Sure, every business loves ringing the gong, blowing the whistle or completing whatever celebratory action the company has designated to announce sales wins. But truly successful businesses make just as much “fuss” about lost deals as they do about those that are won.
Taking the time to dig in and understand why a deal was lost or unqualified is often far more valuable than understanding why a deal was won. Not only can it highlight missed opportunities and areas for improvement, but it can also help your team understand which leads to prioritize and where to focus its efforts.
To uncover this information, companies can perform an “autopsy” on each of their lost deals, dissecting it by sales dimensions.
What’s a Dimension?
Dimensions are all of the factors or variables that, together, make up a sale. Examples of sales dimensions include sales team, rep experience, stage duration, company vertical, contact title, lead source, deal size, price, sales process and much, much more.
Altering just one of these dimensions across deals can have varying results – positive or negative. The key is to pinpoint the dimensions that have the greatest impact on your sales pipeline and performance to identify what adjustments should be made to achieve your desired outcome.
Of course, these will vary by company, so for now, let’s examine a few different key sales dimensions and what they can potentially tell you about your lost and unqualified deals.
Do you keep track of where each of your deals originates? Was it a referral from a current customer? Was it the result of a Google search? Did one of your reps conduct the initial outreach?
Having even just this basic information about your lost deals readily available can save your reps a lot of time upfront by preventing them from focusing on leads from sources with a low win rate. It can also lead to optimizations across your business; for example, perhaps your marketing team should steer clear of a particular search term that consistently results in loss.
Knowing exactly which sales reps sourced and/or touched a lost deal can surface important sales coaching opportunities. Is one rep consistently qualifying deals that don’t make it to the closing stage? Do certain reps fall flat when it comes to converting prospects in certain verticals or with particular objections? Situations like these warrant very different and very specific conversations that, once had, can have a major impact on closing rates.
This dimension can be examined a few different ways, each of which will tell you something important about your sales process:
1) Was a decision maker identified during the sales cycle?
2) If so, at what pipeline stage did this take place?
3) What were the attributes of this decision maker?
If no decision maker is being identified in the sales process, it looks like you and your team need to have a talk. Knowing at which stage of the sales pipeline the decision maker is being identified can help you determine whether this identification should take place earlier. Finally, understanding the job titles, experience levels and other characteristics of these lost deal decision makers will help you and your team spot “fakers” and more accurately and quickly detect the right decision makers for your solution.
Although not every sales team makes note of this information for each deal that it works, it should. Knowing what other solutions, both competitive and otherwise, were being used by lost prospects can tell you a lot about your product and your pitch. Do you find yourself losing against the same competitor over and over again? It may be time to update your sales enablement materials. What about missing out on deals where the prospect is using a particular marketing automation or helpdesk solution? Lack of integration could be the culprit.
Stage duration refers to the amount of time each of your deals spent in a given stage of the sales pipeline, such as Qualified, Quote or Close. Is there a particular stage where lost deals seem to go silent or drop off? Perhaps you need to rethink your pipeline, redefine the process steps within each stage or provide reps with better coaching and resources to effectively move these deals through the funnel.
Outlining the specific steps and information, or exit criteria, needed to move a deal from one pipeline stage to the next is the heart and soul of your sales process. Examining the exit criteria of your lost deals will not only show you if you’re asking the right questions to properly qualify your leads, but will also help you identify red flags in the future. Did your failure to establish budget early on come back to bite you later in the sales process? Do prospects that put off that on-site meeting wind up in your lost deal analysis report? Answers to questions like these tell you what to do differently next time.
The Importance of Scale
Of course, one lost or unqualified deal can only tell you so much. The idea is to collect this information across many lost deals over time to start identifying patterns and variances. You can also examine the same set of dimensions across your won and lost deals and compare to help weed out assumptions and coincidences.
Even deeper insights can be found when you start measuring your deals by more than one dimension at a time to see how they overlap with and impact one another. For example, if you analyze deals from a particular lead source (dimension 1) by sales rep (dimension 2), you may discover that one rep simply excels at closing deals from a particular lead source, while the others require more training.
Deciding Your Dimensions
Are you ready to take the leap and conduct a “lost deal autopsy” for your business? The first step is deciding what sales dimensions to measure first. For help getting started, register for our Science of Sales 101 eCourse.