Step 1. Select a facilitator with industry experience and without bias.

Find a facilitator who will follow an effective, focused approach. Though an internal facilitator knows your corporate culture and your products, they may bring biases into the equation. Biases may reflect corporate politics, job security or a business as usual mentality. External facilitators with experience in strategic planning may offer a more neutral approach and have no hidden agendas. They will also provide valuable insights into the process from previous experiences.

Step 2: Set the agenda.

Key decision makers need to be included to ensure they are committed to the process and plan. These individuals are typically heads of key functional areas and those who will be implementing the plan. To enrich the intellectual potential of the meeting, people with relevant company information (i.e., finance) or are especially creative should be included as well. The meeting should follow a structure, starting broad with the industry analysis, followed by an analysis of your company's capabilities. An action plan must be built towards the end of the process.

Step 3: Come prepared with data.

This step is pivotal to preplanning. Having a firm understanding of industry trends, key competitors and threats and opportunities will be an important backdrop for the strategic plan. You'll also want to come equipped with company data to serve as the foundation for your future goals. Industry and company data analysis should be conducted prior to meeting and shared with key stakeholders.

Step 4: Running the meeting.

Encourage brainstorming and out-of-the-box thinking. Ideas evolve from one another so all input is valuable. Keep to a structured process but be sure you have some flexibility to adapt to your audience.

Step 5: After the meeting.

Conclusions should be summarized and distributed to the team. All decisions must be specific and actionable. The post-meeting document must state your goals and HOW you will achieve them.

The Associate Dean of a leading Executive Education (EE) program engaged R² Strategy Partners to analyze the potential of entering a new market. Objectives of the study were to assess the target market’s interest in EE, identify key providers, and understand the decision-making criteria and process. Feedback was used to determine the feasibility of investing resources in this market.   

The Client expected there to be a number of challenges to address. Primary concerns included: a. lack of awareness of benefits offered by university-based EE, b. the degree to which learning and development budgets have been cut due to the economic downturn, c. that a culture driven by billable hours may limit the time investment in ongoing learning and development, and d. that the few firms that did recognize the value of EE were already working with competitors.

Process

R² Strategy Partners interviewed directors of professional development in leading firms provided by the Client. Following an agreed upon interview protocol, we asked qualitative and quantitative questions to better understand  the firm’s needs, their decision-making criteria and process, budgets, potential participation and preferred program delivery models.

Findings

Our findings provided some interesting insights from which we developed actionable recommendations: 

1. The market is very attractive; all firms we interviewed have professional development departments and are interested in expanding. 

2. Key areas of interest for EE are management and leadership.  

3. The most important decision criteria are reputation of provider, flexibility (i.e., format, location) and time of delivery. 

4. The main source of competition is sole practitioner consultants, not other universities. University-based programs are perceived as more expensive and less flexible; however, during our interviews, most interviewees expressed a willingness to look more closely at EE providers. 

5. University-based EE benefits from the perception of brand cache, expertise in multi-functional content areas and faculty who are the originators of the latest research.

Recommendations

Findings were eye opening to the client on several levels. First, since the most important criteria are consistent with the Client’s offering and many firms are eager to learn more about EE, the market appears attractive and worth investing in. Second, the results redirected attention to the real competition – consultants - and reinforced the need for the Client to position their program relative to this competitive set.  

As such, comparable products (in design and content) would need to be competitively priced, flexible in approach and leverage top-tier faculty thought leaders. A potential strategy could include partnering with consultants.

Results

The project was only recently completed; the client is currently reviewing the findings and developing an approach that takes these findings into consideration.  

In today's challenging economy, retaining your customer base is critical to your company’s profits and long-term success. If you don't give your customers a compelling reason to stay, your competitors will give them a reason to leave. Despite this reality, few companies employ a retention mindset to keep customers happy and competitors at bay. It is widely believed that keeping one existing customer can be five times more profitable than attracting one new one. So what can you do to make customer retention a key focus area in your company? We believe there are four important steps required in any effective retention program.

Determine your baseline retention rate and develop a target.

You’ll need to understand what your retention rate is to start. A quick way to calculate this is to determine a timeframe over which you’d like to calculate retention, quarterly or annually most likely. Subtract the number of new contracts/customers from the current period, and divide the result by the number of contracts/customers you had at the end of the previous period. Now that you have your baseline, you can start to think about retention targets. The remainder of this article will discuss how to conduct research and build a strategy to improve retention rates.

Conduct research with defectors, at-risk and loyal customers

In order to maximize the effectiveness of your research, you’ll need to speak with defectors as well as loyal and at-risk customers. While defectors and at-risk customers reveal your vulnerabilities, loyal customers can offer insights on what you do well, for example, which product lines are successful and which customer service interactions are positive. Loyal customer data can be used to prioritize what needs to be fixed in your company and to customize future interactions and products.

