Win / Loss Reviews

A New Knowledge Model for Competitive Intelligence

Rick Marcet

• Publisher: Wiley
• Year: 2011
• Print ISBN: 9781118007419
• eBook ISBN: 9781118102602
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

An effective framework for strengthening competitiveness by learning from past deals and applying insights derived from them.

Every sales opportunity, whether won or lost, has useful nuggets of information that can be harvested and used to improve performance. When those pieces of information are aggregated, analyzed and made available for all to use, the organization's competitive position is greatly enhanced.

• Reveals how to turn field sales teams, a mostly underutilized resource, into net producers of competitive intelligence
• Exposes new and unconventional approaches for gathering and democratizing sales insights for a broad stakeholder audience
• Presents a proven knowledge sharing model that is being adopted by major companies worldwide

Win/Loss Reviews shows how every company can improve top and bottom line performance by systematically capturing the key insights from deals that have been won, lost or delayed.  While the book talks to decision makers and business strategists, the principles and disciplines explored are aimed at bridging the flow of competitive intelligence between sales and marketing, simultaneously providing insights and line-of-site to the dynamics affecting business performance.

CHAPTER 1

INTRODUCTION

The beginning of wisdom is to call things by their right names.

—Proverb

It’s an interesting paradox—you expect your sales teams around the world to know exactly when they will close their deals, which, when combined and analyzed, drive your forecasts and ultimately your guidance to investors. But you don’t really know why you are winning and losing deals. And you are expected to make strategic decisions that do not accurately factor in what the sales teams are experiencing on a day-to-day basis.

Or perhaps you’re a seller involved in a complex competitive deal trying to get the latest tactical information that will help you win. Your marketing team is telling you to repeat the elevator pitches from their polished slide deck, but they are not talking to you or your specific sales situation. You desperately look for case studies or subject matter experts, but you need the information now or it’s over.

Knowing why a company wins or loses is important to improving business performance as well as the company’s ability to predict its business outcomes. Driving business performance beyond organic growth takes a combination of innovation, intelligence, customer alignment, and repeatable strategies that drive predictable and successful outcomes. Yet, today, it is estimated that fewer than 10% of the managed opportunities that are won or lost in an organization are reviewed with any amount of rigor. This can expose companies to growing competitive threats found in all areas of their business.

There are many factors that affect whether an opportunity is won or lost. When combined and analyzed, these factors turn into valuable insights that can point to new strategic opportunities, expose potential product or service deficiencies, and uncover otherwise-unknown competitive strengths and weaknesses. Getting to those insights requires that companies are thoughtful about documenting their approaches and self-critical when there is an opportunity for learning.

If asked why you are winning or losing in any particular sales scenario, are you able to provide an accurate and confident reply? In sales, we often rely on the talents of the sales teams to deliver the results, yet we’re not really sure of the impact the sales teams have on the outcomes. We must believe that sellers are a critical part of this process, enough so that we spend billions of your hard-earned currency each year training them, assuming that the theory they learned in the classroom will immediately translate into higher performance.

Yet, there are so many other factors apart from sales team effectiveness that contribute to sales performance that are often overlooked. Some of these factors relate directly to the skills of the sales team; others include product, brand perception, services, intermediaries or partner channels, and so on. There is often a strong tendency to look closer at the factors the closer they are within our control, and assume there is causal correlation between these and our performance. This creates fertile ground for tactical and strategic blind spots, which increase performance risks.

The importance of establishing strong and trusted personal relationships is well documented and widely accepted in the sales profession as the primary variable within our control. It is often said that people buy from people they know and trust. There are several variations of this business axiom, but the point is the same. However, relying too heavily on personal relationships to win deals and grow the business does not scale well and can lead to a false sense of sound sales and marketing strategies or incorrect assessment of capabilities. An overreliance on relationships may actually mask mediocrity and underperformance in other areas. How often have you felt that despite suspected deficiencies of all sorts, you were still enjoying healthy growth and success? Your intuition is telling you that there are areas of your business that could be improved, but you may not be sure quite where to look.

Perhaps your company is losing ground against competitors and the pipeline is not looking as healthy. A common suspect is your pricing strategy. Assuming that you frequently lose on price might mask many other reasons for declining performance and may cause you to eat deeply into your profit margins when there may be other factors that are more relevant and easier to solve. It has been widely proven that just dropping your price rarely improves win rates over the long term. It is because you have now recalibrated your price, and the perceived value with it, to lower standards. It is against this backdrop of soundly predicting and planning for successful (i.e., profitable, repeatable, and stable) performance that we look closely at the factors involved in sales outcomes.

