Win-loss analysis isn't a new concept. Most managers want to understand why prospective customers make buying decisions — or don't. Knowing why people buy from you is critical to improving your sales closing rate and gaining market share. But I saw a recent poll that suggests less than 20% of companies have a regular process for win-loss analysis. How about your company?
I think now is the time for sales and marketing managers who work for school-market-focused companies to get with the program. I believe win-loss analysis, with a different spin, could be the secret sauce that could speed up the sluggish sales process, drive better returns from CRM systems, and help differentiate competitive offerings.
What I'm proposing to you is not the typical approach, which is an investigation at the end of the sales process. That classic method involves surveys and interviews with prospects who bought from someone else, and less often (but just as valuable) with those who decided to buy from you. I suggest that instead you expand the scope, take a closer look under the hood, and do it more often.
Does taking a deep dive to learn why you win or lose sales sound like a good idea to you, or does it feel scary? For many managers, the basic win-loss concept is right. But deciding who owns the process can be contentious and anxiety provoking. Research indicates that fear is the reason why most organizations procrastinate or decide not to invest in win-loss at all. My own experience is that sales reps and managers sometimes feel threatened. Product managers may also be afraid to learn their baby isn't as beautiful as they think. The blame game can freeze us from taking constructive action that could have a positive impact on sales, profits, and market position. Rather than fess up to our insecurities, we use the excuse that we don't have the time or resources to conduct a detailed win-loss analysis.
In the school market, especially for companies selling complex products that involve committees and multiple influences in making the purchasing decision — not doing win-loss, waiting until the game is over, focusing only on sales data or sales rep performance — all of those approaches are narrow-view. With the range of technology tools available to managers today, what's needed is win-loss at every step of the customer acquisition process, including the front-end marketing stages when we are investing our time and money to engage our target audience through a range of promotions and lead-generation strategies.
Traditional education marketing has been focused on mass-market lead-generation activity. Results from promotions are difficult to measure. Today, with the WWW and eMarketing, it's easier for us to collect data and use it to evaluate the effectiveness of our campaigns. Now we have tools that give us a detailed view of web traffic, allow us to see the actions taken by each visitor, uncover who they are, tell us what products visitors are most interested in, how well we persuaded them, and why they did (or didn't) convert (aka: win-loss). When conversion rates suffer, scrutiny about the reasons why (by surveying visitors who did what you wanted them to do, and those who didn't) provides valuable information to improve your website's navigation and content, to help you characterize individuals who are more likely to convert, and to improve web-marketing results.
Similarly, email analytics coupled with interviews and surveys could reveal the reasons why district administrators who receive your email message don't behave the way you hope they will (a loss). Most of us only guess why the open or click-through rates are a small fraction of the total. Instead of doing the work to understand why, we may choose to lower our conversion-rate expectations or simply send out more email to compensate. That's very wasteful. It's a limited view, more often, like shooting in the dark.
The more comprehensive win-loss concept should also extend to the most popular and heavily invested marketing method in the K-12 industry: trade show exhibits. Understanding why prospective buyers don't stop at your booth, or walk away disappointed — why you lose them — and (the flip side) knowing why your interaction with some of them results in future sales (wins) would seem like an essential bit of intelligence. Yet, for the same reasons more than 80% of companies don't do win-loss analysis, most companies have not made the small investment in the Mystery Shopper service my company offers, whereby educators visit exhibits and rate them and provide honest feedback. The service provides reasons why exhibitors won — they engaged with the exhibit or exhibitor's staff — or they didn't (lost.) Is fear of exposure the reason for not participating in this program?
After sales leads are generated, these wins are entered into your CRM system. Then leads are again at risk for losses at each stage of the sales process. Good sales managers use CRM stages to estimate closing probability, to generate forecasts and as a sales-skills coaching tool. But when an opportunity stalls or there are sales process bottlenecks, do you investigate the reasons for this "loss?" We all know that delays in the early stages of the sales process may not result in a lost sale, but stalls waste time and require resources to move prospects to the next step toward a favorable purchasing decision. Understanding the reasons for stalls and bottlenecks (losses) at any step of the sales process gives us the information we need to develop a corrective action plan.
How to improve our odds that prospects will do what we want them to do has been an ongoing topic of discussion and debate in our industry. But many of us have either taken the ostrich view, hiding our head in the sand, pretending we don't see the problem, or we wait until a sale closes to learn why we got the order or lost it. Some solutions we offer school administrators have a nine-month (or longer) decision process. Does choosing not to do win-loss — or doing it a year after the process begins — a good management practice? Wouldn't win-loss at every step of the process — from initial engagement to close — give you a new view, the facts you need to really improve your conversion rate for sales? I'll leave the answer to this insightful question to you!