Win/Loss Analysis: What Is It And How to Start
Win/loss analysis can reveal valuable insights about your business and provide a competitive edge.
Most companies don’t why exactly why they won or lost opportunities. And if they do have data, it’s typically surface-level or inaccurate. Reviewing performance data and interviewing won or lost opportunities can provide actionable feedback that you can use to improve the business.
A practical win-loss analysis can help your company sustain long-term growth, improve customer retention and increase sales.
Read below to learn how to conduct an effective win/loss analysis.
What is a win/loss analysis?
A win/loss analysis is a process of analyzing past business deals to uncover why sales opportunities were won or lost. The process analyzes past performance to determine ways to improve the business and increase revenue.
Win/loss analysis involves both quantitative and qualitative data. Quantitative includes data such as information logged into a CRM. In comparison, qualitative is done through interviews and surveys.
Companies that consistently conduct a win/loss analysis can quickly identify critical points in the business that can be improved. Different departments, such as sales, marketing, and product, can find valuable insights to improve product gaps, competitive threats, messaging and positioning, or marketing effectiveness.
When done effectively, a win/loss analysis uncovers the root cause of why you won or lost a deal.
For example, your sales rep may say that high pricing was the determining factor in why their deal was lost. However, a win/loss analysis reveals that price wasn’t the issue. Instead, the prospect chose a more expensive product because it offered a specific feature that your product didn’t have.
From this example, the win/loss analysis can help companies understand competitor threats, equip sales reps with improved positioning and potentially add a feature to product development.
In essence, win/loss analysis involves three core steps: gathering, analyzing, and acting on the data.
The importance of win/loss analysis
If you’re looking to gain competitive intelligence and an advantage, look no further. Win/loss analysis can yield countless benefits that impact the entire organization.
According to Accent Technologies, companies that use a win/loss analysis consistently outperform those that do not have a process. Here are several outcomes from companies that run an analysis:
- Team attainment of sales quota: 5% higher than non-users
- Customer retention rate: 12% higher than non-users
- Year-over-year improvement of corporate revenue: almost double that of non-users
- Year-over-year change in lead conversion: 1.6% improvement versus -0.6% drop among non-users
As you can see, every single department benefits from win/loss analysis. You are collaborating with each team is vital to determine the gaps and what can be improved. Walk through the findings of your research and analysis to share your findings.
Here are several win/loss analysis benefits:
- Gain competitive insights
- Understand buyer’s decision criteria
- Better sales forecast predictability
- Improve pricing and value proposition
- Improve product messaging and positioning
- Improve sales process
- Increase close rates
- Guide product development
How to calculate win rate and win/loss ratio
Before running a win/loss analysis, you have to measure current performance.
There are two important metrics to calculate: win/loss ratio and win rate. Although they may sound similar, they’re calculated differently. Here’s how you calculated both.
Win rate measures the rate your sales team turns opportunities into customers. Divide the total won deals by the number of opportunities worked.
Win/loss ratio measures the ratio of won opportunities to lost opportunities. Divide the total won opportunities by the total lost opportunities. The difference between win rate is that a win/loss ratio doesn’t count active opportunities that have neither won nor lost.
Both win rate and win/loss ratio can be segmented and measured by industry, company size, territory, product line, buyer persona, or competitor. A micro-level insight can give you valuable data to improve or pivot your go-to-market strategy. Segmenting win rate and win/loss ratio tells you which segments you should prioritize resources and training.
Common win/loss analysis challenges
Before starting a win/loss analysis program, there are several common challenges you should be aware of.
These challenges can present roadblocks to getting truthful answers:
- Missing or inaccurate data in CRM
- Customers unwilling to tell the truth
First, review your internal data and processes. Meet with sales reps to see if they need training on how to use their CRM. Ensure they know what information they should gather during a sales process.
Customers will be unwilling to tell the true answer to their decision during a sales process. It’s best practice to conduct win/loss interviews with a third-party organization.
- A third party has no relationship or emotional attachment to your product or company.
- Interviewers are well-trained. They know how to conduct a win/loss interview and have experience asking the right questions.
- Lost prospects and customers are more comfortable sharing information with an unbiased third party. In contrast, they could be afraid, to be honest with vendors.
How to conduct a win/loss analysis
A win/loss analysis can reveal how your business fairs against the competition, determine market perspectives, and qualify your product’s or service’s value.
When organizing a win/loss analysis, looking at qualitative and quantitative data is critical. This means looking at your CRM data and conducting discovery interviews with your customers to get a 360-degree view. These will help you get the most accurate view of the truth.
Here are eight critical steps to start a win/loss analysis.
1. Identify goals of win/loss analysis
As with any business initiative, clear goals and metrics are essential to determine what you want to achieve with a win/loss analysis.
Figure out what the success of the analysis would be and what insights you’re trying to uncover.
Here are common goals for a win/loss analysis:
- Improve sales effectiveness and win rates
- Gain a competitive advantage
- Improve value proposition and messaging
- Understand market perceptions
- Strengthen product development
- Improve customer retention
- Improve customer service
A win/loss analysis shouldn’t be siloed. It’s not meant to expose gaps in specific teams or individuals purposely. Instead, it’s for the company to determine its overall value.
Before starting a win/loss analysis, get relevant stakeholders across the company together to determine collective goals. You’ll need people from sales, marketing, product, and customer support to align on the key areas to uncover.