There are multiple approaches available to assess how and why opportunities are won and lost within a company. Those approaches typically include primary market research, competitive intelligence gathering and analysis, and third-party-facilitated direct customer post-opportunity interviews. There are likely several formal and informal feedback channels that the product groups comb for additional insights. The often-overlooked (sometimes intentionally) component of this research is the insight to be gained directly from the front-line sellers.

The focus of this book is on gaining actionable competitive insights through the scalable process of quickly and effectively capturing win and loss information directly from those on the front lines who have the clearest view to the action—the sales force. This method of “crowd wisdom” is the power behind the insights captured from seller-generated win/loss reviews.1 The method advocated here does not rely on a heavy-handed top-down approach, nor on one that has a single person or team responsible for harnessing and processing information into actionable insights. In fact, we’re demonstrating how a grassroots, bottom-up approach of gathering and aggregating micro-intelligence provides some of the most accurate, relevant, and actionable insights that can benefit a broad group of stakeholders. The organization serves in an enabling and governing role to coordinate and democratize this process to maximize stakeholder value.

The benefits of gaining real-time information at the end of a sales cycle does not replace, but rather complements, those offered by broader marketing research studies, competitive intelligence reports, and customer surveys.

Here, the emphasis is on gaining immediate insights from the source most intimately familiar with your own company, your direct customer, and perhaps your customer’s purchasing criteria—the seller. Understanding broader target customer perceptions about your company’s products—how your broader customer base feels—falls primarily within the domain and expertise of the product and marketing groups. However, as we will discover, the information harnessed by the sales team should become an indispensible resource for augmenting and validating market surveys and competitive intelligence reports.

TRUSTING TODAY’S SELLER

Many sales performance and product management consultancies, including those that specialize in competitive intelligence, often dismiss the validity of seller-originated win/loss reviews. At some point in the past, this position may have been understandable and perhaps forgiven. Today, the sales profession is producing more sales consultants who are disciplined in understanding customer needs, more competent in guiding the customer’s buying process, skilled at marshaling the resources necessary to strategically grow the customer’s lifetime value, and taking more accountability for the outcomes of their sales efforts.

It is an unfortunate and pervasive perception that salespeople are not to be trusted with providing performance information that is believed to be largely accurate and actionable. The stereotype of the unscrupulous salesperson permeates pop culture and is continuously reinforced in iconic literary and cinematic works such as Glengarry Glen Ross.2 An unfortunate consequence of this perpetuated stereotype is that there are many who have failed to recognize the elevated stature of the sales profession (and sales professionals) over the past 20 years, which is evolving toward more consultative selling. Increasing solution complexity, lengthening sales cycles, and smarter customers have necessitated a seller who is not only an expert in the sales profession, but an expert in his or her own products and industry.

Why, then, are sellers entrusted to represent and protect the interests of the company at its most visible interactions and vulnerable moments with its customers? When facing customers, salespeople are trained to shine the light on the strengths of their products and services while exposing the weaknesses of their competitors. This “skill” might find its way into how they assess their own performance. Internally, sellers will often shine the light on the strengths of their own performance while blaming weaknesses in pricing or products when they underperform. There is some validity to this argument. However, we should not confuse predisposition to biases with capability to assess business performance. It is in fact the seller who is uniquely positioned to capture the nuances of the factors related to the outcome. If a seller works within a culture of continuous learning and knows that the information he captures and shares will help put more money in his pockets while growing a larger share of the pie for his company, he is apt to call it like it is, and will align with the spirit of the process, if not the letter.

It is important to note, however, that qualitative data collection is prone to seller bias. Sellers will often attribute wins at some level to their team’s business prowess and to all the people who supported them on the road to victory. However, losses are often attributed to factors such as pricing, product deficiencies, partner weaknesses, and the like. It is estimated that for wins, 75% of the time sellers will cite their selling or account management skills as among the primary reasons. By comparison, they will cite themselves as a contributing factor in the loss only 25% of the time.3

Even so, this does not mean that important outcome insights are absent. We merely need to learn how to manage these biases. In later chapters, we will discuss why we must recognize, and even accommodate, these biases as they offer opportunities to uncover additional learning and insight. We’ll also explore ways to discreetly neutralize seller bias while accurately revealing why deals are actually won or lost over time.

