(Editor’s note: Serial entrepreneur Scott Olson is president of MindLink Marketing. He contributed this column to VentureBeat.)
Losing is never fun. When you invest significant time and resources pursuing a deal and it falls through, it’s frustrating – and invariably causes some self-reflection.
Why weren’t we successful this time? What could we have done differently? Implementing a process to learn from your losses can yield great dividends – and is often the best way to lock in the next potential customer you approach.
There are plenty of reasons deals fall through. See if any of these sounds familiar:
- The price was too high
- The competition had a personal relationship with the buyer
- The product was missing a key feature
- The product isn’t a comprehensive solution
- The sales rep didn’t position our product correctly
- The lack of a reference customer in the industry
- The customer didn’t believe they have the problem you solve
- The competition simply outsold your firm
- The lack of an ROI toolkit
The list goes on – as do the recriminations and excuses – but by taking the time to formally analyze your losses, you can discover a wealth of valuable information that can impact your overall vision and strategy. You can learn a lot from wins as well, but losses can be particularly illuminating.
Here are 10 guidelines you can apply to your own loss analysis:
Interview internally and externally – Loss analysis doesn’t mean the sales representative, or even your sales leader, writes up their perspective of the deal. Interview the appropriate sales representative, but more importantly interview the customer, being sure to identify (and contact) both the business and technical points of contact at the customer.
Choose an objective individual to conduct the interview – It’s difficult for the sales representative for the deal to conduct an objective interview. I have seen interviews conducted by the Product Manager, the VP of Sales, a consultant – and in some early stage companies, even the CEO. The key is you want the customer to feel open to speak about why they did not select your solution.
Don’t wait too long – The closer you conduct the interview to the conclusion of the deal, the better. You are asking the customer to give up their time to better understand the reasons of their decision. They are more likely to do this if it is seen as a part of the natural conclusion of the deal. If you wait too long it may seem like you are simply trying to get back into the deal.
Understand the customer need - Begin by understanding why they were talking to you in the first place. Did they have a budgeted project before they were talking to you? What need were they trying to address?
Get their perspective on your product – In what ways did your product meet their primary need and where was it lacking? Discuss with them their perceptions of your key strengths and weaknesses. Identify product gaps as well as areas where you might be able to communicate better about your product’s true capabilities.
Get pricing feedback – Start by understanding what they had originally budgeted to meet their identified need. Was your pricing too high? Did the competition beat your price? How are they evaluating the return they expect on their investment.
Get competitive insights – Spend time discussing the competitive products they looked at. They may not be able to give much information, but you will be surprised at how much they will reveal about how other products differ from your own including features, pricing and marketing.
Review their key decision criteria – Spend the time to understand the key criteria they used to make their decision. This should provide a good view into how to market your products better as well as guide your product roadmap.
Evaluate the sales process – Did they receive all the materials they needed to make their decision? Are there sales tools that could have helped the deal – like ROI calculators, case studies or better customer references?
Review the effectiveness of your marketing – What publications or blogs do they read? What shows do they regularly attend? Were they looking for materials that weren’t available? Would more product documentation or case studies have helped? What was their impression of the website?
If you build this in as a normal part of your sales process you not only will get valuable feedback, but you will indicate to them that you are a company that is continually looking to improve your products and services. More importantly, if you are engaged in a similar opportunity in the future, you will be armed to win.
Image by Todd Klassy via Flickr.
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