In Your 2020 Budget, Consider the Case for Buyer Interviews
Are you knee-deep in budget planning right now?
Many of our clients are nearing the end of Q4 and are ensuring they have a budget line for either a one-time study or an ongoing cadence of continuous buyer and customer interview research. The return on investment is significant when you consider higher win rates, higher retention rates, and new revenue from a product launch or acquisition. These tangible outcomes are direct impacts of talking to buyers and customers.
Here's what we are hearing from our clients in Q4:
We have noticed that for the last few quarters our retention rates are dropping and we want to proactively understand why.
We have been interviewing our customers when they churn, but know that we aren’t getting the real story.
We are launching a new product and want to make sure it hits the mark.
We are noticing an increase of deal losses in a particular segment of our business and can’t pinpoint what is going on.
We have some great wins but want to understand what we are doing well so we can double down on these strategies, as well as take the learning and replicate it across our engagements (in deals and customer success lifecycles).
Are you facing similar challenges as you look ahead to 2020?
The best way to get the strategic insight you need is to talk to buyers and customers directly. The learnings will benefit stakeholders across your organization. So, as you prepare your budget, consider the business case for buyer research for every team.
Product: Talking to buyers helps product teams sharpen their messaging and value proposition, and better understand buyer personas. All of this leads to improved customer satisfaction and sales. Steve Johnson of Pragmatic Institute advises product professionals to talk to the competition’s customers too. “The most powerful and effective way product professionals can reach the competition’s customers is by engaging in win/loss interviews and analysis,” he says. “By talking about why a noncustomer chose a particular product or provider, product managers get an inside view on things like the buyer’s journey, functionality and market reputation.”
Sales: Win/loss interviews help sales teams get the real story about what happened so they can understand why the buying decision was made, what were the buyer’s goals, and what are the things they can do repeatedly to win more deals. Some research suggests that companies with a regular win/loss analysis program can improve win rates by 15-30% over time.
Customer Success: An ongoing pulse of customer feedback is vital to Customer Success. Talking to customers who renewed will help identify what makes you “sticky” so you can double down on that. Talking to customers who ended their subscription will help pinpoint what went wrong, so you can fix it for others. In a SaaS world, the ROI of retaining customers is clear -- a 2015 survey found that SaaS companies can expect to spend $0.28 to earn another dollar of revenue from a current customer, while spending $1.18 to earn another dollar from a new customer. Further, happy customers are more likely to recommend you to others, and in the B2B world, 84% of businesses start their buying process with a referral.
C-Suite: Buyer interviews cut through the noise of competing opinions and help you align teams for evidence-based decision-making. Even if win/loss or churn/retention analysis confirms what you suspected, it’s still valuable, because now you can act on evidence, not a hunch. Buyer interviews can also inform an understanding of a new persona, a new market, or a potential acquisition. Our research is often used by C-Level executives as part of the venture capital and private equity investor package when raising funds.
Bottom line, as you plan your budget, ask yourself: What is the opportunity cost of not doing win/loss research? What is the cost of not listening to the market? What insights are you missing out on? You’ll never really know what is going on with your buyers and customers if you don’t ask them.