Sales win loss analysis - Increase your sales closure ratio by 10% in less than 6 months

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This free eBooklet contains all the information and best practices you need to start a sales win/loss analysis program. You will learn how to:

1) Figure out what sales win/loss analysis is worth to your organization
2) Sell the idea to management
3) Conduct sales win/loss analyses
4) Leverage the sales win/loss insight and lessons learned

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Sales win loss analysis - Increase your sales closure ratio by 10% in less than 6 months

  1. 1. Sales Win / Loss Analysis Increase your sales closure ratio by 10% in less than 6 months by Roch Gauthier The copyright of this work belongs to Roch Gauthier, who is solely responsible for the content. Please direct content feedback or permissions to roch.linkedin@yahoo.ca. You may not extract or re-use any of the images in this document. rochgauthier eβooklet © 2009. All rights reserved. Page 1
  2. 2. Sales Win / Loss Analysis • Introduction • Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 1. Find out what it is worth to your company 2. Inform sales & marketing management what it is worth Contents 3. Ask prospects permission to contact them following their purchasing decision 4. Eliminate the potential for biases 5. Conduct the sales win / loss interview soon after a deci- sion is made 6. Manage expectations and keep the sales win / loss in- terview brief 7. Ask the right questions 8. Generate “lessons learned” with key stakeholders 9. Share the sales win / loss insight 10.Internalize the lessons learned rochgauthier eβooklet © 2009. All rights reserved. Page 2
  3. 3. Increase your sales closure ratio by 10% in less than 6 months I have been working with hi-tech sales and marketing executives Introduction and directors since 1995. Some of the chief concerns I hear from these people include: “Our sales quotas keep increasing and so does the pressure to deliver. I need to find new ways to meet these targets.” “We’re losing business to competitors. My sales people tell me it’s because of price. I think there’s more to it than that.” “We’ve had a lot of turnover in the sales force. I need to find ways to make the new hires productive – fast!” rochgauthier eβooklet © 2009. All rights reserved. Page 3
  4. 4. Introduction Driving improvements in a company’s sales closure ratio is one of the most effective ways to help sales executives and their teams to achieve their sales quotas. There are various ap- proaches that can be employed to do this, but I find that a quick way to get results is to implement a quality sales win / loss analysis process. My goal in writing this eβooklet is to share with you some practi- cal advice on this matter based on my hands-on experience. What is win / loss analysis? Sales win / loss analysis is the process by which a company ob- tains feedback from a sales prospect and the account team members, following a purchasing decision. The goal of the proc- ess is to understand why a company won or lost the sale, share that information inside the organization, and take action as re- quired. rochgauthier eβooklet © 2009. All rights reserved. Page 4
  5. 5. Introduction Quality sales win / loss analysis drives dramatic im- provements in sales Many companies are looking for “the next big thing”. They spend large amounts of money developing new products and services in the hopes of increasing sales. Although product and service innovations are important contributors to the bottom line, there is often another powerful, yet neglected driver. Using some straightforward analyses, I have demonstrated to sales executives and managers that their biggest opportunity lies in improving their sales closure ratio. Implementing a sales win / loss analysis process is a quick and low cost way to get bottom line results. rochgauthier eβooklet © 2009. All rights reserved. Page 5
  6. 6. Introduction Sales win / loss analysis also helps companies achieve these goals: • Understand how to win against the competition • Understand customers’ decision criteria • Identify the typical roles involved in the customer decision making process • Increase sales productivity • Shorten the time required to make new sales hires productive • Quickly identify market trends and take appropriate action • Improve marketing messages and collateral • Help company representatives speak the same language used by your customers rochgauthier eβooklet © 2009. All rights reserved. Page 6
  7. 7. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Find out what it is worth to your company Implementing a quality sales win / loss analysis process is a key way for many companies to achieve their sales quotas. If this is the case, why aren’t more companies doing this? The answer is simple; they have not taken time to work out the math. I’ve included a table on the next page that will allow you to quickly approximate the dollar value of increasing your current deal closure odds by a meager 5%. Just follow these three easy steps: 1. In the “Bids per year” column, locate the number that best represents the amount of quotes that your company tenders yearly. 2. In the “Typical order size” row, find the amount that best represents the average dollar value of those bids. 3. The intersection of your “Bids per year” and “Typical order size” selections represents the increase in yearly revenue as- sociated with improving your winning odds by 5%. rochgauthier eβooklet © 2009. All rights reserved. Page 7
