Author's disclosure: Since writing this article I have become a strategic partner of Primary Intelligence.
Jeff, SVP of sales, and his team were losing 8 out of 10 proposals to the competition. Jeff knew that if he didn’t increase the organization’s sales numbers soon, he would probably be replaced. The usual list of remedies came to mind: Hire more sales people, cut prices, up the advertising budget, offer bigger sales commissions, try selling to new markets. But before any decision could be made, the unthinkable happened. A major client announced it was terminating a large contract—a deal Jeff had personally sold. Now the team’s numbers seemed utterly unreachable. Out of desperation, Jeff sat his team down and asked 3 key questions:
- When we lose deals, WHY do we lose them?
- When we win deals, WHY do we win them?
- When existing customers leave us, WHY do they leave?
We’ll get back to Jeff’s predicament and what these questions led to in a minute. First, let’s explore the overall practice of Win/Loss Analysis, to understand the factors that can make it work.
When companies turn to Win/Loss Analysis, they can gain helpful, and sometimes surprising intelligence. Angie Franks, while serving as SVP Sales at Healthland, a healthcare IT company, was charged with the formidable task of dramatically increasing revenue. Not knowing the answers to the 3 aforementioned questions any more than Jeff did, Healthland began a rigorous win/loss program. “Immediately, we started getting some really usable data,” reports Franks. “For example, we learned that our sales presentation was leaving prospects confused about our offering, and far from understanding our value proposition. So we made some sweeping adjustments that changed our demo completely.”
Franks and team continued to learn about and improve other aspects of their business, helping Healthland’s win rate shoot up from 23% to 36% (an increase of more than 50%). At the same time, the average deal size more than doubled from $400K to just under $1M, and company sales went up by over 400%. This all happened over a period of 5 years. Angie Franks? She was promoted to CEO, and later moved on to another company, Sport Ngin, where she is currently applying the same Win/Loss Analysis protocols to improve win rates, customer retention stats, profit margins and sales revenues. Franks emphasizes the following key points for anyone wanting to engage this process:
- We realized it was pretty arrogant (or maybe naïve) of us to assume we knew what was going on in the minds of prospects without asking them directly
- The pace of change in customer demand and competitor offerings was too fast to stay on top of, without having a direct conduit to the market through Win/Loss Analysis
- Knowing why customers initially bought from us and why they stayed with us long-term was as important as understanding why they declined to work with us
- Because prospects felt uncomfortable giving us the bad news, or “truth,” about our deficiencies, it was almost impossible for us to get to the real reasons for losing deals.
- Also, market research is not our core competency, so we decided to work with an outside, independent firm specializing in W/L
- Once we started getting this type of intelligence, we kept it going as an essential driver of our company’s innovation
Ken Allred, Founder and CEO of Primary Intelligence, remembers well when Angie Franks and Healthland first came on as a Win/Loss Analysis client. “Angie had an understandable amount of anxiety about how she was going to reach her revenue goals. I let her know that she didn’t need to have all of the answers, because her prospects and customers would eagerly give us that information.” Allred’s journey in gathering buyer feedback started when he was trying to win more business as a sales manager at PeopleSoft. “It was frustrating to lose deals I thought we were going to get, and win deals I thought we were going to lose. There was no way to predict sales outcomes and forecast accurately.” That’s when Primary Intelligence was founded. Now, sixteen years later, Allred seems to have developed a winning formula, using software, change models and transformation services to increase client sales by anywhere from 10% to 50% and beyond. Allred offers his perspective on how to make win/loss work:
- It is important to get intelligence from all three personas: Prospects you lost, customers you won, and customers who left after working with you for some amount of time
- But we have found that it is also extremely beneficial to retain existing customers using the same win/loss practices, before they might decide to leave
- Understanding your buyers’ decision points is the best way to differentiate your company from competitors
- A good frequency for existing customer interviews is at least once a year
- It is crucial to gain both qualitative and quantitative feedback in this process
- Just gathering data, without making necessary changes to align more with your target market is usually counter-productive, thus this process should only be undertaken if there is a strong commitment to innovate and improve
- Buyer feedback is the single best catalyst for organizational change that leads to increased win rates because it is unbiased, non-political, and doesn’t have an agenda
- Buyers buy based on their perceptions, whether those perceptions are accurate or not
So, how did Jeff and his team come out? Jeff kept his job, and his team’s win rate went from 20% to 70% over a 9-month period. Most notably, they were able to go back to the client that wanted to terminate that large contract, and salvage the deal. All of this was because they turned to prospects and customers to get the answers to 3 questions, and followed up with the proper changes.