Any customer research you undertake should preferably be in the form of a dialogue, not a survey. Unlike a survey which is limited to a series of questions and answers, a dialogue creates an atmosphere where customers can freely share their perspectives, and the interviewer can probe to gain deeper insights. Either a third party or an individual in a non-customer facing role will be in the best position to extract candid customer feedback. 

Overview

A software training company (the Company) in the Boston area engaged R² Strategy Partners to analyze why they were losing new business and to define winning strategies that would improve their bottom line. The Company has national coverage and has been in operation for 25 years. Knowledgeable training, high quality service and a recent foray into online training are perceived by management to be positives relative to the competition. 

While the Company appeared to have a solid base of customers, others were turning to the competition for their training needs. Senior management believed that the most important purchase criteria are quality of service and price, yet this was never proven through formal research. More recently, due partly to the recession, management has felt that lower priced competitors and offsite training have been chipping away at their business potential. 

Our Approach

To better understand the perspective of both Wins and Losses, we surveyed two groups - existing customers and companies who considered but did not hire the Company.  We asked unaided and aided questions about the decision-making process, purchase criteria, company vs. competitor ratings, satisfaction with the Company and future trends.

As suspected, existing customers were very pleased with the Company. They were happy with the quality of service, felt that training was tailored to their needs and responsiveness was strong in the sales process. Companies who did not hire our client had a different perspective. They felt The Company did not show a clear understanding of their training needs in the sales process and were concerned that training would not be tailored effectively. Some felt the Company’s price was high. Both put our client at a disadvantage relative to the competition. 

R² Strategy Partners tested some new growth concepts such as webinars, web 2.0 training and 'soft skills' training. While most were not of immediate interest, other ideas were mentioned. One was Windows 7.0 training. The Company is evaluating new ideas within a framework of act, monitor, and eliminate. 

Recommendations

Based on our research, we determined that there were three main areas that the Company needed to address to improve its market position:  

Price training according to market position: Does product offering (quality of service, experience of trainer, and reputation) warrant a premium price or is the target audience more price sensitive, thus requiring a low price/service approach? The Company needed to define its target market, their training needs and price elasticity to be more focused and competitive in the marketplace. 

 

Demonstrate business insights early in the sales cycle:  The Company typically has a solid understanding of clients and tailors training well, as evidenced by the Wins.  However, in some cases, our client does not bring forth that expertise early enough to be convincing.  We recommended that knowledge of the customer, industry and operations be communicated clearly in the sales process and proposal.  

 

Turn trainers into assets and make an integral part of the sales team: Trainers are contractors who typically get involved once the sale is made. The uncertainty about the trainer creates risk in the client’s mind. Given that the Wins rated trainers very highly, they can actually be an asset rather than a risk. We recommended that trainers be involved early in the sales process and that their approach mirrors the Company’s overall strategy.

Results

In a few short weeks our client took action.  Proposals, cover letters and sales approach were updated to focus on customizing to industry and company needs.  And, trainer background descriptions were depicted to more closely match the client’s industry.  Early results reveal that business close rates are improving significantly with these changes. 

Since customers are your firm's most valuable asset, retention should be at the forefront of your business objectives. Most companies know that it is far less expensive to cultivate existing customers than to seek new ones, but few factor this reality into their approach. The following five strategies can help your company serve customers effectively and profitably.

Become a data-driven company

Data-driven companies are best prepared to capture customer insights and develop effective customer acquisition and retention programs. By collecting sales, market, competitor and customer satisfaction data, you have the means to differentiate and deliver value. Industry leaders use sophisticated analysis tools to tailor offerings, optimize prices, segment customers and market effectively. In today’s competitive market, companies that don’t leverage customer data are being left behind. 

Focus on your most profitable customers

Let’s face it, not all customers are equal. You only want to invest in your profitable or high potential customers so understanding profitability is critical. Quantify your acquisition and servicing costs and subtract from average customer revenue. Depending on your level of sophistication, you can even deduct other operating costs such as depreciation and plant costs for example. If your company captures data at the individual customer level, you can get very good at looking for customer opportunities that have the greatest impact on your bottom line.

Segment your customers to deliver the right product and message

Not all customers have the same needs nor can they be reached in the same way. They can differ by industry, company size or service expectations for example. Your ultimate goal is to develop differentiated clusters of customers for whom you can tailor products and fine-tune your sales and marketing approach. Although not all companies have the data and tools to segment in a sophisticated manner, it is always possible to segment on less complex variables such as location and distribution channel. Ultimately your goal is to align your value proposition and message with your customers’ needs.

