By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

sales tips for understanding sales lossesAfter working 4 months on an opportunity a seller is informed the business has been awarded to another vendor. Because the pipeline is decent that month, the seller ignores the initial impulse to leave it in his forecast and realizes a loss report needs to be done. This nets out blaming the loss on one of two factors: 

  • Price

  • Product

Remarkably, many organizations do extensive analyses in reviewing loss reports. Their ultimate goal is to improve win rates. Before doing so, they may want to consider the validity of the data they are being given.

There are a host of surveys and studies indicating that price is seldom one of the primary reasons buying decisions are made. That said, imagine the seller being told: “It was a difficult decision for us to make. Your pricing was that close to the vendor we chose. We appreciate your efforts.” The seller would take comfort believing if only they had narrowly missed getting the order, but should is price a valid reason for the loss?

In telling a seller they lost, buyers usually want to let them down easily, have them feel they did a good job and most importantly: Have them stop all selling efforts. In terminating relationships, here are two effective approaches (even though often they aren’t true):

Personal relationships: “I’m not good enough for you.”

Seller losses: “We chose vendor A because their price was lower.”

sales tipsIf a seller analyzes the buyer’s statement, it would be logical to wonder why he or she didn’t ask for better pricing before making their decision. The logical conclusion is that price is an excuse rather than the real reason for the loss. With the possible exception of RFP’s I believe the only times sellers can rightfully blame price for losses are instance where they were given a chance to meet or beat a price and could not.

Product is another reason that let’s the seller down easily and makes it clear there no further selling will change the buyers mind. For losses where the seller had adequate time and opportunity to develop the buyers’ needs, as a manager I would challenge the seller by asking: “How much of the 4 months did it take for you to realize the buyer needed that feature and how much time did it take you to realized that our offering didn’t have it?” There aren’t any good answers to that question. If true, it means the seller did an inadequate job of qualifying the opportunity. 

If another seller orchestrates getting a last look, if your seller was called in just for pricing leverage with a vendor the buyer wanted to do business with, or if the competitor was able to establish differentiators, it would be refreshing for sellers to realize the real reason they lost:

They got outsold.

If vendors want a more accurate assessment why losses occur, consider taking the following approach: 

1. Wait a few months after the loss has occurred so a contact with buyers doesn’t look like an attempt to change their mind.

2. Hire an outside company or at a minimum have someone who is not in Sales make the call.

3. Tell the buyer that in an attempt to be more responsive to market requirements and customers your company is trying to learn from losses. Ask them to share with you:

  • What vendor they chose and what were the primary reason for their decision.

  • 2 or 3 things your company/seller could have done differently or better that would have improved the chance of winning the business.

While somewhat painful, vendors get far better data with which to make changes to improve their competitive positioning from interviews like this. Also keep in mind these interviews can/should be done for painful losses as well as significant wins to improve your visibility. Learning from your failures as well as your successes can positively impact your win rates moving forward.

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