“Why didn’t we hit quota?”
That question might give you flashbacks to some of the most stressful moments of your career.
The executive team is frustrated you missed your quarterly targets. They’re feeling pressure from investors and the board to perform. They’ve invested in you, providing additional headcount, sales enablement tools, and software for call recording, sales training, and personalized outreach.
You’ve increased pressure on your teams to increase pipeline generation. Everyone is making cold calls and sending out emails like their lives depend on it.
Despite all these changes and improvements to your sales motion, you still failed to hit quota.
Questions start to pop into your head:
- Is it the economic climate?
- Is our product missing features that are important to our ICP?
- Is marketing just sending us crappy leads?
- Are we getting outpriced by our competitors?
- Or am I just bad at my job?
You take the logical step of running some CRM reports, and then you talk to your most trusted reps to get their take on the bigger closed-lost deals from the previous quarter. This helps you develop a hypothesis about why you’re not hitting quota.
You show up to your revenue strategy meeting and present your answers, hoping that they reassure your leadership team. Then you propose your plan to do better next quarter. Despite the confidence you projected to leadership while presenting your plan, though, in the back of your mind there’s a sliver of doubt as you think, “I hope I’m right on this … ”
If you’re like most sales leaders, deep down, you don’t really trust your CRM data. You tend to rely on it because it’s the best (or most convenient) data you have.
The good news is that doubting the accuracy of your CRM data means you’re smart. According to Gartner, poor data quality can cost organizations up to $15 million every year.
Bad data = bad decisions. And bad decisions = lost deals, less revenue, and missed quotas.
In an ideal world, you could get all your closed-lost buyers into a room so they could explain exactly why each deal fell through—and exactly what you could have done differently to win their business.
You could then compare what your buyers say to your CRM—your supposed “source of truth”—and see if there are any gaps in your data. (Hint: There are.)
Or you could simply keep reading this article, because Clozd has already done that work for you.
At Clozd, we specialize in reaching out to buyers and performing in-depth buyer interviews to help our clients understand exactly why they win and lose deals. We recently compared the CRM data from 1,000 deals to the feedback we obtained through detailed buyer interviews.
We discovered five shocking truths (or lies) about exactly how inaccurate and unreliable the buyer data in your CRM actually is.
Lie #1: You know who your biggest competitors are
During win-loss interviews, we ask buyers whether or not they were considering other solutions throughout the buying process—and if so, who.
When this buyer data is compared to the competitor tagged in that deal in the CRM, the CRM data was incorrect in nearly 7 out of every 10 deals.
This happens for many reasons:
- Reps are never told by the buyer if they’re considering other vendors
- Reps don’t even ask the buyer if they’re considering other vendors
- Reps are required to select a competitor to close out a deal in the CRM, and they just pick the easiest option
Having a detailed awareness of your competitors can give you a significant competitive advantage. But if you’re focused on the wrong rival, your game plan for category dominance can be deeply flawed, and you’ll waste significant time, money, and resources while you allow your actual competitor to gain valuable market share.
Lie #2: You know why you lose
Most sales leaders require their reps to identify a closed-lost reason before closing out an opportunity in their CRMs. Reps typically choose from a list of options such as:
- Missing feature
- No decision
When closed-lost CRM data from sales reps was compared to the first-hand accounts of buyers, the data aligned only 15% of the time.
That means that 85% of the closed-lost data in your CRM is either completely wrong or missing vital information.
Most sellers don’t have visibility into what’s going on behind their buyers’ closed doors—the business case(s) being presented, the internal politics, the budget conversations, or the objections being raised.
And most buyers are not going to be 100% transparent about every specific reason they decide to not purchase your product—especially if some of those reasons reflect poorly on the sales rep. Instead, they’ll simply let the rep down easy by saying something like, “Yeah, we just don’t have the budget right now,” which is the sales equivalent of, “It’s not you, it’s me.”
If you don’t have reliable data that reveals why you’re actually losing deals, the inevitable reality is that you’ll continue to lose deals you could (and should) be winning. There’s no path to improvement if you don’t know what’s working and what’s not.
