Loss Reports: Exercises In Futility
Sales Training Article: Loss Reports – Exercises in Futility
By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company
Image courtesy of Stock Images at FreeDigitalPhotos.net
Sellers spend time and effort on opportunities but ultimately they win, lose to named competitors or lose to no decision. Each of the last two options is painful and many vendors require loss reports to be filed. It’s bad enough the sellers’ efforts have gone for naught, now they have to tell the company why they lost.
I believe it’s rare for sellers to fully understand why they lost. When breaking up with someone in high school, you want it to be as quick and painless as possible. It would be a rare buyer that would tell a seller he or she had been outsold, didn’t understand their business, etc. Ultimately they want something innocuous to blame. The two most frequently invoked reasons are price and product which more than coincidentally are the ones most commonly used in loss reports.
Let me share my view as to why these are seldom the real reasons for losses:
1. If a buyer tells a seller she lost because her price was slightly higher than the chosen vendor, some sellers just accept it as fact. Those that are more thoughtful think to themselves: Why didn’t you ask me if I could provide a better price? The answer is they didn’t want to do business with you.
2. In my mind the only times price is the reason for losses is when sellers were asked for pricing that the management team could not honor. Price in all other instances isn’t the reason.
3. After a 90 day buying cycle if the seller blames product, I have one question to ask: Of the 90 days you were selling to this client, how long did it take you to understand the buyer wanted a SaaS offering and how long did it take you to realize our offering isn’t? The fact is if product wasn’t a good fit it was never a qualified opportunity.
The most common reasons given in loss reports are price and product. If you’re serious about learning why you lose (or win for that matter), I suggest hiring someone outside of the company to interview clients 3 months or so after the loss. Have a consultant call the highest level that was involved in the buying decision and explain that:
- The company waited 90 days because they weren’t trying to change the buyer’s mind.
- Time and resources were spent competing and the company would like to learn from the loss.
- What were the major reasons for choosing Vendor A?
- What were the major reasons for not choosing the company I’m representing?
You should be able to gain far more insights interviewing prospects than just accepting price or product as valid reasons for losses.