The Ultimate Guide to Win/Loss Analysis
Every business has room for growth—even those that hit their sales goals month after month. Conducting win/loss analysis can help you improve by understanding why recent evaluators decided to buy (or not buy) from you.
But win/loss analysis is more involved than simply asking buyers to fill out a survey. To truly understand your market’s needs and gain competitive intelligence—and then use that intelligence to make the best decisions regarding your products—you need to approach every win/loss analysis purposefully and methodically. If you don’t, you could risk putting potential customers off or making business decisions based on inaccurate information.
With sound win/loss analysis practices, you can expect to gain insight into your market and amass real data that can inform decisions about your products, sales processes and marketing strategies.
What is win/loss analysis?
Win/loss analysis is the process of understanding the steps recent evaluators took during the buying process and why they did or did not buy from you. Win/loss analysis is different from a customer survey in both audience and substance. Whereas customer surveys provide only insight into buyers who chose to purchase from you, win/loss analyses are more objective, considering the opinions and decisions of folks who chose to buy from a competitor or other vendor or decided not to buy at all. Win/loss analyses also are conducted prior to your customers having much experience using your product so as to not cloud their perspective of the buying process and what led them to make the purchase decision they did.
Most importantly, win/loss analysis has little to do with individual responses. Businesses should not alter products or processes based on any one win/loss analysis. Rather, they should regularly conduct win/loss analyses to identify patterns and themes in the market and make business decisions accordingly.
Thorough win/loss analyses should help you ascertain:
- Who your biggest competitors are
- What your purchasers’ decision-making process looks like
- Your company’s and/or product’s reputation in the market
- How competitive your pricing is
- If you’re offering the right product features
- How effective your sales and marketing programs are
What are the benefits of win/loss analysis?
Win/loss analysis is an excellent tool for gathering competitive intelligence. One-to-one interviews with recent evaluators offer a unique opportunity to gather fresh data from a target audience where competitors play a distinct role in the customer decision-making process.
Recent evaluators can make the truest assessment of our products. Having just evaluated the product against the competition, they can assess your company’s strengths and weaknesses. Perhaps most importantly, you can learn about problems with a product and problems with the buying and selling process.
Win/loss analysis is one of the most critical ways product marketers can benefit their teams. Conducting interviews and collecting data can help your entire organization improve customer acquisition and retention strategies and grow the business. All of your teams, especially sales, marketing and product development, can benefit from win/loss analysis data.
Sales: Win/loss analyses help your sales teams immensely. This can be on a personal level, such as why a specific rep lost a deal, or on an organizational level, uncovering the strongest and weakest areas of the sales process. Both win reasons and loss reasons can be used to foster learning opportunities for your sales reps and, sales organization to improve upon the sales process and ideally, win more future deals.
Marketing: For marketing, win/loss analyses can highlight aspects of your brand that potential customers appreciate as well as its weaknesses. This is beneficial for your marketing team because they can fine-tune messaging, adjust campaigns and create stronger content to showcase your company’s strengths.
Product development: Your win/loss analysis can help drive product decisions and investments. Knowing what works, what doesn’t work, what your product is missing and what makes your customers happy are all great data points for your product team to build out new product features and take your product development in a positive direction.
Win/loss analysis is the process of understanding the steps recent evaluators took during the buying process and why they did or did not buy from you.
When should a win/loss analysis be done?
Win/loss analysis should be performed when a deal is completely closed after your company or another vendor has solidly won the deal (i.e. the contract is signed, the ink is dry and the check has cleared the bank). If you try to conduct the interview too early (and your organization was winning), it’s possible you could raise questions in the buyer’s mind that cause you to lose the deal.
And if you wait too long after the deal is closed, the buyer’s memory will fade, and you risk losing out on important feedback. Plus, remember you are trying to measure what happened during the sales cycle, and if a customer is too deep into implementation and use of the product, their answers will reflect their current views一not what they were thinking during the buying process.
In general, a win/loss analysis should occur two to four weeks after a deal is concluded and no longer than three months later.
Why marketing (and not sales) should manage win/loss analysis
Win/loss analysis is an activity that can be outsourced but not to sales. Win/loss analysis is a marketing function. If sales conducts win/loss analysis, they may not get to the real issues. Often the buyer does not want to reveal the real reasons for fear their salesperson will try to overcome their objections and attempt to restart the selling process. But even if you outsource this to someone else, product managers should plan on doing at least one win/loss analysis interview personally every month.
Regardless, the product manager becomes the objective third party who helps the company and customers/prospects have better success in converting sales. Product management can easily sell the sales team on performing this task by stating the benefits of doing so:
- Product management can perform the function, thus saving the sales team valuable time.
- Product management acts as an objective third party, which will result in a prospect or customer’s ability to be more open about the sales win or loss.
- Product management obtains feedback on how to make products more robust, thus resulting in more sales down the road.
How to conduct a win/loss analysis
Once you’ve decided who will conduct the win/loss interviews (the product manager or another objective third party), now it’s time to get started conducting your win/loss analysis.
