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.
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3) Do not read this blog one sentence per day during your lunch break, while eating a
This post assumes that their is good data available in the CRM system to do a Win/ Loss analysis. In my experience, most companies don’t have objective data in their win/ loss analysis. Lots of gaming, finger pointing, hand waving, … Would like to hear what kind of process were in place in companies that had good W/L data.
Here is a very insightful blog post from Ken Allred that follows up on our post:
Decision Maker-derived vs. Sales-derived Win Loss Analysis
Steve – Great point about patterns, and thanks for sharing link to the awesome post!
Mike – Excellent points on relationship vs products. Thanks also for the tweet that got me to write this post!
Ellen – Thanks for sharing some excellent counterpoints!
I notice that loss reports often tell more about the competition, and win reports often tell the company what they’re doing right, and provide more ideas for product development. Psychologically those that choose to do business with you want you to provide better products/services over time, and they’ll often give you that feedback, as it’s a win/win.
I’ve also had win customers tell me about sales opportunities that I pass along to Sales, and might offer to be a customer testimonial for the company.
I share this since there is so much you can learn from a well executed win/loss program. We need to be open to the nuggets that customers are willing to share, and more deeply delve when we sense they know more.
While we often scoff at sales for saying that their relationship is what made the sale, it’s often very true, especially if the customer trusts the sales person, and good customer service is provided. I’m working with a customer now who has the best products in their market. However, their channels of distribution have changed too often, and are confusing. A competitor with inferior products and less strong product knowledge is making in-roads, and one major reason is their channel strategy is excellent and they aren’t playing musical chairs with their sales force.
While win/loss is just one source of customer, product and competitor intelligence, I like it since it’s current, and if conducted regularly over time detects patterns and trends as Steve Johnson says.
I think you nailed it. Sales based win/loss is biased. Not useless, but you have to be careful with the results you get.
One benefit for sales based win/loss that I can think of is that it is easy to get to with little effort. Sales people are on the front line and they know very well what sells easily and what doesn’t. If there are product positioning problems or if your sales force is inadequately prepared/supported/equipped to sell then you can uncover this, but you have to dig deeper to get to the root of the problem. To me, the results seem more useful for go-to-market strategy than product direction.
No matter what, this can’t be your only source of information and direct win/loss analysis results should be weighted much more heavily than what you get from the sales force. The problem with direct analysis is that it takes time and is just another thing that product managers have on their list of things to do.
There is a hint of truth in the concept that relationships win and products lose. If you’re expecting to win on product alone, don’t expect stellar success. Relationships can create the motivation for your customers to want to learn more about your product. They can provide the opportunity to influence the evaluation criteria. They can get you the second look when you’re behind. If your sales people don’t have the relationship, then you MUST have a product that is far above and beyond the rest and the value difference between you and your competitor has to be obvious and compelling.
Win/Loss is about finding patterns in the wins and the losses, not just what went wrong with a single deal. That’s why product managers need to go deeper than the sales team.
For my thoughts on win/loss, see http://pragmaticmarketing.typepad.com/productmarketing/2009/07/on-winloss-analysis.html
Great points, Saeed. Thanks for sharing!
Sales people should not conduct win/loss. 2 reasons.
1. It’s not a good use of their time.
2. They cannot, even if they are completely honest, give a complete, unbiased view of the deal (whether win or loss).
A neutral 3rd party is best suited for this. e.g. Can a player on a hockey team give a complete and accurate view of why the team let in 3 goals in 3 minutes, or would the replay camera give a better perspective?
Win/loss can be a great tool, if conducted and analysed appropriately.