“Closed-Lost” — What do we do with the deals we’ve lost?
It’s the end of the quarter and the best prospect in your pipeline — the deal that will get you to the next tier of commission—tells you they’ve decided to “handle this in-house”. Even worse, maybe they’re going to go with a competitor.
Cue the five stages of sales grief: denial, anger, bargaining, despair, acceptance. After you try to win them back, I challenge you to try something different: conduct a lost deal interview.
A lost deal interview is a short discussion with a buyer to uncover why a specific deal was lost.
You’re probably thinking — “My manager and I have already discussed this. I know why we lost it. Why do we have to do it again?”
You have to do it again because the superficial excuse the prospect cited as “the reason” for not purchasing is only one piece of a larger decision making process. When was the last time you asked a prospect to rank the factors that influenced their decision? Has a prospect ever told you how to improve your sales skills? How often do prospects tell you why they went with a competitor? Despite the obvious value of these insights, sales reps rarely ask these types of questions.
Lost deal interviews are mini research studies. Like with any good research project, you should first come up with a few hypotheses (or ideas about what went wrong with your deal) and then build experiments (or a series of questions to ask the prospect) to test them.
Each sales rep will want to uncover different facts about their deal, but here are a few example hypotheses:
My personal sales performance would have improved had I communicated in a more formal tone and replied to my prospect’s emails more immediately.
The most important factor in my prospect’s decision making process was the speed of delivery. We had our competitors beat on this factor.
My prospect’s perception of our brand worsened after the trial period since a few features weren’t functioning properly.
After you build a list of 3–5 hypotheses, you’re ready to conduct the interview. Here’s how to do it:
1. Craft a series of 5–10 questions that can be answered in 10 minutes total. Each question should be designed to test a specific hypothesis. Below are a few example questions for the hypotheses above:
How would you describe Joe’s communication style? Did it match your needs? Why/Why not?
What was the most important factor in making your decision? How does ABC Company stack up against other companies on this factor? Tell me more.
What was your opinion of ABC Company before the buying process? Why? What is your opinion of ABC Company now? Why?
2. Ask a colleague that didn’t work on your deal to interview your prospect. (Ideally a third party company would conduct the interview to avoid any bias.)
3. Instruct your colleague to identify the purpose of the call as “to learn about your experience during the buying process”. Your colleague must make it clear that this call has nothing to do with selling.
4. After your colleague conducts the interview, review the findings with your manager and compare them across multiple prospects.
A lost deal interview is just one aspect of a larger sales research project called a Win/Loss Analysis. A win/loss analysis is a comprehensive study designed to understand why you win deals and why you lose deals.
The most effective sales leaders already perform these analyses quarterly. The results help them refine their sales processes, inform the product and marketing teams of changes that need to be made (or studied in more depth), and ultimately increase the company’s competitiveness in the marketplace.
I imagine at this point, some readers are thinking — “I don’t have time for anything that doesn’t directly contribute to revenue.” Let me share a quick anecdote:
One of our clients asked us to complete a comprehensive study of every “Closed-Lost” deal from the past few years. We called everyone and learned an incredible amount about our client’s position in the market. In addition to those learnings, our team uncovered 35 hot leads that were in the middle of their buying cycle (again). With an average order value of $200K, we discovered $7M in new pipeline.
To be clear, the primary goal of a win/loss analysis is NOT to uncover new sales opportunities. Instead, the purpose is to gain knowledge that will make you more successful in generating revenue. I share that anecdote to reinforce the idea that you never know what type of information you’ll uncover when you take the time to interview your customers/prospects.
Bottom line: You may be an expert in selling XYZ, but your prospects are experts in buying XYZ. Become a better salesperson by learning directly from them. Start conducting interviews with your “Closed-Lost” prospects.
Steward does sales research on-demand. The most valuable research projects we’ve conducted for our customers are win/loss analyses —helping sales teams learn why they win deals and why they lose deals. If you’re interested in having us help with this type of research, email request@getsteward.com and we’ll be happy to discuss your next project.
