Learning from Lost Opportunities, or Using Information from "Lost" Accounts to Develop New Business
(Originally published in the September 1997 issue of AFSMI's The Professional Journal)
By William K. Pollock
When a services organization experiences a decline in contract revenues, there are many ways in which it can assess the damage, identify the causes, and begin to correct the problem. Some organizations may attempt to do so entirely by using their in-house resources such as corporate "think tanks" and strategic planning teams, while others may utilize the services of outside consultants and business development strategists. However, it can be argued that there is no better source of data for identifying what the root cause of the problem really is than going directly to the organization's own customers, prospects and "lost" opportunities and asking them specific, direct and targeted questions.
Legend has it that bank robber Willie Sutton was once asked why he robbed banks, to which he replied, "Because that's where the money is!" The same logic also applies to the question, "Where can we go to get the most direct information on why we are losing customers and prospects to the competition?" The answer, of course, is to go directly to your "lost" customers and prospects, "Because that's where the information is!"
No matter how non-, or a-, political your organization may be, during times of revenue downturns, declining sales, or other related financial difficulties, it sometimes becomes too easy for otherwise harmonious coworkers to begin to point the finger at one another. In these times, sales and marketing managers may feel pressure to blame each other for "falling down on the job"; and corporate management may feel that the company's sales force is not "hustling" enough, while field sales may think there is too little management support and guidance to lead the way. Further, company insiders may believe that the downturn is more market-oriented, while market analysts believe that the underlying reasons for the decline are internally-based.
Whatever the reason(s) for a revenue downturn, and regardless of who believes what caused it, it is clear that the organization will need to quickly:
For the purposes of research, this universe of "new", "pending" and "lost" accounts can be divided into the following four groups (Figure 1):
In most cases, interviews within each of these groups should be carried out on an "open" (i.e., where your company would be identified as the survey sponsor) rather than "closed" (i.e., where it would not be identified) basis. In any case, these interviews should be conducted only by specially trained qualitative interviewers, and not by in-house or outsourced low-level interviewers or telemarketers.
The preferred method of approach for carrying out this type of study can be accomplished through the use of a qualified outside consultant in terms of the following tasks. First, a series of qualitative, one-on-one interviews should be conducted with key organization management and staff to identify and define the internal "mindset" that has been built on a base of individual perceptions. This task is a critical component of any study where the following factors may apply:
The final analysis of the collected data can then be used to develop specific patterns of findings, strategic implications and recommendations for both corrective and preemptive actions as they relate to the identified problem. These would include:
Why even bother with a survey of these special types of accounts? Because these are the accounts that are most deeply involved at the present time in the stages of evaluating your company, and its products and services, with respect to future purchases; or they have recently done so, and for whatever reason, have decided to switch to other vendors. Their perceptions, for the most part, are current and well thought out, and if they are planning to switch to another vendor, they will be more than likely to tell you - if you ask them when it is still fresh in their minds.
Why ask them now? Because a decline in contract sales and revenues cannot be allowed to continue and, accordingly, a plan for correcting the problem must be found quickly; before additional accounts are lost, before additional "fingerpointing" takes place, and before any further market erosion occurs. Surveying current customers and prospects may be risky business; but without them, there is no business.
William K. Pollock is President of Strategies For GrowthSM, a Westtown, Pennsylvania USA-based consulting firm specializing in business planning, customer service and customer satisfaction research. He may be reached at 610-399-9717 or via e-mail at email@example.com.
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