The only thing that's worse than losing a deal, is losing a deal and not learning anything from it.
For sales professionals 'lost' deals are a part of the job, and for the most part, we take it in our stride. From a business perspective, there's still a lot of value in these deals that need to be captured and evaluated. Some of the best sales-orientated companies that we have worked with take a rigorous approach to capturing and categorising each deal that they don't win. When Tenacre implements Salesforce CRM Dubai, we always add a feature that requires the salesperson to add more information to the record when they are closing an Opportunity as 'Closed Lost'. This information isn't to drag the sales staff over the coals, but to ensure that each of our clients are capturing and evaluating this valuable information.
Here's how why you should start evaluating each lost deal, and some tip's on how to start this process off.
Identify new competitors quickly
When a new competitor enters your market they will have evaluated your pricing, product range, and sales strategies. One of the easiest ways to grab market share early is to compete aggressively on price to get a foothold in the market. When this happens, agile companies will realise what's happening and put in place a competitive strategy to prevent the new competitor from impacting on their sales growth.
The challenge for the incumbent company is to realise what is happening early enough to be able to react before it's too late.
With 'Lost Opportunity Analysis Reports' in Salesforce CRM, the sales managers can see in real time the number and value of each deal that has been lost to that competitor in real time.
Feedback on your pricing structure
'Price' is a fairly common reason that the Sales team will put forward as the reason for not winning a new deal. If your competitors are offering cheaper rates, better payment terms or better-bundled offers then you better be aware of this so that you can adjust your pricing to stay competitive.
Having a better understanding of the pricing tactics of your competitors also helps you to put in place your own discounting policies. Many sales teams have a formal structure in place that gives the individual salesperson discretion on discounting up to a certain percentage, and thereafter the higher discounts need to be signed off by the sales manager or sales director. These 'approval processes' are a standard feature of Salesforce CRM Dubai projects that we implement.
Evaluate effectiveness at qualifying sales deals
Qualifying sales opportunities is a key skill that all salespeople show have. It helps them to make better decisions on where to spend their time, and how to properly forecast revenue for this business. When we get this wrong it can lead to unrealistic expectations and ongoing missed targets.
Capturing the number and value of deals that didn't close due to 'Project didn't go ahead', or 'No response' will help us to understand if the sales team are creating sales opportunities with the incorrect sales stage. There are two problems with your sales process when this happens
- Your sales team need coaching on how to qualify deals earlier in the sales process.
- Your sales managers need to watch out for sales opportunities that hang around the middle of the sales pipeline (developing) for months on end. Repeatedly changing the close date on a deal can be a form of denial. Better close it out earlier and remove it from the sales pipeline than letting it artificially inflate the value of your forecasts
Build knowledge on sales objections
When you have a report on all of the lost deals that your sales team have worked on each month, it allows you to review each deal with the salesperson involved. This is a fantastic opportunity for coaching and working on their objection handling skills. Handling objections, like qualifying sales opportunities, is a standard task for professional salespeople, and one of the key skills that can have a positive impact on sales figures.
If you can review the lost sales reports and identify objections that your salespeople were unable to overcome, you can put in place the tools and training to prevent this from happening in the future. As an example, your team loses three sales opportunities in the publishing industry because the client thinks that your company doesn't know enough about this industry. Let's deal with that objection by digging out case studies from clients in publishing and going after these clients to ask them for a testimonial. The next time this objection is raised, your sales team can confidently deal with it by sharing these case studies.
Understand your product - market fit
What happens when your sales team are continually losing deals because your product or service is simply not the best solution? As hard as this is to admit to, sometimes we all find that there may be a very niche product that has been developed specifically for a certain industry that is a better fit to customers than your more mass market option. When we know that this is the case we can consider our options and decide to either
- Develop new solutions that are a better fit for this market, or
- Concentrate your marketing and sales efforts in the sectors that you have a better product-market fit
These five benefits of evaluating your lost sales opportunities will ensure that your sales process remain agile and effective. Taking this information onboard at your monthly sales review meetings will give your team a real competitive advantage over your competition. Building the Salesforce CRM features to capture this data is pretty straightforward for our consultants, yet will have a massive impact on your business.