How to conduct Win-Loss analysis in B2B markets

What is Win-Loss analysis?

Customer acquisition and customer retention are twin drivers of business growth. Both are essential – businesses don’t succeed if they focus on one and neglect the other.

For example, many businesses find that their existing customer base doesn’t have sufficient growth opportunities. Natural attrition means that, despite best efforts, some customers will stop spending over time. Winning new customers is the only way to grow.

One of the primary challenges of customer acquisition is that you often get just one chance to secure prospects before a competitor locks them up for the foreseeable future.

That means that you need to optimize the odds of winning every new business opportunity. One way to increase your chances is to better understand how prospects think and behave, including why they select a provider.

A good starting point for that insight is a CRM. It is likely to have sales data that allows you to analyze win rates. For example, you can explore if win rates are higher or lower when you sell to a particular company type or if you’re selling a specific product.

In some instances, the CRM will also tell you why you won or lost a deal. Unfortunately, these explanations are often inaccurate. There are a few reasons for this.

The first problem is how the data is captured. In some organizations, the ‘reason for win or loss’ field forces the sales rep to select an answer from a list.

But that over-simplifies the matter. Business decision-making is complex. Multiple decision-makers with different responsibilities may be involved in a purchase decision. The purchase decision may have many stages, and the final decision will be based on a long list of decision-making criteria.

Forcing sales reps to select a single option from a pre-written list cannot capture the subtleties and details that explain a prospect’s final decision.

The second problem relates to who is entering the data. Sales reps are time-poor and often not engaged in the process. Even when there is the option for sales reps to write an explanation for the win or loss, they frequently input short, one-sentence notes.

Additionally, sales reps rarely know the full story of what went on during the purchasing journey and why they won or lost the business.

When explaining a lost deal, sales reps overstate the importance of reasons outside their control, such as pricing or product functionality. And when a contract is won, many salespeople don’t try to understand why.

Ultimately, analyzing CRM data, and talking to sales teams, will only get you so far. If you want to understand the underlying reasons for a win or loss, you need to dig deeper. Indeed, the only reliable source of information is the actual buyer that had to make the decision.

Win-Loss analysis is a research process that allows businesses to explore the real reason that sales have been won or lost. With that knowledge, companies can take action to improve their chances of success.

Companies that conduct win/loss research are usually business-to-business (B2B) organizations. There are a few reasons for this:

• B2B purchases are, on average, larger than B2C purchases, so each win or loss is more critical
• Vendors are more likely to have prospective buyers’ contact information, making it easier to get their input
• B2B sales cycles are longer than B2C, so there is more to discuss and explore during research interviews

The benefits of conducting B2B Win-Loss research

According to The Pragmatic Institute, more than 80% of organizations do not conduct formal Win-Loss analysis.

Perhaps they should reconsider. After all, Win-Loss research helps businesses to understand how to increase their future win rate. Even if sales are currently at an acceptable level, a company should still want to know how to boost them further.

So, what exactly does Win-Loss research tell you?

First, it gives you a deeper understanding of the process used to buy your product or service by:

• Exploring what triggers a target organization to make a purchase
• Mapping the different buying journeys, including the buying tasks that are usually invisible to a vendor (e.g., steps taken offline or before contacting a vendor)
• Identifying the key players and what makes them tick, including the personas that you don’t deal with directly
• Exploring the interpersonal dynamics between different decision-makers
• Identifying what channels and information sources most influence decision-makers’ behavior (e.g., which channels they trust when searching for potential vendors, and what content they look for)
• Revealing how to influence decision-makers at each stage of the buying journey
• Identifying the conscious and unconscious drivers that make buyers select a provider
• Revealing the relative weight of each driver and how this differs by buyer type

Second, you can assess how your organization performs during the process from the prospects’ perspective by:

• Revealing why you were included in the process (if at all)
• Identifying when and why you won or lost the deal
• Assessing your performance relative to competitors, including strengths and weaknesses
• Revealing what you ‘lost’ to – the buyer may have selected a competitor, but they may have also decided to do nothing or to build something in-house
• Identifying critical areas for improvement, including what needs to be emphasized in future opportunities

All of this information provides businesses with clear guidance on how to optimize their sales and marketing strategy:

• Positioning and messaging – understanding which messages will most resonate with buyers at each stage of the process
• Product roadmap and strategy – identifying which capabilities will make the solution more attractive
• Sales enablement – insight into how to make sales and marketing collateral more effective
• Targeting – identifying which deals are high opportunity to speed deal qualification

Win-Loss research can also help you to build relationships with won and lost deals. Conducting an interview shows that you are committed to improving.

