“It’s fine to celebrate success, but it is more important to heed the lessons of failure.” – Bill Gates
“Insanity: doing the same thing over and over again and expecting different results.” – Albert Einstein
Your team did not successfully close all the opportunities it worked on last month. That’s OK! If you’re a sales rep who shoots 100% from the field, give us a call; we still haven’t run out of software yet, and would love to learn your foolproof methods. For the other sales reps who don’t bat 1.000 and experience the feeling of losing a deal from time to time, it’s critical to heed the words of the two wise men above. From a sales perspective, that means asking yourself the tough question:
What kinds of opportunities are we losing, and why?
A win/loss analysis is all about answering that question, but not just for curiosity’s sake. The object of a win/loss analysis is to win more business, which means that your analysis should include actionable intelligence, real tactical difference-makers that shape your sales process going forward. After all, doing the same thing over and over again without seeing results is pretty crazy behavior.
With a sales funnel conversion analysis, you’re identifying where in the sales process things are breaking down. From there, you can take it one step further to figure out why things are breaking down. Of course, that type of deep-dive analysis requires the data to analyze in the first place. Unfortunately, lost reasons isn’t a standard field or feature in most CRMs like Salesforce.com. This means you’ll have to set up a custom field and function to allow your reps to start logging that data on every opportunity they work and lose. (Don’t worry, we’ve provided a step-by-step guide to setting up lost reasons in Salesforce for you here.)
Once you’ve made Lost Reasons a required field in Salesforce – all reps must log a lost reason before they can save the record and move on – you can start getting the requisite sample size worth of data. With a couple of months or a quarter’s worth of lost reasons in your CRM, you can start identifying real trends.
Take a look at this example Lost Reasons report. For months, your sales reps have complained that they are getting killed on price, that your product is simply priced at a point higher than what clients value, and are willing to pay. That is the reason, according to your reps in the field and on the phones, that you’re losing so many opportunities.
Well, hold on a minute there. You now have clear empirical evidence that price is decidedly not a blocker, and certainly not the primary issue. In the last selling year, your team only lost about 70 opportunities due to a prohibitive price point. Compared to Timing, Need, Poor Qualification and Authority, Price is hardly the overwhelming issue.
A-ha! Now we’re getting somewhere. You can see that there is a clear problem with your process, or with your reps executing the sales process – many of the most common Lost Reasons proves that point. If the most common Lost Reason was Feature, for example, you can take that to product and say, “Hey, we’re selling junk out here. Fix your product and maybe we can sell more of it.” Clearly, that’s not the case.
Now you can dive in and emphasize more sales coaching around shoring up those weak spots in your process. Timing is a huge area of need – are your reps calling at inopportune times? Should they work on their prospect research to find better trigger events? Are they pushing too aggressively and getting pushed off by the prospect, simply because they don’t want to deal with your rep just now? Fortunately, these are all questions that can be answered – and fixed.
Similarly, Poor Qualification is something that comes up often, to the shame of your qualifying reps. This means that there are too many opportunities clogging up your pipeline and moving through your sales funnel that probably shouldn’t have been in there in the first place. Are your reps asking the wrong qualifying questions? Do you need to assemble a team of dedicated inbound qualifying reps to better assist your closers in this area?
The Many Benefits of Win/Loss Analysis
Identifying the problems in your sales process through a win/loss analysis can reap many benefits, chiefly to take corrective action and start winning more business immediately. Other terrific benefits of such an analysis include:
- Identify winning / losing salespeople – This isn’t about public shaming and finger-pointing, but rather to identify certain habits and traits that make up the winners and losers on your team. If your best reps are losing on competition, while your worst reps are losing on qualification, that tells you how to hire going forward.
- Forecast more accurately – Knowing that accurate sales forecasting is a data-backed science, the more data you have around opportunities that are more likely to lose, the better to gird your expectations against those losing opportunities.
- Systematically go after losses – A Closed-Lost campaign – going after opportunities you already lost – can be a powerful weapon…if you’re properly armed to go back into battle. Knowing why they lost in the first place can inform your winning strategy on Round 2.
- Build and refine a repeatable sales process – You should constantly be tweaking and tinkering on your sales process. Getting reams of data around winning and losing opportunities will shape how you sell going forward.
- Change your culture from one that makes and accepts excuses – Finally, tracking won/loss reasons can go a long way toward shaping your culture. You should never accept excuses for why opportunities get lost. You should use that valuable information to draw actionable conclusions and implement those findings immediately.
Perfection in sales might be impossible to attain, but you can certainly get a whole lot closer by not simply resting on your laurels and accepting losses as losses. Treat them as learning opportunities, and chances for improvement, and you’ll see your sales reps and sales process improve by leaps and bounds.