Hello everybody. And welcome to WinLossWeek. This session we have with us Rich Nutisnky from Pragmatic Institute. He's one of our instructors, one of our most seasoned, the most experienced and he's going to talk to us about win-loss and what does that mean and how you can use it to leverage a seat at the exec table. How you can improve those executive conversations. What kind of information can you get to the executive team from win-loss and how can that help you of course? So, hello, Rich.
Hello, Rebecca. Thanks for having me. It's always great to speak with you and hello everyone. Welcome. Just a brief word about who I am and who we are. The Pragmatic Institute of course, is a world-leading organization that provides training and assistance to companies who want to get better in the world of products. We want to develop great resources and processes to create market products. People actually want to buy and be successful in the topsy turvy world of trying to bring things to market with great success. And that's what Pragmatic has helped companies do now for 26 years. Very proud of our position in the market and the tens of thousands of people who we've trained and who have become part of the Pragmatic family.
They're enthusiastic about us and we're equally enthusiastic about them. My own background is I have been an instructor at the Pragmatic Institute now for believe it or not, I can't believe it 14 years. And prior to that, I had a very long history, more than 20 years in the technology world, in the world of products. Mostly around product marketing, product management, product strategy. I have done other things in the technology world. I did sales support, pre-sales activity. I did sales. I did some support. I certainly ran executive roles and had my own startup, which I sold. But the important part for us is I took pragmatics training over 20 years ago. And for me, it opened my eyes to a completely different way of thinking and approaching my job and the companies I work for with great success.
And I then went on to teach other people. And I'm really excited to talk to you today about win-loss Rebecca, because it is one of the key activities and deliverables that product teams required to do so many things. It's so strategic for us. And I am sad to say, I see so many companies that use it's only part of its potential. There's so many things that can do for us and we only use it for part of its potential. Happy to talk about that. Where would you like to start?
Win-loss is one of my favorite topics as well. It's one of those that every year when we run our annual survey makes me so sad because less than 30% of our audience does win-loss at all. 30% of the product managers, we survey less than 30% do it. And it's such a powerful tool. And to your point, I think a lot of people think of win-loss is sort of on the tactical side and how do we improve sales with it. And that's so key. But as you know, it's actually in the, what we call the upper left quadrant of our framework, right? Really strategic focus, market focus, because it can have such a larger impact on an organization then how you kind of go through tactics.
And so that's really what I want to explore with you today Rich. You've got a ton of experience as an executive in company, working with executives in company. And I think your point of view on win-loss is so powerful and in such a way that it can be used. Let's talk a little bit about that. Just at a high level let's talk about what is it from win-loss that matters to the executives? Like what's in it for them and how does that play such a big impact on the strategy of our company and our products?
Okay. I think it's important to understand that when we talk to leadership, we really... Look at the end of the day everybody realizes that, but what we're looking for is performance. We're looking for success and the easiest way to count that and keep score on that is with numbers. When we talk to leadership, a lot of the conversation has to do with numbers. I would further offer that there are three primary things leadership's looking for us to bring to them, to help them with. And I think those three things, two maybe less important than one of them. But the first one and the obvious one, they want revenue growth.
They want the opportunities of business to do more business next year. I've never heard a company say to me, "We just like to get smaller and smaller and smaller". That's not the goal of the leadership team. It's to grow our business. So we got that. We want revenue growth. The second thing is we don't want revenue growth at the expense of not retaining what we have. We don't want stagnate. We don't want net neutral. We want growth that has retention. So there's the retention aspect. And I think the third one is less numbers driven, but equally related. And that's that they expect us to deliver positive perceptions of our company and awareness of what we're doing and fit in their marketplace. So virtually everything we do with leadership. We need to be able to put in terms of supporting the revenue growth goals, supporting the customer revenue retention and awareness and perception of our products and our company and what we do to be positive and to be an asset for us in the marketplace.
