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

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
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rochgauthier eβooklet © 2009. All rights reserved. Page 1

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


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!”


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.


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.


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


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%.



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.



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?



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.



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.



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.



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.



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!



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.



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.



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?



• 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.



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.



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.



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


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