Mike Boudreaux, a fellow Twitterer on Product Management topics, said the following recently – tongue planted firmly in cheek (I think)!
Typical win/loss analysis from sales force: majority of losses due to product and price. Majority of wins due to relationship.
Once I stopped chuckling, this got me thinking of the many pitfalls of overly relying on Win/Loss Reports to drive your product roadmap. Here was my tweet to Mike.
I’d like to expand on my tweet in this blog post.
I’ve found win/loss reports to be rather unreliable because:
- As Mike says in his tweet, your sales rep may be biased when writing it – because he (like any of us) has an incentive in presenting his skills in the best possible light. Doubly true if he’s behind quota for the quarter!
- The prospective customer whose account was lost might not tell your sales rep the truth. It is much easier to tell Jim, the sales rep: “Jim, it is not you – it is your product”! No matter the truth.
- Isolated losses really shouldn’t matter that much. If you try to win every single deal – then you’ll basically fall prey to the good old “If you try to be everything to everyone, you’ll end up not meaning anything to anyone.”
- Win/Loss is reports are usually more about competition, than anything else. I’ve found it usually better to focus more on customer needs than competition. Furthermore, constantly responding to competition will make you just another follower/copycat – not a leader or innovator.
Are Win/Loss Reports Worthless, Then?
I certainly don’t think they’re worthless – they’re often pretty valuable, in fact.
However, I feel it is important for product managers to:
- Not overreact to them.
- Investigate them further – including talking to won/lost customer whenever possible. I’ve found that they’re often much more open & honest to a product manager with whom they have no relationship, than a sales rep who worked with them for a period of time.