This week I sat in all too familiar customer meeting with the CEO, VP of Sales and the Marketing Director to do a pipeline review. The Sales VP discussed the deals they won and which opportunities were lost. And you can probably guess my first two questions. Why did we win? Why did we lose? And you can probably imagine the answers. If “we won because the sales person has a great relationship with the buyer” and “we lost because our price was too high” were on your list, you guessed correctly. Unfortunately these kinds of answers don’t cut it in today’s environment where every deal matters. There’s no time like now to initiate a win/loss analysis for your company.
Win/loss analysis isn’t about determining who is “at fault” for a lost deal; it is about gaining insights to improve results and bolster revenue. The value of win/loss analysis and data is in its ability to affect sales training, define marketing strategies, and prioritize product development efforts all aimed at one thing – improving your organization’s competitive advantage. When done properly win/loss analysis provides clarity and insights into customers’ perceptions of your product, experience throughout the sales cycle, and expectations created by your company messaging. Win/loss analysis is not a customer satisfaction study. It is a process for differentiating why one sales effort wins and others fall short of the mark in order to adjust go-to-market strategies and tactics. The purpose of win/loss analysis is to learn the pros, cons, likes, dislikes, competitive advantages and disadvantages from the specific people responsible for the purchase decision.
When conducted properly a win/loss analysis helps a company answer these questions:
1. Why do customers select your products and/or services?
2. Why did your prospects select your competitors’ products and/or services and why they didn’t select yours?
3. How do your competitors position themselves when they compete with you?
4. How do your customers and prospects perceive your sales and marketing efforts?
5. How do your customer’s and prospects perceive competitors and their products/services?
6. What are the most important criteria a customer looks for when selecting products and/or services in your category?
7. How effective is your marketing and sales team in presenting your company, your value proposition, and your products and/or services?
Many companies think they know the answers to these questions based on anecdotal information from their sales organization. Perhaps you’ve even heard something similar to this from a sales person: “We could have won this deal if we had X feature in the product.” Maybe adding the feature is the right thing to do, but maybe it isn’t. Adding a feature for a market of one is a very expensive undertaking. Using anecdotal information creates a reactive rather than a proactive process. The implications of win/loss analysis extends beyond your sales team and should provide a complete picture into your enterprise’s and the competitions product, services, price, sales channel and marketing and the prospect/customer evaluation process.
Topics to Include In The Discussion:
Because you are conducting the win/loss analysis to learn why you are winning and why you are loosing in order to understand what are doing right and correct what you are doing wrong you’ll want to be sure you analysis includes the following topics:
1. How they found out about your company and the product category.
2. What problem were they trying to solve with your product or service?
3. Who they listened to or went to for advice during the buying process
4. Whether there were any breakdowns during the sales cycle and if so what were they and where.
5. What the competition doing right and if they won, why?
6. What you would need to do in terms of technology, service, selling, product, etc to win have won the deal.
When and How to Conduct the Analysis:
Win/loss analysis should be performed shortly after the deal is completely closed – about 2-4 weeks after the deal is concluded. By closed we mean either the competition or you have solidly won the deal (the contract is signed and the purchase order has been issued). Avoid doing the analysis before this point because you don’t want to throw any wrenches into the process. And you don’t want to wait to long after the deal is closed because the buyer’s memory will fade and the conversation will turn more toward what they are experiencing with the product/service now rather than their experience and thinking during the buying process. Remember, the goal is to measure what happened during the buying process.
Successful analysis rests on being able to capture unbiased in-depth information with all the key decision makers and influencers If the analysis can be conducted in person that is ideal, however, this is often impractical so phone interviews are the most common approach and are by far better than just having these people complete a written survey. Written surveys sometimes supplement telephone interviews when you require more detailed help in ranking customer wants and needs.
It helps to think of the analysis consisting of three steps: pre-interview where you define the key questions, develop the interview list and schedule the interviews; the interview; and post-interview where you analyze and report on the findings and debrief the team.
Should you fly solo? If you are attempting this solo, be sure to explain upfront that the purpose of the interview is to learn as much as possible about the customer or prospect’s perceptions and experience during the recent sales process so your organization can continually improve and to state that all the individual feedback is confidential. Oftentimes companies have sales or marketing people perform the win loss analysis and this can result in skewed data. Relying on an outside organization to conduct win/loss analysis is a good idea because it allows for more candid and detailed responses. The reasons offered by customers and prospects for winning or losing are surface-level only such as price, feature set or lack of budget. It takes an experienced interviewer to glean the underlying reasons and then proper analysis to identify the strengths and weaknesses of your competition (beyond their product) and the patterns that you can use for setting strategic and tactical direction on sales, marketing and product development hiring, training and management. While using an outside party may appear more expensive the benefits outweigh the cost. Prospect and customers tend to be willing and candid with a third party and can really provide the individual’s confidentiality. Third parties don’t have a vested interest in a particular answer, their goal is to seek the truth and as a result bring the perception of objectivity to the process. An additional benefit is that an experienced third party brings expertise including framing the questions, analyzing the results, and identifying the patterns that will affect key decisions.
By integrating win/loss analysis as an ongoing process you will have data in real-time that sales, marketing, and product development can use to act and adjust more quickly to offset problems and exploit advantages. Institutionalizing win/loss analysis will contribute requirements to product development, feedback about messaging to marketing, and may help uncover new sales strategies and initiatives. For win/loss analysis to be beneficial it needs to be done in a timely fashion with accuracy and objectivity.
VisionEdge Marketing, Inc, is a leading data-driven metrics-based strategic and product marketing firm located in Austin, Texas. The company specializes in consulting and learning services that help organizations use data to make fact based decisions to address market, customer, and product opportunities and to improve and measure marketing performance. For more information, go to www.visionedgemarketing.com.
About Nathan Kaiser
