Win/Loss Analysis: An Introduction to Win/Loss Analytics
Win/Loss analysis is a critical practice in optimizing and improving your sales, product management, and marketing practices. With a comprehensive analytical process, you can gain a deeper understanding of you competitive landscape and drive better results across your business.
Assessing your wins and losses makes it easier to understand why your company wins some deals and loses others, as well as how well you’re performing in comparison to your competitors.
What is win loss analysis?
Win-loss analysis, or win/loss analysis is the art of determining why certain deals are won or lost. In simple terms, it involves evaluating your performance in the context of a range of variables. Through a closer look at your sales win/loss analysis, you can determine which factors actively contribute to the process of completing or winning a sale or losing an opportunity.
To conduct a win/loss analysis correctly, companies need to be able to review sales data, interview customers, study organizational practices, and collect information in a host of other ways.
Why is win-loss analysis important?
Win/loss analysis is important because it helps to clarify where your efforts are generating sales, and where you need to make changes to improve your ROI. Without a formulized process and win percentage calculator, it’s difficult to understand how the same sales process can work in some cases, but not in others. Used correctly, a win-loss analysis can offer:
- Marketing insight and overviews of how well your customers understand your products.
- Cost reduction opportunities (by getting rid of strategies that aren’t working).
- Product development guidance, by showing you what your customers really want.
- Greater revenue, by helping you to focus on the sales practices which generate better results.
- Improved customer retention, by helping you to eliminate issues which discourage repeat purchases.
How to Calculate Win Loss Ratio
Unless you have access to a win percentage calculator to show you your win rate, you might think win loss analysis is a complicated process. However, the reality is, it’s often much easier than you’d think. Win/loss analysis involves simply gathering data, analyzing that data, and using what you learn to act.
To calculate win/loss ratio, you simply look at the ratio of won opportunities against the ratio of lost opportunities. All you need to do is divide the number of opportunities you’ve won by the number you’ve lost. If you lose two deals for every one you win, your ratio would be 1:2.
The 3 Steps of a Sales Win/Loss Analysis
The steps of win/loss analysis are simpler than they seem.
1. Collect data
The first thing you need is the data you’re going to draw on for your win/loss comparison. You can start by organizing information about each opportunity won or lost. Some of the various kinds of data you’re going to collect include:
- Sales data (all of the details from each interaction)
- Demographic data and comprehensive profiles of each customer.
- Marketing data and how customers learned about your business.
- Contextual data (such as the timing of a sale and what was going on for the customer).
- Prospect and customer feedback, like reviews and testimonials.
Remember, when gathering your data, you should have an insight into what you want to accomplish with your win-loss analysis. What kind of variables do you want to measure performance against? Are you interested in competitor-specific, persona-specific, or industry-driven data?
2. Analyze your data
Once you have your data, the next step is analyzing it. The more data you have, the more in-depth your insights will be, so make sure you have plenty of details to work with. You can start your win-loss analysis at a high level, calculating things like your win/loss ratio and your overall win rate.
Some companies also like to calculate their competitive win rate – which is the rate at which you win deals involving at least one competitor. From there, you can begin to look a little deeper into the details your data is giving you, such as:
- Common reasons for lost opportunities: Why do customers not buy from you?
- Common reasons for won opportunities: What do your customers say drives them to purchase?
- How are you performing compared to your competition?
- How are your win/loss ratios differing according to each persona targeted by your company?
- How do your win/loss ratios differ according to the source of your lead (where they come from)?
3. Implement Changes
Finally, based on the data of your win-loss analysis, you should have a strong sense of why you’re losing some deals and winning others. However, for the time being, your knowledge is based on a hypothesis. You’ll need to put what you think you know to the test to determine whether it influences your win/loss percentage correctly.
For instance, if you’ve learned that the most common reason for losing sales opportunities is that you’re making too many calls to prospects during the sales journey, try experimenting with cutting down on call numbers and looking at how the change influences your win rate.
You’ll need to regularly re-assess your win-loss ratio to determine which of your methods are working, and which might require further investigation.