win-loss analysisBenefits of doing Win-Loss Analysis

Benefits of doing Win-Loss Analysis

Win-Loss Analysis is a method of evaluating, comparing and contrasting the reasons for why a sale was won or lost. A similar approach that is popular is Lost-Sale Analysis.

Learn How to perform Win-Loss Analysis.

In order to appreciate the importance of Win-Loss Analysis, we will look at the ‘Benefits of doing Win-Loss Analysis’ below. 

Approaching the Goal as an Opportunity and not a Problem

Quite often, whether it is do with conversion % improvement or revenue improvement, Sales Directors focus on identifying the reasons for the lost sale. They want to know about the root causes for the problem. The reality of lost sales is that, there may not be a specific negative point for sale not happening. The advantage with Win-Loss Analysis is to look at the situation through the lens of not only lost sale but also sale won. What did we do right and how?

Drawing Comparisons

By studying both Won and Lost deals, we can draw comparisons that is very useful to identify winning approaches. It can also present deficiencies the sales process. When done across sales team members, we will get to know how to align specific customer & staff personas, how to develop peer-support models, etc.

Developing Unbiased and Result Oriented Culture

Action plans so prepared by studying both won and lost cases with Win-Loss Analysis lays the foundation for an unbiased and result oriented culture among sales staff. As team members are able to appreciate the differences between Won and Lost deals, they recognize that this exercise isn’t about witch hunting. Everyone in the sales team would have some success and some failures. Thus Win-Loss Analysis, when done systematically and regularly can become a powerful coaching tool.

Won Customers are Emotionally Connected to Brand

One of the biggest advantages or benefits of applying Win-Loss Analysis instead of doing Lost-Sales Analysis is that, Won customers are emotionally connected to your brand as they recently made a purchase. They are more willing and forthcoming to share their feedback, opinions, likes, dislikes and choices with us. In simple words, we will get a good mind share from them. On the contrary, lost customers are most likely not to open up and share genuine reasons.

Check out Why doing Lost Sale Analysis is useless?

How To Perform Win-Loss Analysis.

Unlike Lost Sale Analysis, Win-Loss Analysis aims to take a comprehensive approach to studying the reasons for improving the sales process by evaluating orders Won and orders Lost.

Learn more about Why doing Lost Sale Analysis is useless? and the Benefits of doing a Win-Loss Analysis

Here are the steps to perform Win-Loss Analysis

1. Collect a sample of both customers where we won orders as well as lost orders. Make sure you select the right ones
2. Do some homework about each of those cases such as customer profile, persona, sales time lines and customer journey
3. Seek interviews with customers
4. Hone your interview skills as questioning, probing, listening, observation (non-verbal) skills
5. Keep the interviews crisp
6. Validate customer satisfaction with respect to product, features, price, finance options, sales experience.
7. Probe and understand decision drivers such as consideration set, decision makers, influencers, objections etc., 
8. Don’t put words into customer’s mouth and don’t expect perfect answers 
9. Also don’t assume that there’s always a problem for non-purchase
10. Record your observations
11. Study them later for patterns – both between and within Win and Lost Cases

Why doing Lost Sale Analysis is useless?

When Sales directors are trying to solve sales problems such as low customer retention or poor conversion ratios, they would want their sales managers to reach out to prospects who moved up in the sales funnel but didn’t finally make the purchase. The idea behind Lost Sale Analysis is to identify the barriers for the sale by reaching out to the lost customers or prospects. While in principle this makes sense, there are several practical bottlenecks:

• Those who didn’t buy from you aren’t going to spare time for discussions like this.
  They are most likely to assume this is a desperate recovery pitch and turn a deaf ear.
• Prospects who didn’t make the purchase aren’t attached to your brand and are less likely to offer a candid reason for non-purchase.

Here is one more systemic reason for why Lost Sale Analysis isn’t helpful. For Ex: If a lost customer gives a missing product feature as a reason for non-purchase, then what about customers who purchased the product even when this feature was missing? Thus the absence or presence of any factor for non-purchase isn’t validated with won customers.

The most common problem with using Lost Sale Analysis is to take many actions which are not necessary or sometimes even harmful to the objective of increasing sales. For example, making the employee ask too many questions to the customer to understand customer needs before showing a suitable product or variant.

Most sales team members don’t trust this analysis because it’s just used as a mechanism to pinpoint mistakes in their skill or will by their managers.

So what is the alternative?

Consider analysing both sales Lost and Won. Learn more about how to perform Win-Loss Analysis.