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Measure The Sales You Lose To Stop Losing Deals

Blog post by on November 27, 2012 No Comments

Sales managers can achieve a step change in team performance when they look at outcomes from a different direction. Numbers of calls and presentations, totals of opportunities, weighted forecasts, revenue and margin are the typical measures. These numbers help with the sales forecasts we all have to make. They can tell us how well the team is performing against plan. But not how to improve results. In fact they can point us in the wrong direction.


We can find out how to improve results by measuring the opportunities we don’t win. Losing sales is good news. Understanding why we lost helps us figure how not to do that again, provided we take trouble to work it out.

If this sounds a little crazy, stay with me. Take the time to understand the business dimension.

Every lost sale is money wasted. Money which could pay for higher salaries, better benefits, more support. That’s what economists call the opportunity cost – what could we have done if we hadn’t done that? And what would it have been worth.

For every sales deal there’s an opportunity cost. Understanding the concept of opportunity cost helps us make decisions, because we realise there’s another side to the coin. The business dimension is both sides of that coin. Every sale we chase incurs a cost, but only those we win deliver a reward.

Spending less time on deals we’re going to lose allows more time to spend on deals we’re going to win, making a successful result more likely.

Why doesn’t the traditional approach to selling and sales management work so well any more? What can the modern sales professional do to stay relevant in today’s customer driven markets? Check out our eBook Reengineering Sales Management for ideas on how to embrace the new order of customer driven buyer/seller relationships.

Republished with author's permission from original post.

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