Win-loss analysis is an increasingly popular practice. Fast-growing B2B software companies are particularly hungry for strategies that will help them learn faster, sustain high growth rates, and win more. Win-loss analysis fits the bill. For more details about the benefits of win-loss analysis, check out my earlier article.
And, while many companies have taken steps to implement some form of win-loss analysis, the minority of companies do it right. In my experience, there are 5 common mistakes that companies routinely make when it comes to win-loss analysis:
1. Not doing it at all.
It’s baffling to me, but the majority of companies I speak with don’t conduct any sort of formal, win-loss analysis. Marketers or sales leaders might occasionally contact a lost client, but they typically haven’t invested in a regular, ongoing program for capturing win-loss data. In fact, according to Pragmatic Marketing, “The pervasive practice is to not conduct these interviews at all” and fewer than 20% of companies conduct win-loss interviews.
2. Not interviewing decision-makers.
Once companies decide to implement win-loss analysis, they often tap the wrong sources. The most common one is the CRM. Countless sales operators claim that they conduct win-loss analysis, when in reality all they have done is add an extra field for Lost Reason in the CRM. In my opinion, this approach is worse than doing nothing. That's because sales reps rarely fill it in, and if they do they probably enter something inaccurate. According to one study, sales reps are wrong about why they win and lose deals approximately 60% of the time.
In the words of Bob Apollo, founder of Inflexion Strategy Partners:
Asking the sales organization to self-report wins and losses is as insightful as asking turkeys whether they might be inclined to vote for Christmas . . . To be effective, win-loss reports must involve customer interviews that are conducted by an independent party with no case to prove and no axe to grind.
To do it right, you have to go straight to decision-makers within won and lost accounts for feedback. And the best way to do that is through an actual interview. Interviews have higher participation rates than surveys (almost 4x higher in our experience) and boast unparalleled depth and quality.
3. Not having strong executive sponsorship.
Another common mistake is trying to implement win-loss analysis without one or more executive champions. Recently, I’ve interacted with interns at two different companies who were tasked with implementing win-loss analysis. Their programs are destined for failure - not because they aren’t smart or capable - but because they lack the resources, influence, and experience to drive cross-functional adoption, secure budget, develop the right interview questions, etc.
Companies that are serious about win-loss analysis should learn from Gainsight CEO Nick Mehta who personally sponsored the implementation of their win-loss analysis program. Not only did he introduce the concept, but he saw it through to implementation and adoption by ensuring adequate budget, helping select the right partner, and granting all employees equal access to the feedback.
4. Not involving a neutral, third-party.
Even if key executives and stakeholders are on board with the initiative, the program can still fail without the help of a neutral, third-party. There’s actually a pretty long list of reasons why.
A big one is bias. Budget-conscious leaders often say, "let's save money and do the interviews ourselves." But the fact is, decision-makers won’t be as candid or open with an employee as they will be with a neutral, third party. For example, if someone from the product team conducts the interview, the decision-maker will hesitate to share harsh feedback about the product. Likewise, they’ll be tentative in their complaints about a sales rep if they’re talking to the head of sales.
Another big reason is adoption. It’s more likely that leaders across the company will accept and adopt the feedback (especially criticism) if it comes from a neutral third-party that has no prior agenda or personal stake.
Additionally, from a logistical standpoint, it’s helpful to have a third-party run the initiative. An experienced third-party has the bandwidth, expertise, and tools to enable them to run the program more effectively. It’s also likely they’ll secure higher participation rates and do a better job synthesizing the findings over time. I’ve seen plenty of internally-owned programs fail to launch or sputter and burn out after a key employee moves on to a new job or company.
5. Not making the findings accessible to everyone.
I’ve recently spoken with enterprise sales reps at two different SaaS companies who were completely unaware that their company was already running a win-loss analysis program. They were clearly interested in reading the transcripts from recent win and loss interviews, but didn’t even know that such a resource was available to them.
This is a big problem with many win-loss initiatives. Certain leaders or functions invest in win-loss analysis but fail to publicize and share the findings across the company. For example, marketing might initiate the program and never mention it to sales leadership, sales ops, or sales enablement. I’ve even seen some teams intentionally guard the program out of fear that their own function’s weaknesses will be exposed.
World-class win-loss analysis programs grant all employees universal access to transcripts and findings. There is a culture of transparency and an eagerness, at all levels of the business, to learn and grow based on direct buyer feedback. If possible, you should upload and store the transcripts and other win-loss deliverables in a central repository that all employees can easily access.
Conclusion: It’s worth doing it right.
It may seem like a tall order to get win-loss analysis right, but it’s worth it. According to a study by Gartner, some organizations that implemented rigorous win-loss analysis saw 50% improvements in sales win rates. For most companies, a slight improvement in win rate translates to millions of dollars in revenue, easily offsetting the costs of leveraging a qualified third-party to design and run an expansive program.
And, if you like the idea of win-loss analysis but need some help getting started, our world-class team of consultants at Clozd would love to help. We specialize in win-loss services and technology. Check us out at www.clozdinc.com/win-loss-analysis