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.

Spend a day inside most business-to-business organizations and you’ll come to the conclusion that Sales and Marketing need to be better aligned.  The source of frequent friction and open-conflict between the two revenue-generating departments is almost invariably traceable to the topic of “sales leads.” Ask the Sales Manager and he’ll complain that Marketing isn’t providing enough high-quality leads. Spend a few minutes around the water cooler with the Marketing Manager and you’ll hear tales of how Sales practices lackadaisical lead follow-up and poor record keeping. This situation is widespread and extremely detrimental to the profitability of organizations both large and small. Serious money is being spent every quarter on lead generation programs and headcount within Sales and Marketing departments. The financial health of the organization depends on these two organizations working together productively.

So, what’s a CEO to do?

First, ask your Sales Manager if he/she knows how many deals need to be closed in order to reach the revenue objectives for the next two quarters. Odds are pretty high that the Sales department isn’t thinking of number of deals, so they don’t have a solid handle on the amount of effort necessary to generate the required level of deals. Many companies, sadly, don’t even know the average selling price of their products.

Next, stop by the Marketing Manager’s office and ask him/her how many contacts their programs need to generate to deliver a closed order. Chances are good that your Marketing ace may have data related the conversion of impressions to leads, but struggle when it comes to knowing how many qualified leads convert to prospects. So, the Marketing department won’t be able to say how much effort (lead generation) is required to get a deal either.

It’s time for the CEO to insist that Sales and Marketing integrate the lead pipeline with the sales pipeline into a “buying pipeline”, a customer-centric planning and management tool that keeps the company steadfastly focused on the customer at every stage of the cycle.  The buying pipeline tracks the entire course from target to contact, to suspect, to lead, to qualified lead, to prospect and, finally, to customer.  Using a buying pipeline approach encourages Marketing and Sales to work together to understand where each opportunity is in the pipeline and who has the primary responsibility to move it forward.  A useful guideline is for Marketing to own the processes from target to qualified lead; and Sales to own the processes from qualified lead to customer.  Ownership does not mean that the two functions work in isolation.  Unfettered communication between the functions is essential for both developing and honing the pipeline.

A solid pipeline tool also details the many steps and the consequent time involved in each phase.  It’s an easy leap to see how the pipeline can be used to create a dashboard for measuring marketing and sales progress toward revenue goals.

If you embrace this approach, start the buying pipeline as far back as the target, rather than later with a qualified lead, the company can gauge which programs are most effective in reaching viable targets.  Beginning the analysis at the qualified lead stage reveals only half of the story.

Each stage of the pipeline has different demands for the company and product.  For example, at the target and contact stage marketing must create awareness for the company and product.  After all, people buy from people they know.  At the suspect and lead stage, marketing is focuses on getting the audience more familiar with the company and product.  People buy from people they like.  At the lead stage, Marketing and Sales collaborate to determine which leads are qualified so the best opportunities can be pursued.  It is at this transition stage that sales takes the helm in pursuing qualified leads while marketing needs to nurture those opportunities that are not ready to be harvested.

At each stage along the way monitor your progress.  You’ll want to keep tabs on how many people/companies populated each stage and how many advanced to the next stage.  With a little history, a company can assess its conversion ratio and begin to fine-tune its efforts, propelling more opportunities to conversion faster. Over time, employing a buying pipeline provides a consistent way for both small and large companies to track conversion ratios, identify bottlenecks, and monitor the sales cycle. Most important of all, a buying pipeline enhances a company’s ability to win new customers–and thrive.

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.

Guest Contributor: Jason Hausske

Companies don’t fail because they lack a product… they fail because they lack customers…. Which means entrepreneurs must be effective and comfortable in front of early customers.

Following are some seemingly basic ideas that if applied would greatly improve the chance of early sales and customer success… and will ultimately improve your chance of business success.

Sales is not “pitching” - Talking to prospects is not like pitching your company for investment, or getting in front of a crowd to present your ideas … You should be focused on identifying problems, seeking to understand those problems and then figuring out how to solve them…. This requires listening, probing, digging… ultimately trying to understand the explicit pain and the impact on the business of that pain.

This is not about you or your product… this is about your potential customer’s pain. Put your product and it’s features on the back burner - your focus is in identifying problems or creating opportunities, not in “selling” your product.

Listen, don’t talk - this really isn’t brain surgery… anyone can do it… but you must be GENUINELY interested in seeking to understand your customer and their problem. 90% of sales people don’t do this well… this may be one of the biggest differentiators between marginal and great sales.

Managing the sales process is like managing a project. You need to outline explicit next steps and get agreement with customers on those steps… and then follow them. There’s nothing worse than ending a “great” call with a prospective customer and then being unclear about when you’re going to speak next.

Pretty basic, huh? Just try it… I guarantee you’ll have a different relationship with your customers, better insights into your product and a much better chance at success.

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Jason Hausske is a business development executive who’s been involved in growing early stage businesses in the Northwest for the past fifteen years. He currently resides in Boise, Idaho and is providing business development coaching to a handful of early stage companies. Jason can be reached at jason [at] ‘lastname’.com.