The Business Value of Win-Loss Analysis

Gaining a Competitive Advantage through a Well Designed

Win-Loss Program

Triple Edge Sales Consulting

August, 2009
Introduction
Win-Loss Analysis programs have proven to be extremely valuable in providing critical competitive
intelligence to companies who have deployed such programs, yet relatively few firms have
formalized their efforts in this area. Some merely collect statistics…deals won and lost. Others
simply do technical evaluations of competitor’s products and ignore the sales strategies and tactics
the competitors use against them. Others think they understand their competition based upon a
very limited number of engagements but fail to keep up to date on recent events such as new
product rollouts, changes in pricing or daily tactics, often referred to as landmines, used by the
competition to undermine their efforts.

What is Win-Loss Analysis and why are leading companies investing in it? According to Wikipedia
(Competitive Analysis), “Competitor analysis in marketing and strategic management is an
assessment of the strengths and weaknesses of current and potential competitors. This analysis
provides both an offensive and defensive strategic context through which to identify opportunities and
threats. Competitor profiling coalesces all of the relevant sources of competitor analysis into one
framework in the support of efficient and effective strategy formulation, implementation, monitoring
and adjustment.” A well designed Win-Loss Program provides a more complete examination of a
competitor’s sales strategies and tactics based upon up-to-date intelligence collected from ongoing
interviews with both prospects and direct Sales teams. The information gathered through the
process impacts every aspect of the organization’s operations…Sales (how to sell against a
competitor), Finance (pricing), Product Marketing (product bundling, collateral, customer-focused
programs), Product Management/R&D/Engineering (new product rollouts), Sales
Enablement/Training (New Hire programs, kickoff presentations, regional meetings) and
Professional Services/Support (pricing, services offered). Few other programs within an
organization impact the entire business as much across departmental lines as Win-Loss Analysis.
For this reason alone, leading companies in various industries are making investments in Win-Loss
programs. The results are impressive and include increased sales revenues, higher close rates,
bottom line profitability, quicker time to market for new products, flexibility and agility to better
meet new competitive challenges and improved employee morale and productivity.

"The success rate for closing major new proposals is typically less than 20% when several
suppliers are asked to present. Companies often spend large sums in an effort to win
business, but those whose bids failed seldom get any feedback as to why a competitor was
a better fit. As a result, the chances of winning the next major opportunity stay roughly
the same...What is consistent among sales forces that achieve close rates above 40%?
They commit to accessing objective, quantitative and independently collected measures and
analyses of the reasons for wins, and especially losses, compared to their competitors, and
maintain active control of their own success rates by debriefing all proposal team members
with the results of each win/loss analysis."
Peter Gilbert, BIZCOMMUNITY.com
Win-Loss Analysis: Expanding Competitive
Intelligence Collection
As mentioned above, many companies “think” they are doing Win-Loss Analysis by collecting only
statistics. A major Fortune 500 enterprise software company thought they had a Win-Loss program
in place simply by gathering and crunching data...how many deals did we win last quarter and what
was the dollar value of each deal? They had no idea where or why they won or lost business.
Although statistical information is valuable, it merely scratches the surface of doing complete Win-
Loss Analysis. In addition to sales data, it is important to understand:

 The key win or loss factors during the sales cycle as to why the prospect chose a particular
vendor (i.e. results of Proof of Concept, price, ease of use, time to value, etc.)
 The sales team’s understanding of the prospect’s business challenges (business pains) and
how their solutions (applications, services) addressed their needs
 How equipped the sales team was to present the business value of their products/services
as opposed to selling solely on technical merits
 Effectiveness of value propositions presented and how they were perceived by the
prospect
 Identifying repetitive patterns and trends in competitive behavior
o Pricing strategy (i.e. discounting, product bundling)
o Landmines used early in the sales cycle to discredit your solutions
o Use of Executives to close the deal
o Partner involvement to influence the decision (i.e. System Integrator)
o FUD: Fear, Uncertainty and Doubt (i.e. company size, financial stability)
 Product strengths and weaknesses vs. the competition
 Strength of references
 Working relationship with the prospect and at what level your team was selling to the
prospect vs. the competition

