Salespeople claim ‘price’ is the reason 95% of business deals are lost. Upon further investigation, however, price isn’t the determining factor 7/10 times. The true reasons are ones the customer won’t tell you, including:
- Salesperson / Prospect personality mismatch
- You did not spec the job properly
- Your competitors offered a better service package
- And the list goes on…
To understand the truth behind your customer’s purchase journey, it’s best practice to implement a win-loss analysis.
Only 42% of companies conduct win-loss analysis regularly for valid reasons. Time constraints, lack of process, no support and closing the next deal overwhelmingly trump the desire to reflect on a loss.
Failure to conduct a win-loss analysis leads to companies missing out on critical, unvarnished customer opinions. Those who choose to conduct a win-loss analysis reach higher sales quota attainment, customer retention rates and annual revenue growth.
Leading companies typically employ a professional 3rd party to conduct their Win-Loss Analysis for one main reason: Data Quality. It’s much easier for an objective, 3rd party professional to retrieve truthful customer feedback compared to a company salesperson. Customers rarely feel comfortable sharing negative feedback and worry about salesperson reactions. In this case, human truth gets in the way of the absolute truth you need.
What Is Win-Loss Analysis?
A Win-Loss Analysis is the practice of capturing and analyzing the reasons why you win and lose sales opportunities. During the analysis, you document the buyer’s reasons for their actual purchase decision. Then, analyze those drivers to understand what you do well and what you need to improve upon.
Win-Loss Analysis Benefits
1. Competitor Intelligence: Customers are busy. They don’t have time to evaluate as many options as you would anticipate. For this reason, know with certainty who your true competitors are and track their activities (i.e., What they sell, how they sell). It’s common to believe you’re up against many when in fact, there are only a couple of competitors requiring your attention.
2. Understand Buyer Consideration: Effective win-loss analysis reveals Customer Value Differentiating Attributes (what they value most in each segment) and Price Sensitivity. Leading companies use this insight to determine positioning relative to competitors. Then, they create the most valuable offer at the optimal price for maximum top-line sales and bottom-line profit.
A) Price & Value: Analyze your value proposition versus the competition and assess if you have the ability to increase prices or not.
B) Sales and Competitor Intelligence Teams: Open a communication forum and unite your front-line Sales and Competitive Intelligence team to detect competitor threats in real-time.
C) Competitor Intelligence Team and All Other Functions: Integrate quarterly insight exchanges between the product development, design, and support teams. Discussions typically center around new service offerings, product enhancements, and critical changes to business structure.
D) Senior Management: Executives love to know why deals are won or lost. Regular reporting on performance creates an opportunity for the Sales and Competitor Intelligence Team to work directly with company leadership on improving sales success.
4. Create Battle Cards: When win-loss analysis is conducted in collaboration with Sales and Competitor Intelligence teams, businesses gain crucial data insights. First, a buyer’s key decision factors are uncovered. Second, how well competitors meet the buyer’s decision factors are evaluated. With these two critical data points, strategic sales and marketing initiatives focused on competitor weak points can be developed.
5. Accurate Sales Forecasting: When you have ‘accurate probabilities’ versus ‘gut feelings’ on what business deals you’ll win/lose, your sales forecasting improves dramatically.
6. Optimize Positioning & Messaging: Improve your sell story by focusing on your differentiating attributes. Then, understand how the narrative shifts based on the customer segment you’re speaking with.
7. Improve Close Rates: When your pricing and value proposition align with key buyer decision factors, close rates dramatically increase.
Leverage the outcome from your Win-Loss Analysis for immediate company-wide benefits. Your now enlightened customer understanding & strategically packaged insight enables your corresponding pricing strategy to be implemented with confidence.
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ABOUT THE AUTHOR Avy Punwasee is a Partner at Revenue Management Labs. Revenue Management Labs help companies develop and execute practical solutions to maximize long-term revenue and profitability. Connect with Avy at email@example.com