And the reason win-loss is such a critical component to those things is that it answers all three of those questions. It helps us understand the keys to attaining revenue growth in terms of... Look, one of the wonderful things about win-loss, any kind of research that we do engaging to learn things, to become smarter, the universe, the audience that we can conduct research with can sometimes be vast and overwhelming. Now some of us may be in B to B environments. Some of us may be in B to C environments who may be in a B to B to C environment indirect. But nonetheless, the numbers can be overwhelming. When you start to talk about win-loss, the numbers become more manageable because we're talking about a specific audience. We're talking about people who have actually taken the active step of going through an evaluation at some level, making a decision.
We've limited our audience to just those people who we know have already made a decision, yes or no. A decision to buy decision, decision to use, a decision to adopt. And so we have a limited universe that's identified. That's a big plus right there. Secondly, win-loss is an activity that we should do very quickly after a decision point. This is kind of a cause and effect 30 days, 45 days engage these people, unknown audience, and what can we learn. The place I'd really like to start is this contrast between what some companies do in terms of sales enablement and win-loss and perhaps something closer to our view. And it really is a much larger concept. And the concept is, do I want to use win-loss as a tool for transaction forensics? Do I want to play CSI here?
What happened to the patient and just examine that in isolation. Or do I want to study the disease? Do I want to look across many patients? Do I want to look at markets trends, things I hear over and over again. I often teach my classes from a product perspective, the outcome of an individual win-loss report or interview or analysis is secondary to me. The more important question to me, why did my product lose the last five times that lost? Why did it win the last five times at one? What do we hear over and over again? Do we have a functional gap? Is we're not priced for value? Is there a competitor who knows how to eat our lunch? I mean, what is it? That's the trend that I can now address and fix. Here's the thing, going to leadership with anecdotal stories about a particular transaction isn't that valuable to them. Going to them with insights about our customers, our sales process, our products functionality and what we need to do to perform better, that's important to leadership.
Where do we make the investments for the return and to deliver on the results that leadership is looking for? There's so many things directly tied to win-loss, persona development. We learn more and more about who are the people involved in buying and making a decision? What's important to them? How do they get information? What did they look at to make a decision? Who did they consider beyond us? The competitive landscape? What are we competing against? Pricing strategy where we considered as an option to doing nothing or where we considered against alternative solutions? Those two questions can come up with a very different way to approach how we go to market and how we price our products, how we make offers to them.
The messaging we deliver for our is it resonating? The channels that are used to communicate with our audience. What is the buyer's journey? What's the experience and the thing for me that I find so exciting about win-loss is the unknowns. I often say to my classes, you never know what you're going to learn when you engage in win-loss. The unexpected happens. Just a quick anecdote. One of the first experiences that I had with win-loss on my own career is I worked for a company andwe were a best of breed software solution in a B2B space. Most of our competition were much larger, more well-known companies than us. Mostly ERP vendors who had a very wide array of products they offer. Many of them very well-known. The SAP's of the world and the Oracle apps of the world and the PeopleSofts and Edwards and keep going the ERP providers.
And we did okay. But we were a small player in a specific space. I was once talking to someone and by the way, this is long before I ever learned about Pragmatic. And I had these skills. I was doing kind of a win-loss with somebody where we had been involved, but we thought we were doing really well in the evaluation. And we were shocked when we lost the deal. And at a subsequent conference, I met someone from the company who had been our prospect and they saw my logo shirt and they said, "Hey, you guys. God, you were great to work with. Really loved your demos and really enjoyed learning about your product." I said, really, but you didn't buy us. And no, we did. And I said, so can you help me understand that? I'll never forget this gentlemen. He looked at me and he went, "Yeah, you're not big enough to sue".
And I said, "Excuse me, what did you say?" He said, "You're not big enough to sue." And I said, "Could you help me understand that?" And he said, "Yeah, what you do for our company is mission critical. You're the engine where our customers give us our orders and pricing and we process things. And if there were to go something wrong with your ability to handle our order processing and our transaction processing we're down. And what we would lose in an hour, because people will go to an alternative supplier for what we do. What we would lose in an hour is more than your company's worth. We couldn't sue you and get back what we lost. We went with somebody who were more comfortable with that if there was a problem, we weren't taking as much risk." And I thought to myself, Oh my God, had nothing to do with my product. It had to do with I wasn't big enough to sue.