An interesting question to ask of sellers is whom they trust for information that helps them win deals. In an informal survey of over 200 salespersons, when asked whom they trusted for competitive insights, sellers ranked their peers well above other sources such as partners, product managers, and even their own competitive intelligence departments. The proliferation of information-sharing technologies and social networks also promotes a certain level of transparency and honesty. The expectation of peer review suggests the bias-neutralizing effect of providing information that is as accurate as possible, knowing that the primary consumers are those in their own role.

LISTEN TO THE CUSTOMER, TOO

Of course, many would argue that it is what the customer says that matters most, and ultimately it is! However, customers also have their biases and are not always forthcoming as to why you won or lost. Still, a seller may prefer to directly engage the customer if she sees an opportunity to mend strained relationships or build on executive-level relationships. Many customers and prospects who are in a position to provide feedback, especially in loss situations, simply avoid the exercise for fear of confrontation or having to explain their decision. Others may be under self-imposed nondisclosure as part of the request for proposal (RFP) conditions and process in an effort to continue receiving high-quality bids from the most reputable suppliers. The point is that there are many factors that can lead to biased customer feedback.

Conducting in-depth and direct postdeal customer debriefs is often facilitated by third-party consultants who specialize in this field. It is believed that a neutral party will entice the customer to reveal more than would be expected if directly approached by the sales team. These customer interviews usually go into great depth and detail and produce very insightful reports and analysis. Although consultants are positioned as neutral third parties, this does not guarantee unbiased feedback. The trained consultant can often detect bias and further probe in certain areas to cross-check other feedback for consistency.

DRIVING SCALE AND ACCURACY

The methods for conducting win/loss reviews advocated here apply to the spectrum of sales cycles of varying complexity and length—opportunities with short sales cycle time and simple buying decisions, or opportunities with longer cycles and more complex decision criteria. If we are to factor in simplicity, cost, timeliness, scalability and broad utility, getting post-opportunity feedback directly from the customer is not always a viable solution for gaining the insights within these constraints.

If your company manages a thousand opportunities over the course of a fiscal year, how many of these would you consider worth the effort to hire a third party to go and interview: ten (1%), or a hundred of them (10%)? As the numbers of interviews go up, so do the costs. At some point the costs of collecting, analyzing, and reporting this information become greater than the value delivered. And while the information and insights are likely to have great depth, the insights from a limited sample may not be consumable and available across a broad set of stakeholders.

While offering greater depth and breadth of information, rarely will customer interviews offer the scale to derive statistically relevant results that can inform sales strategy and timely course correction. There may also be a lengthy gap between the time when the deal is won or lost and when the interview takes place and the information is analyzed and reported.

The audiences for the final reports generated by the customer interviews are often the senior leaders of companies who have the advanced skills and business acumen to understand them, and who are adept in interpreting complex analytics reports. The orientation and final recommendations from the reports may focus on only one group, for example, marketing managers or product managers. In some cases, the analysis is at such a depth that it may be difficult to interpret the insights in such a way that makes them actionable. Your author has experienced the spectrum of win/loss reviews and can attest to the variability in depth, quality, and intended audience.4

A NEW APPROACH

The information garnered from the seller-generated win/loss review process should complement, not replace, market and competitive intelligence reports, sales analytics, and direct customer interviews. However, it is important to differentiate between customer-engaged opportunity outcome reviews and those originated by the sales teams. For many who do not understand the approach, there is likely to be immediate suspicion raised at many levels. This reaction is natural as most customer feedback paradigms employed today (e.g., interviews, satisfaction surveys, focus groups, etc.) are still rooted in how business was historically done. The disruptive and transformative nature of information technology requires a new approach with the capabilities to reflect how business is being done today.

The approach to win/loss reviews advocated here runs counter to conventional wisdom in the following fundamental ways:

Seller Generated versus Customer Debrief

Win/loss reviews depend prima...

Table of contents

• Cover
• Title
• Copyright
• About The Executive Leadership Series
• Dedication
• Preface
• Acknowledgments
• Chapter 1: Introduction
• Chapter 2: Win/Loss Reviews and Business Intelligence
• Chapter 3: Why Do We Win or Lose?
• Chapter 4: Capturing the Data
• Chapter 5: Surfacing the Insights
• Chapter 6: Beyond Competitive Insights
• Chapter 7: Measuring Process and Outcome Performance
• Chapter 8: Stakeholder and Cultural Considerations
• Chapter 9: Implementing a Win/Loss Review Program
• Conclusion: A Look Forward
• Appendix A: Process Improvement: A Case Study
• Appendix B: From the Blogosphere
• Appendix C: Software and Services for Win/Loss Review
• Glossary
• About the Author
• Index