When a services organization experiences a decline in customer revenues, there are many ways in which it can assess the damage, identify the causes and begin to correct the problem. Some organizations may attempt to do so entirely by using their in-house resources, such as corporate think tanks and strategic planning teams, while others may utilize the services of outside consultants and business development strategists. But there is no better way to identify the root cause of the problem than by going directly to the organization’s own customers, prospects and “lost” opportunities.

Legend has it that bank robber Willie Sutton’s reply to a question about why he robbed banks was straightforward: “Because that’s where the money is!” The same logic also applies to the question about where service leaders can find the most direct information on why they are losing customers and prospects to the competition. The answer is to go directly to lost customers and prospects, “Because that’s where the information is!”

Whatever the reason(s) for a revenue downturn, and regardless of who believes what caused it, the organization will quickly need to determine:

  • To what extent a problem truly exists that is negatively impacting the organization’s ability to maintain its historical levels of contract sales and revenues.
  • How to address the problem to increasing sales and revenues to historical levels through a combination of internal (organizational, sales, marketing, promotional) and external (market awareness and perceptions, public relations) activities.

While the concept of measuring existing customer satisfaction is now universally accepted and widely practiced, the surveying of closed or lost accounts is not practiced nearly as much. However, there can be no more direct source of information for why a company is losing business than going directly to those customers and prospects that are presently, or have recently been, in the process of evaluating your company’ products and services, along with those of other vendors.

The answer is to go directly to lost customers and prospects, ‘Because that’s where the information is!’

For the purposes of research, this universe of new, pending and lost accounts can be divided into the following four groups:

  1. New prospects who are evaluating your company’s products and services for the first time.
  2. Current customers who are evaluating repeat or add-on business with your company.
  3. Lost customers who have recently switched to other vendors.
  4. Lost account opportunities, meaning prospects recently lost to other vendors.

In all cases, it is highly recommended that current customers as well as recently lost customers and prospects be interviewed to obtain the desired responses directly from the key players. Any current customers due for renewal within the forthcoming three-month period would qualify for the survey, as would all lost accounts or opportunities within the previous three months. Beyond three months, the reasons for leaving the company or choosing another vendor may be significantly dampened in the minds of the respondents, and they may no longer be counted on to provide totally accurate information.

In most cases, interviews within each of these categories should be carried out on an open basis, meaning your company should be identified as the survey sponsor. These interviews should be conducted only by specially trained qualitative interviewers, not by in-house or outsourced low-level interviewers or telemarketers.

The preferred method of approach for carrying out this type of study can be accomplished through the use of a qualified outside consultant in terms of the following tasks. First, a series of qualitative, one-on-one lost prospect or customer interviews should be conducted with key management and staff users to identify and define the internal mindset that has been built on a base of individual perceptions.

The information collected from these respondent interviews should be both quantitative and qualitative in nature, and the final research results should be analyzed and evaluated in both tabular and narrative form. All findings should be reported both on the basis of the aggregate data as well as by each of the four key customer or prospect segments (cited above) to develop specific patterns of responses.

The final analysis of the collected data can then be used to develop specific patterns of findings, strategic implications and recommendations for both corrective and preemptive actions as they relate to the identified problem. These would include:

  • The assessment, analysis and evaluation of all responses to the interview questions, and the comparison of those findings to the evaluation of the current internal company mindset.
  • The identification and comparison of patterns reflected by the individual lost account groups as revealed from the interview data.
  • Specific study findings and strategic implications for company management based on the patterns of data reflecting both the aggregate, and individual lost account segments.
  • The identification, assessment and prioritization of key factors, characteristics, attributes and perceptions that would serve to identify and validate the root cause(s) of the current problem.

The final executive report and briefing should focus on the key findings of the overall study, the strategic implications resulting from the analysis of these findings and the development of a set of strategic recommendations for executing the appropriate corrective or even preemptive actions to address the problem.

Why even bother with a survey of these special types of accounts? Simply put, these are the accounts that are most deeply involved at the present time in the various stages of evaluating your company, and its products and services, with respect to future purchases — or they have just recently done so, and for whatever reason, have decided to switch to other vendors. Their perceptions, for the most part, are current and well thought out, and if they are planning to switch to another vendor, they will be more than likely to tell you — that is, if you ask them when it is still fresh in their minds.