And there was this indemnification, this liability issue. I started to say, aha. And I did a little survey in my market. And I found this was a concern to virtually everybody who looked at us. So what did I do? I forged an alliance with a giant company, a technology company, a well-known technology supplier. And I said, "Listen, we'd like an alliance, a channel Alliance with you. And we'd like to both position your technology along with our applications, and your guys can go out and position our applications when your technology where fits. And here's the thing, would you be open to taking the deals on your contracts? We bundle it together and you'll put your technology and our products right in your contract?" They said, absolutely. And so we've forged a channel alliance where we walked in arm in arm with this tech giant. Contract was in their name.
And our sales went up 130% in two years. We overcame this barrier that we learned from win-loss and it had nothing to do with what we're working on in the browser or engineering department. There wasn't necessarily anything we could do about it except come up with a strategy to overcome it. That came from understanding why we were losing. And it was eye opening to me how transformative that can be. We need to understand what's working and what's not working in terms of our programs, our communication, our messages, our roadmaps, our plans, our vision so we can make good course adjustments.
For me, win-loss, although it's a post sales activity, it's a leading indicator. It tells us how we're doing in the market today. What we need to adjust mid-course to get different results. And when you start talking about mid-course corrections and results, you have leadership's attention. That's why it's so important.
That's a great illustration Rich of so many points that you're making there. One, did the difference in that conversation you have with exact space on what you just talked about, the different perspective you brought and the different understanding of the business versus look, maybe we need this feature or we need to position this way. You changed the whole conversation with the execs and you changed their whole point of view about the offering end, about kind of your role with it.
Absolutely. And this channel alliance wasn't even in the author, wasn't in the plans, wasn't something we were thinking about doing. As a matter of fact, we were in the midst of bulking up our own sales capabilities to go wider. And I remember pointing out to a particular person in our leadership team how that would only exacerbate the issue. We'd lose more deals. We'd be in more deals only to lose. And so this notion of developing competitive strategies, for instance, another big area win-loss helps us with, when should we compete, when shouldn't we compete. When will the cards be stacked against us? And we should know that. I remember an instance where there was a particular competitor who I could beat head to head. I knew I could beat them head to head and I beat them more than 60% of the time head to head.
If I was in a deal where they were looking at more than me and the competitor had to head, if there was a third, fourth, fifth player, I lost 80% of the time. Now I will tell you the truth. I can't tell you why that happened. I have a theory, but I can't prove it. But I knew that was true. This enabled me. And I learned that win-loss. That was win-loss data that win-loss data said to me, I lost her. How many people were you looking at? And when I looked at that win-loss data across an entire population of interviews, I said, look at this every time it's just me and them. I win. And every time it's not just me and them, I lose. What's going on here? I went to my sales channel. I went to my salesforce and I said, your job is get the deal down to Austin then.
I informed them to have a sales strategy that said knock everybody out except one competitor because you'll beat that. And that's what we did. We did a midcourse correction. We changed our approach to try to line up the card. So we had the best chance of winning. I don't want to sound as though win-loss, although it's far more powerful than just improving sales performance. It's critical for sales performance. And let's acknowledge this, Rebecca. We should acknowledge this for our audience. This is an area win-loss that can be politically challenging for everybody. The minute people in the product world say, we want to get involved with win-loss. I'm almost ashamed to tell you this. I worked for a company after I had been trained by Pragmatic. I went to work for a company that was very sales driven, a great company, great salespeople, but they ran the roofs.
They called the shots. And if you weren't a salesperson, you were second tier. And I walked in the door and said, I want to do win-loss analysis as the new head of product. And the sale took the VP of sales may be 10 seconds. And I said I don't think so. Anything you want to know just ask us. We do it. We'll tell you what's going on. I wanted to say to him, "Listen, when the patient dies you don't ask the surgeon who performed the surgery to do the autopsy". But okay, I didn't say that. Politically savvy than that. And I said, okay, you don't want me to do it. I won't do it. About six weeks later, a month six weeks later after they had gotten to know me a little bit, I called them up and said, can we have a discussion? I owe you an apology. And he said," Really, is it that important?" I said, I got to see you right away.
