“Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford
“Failure is success if we learn from it.” – Malcolm Forbes
“It’s fine to celebrate success but it is more important to heed the lessons of failure.” – Bill Gates
“Wait, what happened here? Why did we lose this? What’s going on?” – Your Boss (or You)
Unless you’re batting a thousand as a sales person (and if you are, we would like to subscribe to your newsletter) you have some aspect of failure in your day to day. The question is whether you are actually learning from your missed opportunities. For that, you should be examining your historical sales pipeline data to find the reasons why your deals are being lost.
Identify the Reasons
We’ve already written about how to diagnose the weakest point in your conversion funnel. The conversion funnel is a good report to have on hand to show you exactly what step in your sales cycle you should spend the most time and energy on. Now let’s take it one step further: why are these deals being lost? This aspect is more qualitative than quantitative, but you still need the data to do the detective work.
In the example to the left, you see a list of opportunities sorted by value with a short description of the reason each was lost. Logging lost reasons is the key step that your company should be taking to start analyzing patterns of your failures. Here, we see that “Poor Qualification” comes up four times in this list of the largest value deals. So what does this mean? Is your team generating poor quality leads? Is there an extra step you should take to qualify prospects? Meanwhile “Price” only comes up once. Your team might complain “well our product is too expensive to sell,” but now you have empirical evidence that price is not really a blocker.
Loss reasons are not something you get standard with CRMs such as Salesforce.com, but setting up a custom field (use a pick list to cull down the list of brief reasons) and also utilizing the comment field for longer explanations is a best practice.
Address the Issue
Now that you know where opportunities are being lost and why, it’s time to figure out the who. This isn’t to cast blame; this is to coach your team member to improve his or her process so less deals are lost.
In the example to the left, Planck’s win percentage is lagging behind his peers over the trailing twelve months. His employee scorecard will illuminate some of the reasons why this might be, and will help you be prepared to have a constructive coaching conversation the next time you have a one-on-one.
Monitor Your Success
After doing the hard work of learning from your failures, you should trend your win/loss ratios so you know that you’ve successfully addressed your problem areas. Your win percentage trending up is usually a good indicator that you’re learning from your mistakes.
Of course, as you monitor this metric month over month to see how you’re doing, this is a wash, rinse, repeat scenario. You can always do better. You can always improve your conversion rates. The best you can hope for is to fail smarter so you learn from each mistake you make.
What mistakes do you make consistently? Are you learning from them?[button size=”large” align=”center” full=”false” link=”https://insightsquared.com/free-trial/” linkTarget=”_blank” color=”blue”]Free Trial of InsightSquared »[/button]