first week of October for the next post in our series about buying decisions.