And that might just be the thinking for some of your customers as you tick off the list of required questions during a standard win-loss interview. What do you hear most of the time? Was there just no budget? Was the timing all wrong? Do you believe them? Or, are they just trying to get you off the phone? Maybe they think they’re dodging yet another sales call. Maybe they don’t want to hurt your feelings … again.
When done right, win-loss analyses uncover the how and why behind the decisions prospects make. They strip away the subterfuge and get at the real answers, helping organizations get intel on their competitors, build better products, design a more effective message and, at the end of the day, boost that all-important win rate.
Yet, many organizations are doing it wrong, settling for fill-in-the-blank answers that won’t get them anywhere. If you’re ready to move your business forward, here are five hacks essential to effective win-loss analyses.
… at least that’s what Jack Nicholson’s character said in “A Few Good Men.”
Why is it so hard to get the truth from your customers and prospects who declined a deal? Some common reasons:
» They’re suffering from buyer’s remorse.
» They don’t want to deliver bad news.
» They’ll say anything to get you off the phone.
» They just told you “no,” so the conversation is, frankly, awkward.
» They’re leery of another sales pitch.
Head over to the chapters on the theory of cognitive dissonance and Schema Theory in your dusty college psychology textbook. Say what, you say? It’s all about how your customers’ brains work. Research shows that people will uphold and defend the status quo and their preconceived notions. Let’s break it down:
/ Cognitive dissonance is the discomfort people feel when they hold two or more conflicting values, thoughts and beliefs and take part in an activity or learn new information that is contrary to those values or beliefs.
/ The Schema Theory says that people have an outline or theme that they use in their minds to arrange and understand information. Sometimes people don’t consider new, relevant information because it clashes with their beliefs and ideas.
In other words, if you won the deal, your customers might downplay your competitors’ high points so they can feel better about their choice to hire you. If you lost the deal, the prospect could minimize your high points so they feel better about their decision. That’s just how the brain works.
As you conduct win-loss analyses, know that your targets’ minds are doing all they can to justify prior decisions. If you understand that, you can ask better questions and get better answers.
Many companies use win-loss data to identify a sales department’s strengths and weaknesses and to better understand the customer buying process.
But, to get the information you need, it’s time to toss the checklists … at least the exclusive use of them when conducting a win-loss analysis. Conversation is key to understanding why your prospects made their decisions and will uncover real opportunities for future sales activity.
Getting to the truth isn’t easy. Callers must be skilled at phone conversations and be able to think on their feet. They can’t simply check off a series of questions so they can quickly get off the phone and move on to the next interview. They need to be able to pull at the interesting threads as they appear.
Here’s the worst case scenario when that inexperienced staffer simply goes through a checklist: You get bad answers and make the wrong decisions that hurt the direction of your business – changing pricing because prospects claimed your product was too expensive; offering incentives that really aren’t needed; or scraping features that actually are useful.
Does this win-loss analysis workflow sound familiar? Then you’re doing it wrong.
» Starts with sales: The sales rep checks off the reason why a deal wasn’t closed in the drop-down box of the CRM application. Those drop-down boxes make it easy for companies to track the apparent reasons behind lost deals – budget cuts, bad timing, a competitor, no interest, for instance.
» Moves to marketing: From there, the marketing department takes over, sometimes assigning the job to an intern or junior employee to make the call. Already, the staffer has a preconceived idea about why the sale was lost – based on the reason the sales rep identified in the drop-down box.
» The outcome: But, the reason cited by the sales rep might not be the actual reason behind a prospect’s decision. The truth simply isn’t found in excuses that you can track on a spreadsheet.
You’ve heard these excuses before, but those often are just rationalizations. Your customers or prospects want to feel good about their own decisions. They don’t want to hurt anybody’s feelings. They worry about their own image inside their company. They just want to get you off the phone.
Getting the right answers drives opportunities, but the truth often isn’t just that the budget was cut or the timing was wrong or that the CEO is buddies with a competitor. The reasons behind a prospect’s decision often go deeper than those first answers.
Don’t be satisfied. Use those first answers to delve deeper into the sales process to truly understand how your team can improve and how your product stacks up to your competitors.
If they can’t explain the benefits in that scenario, they probably never understood value proposition.
Want answers that you can actually use? Then it’s time to start asking better questions.
Budget: If budget cuts were the reason they decided not to move forward with your company, then ask this: “How would you use the product if it were free?” If they can’t explain the benefits in that scenario, they probably never understood value proposition.
Too busy: Was your prospect “too busy” to consider the solution? Too busy often means that the value proposition was not compelling enough, or that the so-called champion was not willing to risk political capital. If that’s the case, they were not the right champion.
True motivation: Believe it or not, making money and saving money for a company aren’t always the driving ambition. Find out what else is on their minds. What affects their bonus? What other and potentially competing priorities are they juggling?
Risk aversion: The thing you are selling may be the perfect solution, but it may be perceived as too risky. The person 2 years away from retirement could perceive rocking the boat as being risk. Other people may view change management as a bigger risk than they are willing to take on. What’s the mindset of your prospect?
Believe it or not, making money and saving money for a company aren’t always the driving ambition. Find out what else is on their minds.
The goal of a win-loss analysis isn’t to figure out where sales went wrong. It’s to determine how to increase win rates, build a more competitive product, create a more powerful marketing message and, ultimately, boost profitability. It’s about teamwork – not the actions of a single member of the team.
While It’s important to have sales leadership buy-in to the process, it is equally important to have your product people and marketing people on board too.
After all, it’s hard for a sales representative to sell a product that isn’t as good as its competitor or has a convoluted marketing message. Use win-loss analyses to learn how to evolve your product, hone marketing, and improve sales; not to punish and embarrass employees or departments. Be open to all feedback. The final results won’t just help the sales rep on the next pitch, it will push the entire company toward further success.
You’re all in this together.
If your organization embraces intellectual honesty and uses the power of a win-loss analysis for the greater good, good things happen:
I am a member of a team, and I rely on the team, I defer to it and sacrifice for it, because the team, not the individual, is the ultimate champion.
When on the phone with a total (yet well qualified) stranger, people can speak more candidly about sensitive matters. They don’t have to worry about a surprise sales pitch or hurting anybody’s feelings. With a third party, your prospect has the freedom to be more open so you can get the real answers that will make all of the difference.
This section is obviously a bit self serving because our agency does this sort of win-loss analysis … But, using a third party is the best way to get the frank answers you need to move forward. In fact, we use an external consultant when we need this kind of research for our offerings.
Third parties know the questions to ask and work as a buffer between your team and your customer or prospect. After months of working closely with a particular vendor, buyers don’t want to deliver bad news — news that could be even more harsh than “you didn’t get the deal.” They may gloss over or not even bring up specific issues that may be critical to your future success. Maybe they don’t want to get anybody in trouble. Maybe they’re just tired after the sales process and don’t want to accidently give you reason to try again.
Whatever the reason, employees of your company are not likely getting the candid answers they need to affect change.
With an eye towards selling more, knowing the right questions to ask, and the ability to get people to open up, you can get to the “Real No” – The real reason why someone chose not to buy your solution.
We do that at Thirdside.
Our experienced team of senior marketing and sales professionals have carried sales quotas and run marketing departments. We know your pain: You want to build sales, drive results, exceed expectations. You want to close deals.
We embrace the opportunity to pick up the phone to ask the kinds of frank questions that will get you the direct answers that you need.