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Wednesday, February 24, 2021

The Value of a Third-Party Win / Loss Firm

Note: This blog was written by Michelle Martin, Senior Research Analyst at Anova. Michelle works with a number of clients who have made the choice to begin partnering with a third-party win / loss firm for the first time, and shares her thoughts on the benefits that come with that decision

At some point in your life, you have turned to a coach to provide you with objective feedback to help with a sport, a musical interest, a skill, or a career move. For the same reasons you would hire a coach to help you excel in these areas of your life, organizations hire win / loss experts to coach them on how to be more competitive in sales situations. Companies look to the experts because an independent win / loss firm can apply its knowhow to install a consistent feedback loop, eliminate bias, effectively gather feedback, and deliver actionable insights.

INSTALLING A CONSTANT FEEDBACK LOOP

It is common for organizations to ask their salespeople to record a “reason for win/loss” in their CRM when closing out a deal. However, salespeople do not consistently understand why prospects made their decision. Only 19% of sales reps set up separate calls to perform post decision debriefs. This means the vast majority of decision data in a company’s CRM is the sales rep’s interpretation of what happened.

The reason that only 19% set up separate debriefs is because many salespeople quickly move onto their next deal. Salespeople allocate their time to focus on new sales opportunities, as opposed to spending time thinking about deals that have already closed. Unfortunately, this means salespeople do not invest in learning things they did not do well and can improve on, as well as things they did do well and should replicate in the future.

Because companies know that salespeople want to focus on selling the next deal, some organizations “insource” the feedback collection mechanism to another department. If an organization is doing win /loss internally, it is best to have a separate department, such as competitive intelligence or product marketing, run the program. However, there are challenges that come with running a win / loss program internally involving time, expertise, and focus. Keep reading below in the “Effectively Gathering Feedback” section for more detail.

Unlike other companies that are focused on their own product offering, post-decision debriefs are the product of win / loss analysis firms. Win / loss companies need data to operate, and their principal focus is collecting the primary research needed to help their clients. They can allocate resources to focus solely on debriefing with prospects. This makes sure that the feedback is consistently collected and includes specific details that will help organizations sell more effectively. Focusing and devoting so many resources to collecting feedback allows a third-party win / loss firm to help build a consistent feedback loop for their clients.

ELIMINATING BIAS

Let’s say your sales team is made up of reps who are in the 19% of salespeople who conduct a debrief with their prospects. There is still a concern about the accuracy of the feedback the salesperson was able to collect. Based on Anova’s research, salespeople only get the complete truth 40% of the time.

One of the reasons for this low number is because salespeople are not able to get the complete and honest truth from prospects. Prospects sometimes do not feel comfortable delivering bad news to someone who they have built a relationship with. Think about a couple going through a break-up. Does one party always tell the other the exact reasons why they are breaking up with them? Not often. It is more likely they will tell their friends, or even go down the street and tell the bartender the whole story. They just don’t want to hurt the feelings of a person with whom they had a relationship. The same human nature applies to business decisions.

Another reason the number might be low is because salespeople don’t like to admit failure. Anova’s research has discovered salespeople believe they are at fault for losing a deal only 25% percent of the time, but believe they are the primary reason for winning deals 75% of the time. This is because salespeople are only human, and it is human nature to blame failures on external factors but accredit successes to internal factors such as experience, skills, and effort.

So, what does this all mean? If an organization is using data on why they are winning and losing to make decisions, and that data is incorrect, the organization will be making poorly informed decisions and will struggle to improve in the marketplace. On the other hand, an independent third party is in an objective position to receive a prospect’s feedback about the sales process. When speaking to a third-party, prospects are more forthcoming with their true opinions of how a sales team performed and are more likely to share constructive commentary that organizations can use to improve gaps in its offering and sales approach. Third parties will ask all the right questions and remove bias from the debrief stage, and as a result the feedback is more accurate and allows for more confident decision making when the data is aggregated.

EFFECTIVELY GATHERING FEEDBACK

When win / loss is done internally, the job of debriefing with the prospect falls on somebody who lacks the training and experience to effectively probe for details. Without a trained interviewer, an organization will be left with incomplete feedback and there will be holes missing in the data. On the other hand, the specialized interviewers who work for a win / loss company have gone through training to effectively debrief with prospect decision makers and have experience conducting hundreds of interviews. When speaking with a decision maker, it is important for the interviewer to have an engaging, senior-level discussion about the prospect’s buying process.

In addition to the skills needed to conduct a robust interview, there is also a large time commitment required to schedule, conduct, and write up an interview. An average win / loss interview takes around 30-40 minutes. If you factor in the time it takes to schedule and write up the interview, a single interview can require multiple hours of work. For individuals who have other responsibilities, such as salespeople or product marketers, carving out time to do multiple interviews can be a daunting task. However, win / loss firms have trained teams that focus on conducting and analyzing interviews, which increases efficiency.

DELIVERING ACTIONABLE INSIGHTS

When it comes time to aggregate results and look at trends and findings, outsourcing win / loss to specialized firms has key advantages compared to running a win / loss program internally. Win / loss firms have proprietary technology, benchmarking, and can deliver stakeholder presentations that will help organizations uncover insights and drive to action.

Win / loss firms often have proprietary technology that includes client dashboards. The dashboard makes it easy for a company to manage their program and view emerging trends in real-time. Having these capabilities readily available on a platform will help organizations keep track of how a program is progressing and what themes are developing as interviews are completed.

Win /loss firms also have the ability to provide benchmarking, which allows organizations to understand how their results fit in a broader context. Say a company does 20 loss interviews and half of them mentioned issues with their sales team as a reason why they were not selected. Is a 50% sales defect rate normal? Is it above average? A win / loss focused firm will be able to answer those questions because it will have the experience of doing several different studies across different clients and industries. Instead of viewing results in a vacuum, a win / loss firm can help an organization understand its data on both an absolute and a relative basis.

Another key advantage win / loss firms have is the ability to deliver findings to an organization’s senior decision makers as a trusted source. Company executives don’t often see all the problems facing their organization because they are not in the room when the sales pitch happened. Win / loss provides executives with visibility into what prospects think about the organization and the presentation of aggregate findings is a great means for pulling out the most salient insights. While some of the commentary will be negative, it is easier to have a third-party deliver this constructive feedback because they are completely independent and do not have a stake in the game. By receiving this unbiased truth, executives can have clarity when making strategic decisions.

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Win / loss will provide your organization with the feedback you need to sell more effectively. In order to unlock as much value as possible from win / loss, companies should rely on an expert third-party organization to help build a consistent feedback loop, gather unbiased feedback, and use their skills to deliver the feedback in the most effective way possible. You’ve hired coaches to help you improve in other aspects of your life, why wouldn’t your organization hire win / loss experts to learn how to compete more successfully?