And I went over to see him. And I said, I just realized why your guys are not making quota. And he said, "Why aren't they making quota?" I said, it's my fault. Product sucks, prices too high. I don't know how you can sell this. I got to fix it. And I remember him looking at me going, Rich you're exactly right. The reason we're not making quotas is your fault. Go up here and fix it. And he gave me carte blanche to go do what I wanted because I put it in terms that played to his goals. And I would offer that advice to everybody. If we want to make this important to leadership, we have to talk about it in terms of their goals. We don't have to talk about it... Well, I don't know. If I don't do win-loss I want to know which feature to prioritize on the backlog. I want to know how to groom that backlog. I want to know how to... Okay, I got it.
That's important for us. It's not what leadership wants to hear. They want to hear how this is going to grow our business, keep our customers, burnish, our reputation, overcome misperceptions, align the market, target us for success. That's what they want to hear and win-loss is... I hope this isn't just hyperbole, but I think it is one of the best techniques and mechanisms to do mid-course corrections. It's real time data. What's working. What's not working. What messages are being received and absorbed. What aren't. What are bouncing off of people, what channels of communication are being utilized and what aren't. What messaging is striking a chord. What problems are resonating with them as being the most important to them. Are we addressing the competitive threats and weaknesses and we taking advantage of the opportunities we have in the marketplace.
There's this notion of getting these insights to our buyers and their process allow us to align everything from marketing to sales, to support, to better NPS scores, to better retention, to upsell the cross sell, to growth that companies have as their objectives.
I want to kind of a double click as they say on one area that we talked about. Where it's really important, that win-loss is not about anecdotes, it's about insights. And one of the other things we talked about is some of the best information you get from a win-loss is unexpected. It's why they need to be open interviews and open conversations and not just a series of questions, which really could have been a survey. How do we combine those? How do you have those open conversations and still see the trends like, Hey, every time we're up against Acme, we win.
What a great question, Rebecca. Thanks for asking that. I'll explain this for the benefit of everybody who may be watching this. But this is consistent with our entire story about any kind of research. And this applies to any kind of research. There are two components here to make it really smart. One is to first discover what it is you don't know. The second thing is when you think you know something have the rigor to challenge yourself and say, am I really confident about that? How true is that to do those things? I have to gauge both in activities that help me discover things I don't know. And then things that helped me validate things I assumed to be true. I would say there's a place in the win-loss world for both of those things. I discover through the open-ended face-to-face win-loss interview. And I want to do that consistently.
But as I start to establish a pattern, as I start to hear things over and over again, as this is the second and third and fourth anecdote that's brought up a particular issue. I don't like your terms and conditions. Your contract was owners. You are difficult company to deal with. You don't respond to non-standard things. I've heard that three times now. Now maybe I want to do a win-loss survey and I want to send it out to a group of people with a question that said, did you find us difficult to work with? Would you agree with the following words? Where you put off by our inability to deal with your specific needs and start to quantify that that was true or beyond the people I actually spoke to personally. I think this technique is true of any kind of research. And it's equally true in this kind of research.
So companies who say to me, look, I use a third party to go out and do a lot of win-loss for me. Great. That's going to help you scale. That's going to help you. But just remember, it's going to be a scripted conversation. And my recommendation is if you want to use a third party, awesome participate in some percentage of those calls yourself. Personally, listen, interject, what are you going to get surprised with? Best case perfect world we'd have enough people to do everything ourselves in person be lovely. We don't live in that world. So mix the two mix. I'm not opposed to using some quantitative research technique like a survey or any other choice models or any other kind of technique that would be quantitative in nature to try to be confident that the anecdotal interview stuff is really true across a wider audience.
What a powerful conversation then to have with the execs. Here are some qualitative examples here, some quantitative numbers. And here's how they relate to those three items that you talk about. The revenue growth, the retention and the sort of reputation pieces.
