The Eight Rules of Successful Win/Loss Analysis
Post-Decision Interview or Win/Loss Analysis?
Most marketing professionals refer to prospect post-decision interviews as win/loss analysis. However, the greatest misbelief about such an analysis is that it is a definitive means of securing the reality of why a vendor won or lost a competitive sales cycle. The truth is that most vendor-conducted interviews are destined for failure. Furthermore, the prospect has yet to use its acquired products or to experience vendor services in a live production environment, so perception is the only knowledge that is extracted from post-decision interviews. Perception is reality to your prospects. A win/loss analysis could uncover much more than why a competitive opportunity was won or lost. For this reason, if conducted with discipline and purpose, it could continually align (or tune in) your organization’s marketing and sales strategies to your prospect’s perceptions. Therefore, we define a post-decision interview (or PDI) as a market perception validation process that replaces the simple capturing of the reason for winning or losing an opportunity. Alarmingly, fewer than 20% of organizations conduct a PDI and the pervasive practice is to not conduct these interviews at all. This tendency arises because PDIs:
- Are viewed as discretionary;
- Rarely have actionable goals for outcomes;
- Have non-existent templates;
- Are cast to the sales department to enter a single-reason field into a monthly loss report.
The Post-Decision Interview: Validated Market Perception
If you are committed to replacing your win/loss analysis process (if conducted at all) with a post-decision interview process, what benefits should you expect? Market perception can diagnose your sales performance. It can also align your disparate sales and marketing messages. However, the greatest benefit of PDI is that it enables you to verify your competitive differentiation. When previously successful sales performance falters, the differentiation articulation has sprung a leak. WorldNet defines differentiate as “to be a distinctive feature, attribute, or trait.” The only way to rediscover differentiation messaging is to understand the prospective buyer’s perceived reality of their needs and fulfilling those needs with market-leading company attributes and unique solution features.
Prospect perception offers limitless understanding of your corporate attributes. Furthermore, a validated attribute owned by your company is your differentiation. Affixing your unique company attributes to unique product, service or solution differentiation creates your message alignment and the validated articulation of your common sales cycle “story.” Of course, all prospect, client, and shareholder communications should articulate this story! This critical knowledge begins and ends with a disciplined process to successfully extract prospect perception: The Post-Decision Interview.
The Eight Rules of Successful Post-Decision Interviews
What are the top three reasons sales representatives provide to management when asked, “Why did we lose that competition?” If you said price, product, or lateness to the process, you are correct. Isn’t an expensive sales cycle resource investment worth more effort than just a sales forecasting tool field insertion? To prevent this inefficiency, post-decision interviews should be embedded into daily sales, marketing and development routines as a continual performance, differentiation and messaging buyer-alignment process. Before adopting a discipline you should first have some ground rules, so let’s examine the eight rules of successful win/loss analysis (PDI):
- Conduct equal interviews between all client and non-client competitions.
To preserve the statistical validation of post-decision findings, two reasons make it imperative that an equal number of wins and losses are interviewed. The first is that client-only findings (post-decision and customer satisfaction) will affix higher responses to certain “ownership” attributes such as product functionality, service quality, commitment, vision, and implementation methodology. These higher ratings are a reflection and validation of the client’s “wise” decision. As such, an equal number of prospects who are not selecting your solution are needed to counter the skewed ratings. The second reason is that a higher percentage of clients are willing to participate in interviews out of loyalty to their recent selection, so efforts must be increased to secure equal lost opportunity interviews.
- Conduct interviews within three months of the final decision.
Interviews should be conducted prior to the prospect being live, or in production, with its acquired applications, services, or products because sales cycle knowledge is most credible immediately after decisions are made.What’s more, memory perception is diminished six months after the decision; particularly when exposed to actual product installation services, maintenance and training. The more complex the sales cycle solution is the quicker a post-decision interview needs to be scheduled because people retain less than 10% of what they have been exposed to.To counter, we have found that the order of PDI content is very important in stimulating a participant’s memory. As such, starting with simple questions about organizational statistics and the decision process enables participants time (usually 10 minutes) to forget about the event that had them distracted prior to your call. As a result, a clear channel with important knowledge opens up. At that point, competitive advantage and disadvantage is extracted and clearer decision-making thoughts are revealed.
- Ensure a non-sales environment.
*A sales cycle is not complete until the post-decision interview is conducted. Calamitously, a one-time win/loss analysis is typically conducted by sales personnel only after a vendor has finished second in a prospect decision process. Moreover, the singular-focused objective of such an interview is usually to discover any last-minute opportunity or opening that might still secure the interviewee’s business. National statistics reveal that 90% of sales projections don’t close forecaster, so the reason for this desperate effort is more likely that the sales representative projected a “wishful” closure that wasn’t in tune with the prospect.