Ultimately, Win-Loss research gets results. In 2017, CSO Insights found that teams regularly using Win-Loss analysis had higher win rates than those who didn’t.

Best practices when conducting a Win-Loss audit

#1. Don’t let perfect be the enemy of good

Sophisticated Win-Loss programs require a significant amount of internal resources and expertise. Not every business is ready to implement a best-in-class program from scratch.

But it’s better to start somewhere than not to start at all, as some data is better than none. We recommend setting up a simple, pragmatic Win-Loss program that provides some initial insights.

That might mean asking a small number of questions to a small number of lost opportunities. Over time, you can fine-tune and expand your efforts to optimize the program. For example:

• Adding new questions
• Expanding the methods you use to collect responses
• Interviewing more wins and losses

#2. Work with an independent 3rd party

This advice might sound self-serving coming from a research agency, but partnering with an independent 3rd party will help to improve the quality of your Win-Loss insights.

Not every task needs to be handled by an outside firm. Indeed, some tasks, such as analyzing CRM data, should be done in-house unless time is an issue.

However, research agencies can play a critical role when you want to speak to buyers.

First, they are more objective, which has a few benefits:

• Even the most ‘neutral’ employee might have a bias that will influence how they ask questions and interpret responses. Existing pre-conceptions won’t affect a third party
• Objectivity will also prevent internal political issues by ensuring that one division or team doesn’t feel that another division is trying to blame them for a lost opportunity
• It means that lost prospects and new customers are confident that their feedback will be acted upon and so are more comfortable participating and sharing their actual views

Second, research agencies are experts in conducting this sort of research, which means:

• They’ll ask the right questions in the right way (i.e., without ‘leading’ the interviewee)
• They’re able to elicit more candid responses than if the vendor was asking the questions

#3. At the beginning of the program, secure executive and cross-functional buy-in

At the beginning of the project, it is critical to secure the buy-in of the executive team and department heads (e.g., sales, product, marketing, operations).

To do so, you need to educate leaders about the value of a Win-Loss study and the role that their teams will need to play in making it happen. Additionally, you should solicit leaders’ input on what they would like to get from the research (e.g., what questions they would like to ask).

There are several benefits of getting high-level support:

• Win-Loss programs with high-level support are more likely to be provided with sufficient resources
• It’s easier to design a Win-Loss program that addresses everyone’s needs
• Leaders are more likely to adopt the recommendations from the study if they were involved up-front
• It prevents other teams from undertaking similar studies in parallel, which can lead to wasted effort

#4. Include internal sales stakeholders throughout

Sales staff are critical to the success of a Win-Loss program:

• They may not always know the exact reason that an account was won or lost, but they’ll have a pretty good sense. These insights can provide you with useful context for an interview, reassuring the buyer that the interviewer knows what they are talking about
• They may have some valuable insights into how the win rate could be improved. Salespeople often have good ideas about ways to improve the sales process, which can be tested in the interviews
• Salespeople are the individuals who will be most impacted by changes that result from a Win-Loss program. They need to be involved throughout the study so that they are more comfortable with these changes
• On a more practical level, they can help with the research process itself. Salespeople can contact prospective interviewees to ask them if they’re willing to participate in the research. Leveraging this existing relationship increases the chance that a buyer will be interested in participating

#5. Engage with recent wins and losses, and make sure you’re getting a wide range of lost opportunities

If the ultimate goal is to improve your win rate, you need to understand why you win and why you lose.

Doing so will help you identify critical pitfalls and best practices, which should inform the optimum approach.

Of course, lost opportunities will have dropped out at different stages of the sales funnel – some may have stalled early in the process, others may have been on the verge of purchasing but didn’t.

Win-Loss programs ideally include lost opportunities across the sales funnel. If budgets are limited, you should prioritize deals that were lost later in the sales process, as that is where the ROI is probably highest.

