The Lost Art of Lost Metrics: Turning Past Losses into Future Wins

Unless you expect a 100% win rate, a lost deal is not a bad thing. In fact, if you are capturing the right information about your lost deals, then you can turn past losses into future wins! You can identify exactly where to focus your sales training, competitive strategies and positioning. Many sales organizations track the reasons why their deals were lost, but this only paints part of the picture. Let us examine one highly valuable lost metric that is often overlooked…

Lost the Deal

Based on the manager’s response in the comic strip above, it may seem that while the sales rep lost his deal, the manager lost his mind! The manager, however, is asking exactly the right question: “Where did you leave it last?” In other words, “Where was your deal before you lost it?” It is important to capture in which stage of the sales cycle a deal was lost. I call this the “Lost Stage”, the stage where deals disappear.

The Lost Stage, coupled with the Lost Reason, together provide a more complete understanding of your sales challenges. Consider the following two scenarios:

Scenario 1:
70% of deals lost in a given year were lost due to price. The company doesn’t know where in the sales cycle they were lost, only that they were lost because of price. To address the problem, the VP of Sales invests in negotiation training for the sales team and increases the threshold for allowable discounts from 10% to 20%.

Scenario 2:
70% of deals lost in a given year were lost due to price, 90% of which were lost during discovery. Now the VP of Sales understands that reps are disclosing cost even before the pain is quantified and the solution is understood by the prospect. He therefore directs his training efforts to the front half of the sales cycle.

In the first scenario above, the VP of Sales would have invested significant resources on negotiation training, but to no avail. Decreasing allowable discount thresholds was likely to also decreased the value of deals won. This would have yielded the opposite result from what was intended because of the false assumption that the problem was in the latter parts of the sales cycle. Worst of all, they would never have known it!

Knowing why deals were lost without understanding when they were lost can sometimes be misleading. Capturing both the Lost Reason and the Lost Stage provides a more complete and accurate picture. This leads to wiser, more informed decisions, which ultimately leads to improved sales effectiveness.

Capturing the Lost Stage metric can help turn past losses into future wins!


3 Responses to The Lost Art of Lost Metrics: Turning Past Losses into Future Wins

  1. Nice way to highlight the value to applying metrics to the stage in the sales cycle! I think this is the most pressing issue in most tech companies today.

    Tracking the sales funnel and the conversion rates at each stage should be the most important tool for determining sales and marketing investment.

    Marketing in particular, which often has a significantly higher budget then the sales training budget, should also be measuring the value of marketing assets and directing their marketing spend based on the same metrics. The money saved could be spent on proven campaigns or reinvested back into sales training.

    This also highlights the futility of most lead generation investments. Most companies are doing okay at the top of the funnel and can’t really handle more leads without more sales people. They need to focus on lead quality and lead conversion. Money spent on lead generation is wasted unless the conversion rates in the deal pipeline are optimized. Only then should money be spent on generating leads.

  2. Joshua Van Kley says:

    Capturing reason lost metrics is a vital tool to success. In my industry, capturing the reason lost not only leads to better competitive bids in the future, but also better understanding of our company’s strength and weaknesses as perceived by outsiders. This then allows us to make changes to strategy and sales techniques as the market changes. This metric can also help identify where additional staffing maybe needed if bids are consistently lost due to timing. Capturing why a project was lost and understanding what your weaknesses are as viewed by others will lead to a more effective sales force in the future.

  3. Pingback: Tweets that mention » The Lost Art of Lost Metrics: Turning Past Losses into Future Wins Sales Ops Solutions: The Art of Motivation. The Science of Enablement. --

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