This is the kind of information an effective Win-Loss Analysis program will uncover allowing
management to make critical decisions regarding new sales strategies/tactics vs. specific competitors,
updated messaging to the prospect community, product introductions, the introduction of proactive
marketing programs, future sales enablement programs to better equip the Sales team and aggressive
pricing strategies (including bundling of offerings.) To merely collect statistics or simply do
technical evaluations of competitive products only uncovers half of the story. Truly understanding
how the competition sells against you is critical and will help ensure your success in the future.
This aspect of competitive analysis is what is missing in most companies today.
Win-Loss Analysis: The Process
In order to execute an effective Win-Loss Analysis program that will have an impact on your
company’s bottom line, there are several necessary steps to follow.

Table 1 illustrates what comprises a well-rounded Win-Loss Program.

Table 1

Omitting any of these steps in the process greatly diminishes the success of the program and its
impact on your organization. Let’s take a look at these steps in the process to better understand the
importance of each.

Management Support
This is a critical first step. Before launching your program, it is important that you have Executive
Management buy-in. Depending upon the size of the organization, CEO sponsorship as well as
support from the Vice Presidents of Sales and Marketing will help ensure cooperation from the
Field Sales team and associated departments (i.e. Product Marketing, Product Management,
Engineering, R&D, etc.). Preferably, a mandate from the CEO and/or the Vice President of Sales
in support of the program will send a clear message that the program is strategic to your company’s
success and full cooperation is expected from all parties. For a large middleware company, lack of
management support created an obstacle and hindered cooperation with the Sales team.
Create Questionnaire

In order to gather as much valuable information either from the Sales team or directly from the
prospect, the strength of the questionnaire or script used is extremely important. A well designed
questionnaire will not only collect all the pertinent information but will reduce the time of the
interview call. Creation of the form should be a joint process which crosses departmental
boundaries to ensure all parties buy into the program. When doing an interview with the direct sales
team, the Account Manager should fill out and return the form prior to the interview call. This
allows all of the call participants to review the information and formulate the questions they want to
ask on the call. Also, keeping the form simple and easy to complete will increase responsiveness
from the field.

Identify Prospects

This step in the process can be troublesome and that is why Executive sponsorship and cross
department cooperation is so important. Quite often, a repository of wins is kept in multiple
locations (i.e. Finance, Sales, Product Marketing, and Sales Operations). Identifying losses is even
more difficult. As one major software company once said, “we don’t lose deals”. As we all know,
this is not the case and it becomes a cultural barrier to overcome for Sales to admit they have lost a
deal. The important thing to remember is, in most cases, information gathered on loss calls is
more valuable than what is collected on win calls. When scheduling calls, try to have a good mix
of wins/losses, products proposed, sales regions, industries and different competitors. This will give
a broader perspective on the competition. On occasion, management may identify a losing trend vs.
a particular competitor, so weighting the invitations towards losses to that vendor will gather critical
sales information. Lastly, try to have only one Win-Loss program coordinated by a single individual,
the Win-Loss Program Coordinator. Departments often conduct their own interviews and as a
result, an Account Manager may receive multiple invitations which are not only irritating to the rep
but also a redundancy of effort.

A few final thoughts on sending out invitations:

 Establish a number of calls you want to complete per quarter. Even with Executive
sponsorship, some Account Managers will not cooperate, so always send out more
invitations than the number of calls you want to complete.
 Try to limit the number of people on the call, however, be sure to include a representative
cross section of various departments. 3-6 persons on the call is ideal.
 Have a toll-free number for everyone to dial into the call.
 Send out a reminder to the Account Manager the day before the call to minimize “no-
shows” and the need to reschedule calls.

