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8/6/2019 Win+Loss+Analysis+Whitepaper

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The Business Value of Win-Loss Analysis

Gaining a Competitive Advantage through a Well DesignedWin-Loss Program

Triple Edge Sales ConsultingAugust, 2009


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Introduction

in-Loss Analysis programW s have proven to be extremely valuable in providing critical competitive

therss

hat is Win-Loss Analysis and why are leading companies investing in it? According to Wikipedia

intelligence to companies who have deployed such programs, yet relatively few firms haveformalized their efforts in this area. Some merely collect statisticsdeals won and lost. Osimply do technical evaluations of competitors products and ignore the sales strategies and tactic

the competitors use against them. Others think they understand their competition based upon avery limited number of engagements but fail to keep up to date on recent events such as newproduct rollouts, changes in pricing or daily tactics, often referred to as landmines, used by thecompetition to undermine their efforts.

W

(Competitive Analysis), Competitor analysis inmarketingandstrategic managementis anassessment of the strengths and weaknesses of current and potentialcompetitors. This analysis

provides both an offensive and defensive strategic context through which to identify opportunitiesthreats. Competitor profiling coalesces all of the relevant sources of competitor analysis into one

framework in the support of efficient and effective strategy formulation, implementation, monitorand adjustment. A well designed Win-Loss Program provides a more complete examination of acompetitors sales strategies and tactics based upon up-to-date intelligence collected from ongoinginterviews with both prospects and direct Sales teams. The information gathered through theprocess impacts every aspect of the organizations operationsSales (how to sell against acompetitor), Finance (pricing), Product Marketing (product bundling, collateral, customer-fprograms), Product Management/R&D/Engineering (new product rollouts), SalesEnablement/Training (New Hire programs, kickoff presentations, regional meetingsProfessional Services/Support (pricing, services offered). Few other programs within anorganization impact the entire business as much across departmental lines as Win-Loss AFor 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 bettmeet new competitive challenges and improved employee morale and productivity.

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"The success rate for closing major new proposals is typically less than 20% when severalsuppliers are asked to present. Companies often spend large sums in an effort to winbusiness, but those whose bids failed seldom get any feedback as to why a competitor wasa better fit. As a result, the chances of winning the next major opportunity stay roughlythe same...What is consistent among sales forces that achieve close rates above 40%?

They commit to accessing objective, quantitative and independently collected measures andanalyses of the reasons for wins, and especially losses, compared to their competitors, andmaintain active control of their own success rates by debriefing all proposal team memberswith the results of each win/loss analysis."

Peter Gilbert, BIZCOMMUNITY.com
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Competitorhttp://en.wikipedia.org/wiki/Competitorhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Marketing


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Win- Loss Analysis: Expand ing Com peti t iveIntell igence Coll ect ion

As mentioned above, many companies think they are doing Win-Loss Analysis by collecting onlystatistics. 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 whatwas 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 particularvendor (i.e. results of Proof of Concept, price, ease of use, time to value, etc.)

The sales teams understanding of theprospects business challenges (business pains) andhow their solutions (applications, services) addressed their needs

How equipped the sales team was to present the business value of their products/servicesas opposed to selling solely on technical merits

Effectiveness ofvalue propositions presented and how they were perceived by theprospect

Identifyingrepetitivepatterns and trends in competitive behavioro Pricing strategy (i.e. discounting, product bundling)o Landmines used early in the sales cycle to discredit your solutionso Use of Executives to close the dealo 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 ofreferences 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 allowingmanagement to make critical decisions regarding new sales strategies/tactics vs. specific competitors,updated messaging to the prospect community, product introductions, the introduction of proactivemarketing programs, future sales enablement programs to better equip the Sales team and aggressivepricing strategies (including bundling of offerings.) To merely collect statistics or simply dotechnical evaluations of competitive products only uncovers half of the story. Truly understandinghow the competition sells against youis critical and will help ensure your success in the future.This aspect of competitive analysis is what is missing in most companies today.


