Information gathering for journalists classically focuses on the Five W’s: Who, What, When, Where, and Why, and lastly, How. Market research best practices also stem from these fundamentals and are essential to understanding root cause and, more importantly, deriving actionable intelligence for sales, marketing, and product development organizations.
Loss debriefing from a sales representative commonly looks like this: Who engaged (‘VP of Sales’), What they were looking to accomplish (‘retail merchandising solution replacement’), When (‘by Q4 close’), How (‘on-site custom demo and offered 15-day trial’), and Why (‘lost to Vendor B due to price’).
It looks like the Loss was due to price. But, was it truly price or price-to-value ratio? Assuming it is price, was this due to initial licensing fees or 5-year TCO? Did they even conduct a formal TCO analysis? How important were services and implementation costs to the decision? As a marketing or sales executive, how do I create actionable intelligence without truly understanding the root cause of the Loss? I can’t.
Let’s take a closer look at how exercising the 5 W’s and How allows us to determine the true root cause to create actionable insights for the sales, marketing, and product teams.
Who (defined as, ‘VP of Sales’)
Who was the primary decision maker? Who else was involved in making a decision?
“The VP of Sales was a key stakeholder. The VP of IT was also involved.”
Why was the VP of IT involved?
“The VP of IT was brought in as stakeholder due to the nuances of the migration from multiple platforms to a single, integrated platform.”
How did this impact the decision making process?
“Dramatically, he became a key catalyst in this process mostly because we understood that the migration with Vendor A seemed more difficult.”
Why?
“It would take longer because there was no out-of-the-box conversion tool with Vendor A and we would have to work with their partner which would mean additional costs.”
How did this compare to Vendor B?
“With Vendor B it fairly out-of-the-box because they bundled this with the product at no additional cost.”
What (defined as, ‘retail merchandising solution replacement’)
What was the project objective?
“We were looking for a retail merchandising solution replacement.”
Why?
“We had several different vendors and were seeking a unified suite.”
Why was a unified suite important?
“We had a lot of customer support challenges because customers would order a product online and return it in the store and that process would incur additional support time and costs.”
When (defined as, ‘by Q4 close’)
When were you looking to implement by?
“The end of Q4.”
Why?
“This was to align with the end of our fiscal year.”
How did this impact the evaluation process?
“We had a tight timeline and we were concerned with Vendor A’s ability to meet this timeline due to the migration.”
Why (defined as, ‘lost to Vendor B due to price’)
Why did you decide to not select Vendor A?
“We thought we would get more value from Vendor B.”
Why?
“Vendor A was not only priced higher, but we would be looking at a longer and more costly implementation and dependency on a partner. The reference didn’t help their case either.”
Where exactly was the variation in pricing between Vendor A and Vendor B?
“Vendor A was 15% higher in initial licensing, but twice as much when we included the partner services required for the migration.”
How (defined as, ‘on-site custom demo and offered 15-day trial’)
How did you conduct the vendor evaluation? What steps did you go through?
“We had a first demo and then an on-site with their team. After that, they offered us a trial but we never really used it. We also talked to references which were really useful to the process.”
Why were the references useful?
“The references for Vendor B were very enthusiastic. The references for Vendor A were not as enthusiastic. One reference in particular spoke about usability challenges. They said it was extremely difficult to navigate and they were considering a replacement.”
Which reference in particular?
“Jane’s Widgets.”
How did this impact the evaluation process?
“It was ‘the nail in the coffin’.”
Root Cause
The Root Cause of the Loss can now be refined to P2V ratio and TCO concerns.
Vendor A was priced 15% higher in initial licensing, but 2x when considering partner services required for migration.
The prospect also had a tight timeline due to a requirement to implement by the end of the fiscal year and there were concerns that Vendor A would not be able to meet this timeline due to the more complicated migration and partner dependency.
This was an IT-led decision. The VP of IT was a critical stakeholder in the opportunity due to the perceived complexity of the migration. He made the ultimate decision in favor of Vendor B, while the VP of Sales played a secondary role.
The reference from Jane’s Widgets negatively impacted Vendor A’s usability perception.
Actionable Insights
Actionable insights from this opportunity may include:
Consider more aggressive pricing strategies against Vendor B when migration is a key criterion to help neutralize total cost concerns.
Refine messaging in the field to ensure prospects are aware of the rapid, 6-week migration path offered by partner vendor.
Ban references from Jane’s Widgets.
Fine tune marketing messaging in the field to underscore the pain-point of hefty customer support costs and time incurred with point solutions.
Reconsider the priority of the out-of-the-box conversion tool in the product development pipeline; follow-up with a broader examination of migration challenges by collecting feedback from internal resources.