You need to know these win/loss analysis secrets

When I ask sales leaders about win/loss analysis, nearly everyone agrees that it is important. But when I ask them whether their company engages in them consistently and effectively, very few answer with a confident “yes.”

Part of the problem stems from the perception that there is too much to do to bother slowing down for analysis. This is unfortunate, because companies that regularly slow down and focus on strategy typically outperform companies that are in constant “go” mode with no time dedicated to strategic planning.

But another part of the problem is that many leaders simply don’t know the secrets to effective win/loss analysis. Let’s count down the top four mistakes organizations make with win/loss analysis, then we’ll take a look at how technology can help solve the problem.

Top four win/loss analysis mistakes

Knowing how to conduct effective win/loss analysis is key to getting as much out of the effort as you can.

Four: You turn analysis into an offense/defense session

Salespeople frequently feel that the win/loss analysis is a type of performance review. This can lead to unproductive offense/defense sessions in which the manager or coach tries to show the salesperson where they messed up, and the salesperson spends the session trying to defend their actions. This is productive for no one.

To avoid this, improve communication across the organization regarding the purpose of the win/loss analysis. Train your sales managers in the discipline of examining each deal for coaching insights to share with each salesperson. Provide these coaches with access to insights gained from organization-wide win/loss data, including a list of top success factors, and have them identify the key factors that impacted the win/loss in each case. Consistently remind everyone to focus on improvement rather than on placing blame.

Three: You’re treating the analysis as a one-off discussion

Individual win/loss analysis is important to individual salesperson growth, but if you’re not collecting and analyzing data across the organization, you’re missing out on more than half the value. Annual and/or quarterly win/loss analysis based on data collected across the organization can reveal hidden bottlenecks, identify best practices, and uncover key win/loss criteria that can then be carried into individual opportunity analysis.

This type of win/loss analysis requires a disciplined approach to data gathering, to ensure the information is accurate and detailed enough to be useful. It also requires properly chosen and configured technology to support both collection and analysis.

Two: You’re looking only at lagging indicators

Lagging indicators measure outcomes, while leading indicators measure inputs. Lagging indicators include total sales volume, margin sold, discounts given, acquisition cost, and sales cycle length. Leading indicators include criteria like size of the prospect company, point of entry into the sales process, and level of the organization engaged in the process, as well as activities like scheduled meetings, identifying stakeholders, engaging high level executives, and understanding the problem the prospect wants to solve.

Lagging indicators are easier to measure in aggregate, but also less useful to performance improvement. Leading indicators--especially activity-based indicators--are more difficult to track, but also more useful. When you understand, track, and coach leading indicators, it becomes possible to identify when a deal may be sagging as it happens, so you can correct course before the deal is lost. Midcourse correction also improves the salesperson’s learning and motivation.

One: You’re talking to the wrong people

And in the number one position, we have the biggest and most common mistake sales organizations make: They ask the salesperson to explain why the deal went south. This is not productive--if the salesperson knew, they wouldn’t have lost the deal. Puls, asking them to explain what happened is a great way to get them into the offense/defense discussion you’re trying to avoid.

In order to get real information about what happened, you have to go to the customer. The best way to set this up is to have a third party--either your customer service department, marketing department, or an outsourced vendor--call the customer and ask them why they didn’t choose you. A third party is the best choice because the customer will give a more honest answer if they don’t feel like they’re going to hurt someone’s feelings.

Sometimes, these conversations can yield surprisingly simple solutions. In one case that I know of, the interviewer asked the customer to rate the salesperson on their knowledgeability, and their interest to win the customer's business. They rated the salesperson high on the first, and low on the second.

The sales manager took this information to the salesperson, and simply asked them to start every conversation with, “I’m very interested in your business.” That one small tweak immediately increased the salesperson’s win rates. If the opposite had been true (high on interest but low on knowledge), the company would have known to invest in training.

Without that information, they were in danger of investing in training when what they really needed was for the salesperson to be more enthusiastic.

Overcoming the technology gap

In order to conduct effective win/loss analysis, you must not only know how to do it, but also own the capability to do it. Traditional CRM is not set up to provide the quality of data that you need, not least because it provides only lagging indicators, and very little insight into the daily activities and progress made by the salespeople. And completely lacking the customer's perspective and feedback to the process.

To harness the power of win/loss analysis, the technology must provide the following four things:

• Measure lagging AND leading indicators
• Analyze the resulting data in the aggregate
• Apply the resulting learning across the organization
• Feed insights to the managers for use in coaching

Enable a dynamic process based on knowledge gained from customer input

Effective win/loss analysis helps organizations stay current on rapidly changing market conditions, and helps individual salespeople stay fresh and at the top of their game. According to Gartner, companies that consistently and correctly conduct win/loss analysis can boost win rates by up to 50%, an advantage we think is well worth the investment.

To learn how Membrain can help your organization conduct more effective win/loss analysis, schedule a demo today.