The analysis results can positively impact different departments, which is an excellent way to build better internal relationships with each team.
2. Identify a list of interview candidates
Not every customer or prospect will have time to be interviewed.
Build a relatively extensive list of win/loss interview candidates so that you have enough people to reach out to. Here are several tips for selecting customers and prospects to interview.
- Invite 4x more interviews than you expect. Since not every lost prospect or customer will have time, a 4x coverage should be enough to get a robust data set.
- Set a goal to interview an even amount of both won and lost customers to gather data from both sides.
- Interview key decision-makers. You’ll only want to speak with interviews directly involved in the sales process since they made the final decision.
- Offer an incentive for people to attend, such as a $50 gift card.
Reach out to candidates and ensure it hasn’t been over four weeks since the deal closed or lost. The buying decision will still be fresh in their heads, providing a more accurate assessment.
3. Build a win/loss interview plan
Sit with your team to build an interview process that covers what questions to ask and who the interviewer will be.
Get feedback from sales, marketing, and product about what insights they want to uncover. Create questions based on their needs.
Win/loss interviews should be objective and neutral to ensure you get honest answers.
Before each interview, inform the customer or prospect that the interview is confidential. Interviewees need to know that their information will be strictly for internal use and not published publicly. Your prospect or customer will be more open to providing feedback.
Avoid having an interviewer who worked closely with a deal to remove any conflicts of interest. Instead, product marketers typically do interviews since they help align different business functions.
4. Build a list of win/loss analysis questions
Ensure your questions are aligned with your win/loss analysis goals.
The best practice is to conduct interviews within a 30-minute window. So, you’ll want to have the correct number of questions for that time frame.
Here are several win/loss analysis questions you can use:
- What prompted you to reach out to the company?
- What product or features were you initially interested in?
- What pain point or problem were you trying to solve?
- What was your original perception of the company’s ability to solve your pain?
- What were your decision criteria for choosing a solution?
- How many people were involved in the decision-making process?
- How was your experience working with their sales team?
- What feedback would you give the company?
Ensure questions cover the entire buying process from when your prospect identified a problem to evaluating different solutions and determining what to buy.
5. Interview customers
Having the correct information is essential when interviewing customers and lost prospects.
Before each interview, familiarise yourself with the customer or prospect, the history, and interview questions.
Have this information in front of you:
- Interviewee’s name
- Contact information
- Job title
- Company
- Interview date
- List of questions
- Deal information
The interviewer should actively listen during each meeting. If they hear surface-level answers, they should ask the same win/loss analysis question multiple times in different ways. That’ll help get more details out of the answer.
Interview a conversation. It should be free-flowing, natural, and organic instead of an interrogation. Format your questions in a framework format instead of a rigid list. This will provide you ample time to dig deeper into an answer versus moving on to the next question.
Win/loss interviews are also a good time to test new ideas. For example, if your product development team has ideas for a new feature and wants feedback. One question could be, “What if the vendor offered [insert feature]?
6. Identify common themes
Once you complete your win/loss interviews, compile everything into one document and make it easy to extract insights into action items.
It’ll be easier to gather all the interview questions and answers into a spreadsheet so you can filter by customer segment or themes. Each interviewee’s questions and answers should have associated common themes and action items.
Ensure the document is easy to add more feedback, compare and contrast, and read.
Analyze finding to uncover common themes and gaps to improve business. Here are several points to can group answers by:
- Reasons for winning or losing
- By buyer persona
- By industry or company size
- By competitor
Compile and tag all the findings and ensure they are easy to read. Since other departments will want to access the data, you’ll want to be mindful of how they want to digest the information.
7. Present a win/loss analysis
Finally, you should have gained a strong understanding of why opportunities or won or lost. But that’s just half the battle.
One of the most important parts of a win/loss analysis is to present the findings to your sales, marketing, customer success, and product teams. Include any relevant team leaders or executives who have a crucial role.
Focus on common themes and trends first. During the presentation, reiterate the goal, walk through the process, and review key findings. Avoid going into the nitty gritty details of what every customer said. Instead, pull snippets or interview quotes that were the most impactful.
Naturally, your team will want to focus on the losses. You should present strengths and weaknesses to get a complete picture of your performance.
As you continue your win/loss analysis, schedule a regular meeting to walk through the findings. Win/loss analysis shouldn’t be a one-and-done activity because as your customers evolve, so should your company.
Lastly, visualize the analysis so that it’s easy to digest.
8. Implement action items based on the analysis
Use your findings to identify the short-term and long-term key actions to tackle. There’ll be a lot to focus on, so it’s important to have multiple leaders and departments collaborate on an action plan.
Turn customer feedback and analysis into actionable insights that create business value.
For example, if a prospect said they weren’t aware that your product offered an important feature, then an action item would be to build more robust messaging and a value proposition for upcoming sales calls.
It’s time to start a win/loss analysis
Developing a win/loss analysis can be a real competitive advantage. It’s a source of objective and valuable data that can reveal many ways to improve your business.
Consider developing a scalable process and ensure all relevant teams are involved in the analysis. They should be contacted for feedback whenever an opportunity is won or lost.
Every single team can benefit from the power of a win/loss analysis. Companies that truly listen to the voice of the customer can improve win rates and customer retention and build a leading product in the market.
