Mtm12 white paper win loss analysis

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Win/Loss Analysis Intelligence Collaborative - Mastering the Methods Series

Win/Loss Analysis


This White Paper is #12 in a series of intelligence methods being offered to members of the Intelligence Collaborative. It was developed by Dr. Craig S. Fleisher to provide a concise overview of how to apply key intelligence methods to support analysis. Although every effort is made to ensure that the information is accurate and fit for its purpose, the author and Aurora WDC make no implied or explicit warranties as to its applicability or use in your particular work context.

Please direct any questions about this paper to its author at the following: Craig S. Fleisher, Ph.D.

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Other White Papers are available on a regular basis from http://IntelCollab.com. Related Methods in the series are:

STEEP Analysis

SWOT/PEST Analysis

Value Chain Analysis

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Win/Loss Analysis


Abstract

Win/Loss Analysis (WLA) is a forensic market research technique that helps managers and executives de-construct how their companies market and sell their products and services from the prospect’s viewpoint. The process most commonly utilized will typically entail conducting exten sive and penetrating telephone interviews with new clients or lost prospects, and to surface the real-world pragmatics and cold, hard facts that undergird their decisions about your company’s products and services. The objective of WLA is to glean as much useful and actionable intelligence as you can, to make sense of it quickly and reliably, and to utilize the information to facilitate continuous improvement across the organization. Done well, it should produce insights that enable you to win a higher percentage of RFP and client-sales opportunities than you had been previously doing.

The Method’s Primary Value

A key question that sales executives must address in evaluating their company’s prospects is “Why are we winning, or losing, the business we are competing for?” Win/Loss Analysis is a management tool that allows managers to understand customer requirements, the effectiveness of their sales team and of competitors. WLA requires the gathering of dire ct feedback from a client or potential client about why you won or lost a specific sale or contract. It must include both wins and losses. The wins tend to highlight your organization’s strengths and your competition’s weaknesses, and the losses highlight your organization’s weaknesses and your competition’s strengths. The feedback provides information you can actively use to improve your organization’s sales performance and your existing product portfolio. It can also help guide your organization in the research and development, as well as marketing of new products.

Win/Loss Analysis


Overview of the Method

Richard Schroder, author of the book From a Good Sales Call to a Great Sales Call, notes that during the last 15 years, more and more companies, particularly those operating in sophisticated B2B market sectors, have been initiating WLA programs. They do so by either conducting post-sales debriefs internally or by engaging outside research firms to conduct post-decision interviews with their clients and prospects. That said, the growth of such sales analysis remains in its early stages, as fewer than 20 percent of all companies have implemented formal programs. Tapping into the intelligence and insights that are derived from these analyses can often give your team advantages in future sales situations, which are even more valuable in highly competitive marketplaces.

Where the Method Fits in Planning and Strategy

WLA is a unique tool that brings together all the relevant elements of information about customers, competitors, and your own organization within the context of the most critical element for a business the buying decision. As a market listening tool, it is designed to provide an organization with information that can actively be used to increase its sales and identify potential marketplace changes. By seeking feedback directly from the target market and subjecting this to analysis, an organization can gain something of an objective understanding of its place in the market and use this to improve its posit ion. Done effectively, the regular performance of Win/Loss Analysis can generate a number of key benefits for most any organization. These are six of them that I feel are particularly worth your considering it for:

1. Improve your sales effectiveness by gathering insights that help your sales force better position, package, differentiate and deliver your message.

2. Identify areas for improvement within the four key phases of the sales process – building rapport, identifying needs, presenting solutions and closing the business.

3. Increase your understanding of how your competitors succeed in new business situations . 4. Identify the key drivers for closing new business – and thereby significantly increase the win rate

for your new business. 5. Uncover unmet client needs and new product/service development, enhancement and

extension opportunities. 6. Gauge your company’s progress against its own standards.

Cautions with Applying this Method

Problems in conducting WLA tend to fall within several categories. WLA is based on data obtained from interviews arising from sales results. Therefore, it is mainly reactive and event-driven. You must be careful to use a representative mix of sales results. Results will be skewed if, for example, only successful sales to existing clients are analyzed in one round of WLA.

Win/Loss Analysis


Interviews are only as good as the interviewer conducting them. When an interviewer is inexperienced or has not been thoroughly briefed on market/customer sensitivities, the quality of the data obtained will be compromised. An inexperienced interviewer may lack the confidence to ask questions beyond those in the standard WLA questionnaire. Even the most experienced interviewer will be unable to gain all the useful information potentially available if he is not sufficiently aware of the issues in the market to know when to probe for further detail in an interview and when it is not relevant. Value derived from performing WLA will also be only as good as the system set up to educate and inform interested parties about the results. Information taken out of context, such as in an attempt to extrapolate widely from an individual analysis, is unreliable. WLA’s true value comes in doing it regularly and in aiming to gain an accurate and unbiased understanding of performance. The strategic implications of WLA are highly dependent on the quality of the raw data. It should be free of any political or strategic bias and subjective perspective, particularly where employees in an organization may intentionally or naively distort information. The fact that WLA focuses on sales results may lead to a politicizing of the process within an organization. The sales team may be reluctant to cooperate fully with the process if they feel they are being singled out unfairly. Other parts of the organization may try to ambush the process to push their own agendas. The team responsible for running WLA must be carefully chosen and trained to ensure that the members fully understand the WLA process and are prepared to implement it properly.

