Conducting a win/loss analysis always leads to actionable insights that can increase your sales conversion ratio. What would the cost/benefit be to your organization if you increased conversions, and subsequently sales revenues, by 10 percent? My experience is that the benefit far exceeds the cost.
Most companies don’t conduct this easy and eye-opening analysis. And the ones that do are usually motivated by an increase in customer attrition or a decrease in sales conversion. But you don’t need to wait for sales or wins to wane before conducting a win/loss analysis.
When I talk with owners and managers who haven’t done a win/loss analysis, their typical response to the question, “why not?” is, “I already know what our customers would say.”
I then share my favorite quote by William McComb, the former chairman of Johnson &Johnson: “We slip from our obligation to know what consumers are thinking… into believing we can think for them and understand their actions.”
There is no good argument for not doing a win/loss analysis on a regular basis. Properly done, a win/loss analysis (and acting on the results) can improve your product and service mix, inform innovation and product development, increase your competitive advantage, improve customer acquisition and retention, as well as boost your revenues and profits.
A win/loss analysis involves gathering and reviewing both quantitative and qualitative data. The quantitative data is easy — divide your number of won business opportunities by the total number of qualified leads; the remainder is your sales conversion ratio (percentage). Establish a baseline and take action to improve your ratio. How? By gathering and acting on qualitative data.
The wrong way to do a win/loss analysis is to ask your sales reps why they won or lost the business… there is no objectivity in this approach. The right way is to ask your customers and lost leads. Customer interviews should be conducted by a third party. If you need to do interviews internally (to save money), make sure the person doing the phone interviews does not have a sales or customer-facing role in your organization.
What type of questions should you ask? Why did we win (or loss) the business; which competitor did we win/lose the business from/to; what is our key competitive strength; what is a key competitive weakness; what is your primary deciding factor; how can we improve our product or service; and how can we improve our sales process. You will customize questions based on your business situation and sales process.
It is important to set up these win/loss interviews soon after the business was won or lost. After completing an interview, whether you won or lost the business, always mail a thank you card to the respondent. This should not include any sales language or offers, only a sincere thank you.
Another significant benefit it that, with the data, you can better align your sales and marketing departments/functions.
Don’t fall into the trap of assuming you know what your customers and prospects would say; the risks of not conducting a win/loss analysis are high, and the rewards for doing so are even higher.
In summary, conducting a win/loss analysis has both top and bottom line benefits to your organization.
Establish your baseline sales conversion ratio, and then interview customers and lost prospects soon after you won or lost their business.
Then analyze and act on the data to optimize your people, performance, process and products.
Andrew Ballard is president of Marketing Solutions, an agency specializing in growth strategies. For more information, call 425-337-1100 or go to www.mktg-solutions.com.
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