Yeah. I will offer a piece of advice that nobody asked me for. But for the audience, if you want to seat at that executive table, there's something you should consider. And that is the different people will be impacted by information differently. You're going to have people on that team who are data people. They want to know how many people did you talk to? What percentage said this? What time period did that cover? Give me day to day data. And then I'll determine whether what you said was meaningful to me. They're going to be other people at that table who really don't want data. They want to explain to me the process you went through in order to come to your conclusion. Just talk to me about your... because if l buy your formula, if I buy your process, I'll buy your outcome.
There are some people who are story people. They're anecdotal people. They want to know who to speak to. Who told you that? What was their name? What was the place? What were they wearing? How did they say that? What was the look on their face? And if you can't make it personal, if you can't put real people to it, then you're just spouting stuff. So understanding that different people prefer information in different ways. My recommendation is you got to have all those things in your pocket. You got to have names, places, and dates of people you spoke to. And it's not that hard really. You can say, look, we found a trend that said our pricing doesn't seem to be aligned to the value perceived for the products that we deliver. And we're considered to be overpriced compared to the competition. And I did that by going out and interview at doing X number of win-loss interviews. And I followed that up with a survey and I covered 4,000 people in the market who look at our category of product. And 83% said they considered us to be premium priced.
And it was really well put by one interview I did. And there's the slide with the quote and the name and the company. And boom, you've just gotten everybody at that table to nod their head. But you may not get everybody just with numbers or just with stories. You got to have all of that stuff.
The other thing I think I've found is the confidence of which we speak with numbers. I think sometimes product managers in an effort to be just always wanting more data and always looking for where there could be a hole that they don't speak with confidence when they have the data. And if you don't speak with confidence, then you've lost everybody's belief in it. And I'm not recommending people make up data. I'm just recognizing that the data you have that is not perfect is good.
When you present data, you should always follow it up with your confidence in that data. There's a continuum there. When are you confident enough to actually share it? I would hope for most of us that confidence threshold before we share with leadership is pretty high. But we don't want to look foolish with leadership and it might be somewhat lower for other people. But there's a point where you don't want to suffer from analysis paralysis and not be willing to say anything because there are more numbers you can look at. And by the way, shameless plug, here's a place where quantifying this stuff. Data science is an entire frontier for us to get insights from data that can be interpreted, give us great confidence and quantify that confidence. So don't let that escape you in the win-loss world.
Even on some of the qualitative studies, if you can give them the transcripts and they can find those connections that you just wouldn't necessarily see with your own naked eyes, for lack of a better word. Those can be some powerful tools.
One other area I want to explore on win-loss so often we use win-loss. I think we, we tend to talk about the areas of opportunity that we find when we do a win-loss. Is there... Do you have examples of where you do win-loss and what it shows isn't just opportunities, but also some of the ROI. Some of the results of the efforts you've done before they can be used to kind of show impacts.
Well opportunities interesting. It depends what the goal is. What was the goal? Because an opportunity has to be shaped around goals. An opportunity is only meaningful to us if it's an opportunity to achieve something that's meaningful. There's a lot of stuff that you can hear engaging with your marketplace that's interesting. And maybe an opportunity for somebody isn't it an opportunity for me. I don't know. Let me limit myself to answers around refocusing on things based on. And I think your question is akin to my midcourse correction analogy. I think there are things that we can use win-loss loss in terms of ROI to say, okay, firstly, where have we invested resources, meaning time people and money that we're not seeing the return for it. And we need to shift those resources to someplace we'll see a return. I think it's a place that exposes low ROI activities that we may be doing because they're not being utilized if the investment was made in order.
And let's be clear. Win-loss is about our ability to successfully place our product in the market. The new frontier of win-loss relatively new. As a technology industry, moved to a renewal model. When we moved to a continuous model of renewables, every time somebody decides to renew with us as a win, every time somebody doesn't renew with us as a loss. And I am surprised by the number of companies that don't look at the re op decision as a win-loss opportunity. They should be doing win-loss analysis on renewals that I think is really fertile ground for ROI. The cost of reacquiring a customer after you've lost that customer is exorbitant. I think statistic if I'm not mistaken at something like 17 times more expensive to regain a customer than it would have been to make the investment, to keep them in the first place, once they've gone.
