Product managers should be involved in win-loss analysis. Here’s why, and how:
Win-loss analysis enables you to ferret out why prospects initially choose to buy your product (or not) and why they choose to keep buying your product (or not). It is a brutally smart way to learn how to increase company revenue, and is different from many other feedback channels because it requires “intimacy at scale”. (More on that below.)
Why do fewer than 20% of companies consistently conduct win-loss interviews?
The truth is, it can be intimidating. Even in the healthiest company cultures it can run into the usual headwinds: internal politics, fiefdoms, fear that someone will be called out for doing a subpar job, arrogance (“we already know what we need to know”). Getting internal alignment can be a challenge, especially if win-loss is viewed as optional, does not result in actionable goals, and is not based on a standardized process complete with easy to follow templates. Couple that with external challenges: finding customers who want to talk about their buying decision (“win”), finding prospects who did not sign on with your company (“loss”), then connecting with the people who are informed enough about the process and are willing to share the unvarnished truth about their experience.
Actually, the most difficult part is knowing whether you have uncovered a truth or are simply being told what you want to hear. Finding deep insights takes time, patience and skill, while gleaning superficial ones is easier and creates data which can be used to confirm what you think you already know. Bottom line: only 40% of win-loss interviews end up with a truthful reason why a prospect chose a different product or service.
Win-loss interviews, conducted by Sales as part of a deal post-mortem, usually consist of a few standard questions, with the results tabulated into one of a few checkboxes: price, product, process, competition, or other. Some question whether a salesperson can be truly objective when conducting a close-out interview, and whether a client will be able to give the whole truth (either because they cannot articulate it, are reluctant to be too honest, or are restricted by legalese such as a non-disclosure agreement).
For these reasons, it is imperative that a win-loss interview be conducted alongside the Sales process by someone who is perceived as impartial. Product Managers are uniquely suited to this role since they (should) understand the product, market and competition, and are incentivized to look at the market as a whole, rather than what drove a single deal. They’re able to be objective.
Win-loss, done effectively, is actually intimacy at scale: understanding an individual customer’s purchasing wants and needs on a personal level, then translating these anecdotes into actionable assertions which in turn become leading indicators of upcoming trends.
Conducting a win-loss interview should be intimate. You are asking someone to give you a truthful assessment of what went well and what can be improved in the sales process. But, the goal is not to have a one-off conversation; it is to take many intimate, personal interviews and draw larger conclusions from them, ergo scale.
Win-loss analysis should focus on three areas, “The goal is to find out what your company did right (and wrong), how you can improve, and where you stand in relation to the competition.”
Conducting the Interview
Win-loss is about the overall process of moving someone from being a tire-kicker to a buyer. It encompasses the entire customer journey through the sales process, including any touchpoints they may have along the way: sales, media, marketing, the product itself. “Understanding the reasons why a prospect became a customer, opted for the competition, or made no decision at all makes your sales process all the stronger for future bids,” says Hubspot’s Emma Brudner.
Roger Allison’s 8 rules for conducting a successful win-loss analysis include:
- Manage the composition of your sample: look for equal numbers of clients and non-clients so the data is not skewed.
- Conduct the interview in a timely manner: speak with customers and prospects within 90 days of the event, when insights are still fresh.
- Collect the data systematically: Format the data so it can be compiled and assessed.
Find interview candidates by speaking with individual sales people or conducting surveys of people who have gone through your sales process. Beware that people who will volunteer for win-loss are often polarized; they already love or hate your offering. To negate this effect, actively seek out other customers and prospects to ensure you have a good cross section. Your results will only be as good as the cohort you assemble.
Before conducting the interview, do your homework. Connect with people involved with the sales process to understand the account’s history: what’s the relationship with the client or prospect, what was the problem they were trying to solve, how did they connect with the company, what did the proposed solution look like, what was the end result?
Want a list of key questions to ask during a win/loss interview? Stay tuned for Win/Loss Analysis for Product Managers, part 2!