How to make a Win/Loss analysis that generates business

This blog in brief:

• Win/Loss analysis is one of the top 5 most sought after market intelligence tools.
• Win/Loss analysis is a process, not a deliverable.
• The purpose is to improve understanding of why a deal was won or lost in order to generate action to improve or strengthen sales.
• Apart from potentially improving sales, Win/Loss analysis adds a new dimension to the customer dialogue and can strengthen relationships.
• A challenge to create a successful Win/Loss analysis program is to ensure management buy-in.
• Interviewing is the key activity in the whole process – prepare well and pay attention

Interest around Win/Loss analysis is growing

Most companies analyze why a particular deal was lost. Or won, for that matter. But how many companies do it in a structured, objective and continuous way?

More and more, it seems.

In 2017, the strategy consulting firm Fletcher/CSI investigated how companies work with Win/Loss analysis. The survey indicated that 43% of the respondents had been running a Win/Loss-program for more than 3 years. And 89% had had it in place for at least a year!

According to Andrew Beurschgen’s article ’Win/Loss Analysis in Action’  in SCIP’s CI Magazine Spring 2018, it is one of the 5 most sought after analysis tools by market intelligence professionals.

So, what is a Win/Loss analysis? Why is it gaining interest?

It is a market intelligence tool. A process:

1. A deal was won or lost.
2. Analysts conduct interviews with the people involved, on both vendor and customer sides.
3. The analysis and final report are done following pre-defined guides and templates.
4. The main goal is to learn and improve for the future.

The competitive landscape is changing. That drives the interest and need for Win/Loss analysis. According to PWC’s 18th Annual Global CEO Survey, 56% of the +1300 interviewed CEO’s, believe that cross-sector competition is increasing.

And 72% of senior executives believed in 2016 (i.e. a while ago) that their organizations would face more competition within three years due to digitalization, according the Harvard Business Review.

Win/Loss analysis generates action to improve sales work

If you ever were part of a sales project, you know there are powers that pull in different directions. That’s not bad, just a matter of fact.

The account responsible is focused on getting the contract and wants competitive price levels. The product managers push their portfolios as much as they can, with the risk of overdimensioning. Project managers want the delivery to be as pain-free as possible, which can translate into inflated delivery costs. Meanwhile, at the HQ you have the business manager who wants a higher margin overall.

Without a structured and objective process for analyzing how the sales process is executed it can be a lot of finger pointing afterwards. Especially if the deal was lost. Without objective analysis, no new knowledge is generated. And the same errors will be done in the next round.

An example; say you have an IT-player that lost an important bid with a key customer. The CEO wonders what happened. He asks the account responsible to investigate. Two days later the answer is presented; ”The competitor is buying market share! Their integration prices are 50% lower than ours!”.

That is a possible truth. Maybe the company decides to engage in a price war and cuts the integration prices in half to stay competitive. Internally people say ”Well, the competitor pays peanut salaries. What can we do?”. And life goes on.

But what if you conducted an objective Win/Loss analysis instead. And looked into all aspects of the sales process. Maybe you would find out that the competitor’s product was less complex and could be integrated remotely. That only 2 engineers were needed on-site,  compared to  the company’s own solution that requires 8 people at customer’s premises for weeks. The discussion would then be about the need to modernize the solution. Not about lower prices.

“Failure isn’t fatal, but failure to change might be”

– John Wooden, sports profile and basketball coach

Hence, the purpose of Win/Loss analysis is to improve understanding of why a deal was won or lost in order to generate action to improve or strengthen sales.

The benefits of Win/Loss analysis

The main benefit seems obvious; to improve hit-rate in coming deals. Of course, understanding what a company did well and what could have been done differently, helps to sharpen the Go-to-market strategy. And there are other benefits:

• The customer interviews give access to a world of intelligence. Not only about the sales process. Customers that open up can give valuable input on support or relationship issues.
• Customer interviews can also lead to valuable competitor intelligence. For instance, how the customer benchmark vendors’ product features. Or how different aspects of the vendors’ sales tactics are valued.
• Presenting a Win/Loss agenda is a great way to show that a vendor cares about the customer relationship. If a deal was lost, it shows the vendor wants to make better next time. If won, it shows that the vendor wants to enforce and strengthen behaviors that the customer values.
• With a structured Win/loss program in place, analysis will be carried out the same way in report after report. Additional conclusions can be drawn from analysis of several reports over time.

