Lost sales are a significant source of stress for any salesperson. The loss of sales or lost business can mean you miss out on essential revenue, fail to hit your targets, and even struggle to keep growing your company in a competitive landscape.
Fortunately, while you might not be able to prevent yourself from losing sales all the time, there is an opportunity to learn from your lost revenue and implement strategies to avoid issues in the future. Here’s your guide to managing lost sales.
What are Lost Sales?
A lost sale is essentially what happens when you find a lead, start the conversion process, but fail to close the deal in the long term. The loss of sales is something sales professionals need to constantly fight back against, by learning as much as they can about their target audience, optimizing the sales process, and exploring new strategies for conversion.
When you’re losing sales in any industry, it’s important to dive down into your analytics and business data, to determine where the losses are coming from. This can help to improve your chances of successful conversions in the future.
Common Reasons for the Loss of Sales
Lost sales happen for a number of reasons. Sometimes, you’ll find yourself losing sales because you haven’t planned properly for a sudden change in demand towards your product, meaning you’re “out of stock” when a customer comes to place an order.
Lost revenue can also happen because a relationship with a lead goes sour, or you fail to follow up with a customer as quickly as you should. Here are some common reasons for lost business:
You don’t understand your customer: If you don’t really understand your customer, their needs, and their pain points, then you’re going to end up losing sales. Conversions happen when you can convince your target lead that you have the perfect solution to their problems. If your target market is undefined, or you haven’t done enough research into your buyer personas, you’re going to miss out on.
Your sales pitch needs work: One of the most common reasons for lost sales is a bad sales pitch. If you’ve already qualified a lead to a point where you’re presenting them with an offer, then there’s a good chance they need or want what you’re selling. If you fail to get the sale, or generate interest, there could be a problem with the way you’re presenting your product or service. Maybe you’re not focusing on the right benefits.
You haven’t planned properly: Lack of proper planning is another common reason for lost business. If you haven’t planned for an increase in customer demand around a certain seasonal sale, for instance, you might not have enough stock to serve every customer. Loss of sales can also happen when you don’t have a backup system in place if something goes wrong with your supply chain.
You’re not following up correctly: It usually takes multiple touchpoints with a brand for a customer to make the decision to buy something. If you’re not following up with your target audience, they could lose interest in your pitch. You might even end up losing your customer to a competitor, if another business swoops in while you’re ignoring your lead.
You don’t have enough product knowledge: Lost revenue often happens when a salesperson can’t answer the questions their customers have about a product or service. Your client wants to see you as a knowledgeable and trustworthy individual who can immediately respond to their queries. Make sure you have all the information required to close a deal before you begin a conversation with a customer.
Your sales process is flawed: Take a look at your current sales process. Which parts of your strategy could do with some extra work? Do you have a good rapport with your customer? Can you identify the needs of your target audience correctly? Can you link your pitches to the specific problems your customers are facing?
Lost Sales: Results
The most obvious result of lost sales is lost revenue. Every sale you lose means you’re not adding money to your company’s income. For a salesperson, this means you fall short of your targets. For the wider business, this could mean it’s harder to keep the lights on in the organization.
Losing sales can also lead to problems with your brand’s reputation. The more you lose business, the more people you might have in the industry talking negatively about your brand. This can lead to more lost revenue in the long-term.
How to Prevent Lost Sales
As mentioned above, losing sales is something that happens to virtually every business, and every salesperson. It’s impossible to prevent lost sales entirely, but there are steps you can take to keep your loss of sales to a minimum, such as:
Speaking to customers: Find out why you’re losing sales by speaking to the leads who end up rejecting you. You can ask them what made them decide not to go ahead with the purchase. Knowing why people say “no” can save you a lot of lost revenue.
Conduct regular evaluations: Regularly examine your sales strategy to determine which parts could be leading to lost sales. Where do the majority of your leads fall out of the pipeline? How could you improve your chances of keeping them around?
Experiment: Experiment with different sales strategies and measure how your customers respond. This can give you an insight into new ways of minimizing lost sales.
Prepare: Make sure you have as much information as possible about your customers before you begin the sales process, so you can personalize your pitch.