Cultivate a service-driven mentality

Customer service is one of the most important competitive differentiators. A healthy obsession with the customer goes a long way. Employees should be trained in the culture and empowered to find ways to please the customer, even if it means breaking the rules once in a while. Customer service can also be enhanced by moving from a traditional sales and service role to that of business consultant. With a consultant mentality, you should be looking for ways to improve your customers’ success so you can prove yourself indispensable.

Conduct customer research with regularity

World class organizations leave nothing to chance when it comes to customer satisfaction. Research can help you get early notice of "at risk" customers and address their needs before it's too late. Customer loyalty solutions can be fueled by feedback from customers so it’s important to engage in a dialog on a regular basis. Customer satisfaction studies and exit surveys can be particularly helpful in aligning your products, people and processes with what matters most to your customers.

A retention mindset must permeate the culture of all companies in today’s economy. As technology changes accelerate, low price competition abounds, and sales channels shift daily, loyal customers are in short supply. The company that invests in customer research and makes a commitment to customer loyalty gains an important competitive advantage.

What better time to think about improving your company’s sales force effectiveness than now? As business growth is more unpredictable than ever due to a struggling economy, Win Loss may be just the way to help you gain a quick advantage over the competition. Surprisingly, Win Loss is a practice most companies don’t leverage.

Studies show that growing companies win roughly 50-60% of the deals they bid on. If you include customers who take no action, that number drops to 20%. Do you really know why you lost the recent deal, or why some customers keep coming back? While customers have these insights to share, they rarely do so in an unfiltered manner with your sales and service teams.

What are the benefits of Win Loss?

We are all busy. We process megabytes of data daily. Why another piece of analysis? First, Win Loss is more relevant to your company and customers than any piece of market research, because it’s specific to you. Second, what you learn can transform your business if acted upon effectively. In short: it provides the potential for a very large payback. Some customer feedback will be ‘low hanging fruit’ such as tweaking your marketing message, improving your sales process or reaching out to customers in different ways. Other findings will drive longer-term investment in product, services, and new market segments. The output will likely change your investment priorities and enable you to close more deals.

How do I conduct Win Loss analysis?

Win Loss requires an ability to ask your customers some tough questions and to listen with an open mind. Not everyone can do this. Think through the key issues you want to understand. For example, how do your customers make decisions about buying your products/services? What are their most important purchase criteria? How do they rate your company’s product and how do they rate competitors? You need to get to the bottom of these issues before you can truly address how your message or strategy needs to change.

Key Success Factors

There are a few key success factors we think every Win Loss effort should include:

   1. The interviews and analysis should be handled by an objective party: the interviewer can be internal or external to your company, but preferably not customer facing due to potential biases or interest in protecting the status quo. You need your customers to speak with you candidly.

   2. Data should be collected via a 1:1 dialogue, not a survey. Surveys (especially on-line) tend to be short and binary. To get to the ‘gray areas’ of unclear customer needs, you need to dig deeper and go beyond the obvious. Challenge the customer’s first line of answers to get to the real behavioral drivers. Surveys are not designed to do this.

   3. The analysis should be quantitative, actionable and measurable. To be defensible, output should be based on a large sample of quantitative, as well as qualitative, data. We emphasize the quantitative as it ties directly to investment decisions and calculating ROI. While the analysis may not be straight forward, the data should lend itself to short term and long term recommendations that will ultimately lead to higher close ratios and improved profitability.

   4. Win-Loss Programs should be conducted with regularity. Companies should track, at least annually (and in some cases quarterly), progress along the agreed upon action items and goals. By making Win Loss an integral part of your business, you have the ability to harness the insights of customers and to greatly improve your company’s sales effectiveness.

Win Loss is a time-tested way to help you understand customer needs effectively. It gives you the ability to leap frog the competition by keeping a pulse on industry trends, the competition, and needed enhancements to the sales process, products, and services. The opportunity to improve your sales and marketing success rates sits right at your doorstep. Why not take advantage of its benefits?

Rachel Corn and Robin Kahn are principals at R² Strategy Partners. They have combined experience of over 30 years in marketing and customer strategy. You can reach them at r2strategypartners.com.

The Art and Science of Win Loss

Thinking Strategically About Customer Retention

Four Steps to Improve Customer Retention and Boost Profits

Key Success Factors for Strategic Planning Meetings

Case Studies

How Win Loss Re-energized a Software Training Company

Executive Education New Market Opportunity

Strategic Partners

CRM and Sales Force Automation

Warm Regards,

R² Strategy Partners

• The situation: Company wanted to understand why institutional clients were not heavy product users and to explore strategic options.
• The ask: What could Company do to get better traction with institutional clients and investors.
• The findings: Some institutional clients saw economy and asset levels to limit the opportunity. Marketing and account opening processes presented some issues.
• The recommendations: Partner more effectively with institutional client marketing efforts. Improve online account open process. Creatively position relative to competitors.

