Bad Data Is Leaving You Blind To Competitive Threats: Here’s What To Do
Learn from Willem Maas how poor data quality leaves you blind to competitive threats and how to develop an early warning capability against competitive attacks.
Poor data quality in the CRM leaves companies blind to competitive threats and opportunities. An astute competitor can take advantage and eat into the company’s market share. Here, Willem Maas, president, Growth Velocity, explains how it can happen and how to develop an early warning capability against competitive attacks.
According to IBM, in aggregate, bad data cost $3.1 trillion in the U.S. alone in 2016. For B2B businesses that rely on a CRM, poor data quality leaves us blind to competitive threats and opportunities — things like which companies you competed against in a sales opportunity, which competitor won the deal, and why the winner was selected. When we increasingly lose deals to a competitor, they will look to get into more of our deals so they can take market share. We cannot defend against this attack if bad data keeps us from seeing it.
Bad data is a big problem. According to IBM, in aggregate, bad data cost $3.1 trillion in the U.S. alone in 2016. This is a big number, but what does it mean for you? If you are using a CRM to sell and market to other businesses, you are probably familiar with the CRM’s data quality problems. According to a report published by D&B, up to 96% of email addresses and contact data within customer files and CRM systems are at least partially inaccurate.
See More: How CRM Data Analysis Can Help You With Your Sales Campaigns
A lot of the contact data in CRMs is bad, and so is the deal data. The errors include which companies you competed against in a sales opportunity, whether the outcome was indeed a “no decision” or a competitive loss, which competitor won the deal, and why the winner was selected. It is not the CRM’s fault. The CRM is fully capable of gathering and reporting competitive intelligence. We, humans, are to blame. Specifically, the buyer and the seller. Sellers are incentivized to sell. They are not paid for CRM hygiene. In fact, sellers are motivated to spend as little time as possible keeping accurate records in the CRM. And, while it is in a seller’s interest to know which competitors are being considered, it may not be in the buyer’s interest to disclose that information.
How big a problem is this? We answered this question for a Growth Velocity client by comparing their CRM data to what buyers told us. We found the CRM’s primary competitor field was wrong in 75% of won deals. The client had better data on who they lost deals to. The primary competitor field was incorrect in 33% of lost opportunities. That is still a lot of misses, and that bad data makes it difficult or impossible for company leaders to get reliable answers to three vital questions:
- Which competitors are we facing most often in the field?
- What is our win rate against each of them?
- How are our win rates against top competitors changing over time?
And without accurate answers to those questions, you are blind to competitive threats and opportunities.
When a competitor realizes their win rate against you is increasing, they will want to get into more deals against you to take more market share. And your revenue and market share will suffer unless you can quickly defend against that attack. This is unless you can slow that down somehow.
Here is what that could look like.
Image Source: Growth Velocity
Beware the Sneak Attack
In the quadrant above, I have plotted ABC Co’s major competitors. The x-axis is the competitive win rate. The y-axis is the percentage of ABC’s deals that included the competitor. To smooth out quarterly ups and downs, we use a rolling one-year average to plot each point.
Against Sisense, ABC Co’s win rate averaged 24% a year ago. Now, they win just 10% of the time when shortlisted against Sisense.
Mulesoft is a bigger problem, though. ABC’s win rate has declined 15 points to below 40%, and Mulesoft has been shortlisted more often. One year ago, Mulesoft was shortlisted against ABC Co about 60% of the time. Now it’s up to 80%.
Mulesoft has taken market share from ABC Co and is on track to take more.
In your own market, you can be sure that savvy and serious competitors will shift their strategy when they see trends like this.
Develop an Early Warning Capability for Competitive Attacks
Many excellent tools exist for gathering and analyzing competitive intelligence. Tools like Klue and Crayon make it pretty easy to collect data on our competitors’ changing products and GTM. But something is missing. What is the net impact of all these changes? Are our competitors improving outcomes and winning more deals against us?
We have found the best system for detecting competitive attacks depends on deal volume.
Less than 25 opportunities closed per quarter
The approaches below work well if you are closing approximately 25 opportunities each quarter (both wins and late-stage losses).
- Personal email or call from a company executive: This could be your CEO, sales leader, or marketing leader. For lost deals, make the request as short and straightforward as possible. What did the buyer decide to do, and a few words of “why”.
- Product marketing: Product marketing will get a higher response rate than the rep on lost deals. When it is a win, the rep will want to move on. Use product marketing to get better data about primary and secondary competitors and the essential reasons you won. This is your chance to get better data than was originally recorded in the CRM.
- Hybrid: In this configuration, use product marketing to gather key data from won deals. And use surveys (described below) for losses.
Both of these options will require a process for tracking progress and reporting the findings.
More than 25 opportunities closed per quarter
If you are closing more than 25 wins and late-stage losses each quarter, I recommend automating this process with technology.
A survey is the best way to do this because it is efficient (for both you and the buyer). And because it is less stressful for buyers in lost opportunities to engage with a survey, you will get more responses than a phone call or email. So you can run the survey in-house.
See More: Marketers: It’s Time To Offer Customers Real Value if You Want Their Data
Here are some survey options to consider:
- Salesforce introduced a survey capability in 2018 as part of Salesforce Feedback Management. Consolidating all your opportunity data in the CRM is an important benefit. But I would not call this survey module easy to use. Here’s a link to learn how Salesforce surveys work.
- GetFeedback and SurveyMonkey, both part of Momentive, make designing and operating a survey much easier. GetFeedback’s claim to fame is its Salesforce integration, which they describe here. Your survey can be triggered by Salesforce activities, such as closing a sales opportunity.
- Qualtrics is a robust survey platform that also offers a Salesforce integration. The integration can be configured to use activity in Salesforce to trigger a survey and then store the survey responses in Salesforce. We use Qualtrics to collect win-loss data for Growth Velocity clients.
Competitive Ignorance Is Not Bliss
In aggregate, bad data cost $3.1 trillion in the U.S. alone in 2016. For B2B businesses that rely on a CRM, poor data quality leaves us blind to competitive threats and opportunities — things like which companies you competed against in a sales opportunity, which competitor won the deal, and why the winner was selected. When we increasingly lose deals to a competitor, they will look to get into more of our deals to take market share. We cannot defend against this attack if bad data keeps us from seeing it.
At Growth Velocity, we have found that tracking competitive win rate trends is the best way to get an early warning of competitive threats. Survey tools like GetFeedback and Qualtrics can be used to automate the collection of this data. When the number of sales opportunities is smaller, personal emails and phone calls are effective.
How are you making sure you are protecting yourself against competitive attacks? Share with us on Facebook, Twitter, and LinkedIn.
Image Source :Shutterstock
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