If this doesn’t make you nervous, it should.
Lie #3: Your data is strategically valuable
Let’s pretend for a moment that the outcome data in your CRM is 100% accurate. How valuable would that data be to you strategically?
Our research shows that 44% of closed-lost reasons found in the CRM are actually outcomes, not reasons. That is, they inform you of what happened (e.g., “Lost to Competitor”), but they don’t tell you anything about why you lost. Data that only explains the outcome of a deal isn’t actionable.
If 35% of your deals, for instance, are generically marked as “Pricing,” what strategic change are you going to make?
- Do you need to start discounting your pricing?
- Do you need to provide more transparency around your different pricing options?
- Is there a competitor that’s undercutting you?
- Is the way you present pricing on a sales call too confusing to your buyers?
- Do you provide too many (or too few) options with too much (or too little) customization?
- Does it take too long for your reps to deliver pricing options to a prospect?
Nearly half of the closed-lost reasons in your CRM have zero strategic value unless they’re paired with actual feedback from buyers to provide more clarity and insight.
How much time and energy are you wasting by collecting and building a sales strategy on top of inaccurate, low-value data?
Lie #4: Your data gives you good insights into your buyers’ experiences
After conducting tens of thousands of buyer interviews for our clients, Clozd has found that the average buyer shares 4–5 primary factors that impact whether or not they buy. In these interviews, the buyer provides context behind each “Decision Driver.”
Direct quotes from buyers collected by a neutral third party can be used as evidence to make changes outside the sales organization—like influencing product roadmap, improving pricing and packaging, or updating marketing messaging.
In contrast, the most significant data in your CRM explaining why a deal fell through is likely a single closed-lost reason selected from a drop-down menu.
As mentioned above, this data provides little strategic value, and more importantly, it doesn’t provide a complete or accurate picture of why buyers are choosing to purchase or not purchase.
Hitting sales goals becomes significantly easier when you know exactly why you’re losing, because you then have the leverage (feedback directly from the mouths of your buyers) to influence change outside your organization.
Lie #5: You know why you win
Most CRMs lack data showing why you win deals.
Sales leaders often make the mistake of hyperfocusing on organizational weaknesses and losses. They want to know why certain deals fall through, or how a competitor is outperforming them. They focus a lot of time listening to calls, so they can train reps on how to perform successful outreach, run a top-notch discovery call, or execute a high-quality demo.
Over the years, Clozd has found that companies regularly have more success increasing win rates and driving more revenue when they can identify—and then double down on—their strengths, as opposed to focusing their effort on solving problems and improving weaknesses.
If your CRM can’t tell you exactly why you’re winning, you’re relying too heavily on luck or chance to duplicate that success.
When you have better data (by talking directly with closed-won buyers), you get clarity into what you’re doing right. That provides you with confidence to pour more resources and training into perfecting the things that make you stand out from your competition.
How to make strategic decisions with confidence
Your CRM is a great tool for giving you an idea of what is happening in your sales organization. But if you want to know exactly why you’re winning and losing, your source of truth should be your buyers.
When you have multiple buyers calling out one or two specific problems, issues, or weaknesses within your sales process, marketing messaging, or product functionality, that feedback gives you the power to address those issues head-on rather than simply burning out your team by doubling down on pipeline generation.
Your win-loss program is the key to providing buyer intelligence to every organization. As a result, you’ll be able to build better products, retain more customers, close more deals, and generate higher-quality leads.
This data empowers you to answer anxiety-inducing questions (like “Why didn’t we hit quota?”) with confidence. You’ll also be able to use the data to identify outcomes that are outside of your control (like no-decisions due to a tough economic climate) that could potentially turn into win-back opportunities.
Want to test the accuracy of your CRM data? Clozd will perform a free buyer interview on your behalf. Not only will you get a better understanding of why you lost (or won) that recent deal, but you can compare what your buyers say to the data in your CRM to better understand what you’re missing.