Leading Global Travel Site

• The situation: Company wanted to gain some early learnings on a new business to assess growth potential.
• The ask: How valuable was offering to customers and what was the payback.
• The findings: Many customers saw the merits of new offering but few had quantified a payback. Sales support was inconsistent.
• The recommendations: Modify pricing structure, refine sales processes and segment customers to improve target marketing.

Top-Tier Financial Services Company

• The situation: Company lacked understanding of why business was lost and what competitive threats existed.
• The ask: What was important to various customer segments and how could Company align more consistently.
• The findings: Many lost accounts were due to uncontrollable situations. Some dissatisfaction around communications and marketing, and one type of competitor emerged as a significant threat.
• The recommendations: Develop a more robust communications process, expand marketing efforts, and develop a 'defensive' strategy to minimize competitive threats.

Technology Services Provider

• The situation: Company was losing sales to competitors and management wanted to understand vulnerabilities.
• The ask: What were the reasons for lost business and how can situation be reversed.
• The findings: Win loss analysis proved customers were dissatisfied with our client’s project management capabilities. Also, little differentiation among competitors did not give any player a unique selling proposition.
• The recommendations: Develop a best-in-class project model that recognizes differing customer needs, empowers project managers and streamlines global processes. Refine business strategy to leverage strengths and to uniquely align with market needs.

Software Training Company

• The situation: Sales were stagnating and client lacked insights on why.
• The ask: What were the reasons for slow growth and how can situation be reversed.
• The findings: Win loss analysis proved customers did not perceive our client to have training customization expertise. In reality, client had expertise, but this was not communicated well in the sales process.
• The recommendations: Highlight trainer industry expertise early in the sales process. Probe customer needs and involve trainers in selling. Change messaging to reflect customization and expertise.

Leading Executive Education Provider

• The situation: Identified a seemingly attractive market opportunity but unclear of ability to serve.
• The ask: Determine market strategy & attractiveness, degree of existing competition and key product requirements. Understand perception of client.
• The findings: Target market is very attractive but served by individual consultants. Customer requirements are stringent and demanding. Client perceived as viable but not top of mind.
• The recommendations: Client should enter the market through consultant partnerships. Messaging should emphasize brand, flexible product offering, and credentials.

Service Provider to Insurance Companies

• The situation: Repeat usage not high despite positive feedback on service offering.
• The ask: What are reasons customers use service and what market penetration opportunities exist.
• The findings: Light users not viable due to business mix and geography. Multiple buyers exist within many organizations. Penetration opportunities exist in larger accounts.
• The recommendations: Create a multilevel sales and relationship management approach. Revise messaging to reflect buyer values. Focus on larger accounts through relationship pricing.

Software Company Entering the Cloud

• The situation: Client identified attractive cloud market for new product offering. Unclear how to position for success.
• The ask: Determine market entry strategy - positioning, target segments, competition, and partnerships.
• The findings: Very attractive market segment in which they are NOT currently participating.
• The recommendations: Explore partnership opportunities and messaging unique to that market.

Leverage detailed customer feedback to dramatically improve close rates

• Uncover the real reasons for winning/losing business
• Quantify how you rate on key product/service attributes vs. the competition
• Recommend actionable short- and long-term product, marketing and/or distribution strategies

Strategy Facilitation:

We drive the process where key stakeholders drive the roadmap for success:

• Clarify your company's vision
• Evaluate impact of market trends and competition on the future
• Review your core competencies, including strengths and weaknesses
• Define business objectives and underlying activities to reach your goals
• Establish action plans

Market Penetration:

Evaluate options to increase product or service usage among existing customers

• Quantify how heavy and light users rate you vs. the competition
• Profile heavy user behavioral qualities and likes/dislikes 
• For light users, define new marketing, distribution and/or product strategies 

Market Sizing/New Market Entry:

Determine new segment attractiveness and define entry strategy

• Identify market size, trends and existing competitor strategies
• Evaluate market entry costs and likelihood of success
• Determine important product/service attributes and assess competitor performance
• Define market positioning, distribution, and marketing approach and potential partnerships

Retention:

Identify why customers leave, which segments are at risk and develop prevention strategies

• Quantify how you rate on key product/service attributes for loyal customers and defectors
• Determine segments most at risk for defection and indentify early warning signals
• Recommend product, marketing and/or distribution strategies to address problem, including new segmentations