Before joining Pragmatic Institute, I inherited a win/loss program run by the enterprise sales team at Microsoft. It had been established by a chief operating officer motivated by operational efficiency. He invested in win/loss tools and templates and introduced win/loss with an eye toward driving sales improvement.
A classification system accounted for why we won and why we lost. The lead salesperson made most of the calls; sometimes a sales engineer would join in. Their response rate was incredibly low. Few buyers would agree to do loss reviews, and they only had slightly better luck conducting win reviews.
The problem was that win/loss was being driven as a quantitative exercise. If anyone asked about which features we were missing or which ones helped us win customers, no one knew enough to be able to discuss it. And sales had been adhering to this format for a while when my team, the Enterprise Competitive Strategy group, was created.
Get Internal Buy-In
My team was responsible for all infrastructure products, like Windows Server, Windows Client and virtualization products. As a result, we were asked to conduct win/loss reviews on behalf of the sales organization. Our first stab at this was to call the account managers or technical salespeople and conduct the win/loss review by interviewing them.
We got a lot of pushback initially because the sales team believed they were being personally evaluated, instead of the buyers. The scenario looked like this: A salesperson would agree to meet but often cancelled at the last minute because an important customer meeting popped up. Probably less than half the scheduled meetings actually occurred. This went on for the first three of the five years I was responsible for win/loss. In short, we did it wrong for a long time.
When we did get to talk to the sales team, all we heard was “the product isn’t right” or “the price isn’t right.” But we could not get enough context to really understand the situation. Now, instead of having salespeople who couldn’t speak to the real context behind the win/loss, we couldn’t speak to the context.
When we presented data to senior executives that we couldn’t explain, we realized it was time to diagnose why we weren’t successful. We determined that we needed to bypass sales and go directly to the source: our buyers. The sales team was not particularly excited for the same reason as before; ultimately, they were worried about personal criticism.
And although sales leadership had been willing for us to conduct win/loss reviews with their salespeople, when we wanted to conduct win/loss without the involvement of the sales team, a new wall went up. It took even more time to understand that sales leadership was frightened of the same thing their individual salespeople were worried about: They didn’t want their sales organization to look bad to the rest of the company.
Once we understood their concerns, we began asking ourselves, “What are we trying to learn?” and “What are we trying to change?” And the answer was clear: We wanted to find the competitive advantage in our products, which is why it made sense for us to own win/loss.
When we realized the importance of understanding the competition and our position in the market, we also realized that to be successful we had to correctly position and explain what we wanted to learn. We wanted to understand in the aggregate. We wanted to understand the patterns, we wanted to understand our buyers. We wanted to understand the patterns of our engagement with the different competitors, their strengths and our weaknesses. To do that we had to revamp the win/loss process.
We also had to figure out how to explain to sales why it would be in their interest for another team to conduct win/loss reviews. What was in it for them? Equally important, the sales reps had to know that we wouldn’t make them look bad.
At the end of the day, it was about making the sales team more effective. But this was a sales pitch I couldn’t make as a director; it required executive buy-in. The first step was to sell my own organization, then our general managers had to convince the sales leadership.
How did we do that? Well, as an engineering-led organization, the content that was created for the sales team focused on new product features and how to use them. We discovered that the field had been creating unsanctioned PowerPoint decks. Why? Because they worked. The content they received from corporate didn’t support sales-buyer conversations.
We included this information in our pitch to the sales leadership: Your teams are creating this content out of necessity. We believe that by doing the win/loss calls, we will make them more effective by creating better content for them.
Go for the Easy Win
Because it was important to demonstrate value up front, we initially focused on conducting win calls. Win interviews tend to be a little easier to schedule because everybody likes to celebrate a win. It’s like a new marriage; everybody is kind of giddy.
We focused on recognizing patterns, not whether a particular salesperson did this or delivered that. When sales saw that information, they came on board.
Loss reviews are more difficult, and they were our next major challenge. We appealed to our competitors customers in email and voice mail and we followed up. But they wouldn’t return our calls. Again we had to consider their concerns; it turned out they were afraid we might try to change their minds.
We didn’t see results until we explicitly said, “We are not members of the sales organization. No salesperson will follow up with you.” Once they realized we weren’t part of the sales organization, they began to talk.
We still had one more hurdle to overcome: Even if they believed that no one from sales would follow up, they didn’t want to regret their decision (“I’ve just made a multimillion-dollar purchase; I don’t want to realize that I made a bad decision.”).
We focused on being empathetic and understanding them rather than on our engagement with them. What were their key initiatives and why did they go shopping in the first place? Who were the decision-makers and where did the budgets lie? What were their internal concerns? It was more delicate when we asked them what worked and what didn’t work about us, but it helped that we had made it an empathetic exercise first.
Once we cleared these hurdles, we got a good response rate. However, many respondents cited the same reason why they couldn’t do a call: They were too busy; it would take too much time,
My response was to request short calls. I never asked for more than 30 minutes, and I was willing to negotiate. I’d say, “If you don’t have 30 minutes, how about 25, how about 15? Could you do five minutes right now?”
It was kind of funny because one person said, “How on earth are you going to do a good loss review in five minutes?” But they agreed to a five-minute call. I watched the time and when five minutes was up, I said, “You said you would give me five minutes, thank you so much” and I was ready to hang up.
They said, “Well, I can give you another 10 minutes.” It dawned on me that they had been afraid I might try to change their mind until they heard my questions, which weren’t ones a salesperson would ask.
Conducting win/loss calls should be a qualitative exercise. It’s not about creating charts. It’s about understanding your market and buyers. What’s going on with them? How do they make decisions? Are they cost conscious? Are they risk conscious?
Wins vs. Losses
We can glean important information from both loss reviews and win reviews, yet there’s a tendency to emphasize losses over wins because we want to know why we’re losing and who we are losing against. Loss reviews are definitely valuable for that, and they can help reset expectations. Competitive landscape patterns will also emerge from your loss reviews, offering an opportunity to gain insight into customers and understand what else is going on outside of your engagement.
Win reviews, though, can also be enlightening. And more people are willing to participate. You can discover why people buy your products. At Microsoft we thought it was because the features and functions of our products were so great. But we discovered that the decision was actually based on product features and capabilities less than 10 percent of the time. Instead it was based on our ability to sell and market to them.
Although we had to meet the features and functions required by the technical decision-maker, most of time the reasoning came down to our ability to satisfy that we could deliver value to the buyer. We had to understand the customer’s pain and demonstrate the value of why they should enter into a relationship with us.
With win reviews, you’re essentially listening for people to tell you why they bought your product so you can go out and repeat the process with other people. With loss reviews you’re asking people to help you be a better vendor: Even if you didn’t buy from us today, help us be better for you in the future and maybe you’ll buy the next product from us. The painful lesson my team learned is that if these win/loss conversations aren’t managed correctly, you‘ll miss the opportunity to collect the valuable information needed to be an effective vendor.