If the purpose of a business is to create a customer, it’s hard to understate the value of well-executed win/loss analysis. If done well, win/loss analysis answers perhaps the most crucial question for your business: how do I acquire more customers? (Take note: I mean that question in its broadest sense, not in the sense of, “what sales tactics can I use to get more people to buy a contract.”)

A well-executed win/loss analysis program can reveal where your business stands among the competition; how the market values your product; and effective ways to enhance the quality of your offering. It’ll not only improve the sales process but inform how your marketing, product, and customer success teams adapt their functions to best cater to your audience.

So, where do you start?

1. Outline clear goals for the program

As with all business metrics, conducting a constructive win/loss analysis begins with setting goals. Ask yourself: what information are you trying to get through this analysis? Why?

Common goals for win/loss analysis include:

  • Increasing win rates
  • Strengthening product competitiveness
  • Improving customer satisfaction and retention
  • Exposing holes in communications
  • Planning future product development
  • Finding gaps in buyer perception and reality

Goals can also be more specific to your company’s unique challenges and vision. Bottom line is: it’s impossible to win a race without designating a finish line. Set goals that are relevant to current business objectives and work backwards to set yourself up for success.

2. Communicate those goals internally

There’s a common misconception (among sales teams in particular) that win/loss analysis is meant to expose the failures of specific teams and individuals. It’s understandable, because many companies do use competitive analysis too tactically, focusing too much on the sales process rather than thinking about how the company creates value overall. Don’t make this mistake.

The goal is to help every employee do their jobs better and align around customer-creating approaches to the market. According to an Aberdeen Group study, companies using win/loss analysis have higher customer retention rates, year-on-year revenue growth, better lead conversion rates, and more sales reps hitting quota than non-users. The very process of conducting win/loss analysis can even strengthen relationships between teams, particularly marketing and sales.

Win/loss analysis can:

  • Generate competitive insights
  • Gauge brand awareness
  • Reveal how your product is perceived in the market
  • Identify purchase drivers for your offering
  • Validate (or invalidate) new market opportunities

Communicate these points to your team before moving on to the next step.

3. Build a targeted customer list

Here are some helpful tips for selecting customers and prospects for interviews:

  • List companies (current customers and lost prospect) that embody your ideal future customers.Interviewing companies that don’t represent customers you want to attract is short-sighted and ineffective.
  • Make it a 50/50 split between won/lost opportunities. Knowing why a customer converted is just as important as learning why they didn’t. Don’t fall into the trap of making it easier on yourself by selecting only won opportunities.
  • Seek out key decision makers. With the exception of a few niche research objectives, it’s almost always necessary to make sure the decision maker is included in the win/loss interview process. If you don’t understand that individual’s mindset, it’s not terribly useful to move on to other stakeholders in the buying process.
  • Minimize “burnouts.” Focus less on prospects that fizzled out of the sales process and more on companies that were on the cusp of purchasing but didn’t. Your highest ROI lives at the bottom of the funnel.
  • Reach out to 4x more customers than you expect to hear back from. For example, small businesses should reach out to 20 customers at minimum so at least five respond. Larger, complex companies (ex. enterprise B2B firms) should have at least 20 confirmed customers by the end of the process.
  • Offer incentives. Providing motivation – like a $20 gift card – can increase the likelihood of getting a customer or prospect on the phone, and in most cases incentives don’t impact the honesty of responses.

4. Prepare for and train your team for the interviews

Ask teammates what they want to know. Approach any functions that will be affected by the results of this analysis and ask them what information would be helpful. This guarantees you’ll have helpful feedback for your team and minimizes the likelihood that they’ll reject the feedback you gather.

When crafting questions, cover the entire buying process. Begin by asking general questions about the problems their company was facing and slowly hone in on why they began considering your product.Here are some sample questions:

  • When and why did you start looking for a product like ours?
  • What factors did you consider when comparing different product offerings?
  • What other companies did you consider working with?
  • How did our product compare with competitors’?
  • What are the strengths and weaknesses of our product?
  • How was your experience working with our team?
  • Did you reach out to our references?
  • Was anything missing from our product roadmap?

Choose interviewers wisely. Win/loss interviews need to be a neutral zone. Having a sales person lead the process presents a serious conflict of interest that could lead to biased and incomplete feedback. Product marketers are ideal interviewers because they sit at the center of most functions without being directly tied to one. Marketing and business development teams generally provide good candidates for conducting these types of interviews as well.

5. Follow 5 rules to get the most out of your interviews

Below are tips for ensuring you get the most out of your conversations:

  • Ask the same questions in every interview. Your questions should act as the control; make sure they are consistent so all variations in customer responses stand out.
  • Offer confidentiality. If the customer or prospect requests anonymity, be open to it. The more comfortable they are, the more honest the feedback will be.
  • Never correct the interviewee. They may mistake facts about your business, but don’t correct them. Take note of the misunderstandings and later analyze how they might have come to that false conclusion.
  • Don’t interrupt. Your silence will encourage them to speak freely. Let them do the talking.
  • Test new ideas. Win/loss interviews are perfect for concept testing ways to improve the product or sales process. Run new ideas by the prospect to see if any would have made a difference in the buying process.

Always follow up with a “Thank You” note. If you promised them a gift card, it’s time to send it their way.

6. Now, organize the feedback to highlight key learnings

Now, aggregate all the feedback onto one document.

Note each interviewee’s name, contact information and title; the interview date, questions, and answers; and the themes observed and recommended action items for each company. You want the documentation process to be scalable because your team will be adding to it frequently. Feedback from various customers and prospects should be easy to compare, so keep the document or spreadsheet as tidy as possible.

Finally, share the document with your sales, marketing, customer success, and product teams to reference as needed.

7. Continually refine your business based on analysis

Businesses can’t survive if prospects and customers don’t see value in its products.

Win/loss analysis is the first step in determining what a business must do to drive value and stay competitive. As soon as a deal is marked closed or lost, an email should be sent to prospect’s key stakeholders asking for constructive feedback. It takes about three weeks for a customer’s recollection of the product and sales process to get cloudy, so reach out promptly.

Done well, win/loss analysis has the power to boost customer retention, tailor the product to a changing market, and even bring lost customers back on board. If it isn’t already a significant part of your business operations, it’s time to make it one.

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