It’s easy to chalk up a lost deal to ‘not the right time’ or ‘lost momentum’ or some other reason. And it’s easy to mark a closed-lost reason in your CRM, and then move onto the next deal that you have in the pipeline.
But without some proper inspection and deal analysis, we won’t ever diagnose what are the underlying issues that led to that loss, what might we have done to prevent them, and are there any patterns appearing in our closed-lost deals that we should be aware of.
Asking why a deal was won or lost will help you forecast more accurately in the future. It will help you understand what worked and what didn’t and figure out how to drive repeatable success.
Before the details start to get hazy in your mind, review the details of your “closed won” and “closed lost” opportunities. Consider on-the-spot interviews of each sales rep right after they get the news from the customer; this allows you to capture the information right away before the rep gets distracted with the next deal.
Every quarter, conduct an analysis of all your deals, whether they were won or lost. Be as specific as possible so that you aren’t making too many assumptions. For most companies, the outcome is finding that you have a concentration of won and lost deals with similar or corresponding criteria.
Gathering the data
Analyze the deals using the SPICEDTM framework. SPICEDTM is a sales methodology that addresses the entire customer journey. Look at the Situation, Pain, Impact, Critical Event, and Decision criteria to analyze your wins and losses.
Situation. This should be everything you know about the customer and how you started working together. Was this an inbound or outbound account? How were you introduced? Were they referred by a current customer? What specific person in the customer’s organization did you work with most closely?
Pain. This is the reason the customer came to you in the first place. Was it a problem with their technology? Or was it more about their process? Don’t forget to factor in the result of the pain. Was it a failure to reach a financial goal, a deadline that was missed, or complaints about their user interface?
Impact. What did the company hope to accomplish by working with you? Was it increasing revenues, decreasing costs, or improving customer experience? What was the size of the impact? What was its strategic importance?
Critical Event. Was there a deadline that the company had to meet? What would be the result of missing this deadline?
Decision. What criteria did the customer use to decide on a solution? Did your team work closely with them on establishing the criteria?
Analyzing the deals
Looking at the data, you might find that most of your wins come when you’re working with newly hired champions looking to make an impact on an organization, or when a critical event date is within 120 days or less.
Equally as valuable, you may also find very clear reasons why you lost. For example, you might close fewer deals when there are fewer than two stakeholders involved. You might be falling short when user experience is the main pain point.
Once you have completed this analysis, put together your action plan for moving forward.
1. Make any necessary data collection or data integrity changes in your customer relationship management process or tech stack. You want to make this process easier to do so you can regularly benchmark against it for trending analysis.
2. Include these learnings early in the qualification process so that your team doesn’t waste time on customers they can’t win. Prioritize the deals where you are the right solution.
3. Leverage this insight to adjust and adapt your forecasting confidence, lead scoring model, and customer-expansion or account-based targeting.
Remember to repeat this analysis every quarter to continually refine the process and confirm that you are making the right changes. As you become better at seeing what went well and what didn’t, you should start seeing measurable results.
Access the complete blueprint on Deal Analysis so that you can improve your win rate over time.