Win/Loss Analysis is one of the most powerful services I provide for clients to improve their revenue performance. Statistics show companies that conduct win/loss reviews and make adjustments based on the findings increase their win rates by 5-12%. Win/loss analysis uncovers "Why did our company win a most recent opportunity?" or "Why did we lose?" The answers are frequently not what you'd expect -- especially if asked by someone impartial, not involved with the deal.
The process consists of interviewing companies who have recently exited my clients' sales funnel - because their prospective customers made a decision in favor of my client (a "win") or a decision for their competition (a "loss"). We get to the heart of my clients' customers' decision making process, giving companies much more objective information about why they ended up a "winner" or "loser". Imagine conducting 10-20 of these interviews for a typical emerging B2B company in the course of a quarter. Rarely do companies get the massive insights available that come from a series of win/loss interviews.
Who should conduct win/loss interviews? At some companies, I hear people say, "Well, our sales people talk to customers all the time, and when they make decisions, our sales people find out about it." While this is no doubt true, it's definitely a "worst practice" in the world of win/loss analysis. Why? Sales people have a vested interest in the outcome, and the customer knows it. Just having the sales person asking the questions to a customer they know inserts a bias into the process. Will the customer be comfortable speaking honestly and truthfully, including any negative feedback about the sales rep or company's products, to the rep directly? In addition, like any human, there's a non-zero probability that the rep will get defensive, or seek to counter or debate a point, which has the unfortunate outcome of turning an interview into an argument. And, how much will any employee report "up the hierarchy" about their own weaknesses heard in an interview? Bottom line, do not have your sales people conduct your win/loss analysis.
Best to have someone not involved in the deal. If possible, have one person contacting all companies so they can identify patterns across the deals and provide that in their analysis. Marketing staff who are used to meeting with customers may qualify, a senior person in the product management function, or someone from the outside. It also helps if the person is an awesome note taker -- able to type as fast as people talk. While you can record some of the calls, depending on your market, there will be some percent of customers who will not agree to be recorded, so you have to take good notes. U.S. customers are more comfortable with recording, but it seems other parts of the world are less comfortable with recording. If you just talk to people and don't write the comments down, you will be challenged to turn the interviews into any sort of corporate learning, which is really insulting for the customers who spent the time being interviewed - an expectation may be created in some instances that their feedback should be acted upon, but if you have someone who doesn't understand the action items or the business, and cannot capture the points made, these opportunities are lost forever.
The CEO at one of my client companies just told me the reason he likes having me do the interviews is he knows I have no agenda. Anyone else in the company has some kind of agenda -- a certain type of functionality to add to the product, a new service they want to offer, more marketing campaigns to drive a particularly agenda, a partner they think we should work with, etc. Uncontrolled, win/loss analysis could be distorted to support such agendas. By having someone from the outside, the facts come in as a clear signal, without political distortion.
The exact questions to ask vary slightly depending on your research objectives and whether you're calling for a win or loss, but core questions include:
- What problem or need were you experiencing that led to a search for a solution?
- What was most important as you considered solutions?
- How did our solution compare for your primary evaluation criteria?
- Why did you choose us?
- How did you perceive us to be different that the other solutions?
- What caused you to take action, instead of "no decision"?
- What happened to have the other providers become eliminated?
- How can we continue to increase the value we deliver to you?
I want to say something about "analysis" too. It's one thing to listen to customers, and something again to determine
a) which information to act on and
b) what actions to take.
I provide my own observations and recommendations (aka "analysis") along with every win/loss interview, as well as across the whole set of interviews. This requires looking at the totality of the business as a system, applying some judgment, rather than taking all comments at face value.
For example, a client's customer indicated they started their selection process by doing some research on the Internet (but the CRM system indicated the source of the lead was an existing relationship with the CTO) . In another part of the interview, the customer indicated what name they gave to this particular category of software solutions. Putting those two things together - I conducted a Google search using the customer's terminology for the product category, and sure enough, my client's products were no where to be found in the organic or paid search results. They are likely missing out on some percentage of opportunities because they are not going to surface when people conduct Internet research at the beginning of the sales process. Recommendation: optimize the company's site to focus not just on the product name, but also category, so the company appears in search results when the customer looks for solutions in the product category -- like "ERP Software" if you're SAP or Oracle, or "Anti-Virus Software" if you're Symantec. In initial stages of research, prospective customers may not yet be familiar with your brand.
For huge value, run a win/loss analysis cycle of several interviews prior to starting your process to update your company strategy. The insights may provide facts and shortcut the typical internal discussions about where and how you are perceived to be different in the market, and may help to determine where to focus going forward.
Best of luck with your win/loss analysis -- and if you'd like to outsource your win/loss to someone else, or would like coaching to create your own function, please contact us.