MARKETING STRATEGIES: Why you need to analyse lost sales – Part one
No system is perfect and any process which involves the interaction of buyer and seller is going to be subject to many internal and external influences.
While you might guess why you won a deal or lost a deal, unless you are systematically collecting data in an independent manner, you are just guessing. Only by undertaking a proper analysis of what went right and what went wrong, can you develop a consistent and logical process of improvement in your marketing and sales activity.
All too often salespeople quickly forget the lost or forgotten prospect, knowing that their rewards are in the ones they close. They are more than willing to talk enthusiastically about the wins but have little interest in those they lose. However, what this fails to capture is why they won or why they lost, both of which can help improve the process and the competitive position.
Just because we win business does not mean there is nothing to learn. The reasons for winning are a valuable input into the sales process. After all, you may have won because the others lost. It may be that you did the least-worst sale process. The buyer may well have wanted to buy something else but for various reasons was not able to. Perhaps the other vendor was not available within the timescales, unable to resource the project or had a salesperson that could not convince other decision-makers.
At the same time, you may have lost when you should have won. There are many occasions when a buyer has a preference for a specific product or vendor but the vendor does something or offers something which puts the buyer off or, for whatever reason, is unable to fulfil the requirement at that point in time.
Some of the benefits of conducting a win/loss analysis are:
- Understand what features and functions or strategies win business.
- Find out what missing features and functions lose business.
- Discover whether the messages you communicate are received as you intended.
- Identify the expectations of prospects and compare these to what you anticipated.
- Undertake a competitive review. What are the competitors doing which you are not? What do the competitors have or do which is winning them business? When are you winning against competitors and why?
- Review your sales process to discover if it could be improved.
- Review individual salesperson performance to see if additional training is required or if they have the aptitude and attitude for the task.
- Learn more about when you should reject a prospect.
- Find out if you are rejecting prospects when you should not be.
- Follow up on wins to improve the customer relationship.
In a win/loss situation, you effectively have four outcomes: reject, withdrawn, won and lost. Your analysis should sample each of these groups to discover insights into your process and market position.