What is Win-Loss analysis and how to do it?
In this article entitled, what is Win-Loss analysis and how to do it, we will describe what it is and why it's so powerful. And how to run the analysis, how to read and use the results. The win-loss analysis takes the guesswork out of why a sales opportunity become a customer, or why they decided not to buy from you.
Why conduct win-loss analysis?
If you are not asking why people did not buy from you, then how do you expect to find out the answer? A big dollop of assumption based on guesswork with some platitudes from your sales team?
Unfortunately, we know this sort of analysis takes place a lot. Because it's easier for people to ignore the real reason for a failure and success. We understand from several sources that the number of organisations using Win - Loss analysis is well below 20%.
It has to be essential to get to the bottom a customers decision-maker process. And to understand how the market sees you. What you are missing (or why you are attracting customers) and which competitors are getting the better of you? And most importantly, why? No more one sentence written by a salesperson on your CRM telling you what they think you want to know.
The win-Loss analysis is a potent Intelligence tool, and it will allow you to suddenly see trends and patterns early to enable you to either keep doing what you are doing, but more of it. Or getting your act together and doing something different to get back on course.
You will be shocked and surprised by the results. Moreover, the best aspect of the win-loss analysis is that it is relatively simple to do. The simplest way to find out how you won or lost a customer is to ask them. So, here's everything you may need to know to start implementing a successful strategy and win more, lose less.
Win - Loss analysis works equally well with products, services and professional services like law firms and accountancy practices.
Quantitative ratios for win-loss analysis are relatively simple:
- The number won opportunities / Number of lost opportunities = win/loss ratio
- Number of won opportunities / The number total opportunities = win rate.
Who should conduct win-loss interviews?
The win-loss analysis is best done by a completely independent bias-free organisation. Not by your sales and customer service teams. Now, you may think that we would say that, but for customers or those who went else where, you need to know any expressed views are reported correctly, with nothing left out and offer an unbiased opinion of the events leading to the win or loss.
Those potential customers who went elsewhere are the most important to speak to, and they also need to know that Win/loss is not going to be just a sales pitch. Don't use anyone involved in the sales process as you are looking for the prospect /customer to offer uncensored feedback within a sales-free environment. The last thing you need is an uncomfortable conversation. Also, remember if you ask your product teams to do the job they may focus on the technical details of the product and get defensive if a non-customer criticises their work.
It is, for this reason, we argue that an external CI consultant best does the Win-Loss analysis. But it would be best for you to have an input on the standard questions they will ask. Ideally, get them to offer their thoughts on the question content.
How many interviews do I need?
For Win-Loss analysis to be useful, you need to get a wide range of interviews to achieve a consistent picture. So as many as you can and ideally on an ongoing basis. Also, to prevent your final figures being out of sync, make sure you have an even number of results. And keep the interviews to 20 minutes max, so they don't think they are getting grilled and you don't eat into their day.
When should it take place?
A Win-Loss analysis is best done soon after the event. The longer you leave, the less fresh a perspective the interviewee will have, and their emotions will have mellowed. Try and get won and lost deal interviews out of the way before they start using your or your competitor's service. So they are not blinded by the hopefully fabulous service they have received post-sales.
How should a win-loss analysis take place?
Win-Loss analysis should ideally take place in person or over the telephone. The key reasons are the interviews will rarely go to plan and sometime when asking a question you will get more insight with the interviewee going off-piste. You will be able to dig deeper on the phone or face to face but remember to stick to the list of the questions too as you need to be able to compare and contrast the answers with the other interviews.
Also, without seeing or speaking to them, you will not be able to take note of their positive or negative inflexions, passion and body language. Always create open-ended questions. Yes and no answers rarely tell us anything, and the conversation will flow better without these closed questions. Never turn the interview into a sales call and never get defensive. It's the interviewee job to tell you how it is, not you.
Analyse your results
The best thing about outsourcing the process is that you will not need to do the analysis, as it should be done for you. In a format where you can see the workings out so you can agree or disagree with the analysis. You cant disagree with the interview content as they are facts - at least in the eye of the customer.
- Strip down and collate the interviews
- Take notes and look for patterns. You are going to get extreme views either way. They are expected, but it's more important to look for the patterns and spot trends. If you react to every interview’s complete findings, you are going to be selling a round, square triangle solid with a liquid surface made of wood or water!
- Look out for problems with your sales process - too long, short, unprofessional, scripted or too pushy etc.
- Isolate pricing issues. Too cheap or too expensive? And are you consistently missing features they are looking for? Features your competitors have, and you don't. Never restrict yourself to just pricing, feature and sales issues. If you do, you may miss other patterns and trends.
Agree on actions
Once you've identified what's going on put a plan together to overcome any problems. And because you have the Win-Loss ratios, it is easier to see the results. An run the numbers monthly to make sure you're going in the right direction.
Show the results
Tell your sales, product marketing, customer services teams and anyone else involved in the supply chain what you have found. Publish the ratios and put them into your organisation's objectives.
Interestingly, once you have the data, you can use the ratios to track what you have done to resolve any problems you found in the exercise. You can use Win-Loss to determine success in new product launches, new sales initiative, new marketing etc. etc. This insight is where Win-Loss analysis becomes an even more powerful tool.
Thank you for your time. In this article called, what is win-loss analysis and how to do it, we described what the process is, why it's so powerful, how to run the analysis and how to read and use the results. If you have any questions about win-loss analysis, then please get in touch.
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