Gartner: "Boost your sales win rates by 50% via win-loss analysis"
Most sales organisations claim to conduct some form of win-loss analysis. But according to a recent Gartner investigation, no more than a third conduct them with the proper degree of rigour. And guess what? The minority that do see up to a 50% improvement in sales win rates.
The findings are published in Gartner’s latest report “Tech Go-to-Market: Three Ways Marketers Can Use Data From Win/Loss Analysis to Increase Win Rates and Revenues”. The findings make for compelling reading…
I should know, because analyst Todd Berkowitz interviewed me for the report. I was able to share some of the lessons I’ve learned over the years from both participating in and overseeing win-loss reports.
Todd concludes, “A formal and rigorous win/loss analysis program enables better segmentation, product strategy choices and sales enablement” - and that matches my experience exactly. So why do so few organisations do a good job in this area?
The need for rigour
Firstly, it is hard work. Superficial win-loss reports can give the impression of having addressed the issue, but they usually turn out to be shallow box-ticking exercises in which positions are defended and little useful is learned.
Asking the sales organisation to self-report on wins and losses is as insightful as asking Turkeys whether they might be inclined to vote for Christmas - and likely to result in the same level of gobbledygook.
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. Without such safeguards, the analysis will simply serve to defend established positions and prejudices.
Cover the entire decision process
Next, the win-loss analysis needs to span the entire customer decision-making process. Traditional analyses tend to focus on the tail end of the sales cycle, but the most valuable lessons are often to be learned from revisiting the early days of the customer decision journey.
My contribution in this part in the report suggested “Far too many sales organisations are focused on the latter stages of the sales cycle, but what happens in the early stages is vitally important since this is where you can have the greatest influence in shaping the buyer’s perception - this depends upon the sales people asking the right questions in these critical early interactions…”
This bears out a repeated experience across a wide range of client engagements: what at first appear to be bottom-of-funnel, inability-to-close problems often turn out to be top-of-funnel, inability-to-set-the-scene-properly-to-start-with-problems.
What caused them to recognise the need for change?
Sales and marketing organisations can learn invaluable lessons from understanding what caused their recent sales wins to recognise the need for change in the first place, and how the prospect went about deciding if, what and how they chose to buy.
It’s a matter of intelligent segmentation, informed by rigorous win-loss analysis. Segmentation that goes beyond the obvious demographic factors and really digs deep into the structural and situational factors - both internal and external - that determine whether a prospect is likely to buy at all, and whether they are likely to buy from you.
Not just about sales strategies, tactics and execution...
Please note that I’m not denying or ignoring the importance of sales strategy, tactics and execution in making the difference between winning and losing. I’m simply suggesting that they are the obvious factors, and that you need to look beyond them if you are to really benefit from win-loss analysis.
If you are a Gartner subscriber and have access to the report, I recommend that you read it and act upon the recommendations. But even if you are not, I urge you to adopt a rigorous and disciplined approach to win-loss analysis.
You must avoid simply going through the motions. You have to involve independent assessors who were not directly involved in the sales process itself. And you must interview your customers and former prospects - both wins and losses.
You learn most from your wins and draws
By the way, although you can learn some really useful information from your losses, in my experience you learn the most valuable information from your wins - and by identifying what you can do to replicate them. Oh, and don't ignore all those apparently well-qualified opportunities that ended up deciding to "do nothing".
Lastly, you must commit to actually doing something with the information. Use the lessons learned to inform your market segmentation, sales process and product roadmap. If you have any doubt about whether the effort will be worth it, just consider that Gartner statistic again: you could increase your win rates by up to 50%.