Before the win/loss analysis interview
First, we have to identify evaluators. Who are evaluators, and how do we find them? Evaluators are the people in your market who have recognized they have a problem to solve and are actively looking for solutions to their problem. They are looking at your solution and at your competitors’ solutions. This is the part of the market that your sales channel is most familiar with; they are active leads in the sales funnel.
Finding evaluators depends on the type of sales channel you use. The more anonymous people are during the sales cycle, the more difficult it is to find them. Use this guide for finding evaluators based on different sales channels.
Next, sit down with the sales team involved in the win or loss. Be sure to include the highest-ranking salesperson in the discussion. Ask for background on the evaluator, including how the company got involved in the proposal, the type of relationship they had/have with them, the sales processes involved, products or solutions used to close the sale, the result and whether they anticipated this result.
Don’t forget to coordinate efforts with other product managers who may also be conducting interviews with the same evaluator. The last thing you want is multiple people reaching out for the same reason. Not only will it annoy the evaluator, but it will also make your company appear disorganized and unprofessional and could jeopardize future sales.
Now you’re ready to schedule an interview with the evaluator. If the evaluator you’re contacting decided not to buy from you, reach out and say something like, “I understand you recently made a decision, and you’re going in another direction. I respect your decision. I wonder if I could get 30 minutes of your time to understand how we could have helped you better for the next time.” This introduction would be even simpler if the evaluator did choose your product. Either way, let the person know in advance the topics you plan to discuss.
During the win/loss analysis interview
When you call the evaluator, start by thanking them for their time and explaining the purpose of the interview (to learn as much as possible about his or her perceptions and experience during the recent sales process so your organization can continually improve). State that you wish to use the evaluator’s feedback within your organization, but he or she should feel comfortable speaking freely because you’ll handle sensitive aspects of your conversation appropriately.
Next, ask the questions you have prepared. These will be specific to your organization, products, sales channels and market, but here are some to get you started:
- Could you please explain your decision-making process?
- Why did you decide to buy/not buy from our company?
- What other companies/products did you consider?
- How did we stack up?
- Which capabilities were most important in your decision to buy?
- What were your thoughts on our proposal/sales process?
- What were your thoughts on the value and pricing of every product you considered?
- What was your perception of our organization prior to entering the buying cycle? Did it change throughout?
- Did you contact our references? If so, were they helpful?
- What advice would you give us for working together in the future?
- What additional comments would you like to share?
Once you ask a question, listen to the evaluator’s answer intently and remain neutral upon hearing their responses. This is a fact-finding mission, not an opportunity to cast doubt on their decision or persuade them to reconsider. Be sure not to challenge or threaten the evaluator’s opinions or perceptions. Do not ask them to justify their decision or correct misinformation.
Remember, perception is reality in sales. If they chose not to buy from you because they thought your product didn’t have the same capabilities as a competitor’s, it doesn’t matter if your product does have the same or even better capabilities. The fact is, they perceived that it didn’t, and that’s the issue that needs to be addressed for future deals.
After the win/loss analysis interview
Once you’ve concluded your interview, send a personal thank-you note to the evaluator. Then, summarize in writing the notes from your interview and distribute them to the appropriate internal team members. Conduct a debriefing meeting and list any action items that need to be immediately addressed. However, unless something egregious comes from an interview, you’ll want to refrain from making any large-scale changes based on one, two or even a handful of interviews.
You’ll need a large-enough sample of win/loss interviews to begin to identify patterns. And it’s a numbers game. You must do win/loss consistently to get a sample set that’s large enough. At Pragmatic Institute, we generally recommend doing no fewer than 10 interviews before starting to react to trends.
Once you establish a pattern in your data, it’s important to cast a much wider net. Do something more quantitative, perhaps a third-party survey. You want to validate what you think you have learned in your interviews.
How to calculate win/loss ratio
Though there is no single way to conduct win/loss analysis, there are many helpful pieces of data that can contribute to your results. It’s essential to incorporate both quantitative data and qualitative data into your analysis.
Quantitative win/loss analyses allow you to put hard numbers to your team’s successes and opportunities. There are a handful of quantitative data points you should be calculating to gather the most accurate information across your organization. Calculating different win rates can highlight how well you’re doing and where you need to invest more resources. Below are the key data points to form your quantitative analysis.
These metrics should be calculated on a cadence that mirrors your sales quota cycle so that you can measure your progress. To keep these data points as up-to-date as possible, calculate these metrics at least every month and every quarter. By regularly measuring your win rates, you can monitor your successes over time and identify new opportunities for improvement.
You can make it easier to track these metrics by setting up reports in your CRM (or wherever you keep your sales opportunity data) to automatically generate these reports on a regular basis.
A win/loss ratio compares your won opportunities against your lost opportunities to put wins and losses side by side. To determine your win/loss ratio, write out your number of won opportunities (A) next to your number of lost opportunities (B) like so: A:C
Overall win rate
Your win rate is a measure of the percentage of sales opportunities your team successfully turns into a paying customer or client. To calculate your win rate (WR), divide your number of won opportunities (A) by your total number of opportunities (C) like this: A/C=WR.
