Win-Loss Analysis is a technique that leverages qualitative interviews with organizations that decided to purchase or not purchase a solution from your company. Effective Win-Loss Analysis programs can identify insights that you can leverage to improve the success of your marketing and sales efforts. Most people think Win-Loss Analysis just focuses on the end result – did we win or lose the deal and why? Win-Loss Analysis can help answer these questions, but it can provide much more benefit. By developing an understanding of how prospects initially investigate and select vendors to consider effective Win-Loss Analysis can help your company get into more deals, which will lead to more wins in the long run.
The Buyers’ Journey Has Changed for Good
In 2020 it is indisputable that the buyer’s journey has fundamentally changed. In the ‘old’ days prospects would rely on publications like Computerworld or Datamation for articles or vendors ads to learn about potential solutions. Or, if they had access to research services like Gartner, IDC, or Ovum they could review research reports or Magic Quadrants.
In the ‘old’ days, the vendors were the gatekeepers to information about their solutions. A prospect usually had to contact a vendor to get brochures, white papers, or other resources to learn about potential solutions to their business challenges. In 2020, the roles are reversed. Product information is freely available on the Internet and prospects can find and analyze dozens or resources about a product or technology. User review sites like Gartner Peer Insights, Capterra, and Software Advice provide thousands of hands-on user reviews for almost every business software product in the market place.
In 2020 prospects spend the majority of their buying cycle not interacting directly with vendors. According to the Gartner Group:
Gartner also noted that the buying process has become more complex and iterative in nature:
How Do Prospects Research and Analyze Potential Solutions
Understanding how potential prospects identify, research, and analyze potential solutions early in the buying journey is critical. The more opportunities your solutions can be discovered and analyzed, the more deals your company can get involved in, and win.
What is the best way to learn about prospect’s early buyers’ journey activities? Qualitative interviews with prospective buyers in context of a formal Win-Loss Analysis project. Typical Win-Loss Analysis projects have five major phases:
The first step of the process is to do all of the preparatory work required to ensure the success of the project. An important first step is setting research objectives. Setting clearly defined Research Objectives will help you to both target your Win-Loss research as well as set expectations for the success of the program. As with all things Win-Loss, setting research objectives is best done as a team project. And be sure to your Research Objectives with the strategic goals of your organization. There is no sense chasing information from buyers that your organization has no interest in anyways. Research objectives may include:
- Your Product-Market-Price fit
- New market problems that your organization can solve
- Your service levels
- Persona refinement
- Buyer purchase-decision process
- Marketing channel effectiveness
- Sales process
- Communication style
- Better understanding of your place in the competitive mix
In addition to establishing your Research Objectives, you should also define the questions that will be asked during the interviews. The questions should be open ended and designed to encourage a free flowing discussion.
Finally, you will need to design the process you will use to recruit potential interviewees, conduct the interviews, analyze and report the results you have learned. The plan should layout the roles and responsibilities of each participant in the project. You should also develop a schedule and a simple status reporting mechanism so everyone can stay up to date. Create a project charter that contains the research objectives, interview questions, roles, responsibilities, and schedule. Conduct a review meeting with the participants to approve and commit to the plan.
The next step in the process is to recruit people for the interviews. Most companies target a mix of net new customers and existing customers who have upgraded or expanded their use of products. You are looking for a mix of won deals and lost deals. Most Win-Loss Analysis projects with a single research objective try to get 15 to 20 interviews.
A portfolio approach to soliciting interviews works best. The tactic that has the highest success rate is when a salesperson makes a personal outreach to a potential interviewee. Generally 25% to 40% of these contacts will convert to an interview. The second most common approach is email. Organizations pull a list of candidates from their CRM or sales force automation system and then email them asking for participation in the project. This approach performs like most email campaigns – a 20% open rate and 2% to 5% click thru rate. 50% of those who click thru convert to interviews. The final tactic is to do phone follow-up with contacts that opened the email but did not click thru. This tactics performs like telemarketing campaigns – a 1% to 2% success rate.
