A sales training / meeting is coming up, and on the schedule is a win/loss session. 90 minutes of the sales people each giving a win and a loss from their territory. Oh joy.
Not that I am critical of win/loss analysis, done right it is a very valuable tool that can yield a lot of information on you, your competitors, and how effective you are in the marketplace. All important things to know as a marketer or product manager. However, this is not going to be useful.
Why is this a bad idea?
There are many reasons to expect this to be less than useful, but to get started:
Sales will self select the cases – far and away, this will be the top reason why the exercise will be a waste of time. Since the sales person gets to choose the case for the win, and the loss they will report on, they will naturally pick two that make them look good, and apportion the blame for the loss on someone else
They won’t actually talk to the customer – next on the deficiencies is that they will rely on what they captured in the CRM tool during the sales case. Maybe a past email or two, or a transcript/notes from a few phone calls or meetings will be reviewed. The passage of time will make these unreliable, and most importantly, they will be snippets from BEFORE the order closed (won or lost). Sales people are notoriously poor at adding to the trove of CRM data after a case closes
Selection bias – this is the human tendency to look at pools of data with a preconceived notion, and cherry pick data to support this supposition. It is natural, and everybody is guilty of it to some degree. From the scientific researcher, to the journalist, your world-view alters how you see the data. In this case, the selection bias will bring out two cases, the awesome win, where they overcame the odds, and foiled the competition, winning the order and the fair maiden’s hand in marriage, and the case where the deck was so stacked against them that even though they fought valiantly, they were vanquished because the product failed to deliver
I could go on for a few more hours, but by and large internal win / loss analysis is not likely to yield actionable data. And putting sales in charge of it is putting the fox in charge of the henhouse. Thus this will be a very predictable 90 minutes of my afternoon. On to the game...
The Drinking Game
The rules are simple. Every time sales says they won because of “superior sales effort” you take a shot. Every time they blame the product or a missing feature for a loss, you take a shot. And lastly, every time they complain about the price, whether it is for a win or a loss, or that the competition discounted more, you get to take a shot.
The smart money says the Dude will be shit-faced - or in alcohol toxicosis - before 30 minutes have gone by.
How to do win/loss right
I figure that I should say a few words on how to do it right. This is one of those situations where you must engage a third party. Not because they can do it better (and they usually can, because they do a lot of it), but because they should call the prospect up and talk to them. They will not have a prior experience with the customer, so they have no bias.
The cases submitted for the analysis should be randomly selected. Truly take a list of wins and loses, and toss darts. If you really want to know why a deal went down the way it did, you must not cherry-pick the targets.
They should be reasonably fresh (no further back than 3 – 4 months at most), but not too fresh (the loss last week for example). You want to catch the principal contact, the “decision maker” at a time where the details will still be fresh, but not when any animosity might linger.
You should hand them the decision maker’s contact information. You should be able to get this from the CRM. The decision maker is the person whose signature or authority executes the deal. (nb: This is often the top reason for a loss. Sales had the wrong decision maker targeted, and was talking to people in the chain that while they may have been influential, never had the authority to choose). Should they find that they had the wrong person, a good partner for win/loss analysis will be able to find who the decision maker was, and talk to them. These are often very illuminating reports.
But you might be saying: “Why would they talk to a third party about this?” The truth is that a third party contact, done right will get unbiased input. If you (as the product manager) called up a lost order contact, they will likely hide their true feeling. If the sales person had horrible halitosis, or was the hard sell approach, they won’t tell you that. Likewise, when you ask about why they selected the competitor’s kit, they will tend to trivialize and say that you all were close. Useless rubbish. Get a contractor to call them, and the floodgates will open.
There are plenty more rules for doing win/loss analysis, but remember, bringing in a pro, an outsider is the first step in getting valuable, actionable results.
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