Regardless of the type of win or loss, the goal should be to speak to companies while the purchase is still fresh in their minds. We only recommend interviewing companies who purchased in the last six months (ideally in the previous three months).

#6. Be careful when selecting potential interviewees, and be open to interviewing multiple individuals within an organization

In many cases, multiple individuals will have been involved in a purchasing decision. It can be challenging to select which individual(s) should be interviewed.

Most vendors’ initial instinct is to interview the most senior person in the decision-making unit, or to interview the person they spoke to the most during the sales process.

But they are not always the right candidate:

• The senior decision-maker may have been relatively hands-off, for example, acting as the ‘approver’
• The primary contact may have just been a vendor liaison and not that heavily involved in the decision-making

You are looking for an individual who is very familiar with the specific details at each stage of the process. Sometimes, there is no single individual who fits these criteria. You may need to speak to 2-3 individuals to get the complete picture. The research methodology should be flexible enough to accommodate this scenario.

#7. Tailor your methodology to the situation, but prioritize qualitative research

Generally, qualitative one-on-one interviews are the most appropriate method of conducting Win-Loss research:

• B2B decision-makers are more likely to participate in a depth interview than a survey
• Depth interviews are longer, which means that the research can ask more questions
• The less structured nature of qualitative interviews means the researcher can ask questions that aren’t possible in a survey, as well as ask follow-up questions to explore a topic in more depth

However, the cost of doing depth interviews means that you can only speak to a select number of organizations. Quantitative surveys can be more cost-effective, which, in theory, allows a researcher to talk to a broader range of wins and losses.

There are a few scenarios in which quantitative research is more appropriate for Win-Loss research.

For example, quantitative Win-Loss research is more relevant for companies with a high volume of low-value deals. Qualitative research may not be advisable in this situation for a few reasons:

• You would need a lot of qualitative interviews to get a representative sample. A small number of qualitative interviews may provide a misleading perspective. Using a more expensive methodology to get an unrepresentative sample seems like an unwise use of budget
• Buyers are less likely to give up a lot of their time for low-value deals as they may not feel that it is worth their time
• Low-value deals tend to have more straightforward buying journeys. Quantitative research may be sufficient to get a solid understanding of the nuances of a purchase

In this scenario, we recommend doing both qualitative and quantitative research. Qualitative research is essential up-front to understand some of the nuances of a purchase and inform the questionnaire’s design.

Then quantitative research can be used to monitor reasons for wins and losses over time.

#8. Don’t use too much of people’s time, and keep it simple

There are a lot of questions that you could ask in Win-Loss research. However, the people taking part in the survey or interview are time-poor and participating as a favor to the vendor. It is essential not to take advantage of their generosity.

As a result, we usually recommend that Win-Loss interviews are shorter and more straightforward than they would be in other B2B interviews:

• Depth interviews should be 20-30 minutes rather than the standard 45-60 minutes
• Surveys should take 5-8 minutes to complete, whereas standard surveys can take as long as 10-15 minutes

#9. Select the right number of interviews

When conducting qualitative Win-Loss research, you need to pick the right number of interviews.

B2B purchases are complex, and buyers vary in their needs and attitudes. Each interviewee will respond differently. Conducting more interviews allows a company to ensure they get a representative view of the market.

However, there can be such a thing as ‘too many’ interviews. At some point, the insights that you gain from additional interviews are so minimal that the cost or time of conducting them isn’t justified.

The optimal number of interviews differs by business size and complexity. A small business with a relatively low deal flow may only need to conduct 20-30 Win-Loss interviews a year. But a global business may need many more interviews to account for different products, locations, and customer segments.

Of course, if budgets are limited, you may not be able to conduct the optimal number of interviews. We recommend focusing on the buyers of most importance to your business, e.g., company types with an unusually low win rate or companies that have larger budgets.

You can conduct the optimal number of interviews with that group and expand to other segments later.

However, remember that the number of interviews you want to conduct is not the same as the number you need to invite to participate in the research. If you’re going to conduct 20 interviews, you need to contact more than 20 potential interviewees. Some individuals may be unavailable during the period of interviewing; others may be uninterested in taking part.