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Win- Loss Analysis: The Process

In order to execute an effective Win-Loss Analysis program that will have an impact on yourcompanys 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 itsimpact on your organization. Lets take a look at these steps in the process to better understand theimportance of each.

Management Support

This is a critical first step. Before launching your program, it is important that you have ExecutiveManagement buy-in. Depending upon the size of the organization, CEO sponsorship as well assupport from the Vice Presidents of Sales and Marketing will help ensure cooperation from theField 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 Salesin support of the program will send a clear message that the program is strategic to your companyssuccess and full cooperation is expected from all parties. For a large middleware company, lack ofmanagement support created an obstacle and hindered cooperation with the Sales team.


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Create Questionnaire

In order to gather as much valuable information either from the Sales team or directly from theprospect, the strength of the questionnaire or script used is extremely important. A well designedquestionnaire will not only collect all the pertinent information but will reduce the time of theinterview 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 salesteam, the Account Manager should fill out and return the form prior to the interview call. Thisallows all of the call participants to review the information and formulate the questions they want toask on the call. Also, keeping the form simple and easy to complete will increase responsivenessfrom the field.

Identify Prospects

This step in the process can be troublesome and that is why Executive sponsorship and crossdepartment cooperation is so important. Quite often, a repository of wins is kept in multiplelocations (i.e. Finance, Sales, Product Marketing, and Sales Operations). Identifying losses is even

more difficult. As one major software company once said, we dont 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 adeal. The important thing to remember is, in most cases, information gathered on loss calls ismore valuable than what is collected on win calls.When scheduling calls, try to have a good mixof wins/losses, products proposed, sales regions, industries and different competitors. This will givea 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 criticalsales 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 aresult, an Account Manager may receive multiple invitations which are not only irritating to the repbut 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 Executivesponsorship, some Account Managers will not cooperate, so always send out moreinvitations 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 representativecross 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 collectingcompetitive intelligence. The Program Coordinator should moderate the call to ensure it follows thecompleted form and minimizes everyone from talking at the same time. Needless to say, questionsfrom 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.


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Tally Results

Now that your Program Coordinator has collected the information, it is imperative he or she addcritical notes to the form in a timely manner. Think of it this waythe form is simply an outline ofthe deal whereas the notes collected on the call, based upon the Account Teams interview andanswers to questions, actually fills in the blanks and tells the complete story. Depending upon the

sophistication of your companys IT department and online technology available, the Coordinatormay have several options regarding how to store the competitive information. Creation of an onlinedatabase 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 ProgramCoordinator manages and shares with others at his or her discretion. Also, the creation of slide setsfor 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 keycompetitive 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 toeveryone in the company invites the information being shared with the competition once anemployee leaves your company. In one situation, a competitor got their hands on a leaked internaldocument (slide sets) which included a customers logo. The competitor immediately showed it tothe customer who then threatened to sue for copyright infringement, so be careful. Distributingquarterly 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 anAccount Manager is seeking references or recent wins over a specific competitor in a particularindustry.

Follow-Up

This is a critical step in the processhow to use the information gathered to have a direct impact onthe companys success. Win-Loss intelligence can play a key role in both strategic and tacticaldecisions 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 betweendepartments within the company. At first, support for the program may be lukewarm (hence theneed for Executive support), however, as various departments see the value of the informationgathered and how it impacts their role in the company, they will be more cooperative and quiteoften, more willing to participate in the process.


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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 aspectof your business. So why dont 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 thatmost firms do not conduct this type of analysis systematically enough. Instead, many enterprisesoperate on what is called informal impressions, conjectures, and intuition gained through the tidbitsof information about competitors every manager continually receives As a result, traditionalenvironmental scanning places many firms at risk of dangerous competitive blindspots due to a lackof robust competitor analysis

Progressive companies see the value and they are winning more business as a result. A leadingsoftware 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 partupon 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 orMarketing to avoid any conflict of interest within the Sales organization

Make the program a cross-departmental effortsell 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 thathas experience in this area. They can help you design the program and get it off theground quicker. Once the program is up and running, your company will be self sufficient.

ww.TripleEdgeSales.com.

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