We want to keep customers that's good business. It's really good business to do that. That means we have to know why they're leaving. Why are they leaving? Why are they staying? And so some of the ROI we see are high retention rates, certainly in the perception and awareness area. If there's an area as a marketing professional, Rebecca, you know this better than I do. There is nothing harder to move nor more expensive to do than alters people's perceptions, misperceptions. It takes up a ton of work and a ton of money to move the needle in people's minds. So we talk about win-loss is giving us insights into where we can actually spend those resources in order to get the return increased awareness and better perception of us removing those blockades as misperceptions. That things that aren't well earned. It also gives us a direction.
Well, I will tell you that win-loss also has been a fertile ground for finding things like references, where we have great alignment and the goals demonstrate what we want to articulate as a business. We teach at Pragmatic when you're doing a win loss is probably the perfect time to set yourself up, to capture what why people bought us so that we can come back and see them sometime later and say, did you get what you bought? Would you be a reference for that? And stand up in the marketplace as a proof point, a data point that says they deliver on what they say, how much do you pay for that? What would a business pay for that? And the investment we have to make to get that? So the investment in win-loss is negligible.
We're talking about rounding, or is he a really, in terms of other things, we spend money on. The return we get in awareness, perception, retention, aligning, misspend, aligning resources to be more productive and effective. I can calculate what that ROI is. It's huge. It's huge for a business.
All right, Rich. This was a great discussion. As usual, I'm going to ask one last question. If you could have people do things differently tomorrow, based on what we just talked about today, what would it be?
Make more attempts to do face to face in person win loss interviews. We all know how frustrating it is the dial for dollars. I'll just share this with you, my approach for a long time. First of all, I should share with you. We should try to do win-loss should always be done by somebody that wasn't involved in the sales effort. No previous relationships, no axes to grind, no feelings to be hurt. I would call people literally dialing for dollars. I'd go through the pipeline of recent wins and losses. And I would literally call up and say, "Hi, this is Rich from Pragmatic. I understand you've made a decision recently where we were an alternative and I respect your decision. I don't want to second guess that. Could I get 30 minutes of your time to talk about your decision and how we might've served you better?"
And I will tell you my experience was I got well a 75%, 30 minutes. I can give you 30 minutes for a conversation on that. Very rarely I get no, and I never incented people. I simply asked the question, can I get 30 minutes to know how we can help you in the future? One thing I would say is do more of that, do more of that direct. Can I get some of your time? And if the second thing I would do is learn how to put aside your ambassador title when you're doing win- loss.
We are all trained to be ambassadors for our company. We hear something negative. We hear something that's wrong. Inaccurate. We hear a misperception. We hear something and we react to it with defense. Let me correct. You let me know... No, that's not exactly true. Well, that's not really. No... Learn to do that. Learn to smile. Except what you hear is the reality of the moment. It's more important for you to know the misperception, the miscommunication, the inaccuracy so you can fix it than it is to try to correct it one account at a time. And get the entire organization to realize the importance of an removed detached, neutral win-loss process. That's not about pointing fingers at anybody for responsibility, for why we won or why we lost, but understanding how we're performing as a business for better business results. Those are the two things I would do, Rebecca.
Great advice Rich. Thank you for sharing all of your advice and your insights and your experience on win-loss.
Thank you for having me Rebecca.
Oh, it was great. And if you guys want to see more Rich, you can always find Rich in our office hours on Friday mornings or you can also find Rich obviously in the classroom and please find some great resources. There are several articles that he has written on win-loss as well, that are on our firstname.lastname@example.org
And Rebecca I'm starting to hang out a little at the pragmatic alumni community goes to the pack, man, because the pack is full of conversations about this stuff. So check that out.
Full of good peers who have win-loss stories to share as well. Excellent. All right. Thank you everyone.