What data can tell you about failure: how to effectively analyze lost deals

Failure Analysis

Before you put a failed deal behind you, take a moment to revisit it and find out what went wrong—and what you can do better next time. This is often referred to as a win/loss analysis, a method used to evaluate sales opportunities and understand what led to their success or failure. In this case, we’ll focus on the latter.

Lack of Data = Lost Opportunities

To understand why a deal fell through, you need sufficient data about the opportunity. Sales management expert and author of eBooks and articles on sales, Nikolaus Kimla, recommends in his article that all information should always be recorded—whether it’s contacts, meeting notes, sent quotes, or other communication. When a deal ends unsuccessfully, don’t discard the data; keep it so you can review and analyze it at any time.

A CRM helps you store all deal-related information and data. You can easily go back and access key details later, and by analyzing them, you can improve your sales strategies.

Ask the Customer You Lost

Getting feedback directly from the customer you didn’t win can take your analysis even further. It gives you valuable insights not just about your business, but also about the market, your product or service, and your competitors. You might be surprised by how willing people are to explain why they chose a competitor—or why they didn’t buy anything at all.

Ask the lost lead:

• why they didn’t buy from you and what you would have needed to do differently for them to choose you,
• what convinced them to go with the competition,
• whether they understood your services and the benefits you offer from the salesperson’s presentation.

Focus on Clients and Their Needs

The issue might also lie in targeting the wrong audience. When analyzing a failed deal, consider the following questions:

• Needs – What were the customer’s goals? What solution were they looking for, and how did it differ from what you offered? Based on that, adjust your targeting or the product and its presentation to better connect the client’s needs with the product’s benefits.
• Timing – Did the customer have an urgent need to buy? Were they ready to make a purchase? If not, focus on better lead qualification.
• Price – Was the customer discouraged by the price? Emphasize the value of your product or services, or target a different customer segment.
• Competition – Is your competition winning and drawing customers away? Look at what they’re doing better and take inspiration. Or identify what makes your product unique compared to theirs.

Try the Lost Keys Method

When you lose your keys, you try to remember where you last had them and start searching there. In his article, Steve Bookbinder recommends applying the same logic to failed deals—go back through the entire sales process and look for the point where you lost the customer.

This could be:

• Lead generation – If you're targeting customers who aren’t interested in your product or can’t afford it, the issue might lie in lead generation and qualification—right at the start of the sales process.
• Sales meeting – If you’re losing clients after the sales meeting, focus on how your salespeople are presenting the product and whether they’re clearly communicating its value.
• Quote – If customers change their minds after reading your quote, the price might be the problem. Look at your competitors and evaluate whether your pricing aligns with the product’s value and the current market conditions.
• Follow-up – If customers only buy from you once, take a closer look at how you’re building and maintaining your relationship with them.

Analyze Failure as a Team

Here’s one last tip: whether you’re analyzing your data, collecting input from sales reps, or asking customers for feedback, Steve Bookbinder recommends doing the analysis as a team. Team-based reflection:

• provides a deeper understanding of where the deal was lost, thanks to multiple perspectives and varied team experience,
• fosters learning and sharing of know-how on how to avoid future losses,
• improves team communication and prevents finger-pointing when something was overlooked.
  
  

Once you identify where deals are being lost, focus on how to avoid these mistakes. Refine your sales personas and targeting, provide training for your salespeople, improve the presentation of your services, and review your sales process. For guidance on how to build an effective sales process, visit the SalesDriver educational hub for sales consultants.