Conduct Interview

Now that all the prep work is done, it is time get down to the important business of collecting
competitive intelligence. The Program Coordinator should moderate the call to ensure it follows the
completed form and minimizes everyone from talking at the same time. Needless to say, questions
from the audience are encouraged but the Program Coordinator needs to keep everyone on track.
Also, the coordinator is responsible for taking notes for fulfillment purposes after the call.
Depending upon the complexity of the deal and the number of questions, the average call lasts 30-
45 minutes.
Tally Results

Now that your Program Coordinator has collected the information, it is imperative he or she add
critical notes to the form in a timely manner. Think of it this way…the form is simply an outline of
the deal whereas the notes collected on the call, based upon the Account Team’s interview and
answers to questions, actually fills in the blanks and tells the complete story. Depending upon the
sophistication of your company’s IT department and online technology available, the Coordinator
may have several options regarding how to store the competitive information. Creation of an online
database is one option but security may be an issue since the intelligence is company confidential.
Another option is to simply track the information in spreadsheet form which the Program
Coordinator manages and shares with others at his or her discretion. Also, the creation of slide sets
for both internal and external presentations is quite popular with management and the sales teams.
Lastly, once all the results are in for a quarter, statistical analysis should be done to help identify key
competitive behavior and why your company wins or loses vs. particular competitors.

Distribute Results

Distribution of highly confidential information can be tricky. Making all of the data available to
everyone in the company invites the information being shared with the competition once an
employee leaves your company. In one situation, a competitor got their hands on a leaked internal
document (slide sets) which included a customer’s logo. The competitor immediately showed it to
the customer who then threatened to sue for copyright infringement, so be careful. Distributing
quarterly results to management is an excellent idea to foster continued support of the program.
Sharing information with the rank and file employees (i.e. Accounts Managers, Product Marketing,
Product Management, etc.) should be handled on an “as needed basis.” An example would be if an
Account Manager is seeking references or recent wins over a specific competitor in a particular
industry.

Follow-Up

This is a critical step in the process…how to use the information gathered to have a direct impact on
the company’s success. Win-Loss intelligence can play a key role in both strategic and tactical
decisions in many areas of your business:

 New sales strategies/tactics vs. specific competitors

 Product/Services pricing
 Product bundling
 New product introductions and/or enhancements to existing products
 Creation of customer demonstrations/Proofs of Concepts
 Sales enablement programs (i.e. live training sessions, E-learning, competitive webinars, etc.)
 On-going support of Field Sales opportunities
 Board of Director and Executive Leadership presentations

The key to distributing the information is a having a close working relationship between
departments within the company. At first, support for the program may be “lukewarm” (hence the
need for Executive support), however, as various departments see the value of the information
gathered and how it impacts their role in the company, they will be more cooperative and quite
often, more willing to participate in the process.
Summary
Win-Loss Analysis should be one of most valuable programs in your competitive intelligence toolkit.
It allows you to mine data already within your sales organization which will impact every aspect
of your business. So why don’t more companies use it? Opinions vary from lack of education on
the value of such a program or they are hesitant to commit already stretched resources. Wikipedia
(Competitive Analysis) says,

“Given that competitor analysis is an essential component of corporate strategy, it is argued that
most firms do not conduct this type of analysis systematically enough. Instead, many enterprises
operate on what is called “informal impressions, conjectures, and intuition gained through the tidbits
of information about competitors every manager continually receives As a result, traditional
environmental scanning places many firms at risk of dangerous competitive blindspots due to a lack
of robust competitor analysis”

Progressive companies see the value and they are winning more business as a result. A leading
software vendor, who initiated their program seven years ago, continually recognizes their
Competitive Sales team as the #1 organization within the Sales Operations group based in large part
upon their highly successful Win-Loss Program.

A few final thoughts on how your firm can take advantage of this strategic program:

 Get Executive sponsorship before launching the program

 Appoint a Program Coordinator who is responsible for the rollout/on-going program
activities, fulfillment and distribution of competitive intelligence
 House the program operations in a neutral department such as Sales Operations or
Marketing to avoid any conflict of interest within the Sales organization
 Make the program a cross-departmental effort…sell the program to key decision makers
 Be visible. Keep upper management informed regarding your findings and recommendations
 Reinforce to Field Sales how the competitive intelligence gathered on Win-Loss calls helps
them sell more deals!
 If you are uncomfortable starting the program, enlist the services of a consulting firm that
has experience in this area. They can help you design the program and get it “off the
ground” quicker. Once the program is up and running, your company will be self sufficient.

. www.TripleEdgeSales.com