Win-Loss Analysis – Unlock the hidden dynamics in your sales opportunities
One of our goals at SalesLeadership is to provide you with valuable resources that will help you grow top and bottom line revenues. This month, we are featuring Stu Perlmeter, president of First Resource. Stu is an expert at helping sales teams uncover the hidden reasons they win and LOSE business.
What makes a win-loss analysis so important? In sales, we win some deals and lose others. “It’s the competition, the economy, cheap foreign substitutes, our pricing policies” and the list of culprits goes on and on. There are lots of reasons and explanations, and almost none of them completely right. Losing viable deals hurts a lot and keeps us awake at night. What haunts people is not just the loss, but the non-knowing whether they could have won the deal and how. Smart sales managers and owners want to know the “whys” behind the “win-rate.” Without knowing the true, hidden facts about the customer’s hidden decision dynamics, the selling organization is shooting blind and is at risk of losing more deals for similar reasons.
What can a sales organization do to improve its “win-rate”? Lots of things, but it starts with understanding what’s truly happening with your deal-flow. There is a valuable diagnostic called “Win-Loss Analysis” that allows your company to learn the true dynamics behind customer decision-making.
What is Win-Loss Analysis, exactly? Win-Loss Analysis (WLA) is primarily a highly structured, in-depth interview process, conducted with recently won customers (wins) and failed prospects (losses.) The losses are prospects that considered you as a “short-list” finalist, but in the end, went with the competition. It yields important insights about each deal, and allows for trending to reveal what patterns emerge across opportunities. For example, a healthcare provider who competed with a small group of key competitors found it useful to see how the decision process varied, depending upon which competitor they were they were being compared to. They were able to better determine how the combination of customer buying drivers and competitors played into the final decision. This allowed for “scenario-based” selling strategies versus a one-size fits all selling approach.
I’m concerned my sales force will hate this; they would worry that a WLA will uncover all their flaws, and make them look incompetent. In fact, in WLA, sales is not singled out. Done properly, WLA shines light on every business function: marketing, product management, customer support, operations, engineering, finance, and on and on. For example, a Software firm learned that several facets of their product design and product marketing programs stood as impediments to closing sales, and are now working to implement their learnings. The hard truth is that improving results starts with improving every aspect of your game, which in turn requires fact-based insights. Win-Loss Analysis works well in companies where winning trumps being right or looking good.
We already do a download after every deal, so why would this apply to us? It’s nearly impossible for any representative from the company to get a truthful answer from the would-be-customer. You’ll get answers that make people feel good, or be vindicated, but not the insightful answers that enable meaningful change. It’s just human nature; people avoid confrontations or any situation where a defensive response may occur.
We are doing a good job of winning. Why should we consider a WLA? This is about winning–more often. To do that, sales organizations have to be able to assess the underlying perceptions, attitudes, behaviors, values, decision dynamics and biases of the people you are selling to. A Financial Services company learned from their WLA that customers were coming from a wider range of perspectives than previously thought. As they gained a better understanding of their customers, they were able to sharpen their focus, segmentation and increase new client acquisition.
We have a market research firm; why can’t they handle it? There are many substantial reasons why Win-Loss Analysis differs from market research. It’s easy to confuse the two, because they share many core techniques and methods. Remember, in Win-Loss, each deal matters, and you have only one shot at getting the answers. You’ll want to work with a firm that specializes in this craft.
