If you’re in sales leadership or management and you aren’t learning why you won or lost deals directly from your customers, you’re squandering a significant opportunity to improve sales effectiveness.
I had the opportunity to chat with Rick Reynolds, CEO of AskForensics, about this subject. Rick and I discussed his company’s most recent report. I thought an interview with Rick would provide some real value for you.
Here is the interview:
Rick Reynolds: Our data reveals that sales team actions and a lack of account support are the top influencers for why companies lose new sales. Of the executives we have interviewed to find out why they did or did not purchase from a company, 37% cited sales teams actions as the top reason for not buying from a company. Sales team actions that jeopardize sales include late proposals, poor presentations, and an overall lack of understanding of prospects’ requirements. A lack of account support encompasses the actions of both corporate and direct client facing teams.
In contrast, for rebids price becomes more of an issue. Thirty-four percent of executives reported price as the top issue for why they did not renew a contract. When price is the issue during a rebid, it’s usually because the incumbent’s price was significantly off from what other bidders submitted or the competitor simply submitted a superior bid. If your price is significantly off from other bidding companies, it means you didn’t fully ascertain the prospect’s needs.
DS: Why are executives willing to open up and share their candid views on a company’s sales process, especially when they did not buy from the company you’re representing?
RR: Senior executives are usually not asked for their views on sales events, so they appreciate that we are contacting them to find out their opinion. They have a vested interest in helping because they often want the bidding company around for the next time. It ultimately benefits them in the end when a bidding company is better able to understand their needs. Finally, we are a third-party with no intent to sell for our client. Since we only want their unvarnished opinions, we provide a safe environment for them.
DS: How should a company most effectively act on what they’ve learned from why they won or lost a sale?
RR: When companies win there are two primary actions. One is to transfer best practices to upcoming selling opportunities. The second is to address all issues and concerns uncovered during an investigation. When companies lose, it’s important to take relevant learning and apply it to new prospects. In other words, don’t repeat mistakes. Over time you obtain trend findings that can be applied to sales training and coaching. When acting on these trend insights we find overall sales performance increases.
DS: Can you share with me some of the high level reasons why companies win or lose major opportunities? I would venture to guess you have found some unexpected reasons.
RR: Our 2014 SalesForensics Annual Report reveals some interesting findings about the shifting role of price in why companies lost sales in 2013. Data revealed that service quality, account support, and culture took on more significant roles in why companyies lost deals in 2013, and price, while important, was less of a factor in 2013. However, when price was cited in both years, the losing company’s financial bid was significantly off from what competitors offered and prospects were seeking.
When it comes to what companies could have done to win a deal, executives mentioned the following six actions in 2012 and 2013. Click for graphic.
- Incorporate more innovation / technology into the solution
- Better understand prospect’s requirements
- Offer value-added programs
- Improve presentation
- Offer more proactive ideas
- Respond to questions and requests in a more timely manner
Here is a link to a graphic on the reasons for losing:
DS: If a company wanted to launch a sales win/loss program, what pointers would you give them?
RR: First, make sure you are interviewing the right people and that they are high enough in the organization. Their opinions are most important. Second, be sure that the people who interview your prospects had no involvement in the sale. It is essential to avoid any perception of attempting to re-sell to your prospects.
Here is the link for the source of this data.
About Rick Reynolds
Rick Reynolds is a co-founding Senior Partner of AskForensics. He brings unrivaled expertise in business forensics to the team, having led thousands of investigations over a 20 year period for best in class Fortune 500 corporations.
AskForensics assists Fortune-ranked companies in winning and retaining multi-million dollar accounts. Using a forensic science approach to sales, AskForensics has been delivering objective insight into what’s really happening behind the scenes with prospects and customers for more than 24 years. AskForensics has evaluated more than $10.6 billion worth of prospect and client accounts for world-class Fortune-ranked companies, identifying more than $3.3 billion of vulnerable accounts and generating millions of dollars in ROI for its clients. Clients include FedEx, ARAMARK, Equifax, Marriott, and Coca-Cola. Follow @AskForensics on Twitter. For more information, visit www.AskForensics.com