Inside Sales Telesales Tips Blog

Lost Sales Analysis: a key to increasing sales

  

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I was contacted by Sandra, one of my blog subscribers this week, who wanted to address the subject of analyzing sales that were lost last year, to determine if any of these might be resurrected. She confided that more than 50% of all sales opportunities were lost last year. One of the things I discuss in my inside sales training courses is the importance of diagnosing lost sales. This is a subject for avoidance on the part of many sales reps, but frankly, everyone should keep a lost sale log, and categorize it according to the major reasons sales were lost. I recommend you tracking lost sales throughout the year. If everyone in your department does it, it will be invaluable to your sales and marketing execs, who can then determine if product enhancements, additional marketing programs, or customized sales training could be an answer. 

Here are a few of the most common reasons why sales don’t materialize, and you can use these as tracking categories: 

1) Solution set didn’t fit for the customer.
2) Budget could not be obtained (ROI was discussed).
3) Budget could not be obtained (ROI wasn’t discussed).
4) Sales discussions were carried on a too low of a level within the company, and decision was overruled at a higher level.
5) Ethical issues that prevented the sale from becoming a reality.

Let’s discuss them, and then I’ll give you a great idea on how to professionally track them. 

Solution set didn’t fit for the customer. If you make enough calls, this will probably be your major hurdle. Could your company add a solution set that is pared down for people who need less? Or could your company add additional R&D resources to beef up your offering to be more in keeping with what the market demands? You’re on the front lines, so your opinion is valuable. Ensure that you communicate this information professionally through your organization. 

Budget could not be obtained (ROI was discussed). Here, you did a great job discussing return-on-investment, and your prospect agreed. Budgets were slashed, other things were prioritized, and the deal was lost. 

Budget could not be obtained (ROI wasn’t discussed). Unfortunately, you own this one. Every sales transaction should include a frank discussion of whether, in the prospect’s mind, your solution will either help your prospect company make money, or stop losing money. And if you don’t have this discussion, everyone may agree up until the last moment, to where it falls on the CFO’s desk, and he or she asks the question. And if the answer’s not there, the sale has a great chance of failing. Your prospect may not fully understand the ROI issues either, but he or she will have a better chance of getting your solution on board if you can work on this together, early in the sales process. For more on creating these discussions, read my free ROI whitepaper. 

Sales discussions were carried on a too low of a level within the company, and decision was overruled at a higher level. This is why I recommend starting your sales process at a high level within your target company. Discussions with high level individuals let you know whether these folks already have a preferred vendor, are already in discussions with a competitor, or are even thinking about a solution such as yours. They will often send you down the ladder to someone else, and that’s OK, too. Since you’ve already begun your sales process at a high level, you can always call these people back for additional clarification or information. When I do this, I always tell the exec that I’ll call back to keep him or her in the loop, and I mention that fact to the lower level person as well. 

Ethical issues that prevented the sale from becoming a reality. You may not always deal with this, but they are out there. These fall into two categories, material and legal, and I’ll give you a couple of examples. In my business, it’s important to me that my training classes are effective, and the effectiveness can be proven. My reputation rides on it. So I always engage my prospects in discussions about how the curriculum will be reinforced after it’s delivered. In some cases, they don’t care, and just want the training. So ethically, I have a problem if I think what they’re attempting to do won’t give them the results they want. This may result in a lost sale initially, but many of my best (and most successful) customers have adopted superior reinforcement principles after these discussions, and they understand that I’m a partner to their successes, not just another vendor waiting to take their money. 

I’m sure you have your own examples, based on the solutions you sell. So be consultative, take the high road, and always focus on making your prospects successful. Your own reputation will be enhanced if you have your prospect’s bottom lines at the forefront of your sales presentation. 

There are also potential legal entanglements. Many companies, for example, deal with bribery issues, payoffs to partners, and a host of other legal issues that often come up by surprise. I think walking away from a legally nefarious sales situation makes good sense. Just read the newspapers. 

Tracking your losses 

I really believe in codifying losses through your CRM database, because it provides a historical record that can be used to objectively describe how your company’s sales, marketing, and product functions can be improved. I therefore recommend putting a field in your CRM that is called something like "reason the prospect told us he or she would not be renewing," or similar, and put the reason in the prospect’s own exact words. This way, when you do a Loss report, the prospect-articulated reasons as well as the titles of those respondents will be in the report.  Use a similar approach to detail "Wins," and you’ll have great data on why you’re winning and losing business. This will also provide superior data for Performance Reviews as well.

So to increase sales and continually improve your sales professionalism, add quantifiable “Wins” and  “Losses” reports to your Best Practices Playbook.