Most Win-Loss Analysis programs use incentives to encourage targets to commit to doing the interview. Companies offer a $25 or $50 gift card. This provides the interviewee with something tangible in exchange for their valuable time.
The core activity of the project is conducting interviews. Most interviews take 20 to 30 minutes to complete. Companies use internet meeting services that facilitate the interview scheduling process, but also allow the discussion to be recorded. This enables the interviewer to focus on the discussion instead of trying to listen and take notes at the same time. There are services that will transcribe the recordings for you into a Word document for about $1 minute.
Organizations often outsource the entire Win-Loss Analysis process to 3rd parties. Experience has shown that interviewees are more comfortable talking to an independent third party instead of a representative from the company. This results in a free and easy discussion. It also avoids making embarrassing or disparaging comments about their experiences or opinions.
A critical aspect of the interview process is asking why a customer believes certain things they say. Surveys and check lists are one way to get customer feedback, but they lack the ability to follow up on interesting statements. The real value of using experienced interviewers is that they can follow up and explore why a customer believes specific things. Often this is the most valuable outcome from the interviews.
After the interviews are completed, the recordings are transcribed. Next the team reviews the transcripts to identify common themes. These themes are analyzed and documented into a final report. The report contains a summary of the interviewees – company size, interviewee title, transaction type (new/upgrade and win/loss). For each theme or finding, specific quotes from the interviews are included. This lets the report’s reviewers hear, from the customer’s perspective and in their voice, the exact point they were trying to make. A meeting is held with all of the interested internal organizations to review the report’s findings and conclusions.
The final step is to take action on the recommendations. Effective Win-Loss Analysis programs are really part of a cycle to drive improvements in the business. Win-Loss Analysis is a variant of the Six Sigma DMAIC (Define, Measure, Analyze, Improve and Control) methodology. If action is not taken based on the recommendations from the interview analysis then an opportunity to fundamentally improve your business will be missed.
Key Interview Questions to Discover Prospect Search & Research Preferences
An important part of a Win-Loss interview is to focus on the start of the prospect’s buying journey. What triggered the need for them to start investigating potential solutions? What resources did they leverage? What did they consider to be credible sources of information? What sources did they consider to be biased or misleading? Was there information they could not find, but would have considered it valuable if they could have access to it?
While some organizations attempt to use simple Internet surveys to gather this information, experience has shown that qualitative interviews yield significantly better results. A 30 minute interview lets you delve into why a prospect believes what they do. You have the opportunity to investigate a topic in detail, and not be constrained by the fixed path of multiple choice questions in an Internet survey
The RAIN Group Center for Sales Research surveyed 472 sellers and sales executives representing companies with salesforces ranging in size from 10 sellers to 5,000+. They found that buyers had specific preferences for credible sources of information:
In our work at the Win-Loss Agency we have conducted hundreds of Win-Loss interviews. The #1 source of credible information for potential vendors to solve a business problem was that the evaluator had used a vendor’s solution in a prior job/company. The #2 source was a recommendation from a colleague or trusted networking contact who had evaluated/purchased/implemented a specific vendor solution in the past. In a recent project, we discovered that prospects in a particular technology market looked to thought leaders on Twitter and LinkedIn. Another source, which was a surprise, was peer-reviewed journal articles in leading academic and business publications. We were able to discover these preferences because we were having natural free-flowing conversations with our interviewees.
Effective Win-Loss Analysis programs do not just focus on the end result – a sales win or loss. Instead these projects can help your organization develop a more holistic understanding of a prospect’s buying journey. This will provide you with information about where to focus your investments so that potential prospects can discover your solutions early in the buyers’ journey, and consider that information to be credible. The more chances your solutions can be discovered, the more deals you will get a chance to compete it, and eventually win.