There are plenty of famous quotes that remind us that we learn more from our failures than our successes. I’m sure you’ve seen them:
- “We learn from failure, not from success”
- “Failure is success if we learn from it”
- “There is no failure, only feedback”
This popular attitude may help explain why managers conducting win-loss analyses tend to look to their lost deals for wisdom more often than they inspect their wins. But both questions are important. Knowing why we win is as valuable as knowing why we lose. As you look for insight in your pipeline’s win-loss data, keep a few considerations in mind.
Ensure that You Capture a Win or Loss Reason Every Time a Seller Closes a Deal
To enable sales operations to analyze all sales outcomes, sellers must provide a summary of characteristics when closing a deal. This includes a win or loss reason, to indicate the primary factor that led the buyer to accept or reject the sale. Typical win or loss reasons offered to sellers for this purpose include
- Product features
You’ll have to tailor your list of reasons to your business, ideally with input from your products, marketing and finance organizations.
Your list of possible win or loss reasons should be the same, with one exception: possible loss reasons should always include an “invalid/duplicate” value. This is critical; you must exclude invalid/duplicate deals from all downstream win-loss analyses, or you’ll artificially inflate your loss rates.
Pay Attention to Competitive Influences
Frequently, “Lost to competitor” appears on the list of loss reasons. That’s unfortunate because it robs you of valuable insight. Your sellers don’t lose to competitors simply because those competitors exist; your sellers lose deals on features, service, price, or other reasons. The questions “why did we lose?” and “did a competitor win?” are independent of each other, and their answers must be captured separately. Otherwise, you’ll never know how much business you’re losing to a specific competitor for a specific reason.
Similarly, you can gain more intelligence from your wins if you capture the primary competitor vying for the deal. If you enable your sellers to indicate which competitors factor into the win or the loss, you can offer richer win-loss insight to your sales teams.
Analyze Wins and Losses in Tandem for Better Insight
Knowing which loss reasons are most common for specific customers or products is valuable, but it tells an incomplete story. What if some of those common loss reasons are also among your most common win reasons? For example, suppliers selling commoditized products see pricing determine many of their wins and losses.
To better understand how your sellers are differentiating your offerings, inspect the difference between wins and losses for each of your standard win/loss reasons. Express this “margin of victory” as the percentage of closed deals won for a given reason minus the percentage of closed deals lost for the same reason.
In this win-loss analysis example, pricing is the most common win reason, but the margin of victory shows that it’s actually delivery timing that best differentiates the supplier in this sector.
Inspect your margins of victory for individual products, business units, regions and competitors to better understand the dynamics of your business and uncover the best next steps for your sales teams.