We’ve all heard the phrase: “If you want something done right, you gotta do it yourself”. My take is that’s not exactly always true.
Today I was reviewing a transcript of a recent interview we had with one our biggest clients’ churned customers. This conversation was no different than any other churn interview we do on any given day - we were asked to interview our client’s customer about their decision to cancel our client’s SaaS product. Our client wanted to know the reasons why. Churn reasons vary significantly and can range from poor ROI to service dissatisfaction. When we relay detailed feedback back to our client, it helps them understand what to improve for the future, so that they can avoid losing other customers (and win more new ones). If you want to nail and scale your business, win/loss and churn analysis makes total sense. The question is, who should do it?
Many companies are seeing the widespread benefits of win/loss and churn analysis to their business. We at Eigenworks have been going strong since 2008 and see that win/loss as a service has really taken off. As with any necessary element of business success, this also means that many companies try to tackle win/loss and churn analysis internally. I see this as a bit unfortunate. And I say that beyond the valid reasoning that you hiring us helps us pay the bills.
Most skeptics to our services argue that they can do their own win/loss and churn analysis and, absolutely, they can. They can hire great interviewers, have the best software to organize their process, and perhaps achieve impressive turnaround times on their in-house data analysis – although I imagine this type of effort is easier-said-than-done for most companies. They can also just ask their sales team to do it – which they often do – because it’s inexpensive and has minimal impact on the business flow. Indeed, companies certainly can do their own win/loss and churn analysis. Anyone can call up a customer and ask the simple question, “What happened?” My argument is that they shouldn’t.
I should probably disclose that my argument has a strong psychological component (naturally, as I’m a psychologist by trade – but, please, keep reading). I should also make it clear that we at Eigenworks don’t necessarily discourage companies from doing their own win/loss, we just recommend that they don’t solely rely on it. There is incredible value in getting a third party to conduct your win/loss and churn analysis. And there are two key reasons why.
Reason One: Your Social Ties with the Customer (and Awkwardness Avoidance)
We can assume that you and your customer have been chatting back and forth for some time. You’ve likely created a bit of a relationship with them. You’re probably also very friendly with each other. Are they going to be honest with you? Really? Are they honestly going to pick up the phone and say, “Hi Joe, how are you? It’s been so long. We used to work together so often and now we never talk. Yeah, we cancelled because your product is vastly overpriced and your team dropped the ball…” You can imagine, those types of candid conversations are rare. Why? Because of your social ties with that person, however distant they may be. No one wants to be the blunt, bordering-on-rude guy that tells someone exactly what they need to hear. Ok, maybe SOME want to be that guy, but most don’t. It’s awkward.
Having a third party elicit the conversation removes that awkwardness. We can contact customers and, because they don’t know us and have no prior connection to us, they open up. They have absolutely no fear of hurting any feelings, because it’s not our feelings they’re hurting. This is Psychology 101 to a tee – the human mind reacts differently to the social situation in which it finds itself. People present themselves differently depending on their audience. They adjust what they say to those they are speaking to, relative to what they’re actually thinking. People do this in an effort to protect themselves and/or to protect others.
When we speak with your customers, there is no one to protect. We get the full story.
Reason Two: Impression of Giving Yet Another Sales Opportunity
Your customer knows you want their business. They also know you might try to address the issues they raise about your service or product (and you might not be able to help yourself). If you re-open communication after a deal has been lost or cancelled, your customer is going to assume that you want another try at winning their business.
We’ve all been there; we say no to a vendor trying to sell us something, they ask us a question, we answer, and then they spring from that to offer us something different. It’s typical, and flat-out exhausting. While that may not be your approach, that’s the approach your customer is going to assume you’re taking. It’s a natural assumption. And it unfortunately means you either aren’t going to get them to open up about their true reasons for refusing or cancelling your product, or you’re going to get simple, surface-level reasons that leave no opportunity for further exploration.
When we call your customer up, we make it clear that we are just doing research – no sales. There is no direct incentive for us to encourage a sale, and the customer knows that. The pressure is off.
In the transcript I analyzed today, the interviewee recognized these nuances in giving and gathering customer feedback. After explaining to us the deep, unvarnished reasons why his company churned from our client, he said this:
“You don't get this type of feedback when your customer service managers
or your executives talk to customers.
I wouldn't talk this way to the CEO, or anyone on his team probably.”
There is nothing particularly fancy about that quote, but it’s nice to hear acknowledgement from the customer that there is significant value in having win/loss and churn analysis conducted externally. The interviewee outwardly admitted that our client wouldn’t get the same blatant feedback if they had asked for it themselves.
And yet that’s exactly what our client needs. So that’s why they use us.
If you are part of an organization that is attempting to do its own win/loss and churn analysis, I urge you to consider my claim. In fact, I encourage you to get the proof you need. Have one of your own conduct an interview with a lost customer. Then, a month or so later, hire a win/loss research firm to conduct a similar interview with the same client. Compare the results. I’m willing to bet my psych degrees that you will see the difference.
When you want something done right, sometimes you have to hire a third party. (Hmm… Not very catchy. But you get my point.)