Just tripped across the above-quoted sentiment and it just resonated. Am (still) reading Reichheld’s The Loyalty Effect, and have just embarked into what is, so far, the best chapter I’ve read in a business book in a long time. It’s entitled “In Search Of Failure.”
Why don’t more folks take Buffett’s approach, and examine failures (both business and personal) more aggressively? Two reasons (says Reichheld):
- Fear
- Incapacity
Examining failure is culturally taboo. It means that “something went wrong…and talking about it might make me look bad.”
Get over it. Things happen. (Remember Windows 2.1?) Only by examining where things went wrong, can a business figure out what not to do the next time around.
This is of critical import with respect to customers.
- Did the customer defect? If you don’t have a process in place to analyze that defection (an indictment of the organization’s inability to meet the customer’s needs), how can you prevent the next defection?
- Did the prospect choose a competitor over your organization? Talk to them, and find out why. That way, the next time a similar opportunity comes up, you won’t make the same mistakes again.
We’re currently working on a large win/loss analysis project for a client. And…surprise…better conversations are actually taking place with the losses than with the wins. Better insight. More candid conversations (hey, the deal’s already lost…why beat around the bush?).
This approach is applicable not only to the win/loss process, but product development as well. We’re currently working on some new things (watch this space!) and, far and away, we’re learning more from the constructive, critical feedback we’re getting from customers than from the attaboy’s.
The bottom line? Listen to the customer. Embrace the failures when they happen. Learn from them. Make things better.
As an identity company, we have started to embrace this idea when we lose a project to someone else. It has greatly improved our process and, in doing so, saved money.
Years ago I was told that sales is the attempt to get people to buy your stuff, but marketing is asking them what they want, then helping them get it. It only makes sense that we become better marketers after talking to people who found someone else to deliver what they want.