  8. 8. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Typical order size ($) $ 10,000 $ 25,000 $ 100,000 $ 250,000 5 $ 2,500 $ 6,250 $ 25,000 $ 62,500 10 $ 5,000 $ 12,500 $ 50,000 $ 125,000 Bids per year 50 $ 25,000 $ 62,500 $ 250,000 $ 625,000 100 $ 50,000 $ 125,000 $ 500,000 $ 1,250,000 200 $ 100,000 $ 250,000 $ 1,000,000 $ 2,500,000 300 $ 150,000 $ 375,000 $ 1,500,000 $ 3,750,000 Can your company’s winning odds be improved by 5% within a year? Absolutely! It is not unreasonable to even plan on in- creasing your win rate by up to 10% in less than 6 months as a direct result of implementing a quality sales win / loss analysis process. rochgauthier eβooklet © 2009. All rights reserved. Page 8
  9. 9. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Inform sales & marketing management what it is worth Now that you have an idea of what sales win / loss analysis is worth to your company, your next step is to make your sales and marketing leadership team aware of this. Develop a concise business case to help management understand the essentials of a sales win / loss program. Your business case should provide answers to the following questions: • What is sales win / loss analysis? • Why should your company do anything in the first place? What is the value? How quickly can you expect to capture this value? • Why do this now? What are the consequences (if any) of not doing anything? • What is being proposed? What is the process? What are the deliverables? rochgauthier eβooklet © 2009. All rights reserved. Page 9
  10. 10. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Investments in sales win / loss programs should be relatively quick and easy to fund given the associated return on invest- ment. Make sure to appoint an independent and objective per- son to conduct the sales win / loss interviews (more about bi- ases later). Someone responsible for customer, competitive and market re- search inside your organization might be the right person to own this process and create the sales win / loss deliverables. If you can’t find someone inside of your organization, you may wish to consider outsourcing this activity to a reputable third party. rochgauthier eβooklet © 2009. All rights reserved. Page 10
  11. 11. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Ask prospects permission to contact them following their purchasing decision Get sales people to ask prospects upfront for their permission to have someone contact them following their decision. Explain to them that your company is committed to better serving the needs of the marketplace and that customer feedback is of vital importance. Many customers will be impressed that your com- pany wants to learn the reasons why you win or lose. Some prospects will need to be reassured that in the event of a “NO” decision, your company simply wants to learn from the ex- perience and move on. These prospects dread having pushy sales people calling them when they’ve made up their mind. Having your sales win / loss analysis conducted by an inde- pendent and objective person can help reduce a prospect’s re- sistance and anxiety. rochgauthier eβooklet © 2009. All rights reserved. Page 11
  12. 12. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Eliminate the potential for biases Let’s face it – the truth hurts. Yet pain is one of our greatest teachers. You owe it to yourself and your company to obtain candid and constructive feedback from customers. Letting an independent and objective person conduct your sales win / loss interviews will eliminate the potential for biases. I know many companies that let sales people follow up directly with customers in order to conduct loss interviews. The problem with this approach is that sales people tend to go on “fishing ex- peditions” in order to find reasons to justify to their management why they didn’t make the sale. This approach is absolutely the wrong way to go! In all likelihood, you’ll never get valuable infor- mation regarding the buyer’s opinion of the sales person’s knowledge, demeanor, and manners when interviews are con- ducted in this manner. rochgauthier eβooklet © 2009. All rights reserved. Page 12
  13. 13. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Conduct the sales win / loss interview soon after a de- cision is made There are two reasons for interviewing customers sooner rather than later: First of all, they will remember more and be in a better position to tell you the specific reasons why they made the decision the way they did. The value of sales win / loss interviews dimin- ishes with time. This is especially true when a prospect’s pur- chasing decision process was lengthy and/or involved numerous vendors. A “lost” customer I interviewed told me: “I’ve spent the past month reviewing the offerings of eight vendors who made our short list. I’m having difficulty remembering your company’s product demonstration. Everything has become a blur.” It was a shame that I wasn’t able to conduct the interview earlier. rochgauthier eβooklet © 2009. All rights reserved. Page 13
