Total Quality Sales Management Topics

Win/Loss Analysis

Typical success rates for closing major new proposals are less than 20% when several providers or competitors are asked to present their offerings. In this light, companies often spend tens of thousands of dollars (if not hundreds of thousands of dollars) in an effort to win major business. For those who failed in their bids, little feedback is available to explain why a competitor was perceived to be a better fit. As a result, sadly, the likelihood of winning the next major opportunity remains about the same.

To further complicate the challenges sellers face, customers' expectation levels have risen dramatically. Today, 80% of customers who leave their previous supplier rate that supplier as "good". This was derived from a report in a Harvard Business Review as far back as the November/December issue in 1995. Good isn't good enough anymore. In order to succeed, to improve, or to defend success against competitors, much more detailed information is needed to move the bar from “good” to “excellent.” Most importantly, this information needs to be both consistent and comprehensive if it is to be dependable and valid.

Chally’s Win/Loss Analysis is a process for independently collecting research data, gathered by interviewing vendor selection teams. It often discovers surprisingly simple fixes that losing competitors could use to improve success rates. Surprisingly, only a few top-draw sales forces consistently gather quality data about their losses to permit a legitimate benchmarking or tracking process. Thus the management of their proposal and presentation process to create improvements depends on anecdotes and assumptions.

A typical example: A proposal team at a major software integrator lost a huge piece of business because it wrongly assumed that the customer was completely satisfied with their existing services and they offered the same “strong support service process” in their proposal. Had the proposal team been aware that the customer was unhappy with its customer support, a different tactic could have been used to explain how they were going to improve service in this proposal and, quite likely, the business would have been saved.

What's consistent among sales forces that do achieve close rates above 40% and double the 20% of the average close rate?

First, they commit to accessing objective, quantitative, and independently collected measures and analyses of the reasons for wins, and more importantly, for their losses. And all of this data compares them to their competition. No matter how good they are, if they fall behind in the perception of their competitor’s efforts, it won’t be good enough. Likewise, there is no further sense in expanding a relatively average strength if it is far superior to what the competitors are offering or perceived as offering.

To maintain active control of their own success rates, winners order win/loss analyses to provide useful debriefing to all concerned. These companies also develop new techniques to address the two to four most serious deficiencies that are discovered. Typically, improving these two to four weakest points will have a dramatic effect on their close rates in the future.

Additionally, they reward salespeople for their rate of improvement instead of a single win or failure.

In researching various reasons why organizations don't routinely track, analyze, and change the techniques they use in making their proposals in order to increase their wins, there are several reasons:

Defensive resistance really comes from the internal politics of the organization, where members of the sales force have a natural concern or fear of having anyone look over their shoulders, especially those that they believe might interfere with their prospect or customer relationships.

Many times they don't believe prospects will give in-depth, candid information, especially about competitors -- the most important issue they want to compare themselves to.

Alternatively, some organizations feel they are already doing well and while things are going well and they’re busy, they simply don't have the time.

And lastly, and probably the saddest of all, is where things are going so poorly they often don’t believe they can afford the time or the effort to do any analysis.

All of these are, obviously, prescriptions for failure.

Chally does provide a real advantage. Our results are predictive and not just descriptive. This means we use sound statistical or “actuarial” techniques to do regressions that effectively predict which techniques are most likely to improve your overall chance for winning major bids.

The interview data we collect is both qualitative and quantitative. Not only do we provide accurate “predictions,” we provide the qualitative explanation to fill out an understanding of how proposal processes must change.

Finally, because Chally does its work so professionally, customers are usually impressed, not only with our professionalism, but your level of interest in getting good data.

Overall, your success will be based more on objective, concrete analysis and the specific actionable conclusions that Chally provides than the more intuitive or anecdotal processes  most frequently used.