When calculating your overall win rate, be sure to calculate it both for overall opportunities and again while excluding open and in-progress opportunities that may still close in the future.
Competitive win rate
Competitive win rates shine a spotlight on your success rate in opportunities where you go head to head with another solution. When calculating your competitive win rate (CWR), you can group all of your competitive deals together for an overall rate, as well as calculate this by each individual competitor. You could also group your competitors into tiers and calculate your win rate by direct, indirect and aspirational competitive deals. This formula is the same as your overall win rate, but only includes data from specific competitive deals.
To calculate your competitive win rate, follow the standard win rate formula, but take the number of opportunities won where you were head to head with a competitor (D) and divide by the number of total opportunities where you went head to head with a competitor (E) like this: D/E=CWR
For details on how to calculate more specific rates, such as win rates by sales segment and loss rate by reason, check out Types of Data Needed for Successful Win/Loss Analysis.
How often should you conduct win/loss analysis?
Consistently conducting win/loss analysis will make your solutions and your company more valuable and build more credibility in the eyes of your customers and prospects.
Use the data you collect as well as simple win/loss statistics to establish a baseline and measure success. These metrics should be calculated on a cadence that mirrors your sales quota cycle—at least quarterly, if not monthly. By regularly measuring your win rates, you can monitor your successes over time and identify new opportunities for improvement.
What to do after win/loss analysis
Win/loss analysis can give you data to validate the things your team is doing correctly and insight into what isn’t working. It is a more effective way to learn the strengths and weaknesses of the competition (not just about their products, but also about their sales expertise). In the absence of win/loss data, we typically react to anecdotes from the sales channel, which might reflect a market of one and not a market of many.
Once you have identified patterns in your win/loss analysis data, it’s time to use it to improve. Perhaps you do, in fact, need to consider adding product features or rethink pricing. But more often than not, you can increase your win/loss ratio by tweaking your messaging, simplifying your sales process and reframing conversations with prospects.
Read about the simple adjustment one company made to their internal processes that led to a sizeable increase in their win rates without spending a dime on product development or marketing.
Consistently conducting win/loss analysis will make your solutions and your company more valuable and build more credibility in the eyes of your customers and prospects.
Challenges of win/loss analysis and how to overcome them
Win/loss analysis is a powerful tool every organization should implement to get honest feedback from their market and improve their products, sales efforts and marketing strategies. But that’s not to say you won’t run into challenges conducting win/loss analyses. Here are some of the most common and how to overcome them:
Sales not being on board
While win/loss analysis can provide incredible insight into the buying process for your sales team, they aren’t always on board with the idea. That’s because, often, win/loss analysis can come across as a performance review for salespeople.
Of course, sometimes win/loss analysis does uncover problems with an individual sales team member, but that’s not the spirit of conducting the research. In reality, win/loss analyses are actually highly useful for sales professionals, and, when handled diplomatically, should never seek to place blame but improve business. See these tips for getting sales on board with win/loss analysis.
Evaluators not fully participating
Our experts in win/loss analysis at the Pragmatic Institute typically find evaluators are quite amenable to participating in win/loss interviews—if approached correctly. And the first rule is selecting the right person to conduct the interview. Evaluators are much more likely to open up to a product manager or third party as opposed to the person who tried to sell them on your product or even a sales manager.
Second, in your introductory call, you must clearly communicate that you respect their decision to buy or not buy and will make no attempts to change their mind or sell them anything additional. Then, you must respond impartially to all of their feedback, even if they have misconceptions about your product or business.
Win/loss interviews take some practice, but once you get good at them, you’ll find evaluators are generally pleased to be asked for their opinion and will happily disclose valuable information, even including competitor pricing, RFP processes and more.
Not debriefing the results
Win/loss analysis can be time-consuming, certainly, but it’s worth its weight in gold, considering how much market intelligence you’ll gain. But that information is only valuable if it’s disseminated and put to good use.
After conducting a win/loss interview, gather the team—salesperson, product manager and product marketing manager—to debrief and interpret your findings in a structured setting. These conversations should aim to extract best practices and areas for improvement from each interview for development into deal-winning tactics. The benefits of regular debriefs extend beyond coaching opportunities (e.g., a guaranteed uptick in your win rate) and are an effective tool for engaging your team in win-loss analysis.
Debriefs drive engagement in win-loss analysis by reinforcing the notion that they aren’t a tool for assessing performance but for collecting buyer intelligence to drive improvement.
Scheduled and frequent touchpoints give teams a routine setting to share their side of the story and absorb the customer’s perspective. It gives sales teams a voice and stake in the process.
Debriefs help teams understand their buyers better and drive smarter selling. These discussions help teams peel back the layers of each deal to uncover the main decision points. These decision points become a team’s greatest resource for aligning sales tactics with buyer business needs.
Learn more about win/loss analysis
Mastering win/loss analysis will unlock insight into your market you never imagined possible. Register for Pragmatic Institute’s Foundations class today to better understand the power of win/loss analysis and how to conduct effective win/loss interviews to improve your business.