  14. 14. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Secondly, the longer you wait to interview customers, the less chance you have to obtain emotionally charged responses. Frustrated, angry, or disappointed customers tend to be a goldmine of feedback! rochgauthier eβooklet © 2009. All rights reserved. Page 14
  15. 15. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Manage expectations and keep the sales win / loss in- terview brief It’s been my experience that prospects will grant you time to give feedback if you ask for it in the early stages of the sales cy- cle. Be courteous to the prospect and set appropriate interview time expectations with them up front. I recommend that inter- views be 5-10 minutes for business-to-consumer pursuits, and 15-30 minutes for business-to-business pursuits. rochgauthier eβooklet © 2009. All rights reserved. Page 15
  16. 16. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Ask the right questions The value of your post-decision interviews will depend on the questions you ask customers. For companies that leave it up to the sales person to conduct their own interviews, the questioning tends to go like this: “Why did we lose… Was it because our price was too high?” If you let sales people go on “fishing expeditions”, they’ll likely come back with price as a main reason. It’s been my experience that price is usually not the main reason for losing a sale. Questions are powerful things – they help guide thinking (yours and your prospects!). Figure out what you want to learn from a customer and craft your questions carefully. rochgauthier eβooklet © 2009. All rights reserved. Page 16
  17. 17. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Generate “lessons learned” with key stakeholders Once you’ve interviewed the customer, schedule a meeting with stakeholders in your organization. The goal will be to review the interview findings, reflect, and develop key “lessons learned” from the sales pursuit. This 360 degree feedback is especially important in significant sales pursuits (e.g. new product introduc- tions, large revenue opportunities, key customers, etc.). Con- sider inviting: • Members of the sales team involved in the pursuit: Give these folks an opportunity to reflect upon the pursuit and the customer’s opinions. If they were asked to pursue a similar opportunity, what would they do differently – if anything? • The owner of your product or services development road- maps: Customers often provide valuable feedback about your products’ strengths and weaknesses. Does your product or services roadmaps need to be modified based on the feed- back? rochgauthier eβooklet © 2009. All rights reserved. Page 17
  18. 18. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 • A representative from marketing: In win situations, market- ing will get a better handle of the company’s differentiators. Loss situations will provide them with an opportunity to reflect on positioning, messaging, buying criteria, etc. rochgauthier eβooklet © 2009. All rights reserved. Page 18
  19. 19. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Share the sales win / loss insight Sales win / loss analyses contain valuable lessons that can be used by other sales people. This is particularly true for compa- nies having geographically dispersed sales teams. The informa- tion contained within these analyses serve as excellent training material for new sales hires. Furthermore, comprehensive competitor specific guidelines can be created once your company accumulates enough win / loss information. These guides are invaluable resources that help sales people win new business. I speak from experience when I say that these sales win / loss insight documents will quickly become one of the most downloaded and valuable resources from your company’s intra- net. rochgauthier eβooklet © 2009. All rights reserved. Page 19
  20. 20. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 Internalize the lessons learned The real value from sales win / loss analysis comes from inter- nalizing what you learn. Make sure to implement business proc- esses to institutionalize “lessons learned”. Here are some ideas: • Incorporate sales win / loss case studies during formal sales training programs. It’s a great way to engage sales people in a dialogue and is the total opposite of the typical “death by PowerPoint” approach. • If you are a Sales Director, consider facilitating a discussion about sales win / loss findings during monthly meetings with your sales team. How can the “lessons learned” be applied to current sales pursuits? • Update your competitive fighting tactics resources on an on- going basis using the sales win / loss findings. rochgauthier eβooklet © 2009. All rights reserved. Page 20
  21. 21. Starting a Sales Win / Loss Analysis Program: Roch’s Top 10 About me: Roch Gauthier “It’s interesting when you dis- I am a marketing and management consulting professional currently working cover why you won or lost a sale. in the software industry. I have been responsible for conducting sales win / loss analyses for the past three years. I keep being pleasantly surprised by It becomes exciting when your company uses that knowledge to how quickly SVP and CXO decision makers reply to my email request for 15 defeat the competition.” minutes of their time to get their candid feedback on why an opportunity was won or lost. Contact me at: roch.linkedin@yahoo.ca rochgauthier eβooklet © 2009. All rights reserved. Page 21

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