We recommend reaching out to 3-4 times the number of individuals that you expect to hear back from. Therefore, to achieve 20 interviews, you might need to contact 60-80 individuals.

#10. Use a variety of research techniques to go beneath the surface

In the buying process, a lot goes on beneath the surface. There may be hidden dynamics that even the buyer is unaware of.

That is particularly true of the criteria used to assess potential suppliers. Often what buyers say matters isn’t the whole truth.

That’s not because they want to mislead you willfully. Instead, people often lack real insight into why they make the decisions they do. They also tend to over-rationalize the claimed reasons for their behavior.

For example, buyers may provide vague reasons like ‘price’ or ‘they were a better fit.’ The former usually means that the losing vendor didn’t communicate its value, and the latter usually means there’s a problem with the sales process.

It’s essential to probe deep into behaviors and motivations to understand the real reasons that a deal was won or lost. Adience uses various smart techniques to elicit these responses, such as projective questions and the ‘jobs-to-be-done’ framework. For more information, contact us.

#11. Consider using the research to build different ‘personas’

Companies have different buying journeys and different decision-making criteria. If you treat them as one big group, you will miss potential opportunities due to a lack of personalization.

For example, if you go to market with price-related messaging, you will appeal to any cost-conscious companies, but you will alienate personas who care about other things.

Win-Loss research can be used to develop buyer personas that help sales and marketing teams better understand how to tailor their approach and messaging to each prospect.

#12. Don’t just focus on what was said during the sales process – look at how it was said

Buying decisions aren’t based entirely on what you say, but also how you say it. As well as assessing responses to your messaging, you should explore perceptions of:

• Your engagement style
• How you communicate vital points
• The supporting evidence or material provided

After all, human relationships are still a crucial part of most B2B relationships.

And it is essential to look at the engagement style of all staff who interacted with a win or loss. Prospects may primarily speak to salespeople, but they also engage with individuals from other functions. Each of these interactions can impact the overall decision.

#13. At the end of interviews, ‘close the loop’ and thank interviewees for their time

Decision-makers who take part in Win-Loss interviews are generously donating their time, often without a financial reward. But that doesn’t mean they are altruistic; decision-makers participate because they hope that they can help the vendor improve its processes and products.

It is important to ‘close the loop’ after these interviews so that respondents feel that their time wasn’t wasted. Doing so may increase your chances of being considered the next time a company decides to make a purchase.

‘Closing the loop’ can be as simple as sending an email to the interviewee to thank them for their time. In some instances, it can be valuable to include more information in a follow-up email. For example, being specific about the changes you will be making in response to their feedback.

Additionally, when it is suitable, you can return to the interviewee later to ask follow-up questions or test concepts developed due to the research.

#14. Compare buyer and sales team feedback

Buyer interviews shouldn’t be analyzed in isolation. You should compare a buyer’s responses to what the sales team said about that deal.

There may be discrepancies between the two. In that scenario, buyer feedback should be prioritized, as ‘perception is reality.’

For example, if a salesperson believes that they communicated the solution’s value, but the buyer disagrees, then it’s possible that some training is required to close that gap.

#15. Apply what is learned via sales meetings, collateral, and training

The ultimate goal of a Win-Loss program is to drive meaningful action. For that to happen, every team that can impact a deal – including sales, marketing, product, customer support – should be able to access and act on the research findings.

In our experience, the following steps help to ensure findings are transparent and accessible across the business:

• Create and distribute summaries of each interview so that employees can learn from specific situations. These summaries can be adapted into ‘battlecards’ that the sales team can use the next time they engage with the target company
• Create and distribute regular ‘trend reports’ which aggregate findings and highlight key trends
• Publish reports and summaries internally. For example, publish trend reports on Slack, or add individual summaries/’battlecards’ to your CRM
• Conduct workshops with department heads to share the research findings and to discuss how best to improve the win rate as a result

#16. Repeat the process regularly

Win-Loss programs are most valuable when they are ongoing initiatives rather than one-off projects.

Businesses who conduct ongoing Win-Loss studies can monitor changes over time, enabling them to identify:

• New trends, such as emerging competitors
• New reasons that they are losing deals

Interested in conducting a Win-Loss study? Contact us.