Last week, I shared some of our new research (just a bit–much more depth available for clients) that reveals the significant number of failing projects. But in looking at failure, we have to look at success as well. For that, we’ll consider an index that we call the High Quality Deal (HQD)–see the end of this post for a definition.
For hiqh quality deals vs. others–deals that may not have been failing but did not meet the high bar, there are a few things that we have noticed right away (and we are continuing to dig). One of them being particularly noticeable. Respondents that are part of a high quality deal are much more likely to continue to leverage independent sources (analysts, reviews, experts, etc) after they have engaged with the vendor (vs. relying only on the vendor or vendor resources for their information). They do this to validate assumptions, discover blind spots, and expand their thinking.
The use of independent sources helps to fight biases that could develop as a customer “locks into” a particular focus. I asked a former colleague, Erik Larson (whose company Cloverpop has a SaaS product to help companies improve their decision-making processes) about this. He said,
[Experts] are very good at helping to correct a common bias geekily named “base rate neglect” (https://www.theatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/). The bias is this: people making decisions tend to ignore how most projects like theirs typically go, and instead focus excessively on very specific details of their project that make it seem different from a typical project. That then gets compounded by confirmation bias, where they pay attention only to examples that support their beliefs about the “special nature” of their project.
Thus you can see the most important role experts can play: “Yes, you are special. And yet your project is mostly like other projects. I have a lot of experience with projects like yours in general. Here is what you need to keep in mind based on how these projects typically go.” This is also known as “taking the outside view” or building a “reference class” (https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/bias-busters-taking-the-outside-view).
This situation may be uncomfortable for vendors. On the one hand, if you are in the driver seat, the idea of encouraging customers to continue to talk to others seems risk, even if it is not other vendors, but other people knowledgeable about the type of effort being considered. On the other hand, its pretty clear that this could help your customer be more successful.
This is yet another case for strong influencer and advocacy marketing programs, where you identify independent parties and existing customers that are knowledgeable about the area you work in, cultivate relationships, encourage creation of assets (articles, reviews, etc), and understand their perspective.
Then encourage customers to take advantage of these resources. While you can’t control the message (and should never try to) that is delivered independently, you can build awareness of the parties that you trust and help your prospects help themselves.
Independent resources are critical to buying processes—you must understand, cultivate, and manage them.
High Quality Deals (HQDs) are situations where the respondent strongly disagrees (chose it 1 or 2–lowest on the scale) with the statement “The project is failing/failed to meet expectations” and also either did not compromise their ambitions (chose 1 or 2 in response to a statement “we settled on less ambitious plans”) OR purchased a premium solutions (chose 6 or 7 to a statement “we purchased a premium solution from the lead vendor”).