Win/Loss analysis needs to be positioned with the stakeholders

There are challenges involved in conducting Win/loss analysis. My experience is that a customer never asks for a deal analysis, for example.

Also, the own sales force might feel that the analysis is an excuse to point fingers and put the blame on a specific unit or individual for losing a deal.

Hence, the analysis must be positioned with the stakeholders so that they see the benefit of conducting it. Best way is probably to set up one-on-one meetings to explain the process. Take special consideration to each stakeholder’s concerns.

Positioning the Win/Loss is important since that helps with the challenge of getting hold of data to analyze. If people don’t see the benefit of giving you information, they probably won’t. Remember that without good input, it is hard to create good output.

Another challenge can be to identify and deal with people’s hidden agendas. People might want to influence the final report somehow. They might try to downplay or exaggerate the meaning of different actions. Relying on a structured methodology with set questions and one-on-one interviews helps staying objective as analyst. If a bunch of people answers the same question and one person gives a very different answer, it will stand out.

Preparing and conducting the Win/Loss analysis

After the Win/Loss analysis has been successfully positioned with the stakeholders it is time to start preparing. If it is the first time a Win/loss analysis will be conducted more preparations are needed; a report template and an interview guide must be created.

The report template looks different from company to company. It is important however that it covers certain aspects of the sales process, for example:

• What did the opportunity consist of?
• How did the different offerings compare?
• What did the different bidders do well?
• What could they have done differently.
• What did the power base look like?
• What was the final customer decision and why was it taken?

The interview guide is a set of questions that follow the report structure. Each deal requires that some specific questions are created. In order not to waste people’s time and repeating issues, it is a good idea to follow Barbara Minto´s Pyramid Principle when creating the questions (What’s the situation, the complication, the question?).

The Win/Loss analysis process

The high-level Win/Loss analysis process can be described as follows:

1. Get a green light from stakeholders.
2. Update the interview guide with customized questions.
3. Identify the contacts to interview (internally and externally).
4. Approach the contacts; invite to one-on-one meetings.
5. Gather the data (documentation, interviews).
6. Conduct the analysis.
7. Write the report.
8. Present the report.

The key activity – the interviews!

Interviewing is a skill that requires time to master. It’s more about listening than asking questions, I think. It is definitely a difference between hearing and listening. The most important thing is to pay attention. And actively focus on understanding. It doesn’t mean sitting quiet all the time of course. Ask clarifying questions when needed.

”The one lesson I have learned is that there is no substitute for paying attention” – Diane Sawyer, news anchor at ABC News

Start the interview with explaining the purpose and benefit of the Win/Loss analysis. It is worthwhile preparing an explanatory one-slider for this.

Talking to a person is a very valuable way of gathering intelligence. It is referred to as ’humint’ by some, short for human intelligence. Considering we are subjective creatures, humint can be risky also. People might knowingly or unknowingly say things that aren’t true.

Be sure you ask enough people the same kind of questions (in one-on-one sessions) to detect data points that stand out.

Also, interviews take time so make sure you don’t interview more people than needed!

Itzik Amiel and Suzanne Sabroski suggest in their article ’Paying attention to Win/Loss analysis´ (SCIP CI Magazine Fall 2018) that you stop interviewing if you get the same responses in 4 interviews in a row.

Remember to always end the interview with a ”Thank you”. It’s the quickest way to show you appreciate and recognize the time the person gave you.

Some concluding tips:

• It might be a good idea to create two reports. One with specific and detailed recommendations on improvements to the internal team and another one with the more general learnings for a wider audience, including the customer.
• Measure the success! Ask for feedback to improve the Win/Loss analysis process. If people believe it was worthwhile and would like to do it again, you are on the right track!
• Remember to analyze won deals too! It is easy to focus on the lost deals and learnings on what needs to change. But learnings on what positive behavior to maintain and strengthen are also important.

There you go! The building blocks for creating a Win/Loss analysis that generates business.

Please let me know your thoughts on this subject.

Saludos / Ingemar

Ingemar.svensson@comintelli.com

This blog post was written by Ingemar Svensson, Senior Advisor at Comintelli. You can read more about Ingemar and his services here!