More often than not, there are several requirements you first must address before offering your product to customers, which may include customer needs and feedback, business goals and strategy, regulation, technology and innovation, and internal stakeholders. Unfortunately, most of these requirements are often too detached from the real frontline of the business. Even customer feedback may concentrate too much on small incremental improvements to the user rather than larger improvements that could add value or remove barriers to entry.
One successful way of getting more input from real customer cases is to start systemizing win-loss analyses, adding valuable information to complement the other requirements listed above. Win-loss analyses allow us to collect real data not just for product-related development needs but also for feedback on our sales process.
In theory, they are a powerful tool for measuring competitiveness. You will gain substantial data that delivers value from real customers by analyzing wins and losses. Your business will grow if the data is utilized to improve the offering and sales process. For businesses unfamiliar with this analogy, these scenarios may sound familiar to you.
You have lost customer cases because:
- Your product’s price was too high
- A political decision made by the customer in favor of a competing supplier
- A single (minor) feature was missing from the product
When a successful sale is achieved, its success is often attributed to "the excellent performance of the sales team." If that sounds familiar, it is more than likely that the sales team conducted a win-loss analysis beforehand.
When a sales team loses a deal, the reason for this is often explained away - leaving them feeling disappointed. On the other hand, any big wins they receive are often celebrated as personal victories. So then, what’s the problem here? Shouldn’t we always look to move from our past mistakes and work toward future opportunities? The passage below perfectly illustrates how the previously described culture can affect (and ruin) your business:
- You set the pricing to be as low as possible
- You restrict sales to known customers only
- You build features in your product that cater to a single customer rather than meeting the needs of other customers.
In reality, there are a lot of different criteria and perceptions involved in the decision to buy a product or solution. Sometimes it is difficult for a supplier to know what the customer appreciates and why deals are won or lost. It is crucial to understand the market's needs (not just an individual customer) to foster product development, enable focus on prioritizing high-value activities, and gain a competitive edge.
Below are the key aspects of a win-loss analysis:
- Customer problem - Determining the importance level of a customer's issue or need is critical to securing their business over competitors. The customer may pursue alternative options if it is not addressed with the necessary level of attention and urgency.
- Solution - Assess whether your solution effectively fulfilled the customer's requirements, performed favorably compared to competitor offerings, and provided superior perceived value compared to your pricing.
- Purchasing process - Put yourself in the buyer's position of a sales process. Was the product easy for the customer to buy? Were you able to steer the customer's purchasing path regardless of hidden pitfalls?
Benefits of win-loss analyses
Through win-loss analyses, we can gather valuable data that help us identify repetitive patterns. Examining what went right in successful cases allows us to spread our learnings for wider use. Additionally, it is always worth resolving problems that cause multiple losses.
It is important to remember that performing a win-loss analysis outside the sales cycle (where emotions can cloud your judgment) can be just as valuable. As experts in their products and market, product managers are well-equipped to gather feedback from individual customers and apply it to the bigger picture. So why not take advantage of this valuable source of information to enhance your competitiveness?
How do you take full advantage of a win-loss analysis?
Win-loss analysis in its traditional form provides very little insight into business development, as it often consists predominantly of praise from sales teams regarding their achievements or criticisms of high pricing and missing product features. Neither of these contributes to improving the business or its products.
A win-loss analysis is a valuable tool to gather customer feedback at the precise moment of bidding, providing insights into how our operations and offerings can be enhanced to win new business. Collaborating with potential customers can be a big effort during the bidding process, but it provides an opportunity to obtain valuable insights into why they chose (or rejected) your product. Although the decision-making process for customers may involve several parties, some form of connection can be established. That is why it is essential to understand the reasons behind the final decision so that the supplier can improve their activities in the future.
As a product manager, you must remember that the reasons for your product's failure might extend beyond the product itself, as high commissioning costs or limited service provision can also play a role. Determining the root cause of unsatisfactory sales figures may prove tricky, so win-loss analysis is indispensable. By gaining insight into your customers' needs and experiences, you can refine your sales strategy and keep your product competitive.
How do you perform a win-loss analysis?
1. Keep documentation of your prerequisites:
To better understand customer relationships, you should record and evaluate customer and sales case information. Gathering detailed data on when you become involved in the purchasing process is very impactful. For instance, if we only hear about a case during the formal invitation to tender, our chances of influencing its content are slim compared to being involved from the beginning. Collecting comprehensive information like this is crucial for successful sales and customer engagement.
2. Divide your analysis into subdivisions
When planning the implementation of a solution, it is crucial to strategize various areas of importance to map out. For instance, sales and purchase client collaboration, product/solution deployment, user training, and pricing. Be mindful that assessing technical compatibility alone may not suffice; other factors could dictate how well the solution aligns with customers’ needs.
3. Interview everyone
To ensure comprehensive coverage, a sufficient number of people should be interviewed, especially in larger purchases. The customer's side might include decision-makers, purchase representatives, technical evaluators, and users—all of whom can provide valuable information. When interviewing customers, their input should take priority, though the data gathered from your teams should also be leveraged. Given that full coverage is not always feasible, defining a broader scope at the outset of interviews is important to avoid limiting each interviewee's specific competence or interest.
4. Conduct the interview
Meeting customers is ideal, but in situations where that's not possible, a phone interview will suffice. It is crucial to inform customers beforehand about the importance of the interview and how their feedback supports the development of your operations. This indirectly benefits the customer so that they know their time is respected. Competitors won't question the customer's decision, but understanding the factors influencing it can help improve future sales strategies.
To ensure a comprehensive and productive discussion with your customer, using this template as a basis is highly effective in preventing the omission of important details. It's also important to actively listen to the customer and avoid overly influencing them, as they may simply mirror your thoughts. Writing down the answers can further enhance the clarity and organization of your analysis results.
5. Process your results
When collecting insights from multiple interviews, it is important to acknowledge that various factors make direct comparisons challenging. From limitations with time and varying behaviors of interviewees to some stakeholders not being involved, these variables illustrate how the data may differ. Additionally, while retaining authenticity by not editing customers' comments is important, it is crucial to include your own view on progress. One way to illustrate and compare findings is by creating diagrams out of numerical review data. These images provide insight into potential trends and allow for comparisons to be made easily.
6. Utilize simple tools
To drive informed decisions, you should document the results of win-loss analyses, which include real data from customers. This provides relevant stakeholders easy access to information through tools like Atlassian Confluence. Neglecting this can lead to a loss of opportunities to improve your offering and sales process - which will be based solely on opinions rather than real insights.
Overall, to get the most out of win-loss analyses, it is recommended that you:
- When handling customer cases, leaving it to a product manager or someone who isn't directly measured by sales targets is best. This allows salespersons to focus on their role, building relationships with customers and creating more sales opportunities that contribute to the business's overall success.
- Separating the sales and win-loss analysis processes can greatly enhance insights. Starting your win-loss analysis after commercial negotiations have settled down provides the clarity needed to learn from each opportunity.
- Creating a template for win-loss analyses can help standardize the results and make them more comparable. This not only enables more accurate evaluations but also saves time.
- To provide excellent customer service, it's important to differentiate between product-related complications and sales process-related ones. This distinction helps teams efficiently and effectively resolve customer issues.
- To continuously improve your offering and sales process, it's important to share the results. This allows for analysis and insights to inform future strategies and enable even better performance. Sharing results is a valuable way to stay on top of the game and reach new heights in your business.
Published: June 21, 2023