A post-decision environment must be free of conflict or judgment if impartial knowledge is to be captured, so it must be completely devoid of salesmanship. An organization increases its probability of success if a separate department not staffed with sales-related individuals conducts the post-decision interviews. Progressively thinking organizations are embedding these people into a newly formed Sales Enablement department along with other business development individuals(e.g., Chief Branding Officer, Customer Awareness Manager, Analyst Relations). Their objective in doing so is to maintain a common pulse on their industry, corporate culture, clients, brand, prospect need sand messaging.
- If a non-sales environment can’t be achieved, outsource to an unbiased outside party.
The odds are stacked against most organizations that are trying to internally conduct post-decision interviews. Several tendencies contribute to this problem: difficulty in achieving objectivity; inaccuracy of self-diagnosis; lack of continuity metrics; discretionary priorities of conducting win/loss analysis. If the post-decision interview cannot be conducted in a non-sales environment or if the tasks too daunting for an organization, then it must be outsourced. The same careful evaluation that is employed when assessing potential customer satisfaction outsourcing companies also pertains to the evaluation of post-decision interview outsourcing companies. When assessing a best-of-fit outsourcing company for post-decision interviews four rules apply;
- Avoid conflict of interest (e.g., biased sales process training firms, consultants who sell services to your prospects).
- Ensure a reasonable interview-to-interviewer ratio (e.g., 1200 annual interviews: 1 interviewer).
- Select interviewers who understand your business and sales cycle.
- Make sure that the deliverable is actionable (e.g., recommendations that either validate your process or verify change).
- Compile, compare, and present quarterly findings. A one-time interview is helpful in assessing a single opportunity, yet it provides no indication of improvement or degradation of sales performance. Therefore, scripted post-decision interviews must be collected and compiled no less than quarterly to monitor changes in buyer decision criteria, process, perception, and sales performance. Ratings must be aggregated and compared to other quarters once the analysis has been completed. Reports are suitable as a communication medium, but they are seldom read. As such, PowerPoint presentations are a better venue in enabling contextual questions to be asked that may be known by the interviewer but may have gone overlooked during the findings assessment. The findings can be entered into an Excel spreadsheet or managed using a database such as Microsoft Access, Zoho Creator(Internet-based) or Caspio (SQL Server-based).
- Use a metric-based and structured template. What a prospect declares after a decision process is steeped in emotion. As a result, it is easier to secure a scale of how they feel about a subject than it's to secure tangible and resolute free-form articulation of a complex sales cycle. Therefore, it is easier for an interviewee to quantify their perception of the competition, products, sales cycle performance, services, and companies when ratings (e.g., 1-10), rankings (e.g., Top1-5), or weighted priorities (e.g., High, Medium, Low) are used. Even though quantifiable evidence is preferred, capturing contextual free-form comments is essential to gaining insight into each response.It is important to mention, however, that post-decision interviews must be carefully planned to: match the stages of your sales process; narrow the interview vehicle attributes or actions to a single word or hyphenated phrase; group attribute and actions into statistics, process, criteria, and performance categories.
- Make the post-decision interview non-discretionary. Fewer than 20% of complex organizations conduct win/loss analysis and a lesser percentage of organizations monitor the alignment between their selling process and the buyer process. Whether the reason is fear(e.g., sales management doesn’t want executives to verify reality; marketing is unsure of its brand perception) or the value is unclear(e.g., corporate doesn’t want to invest the resources; company has not performed PDI in the past), this is an alarming oversight. Matter off act, an organization’s sales process will be out of alignment within six months of any sales training event devoid of an iterative diagnostic and alignment process. Moreover, its expensive investment into sales cycle process training is wasted. Post-decision interviews are the only means of capturing the knowledge needed to align any marketing and sales strategies to market perception. Post-decision interviews are not discretionary for successful organizations!
- Understand that perception is reality. Perception is more powerful than reality when a prospect evaluates a solution. Buyers buy what they believe is true. Additionally, post-decision interviews are conducted prior to a prospect or customer using the acquired products or services, so the only knowledge gained is perception. Prospect’s perception, as obtained from a post-decision interview, is required to competitively differentiate and align a vendor company, product, and service to market perception.
In summary, most organizations are equipped to conduct unbiased post-decision interviews. However, if your firm has the discipline, regularity, and resources to instill an iterative and continual process of verifying market perception, you must adopt the following eight rules of successful win/loss analysis (PDI):
Conduct equal interviews between all client and non-client competitions;
Conduct the interview immediately or no later than 3 months from decision;
Ensure a non-sales environment;
Outsource interviews to unbiased outside parties;
Compile and present quarterly findings;
Use a metric-based and structured template;
Make the PDI non-discretionary;
Understand that perception is reality.
By making post-decision interviews non-discretionary and by internally adopting or outsourcing a diagnostic back-end to your sales cycle process, your firm can “tune in” to market perception. Armed with reality, you will gain competitive advantage by diagnosing your sales performance, verifying your differentiation, and aligning your selling process with your buyer’s process.
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