Applying the Method

Step 1: Determine the Target Segments and Identify Prospects Target the right accounts to analyze and the right interval to conduct analysis. A good starting point is to look at the accounts that generate most of your organization’s revenue. The 80/20 rule states that 80% of an organization’s revenue comes from 20% of its customers. However, other considerations in choosing whom to interview may include whether your organization wants to pick up business from particular potential clients or ex-clients, or whether there are plans to introduce new products to the market. Specific companies that meet the organization’s chosen criteria need to be identified, singled out, and reviewed to ensure that the targets are worth the investment. Step 2: Understand Internal Cultural Issues Understanding the organization’s culture helps you understand how information will be used. For example, in a learning-driven and consultative culture, sales representatives and their managers might become highly involved in both collecting and evaluating information. It is also important to ensure that involvement in the process extends beyond the sales team. Other key stakeholders need to be clearly identified, and creating cross-functional teams may be a way to address the differing needs of critical groups. Step 3: Develop the Questionnaire A WLA questionnaire needs to cover four essential areas:

Win/Loss Analysis


Sales attributes. This topic covers the professionalism of your sales team, the quality of the relationship your organization has with the client, and the esteem in which the client holds your organization compared to your competitors.

Company reputation. This includes questions about the perception of your organization’s and your competitors’ image in the marketplace, the stability of your organization, its reliability as a supplier, and the quality and performance of your products.

Product attributes. This is a wide area basically covering whether your products actually perform as advertised, as well as issues of price and technology.

Service issues. These questions cover the delivery and implementation, maintenance and after-sales service, and training provided to clients.

Step 4: Prepare for the Interviews The interviewer now needs to be briefed about the significance of winning or losing each sale. To get the most from the interview, the interviewer must be aware of all relevant details and sensitivities of the sale/non-sale being investigated. Step 5: Conduct the Interviews Carefully consider how you want to go about conducting interviews. This decision depends to an extent on whether you plan to use a third-party interviewer or your own sales team. Experts in this field highly recommend the use of an independent third party to keep interview results from being skewed by any preexisting relationship between a salesperson and his or her client. For example, the interviewer may direct the responses he or she receives with unintentional body language cues. Step 6: Analysis and Interpretation When the interviews are complete, the results need to be tallied and analyzed. The interviewer generally summarizes each completed interview and analyzes and reports on key trends or issues identified as a result of the interviews. If the interviews are conducted by internal staff, training and support must be provided to carry out these tasks effectively and to aid with the report development. WLA must be given clear priority over other duties when analysis needs to be done. The value of WLA is compromised by sporadic rather than regular analysis. You can leverage different types of analytical tools to help deliver insights from the information collected during the interviews. Depending on the driver for the WLA, techniques can include benchmarking comparisons, competitor analysis, BCG matrix, statistical analysis, value chain, or even input into the organization’s SWOT. Below you will find an example of how one company did WLA using an importance, weighted criterion grid which they populated with the data that came out of the WLA interviews they conducted.

Win/Loss Analysis


Step 7: Dissemination The report and results can now be disseminated. Information will arise from WLA that is relevant to different departments in the organization, such as research and development, marketing, and sales. The program team should ensure that each department receives the information that is relevant to it. This should hopefully increase the likelihood that the information is read and supports decision-making in the appropriate department. The results may be presented in different forms, depending on preferences.

Complementary Methods

Benchmarking

Competitive Profiling

Customer Segmentation Demand Chain Analysis

Functional Capability and Resource Analysis

Sales Forecasting Strategic Group Analysis

Voice of the Customer (VOC)

Additional Resources

See chapter 14 on Win/Loss Analysis in the (2013) book Analysis without Paralysis: 12 Tools to Make Better Strategic Decisions, 2nd Ed., by Babette E. Bensoussan and Craig S. Fleisher, Upper Saddle River, NJ: FT Press.

Win/Loss Analysis


Business and Competitive Analysis: Effective Application of New and Classic Methods by Craig S. Fleisher and Babette Bensoussan, 2007, Upper Saddle River, NJ: FT Press.

Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition by Craig S. Fleisher and Babette Bensoussan, 2003, Upper Saddle River, NJ: Pearson/Prentice Hall.

Naylor, Ellen. "Increasing sales through win/loss analysis,” Competitive Intelligence Magazine, 2002 5(5) pp. 5–8.

Schroder, Richard M. From a Good Sales Call to a Great Sales Call: Closing More by Doing What you Do Best. 2010, New York, NY: McGraw Hill.

Presentations & Public Speaking

Mtm12 white paper win loss analysis