This article was based on a gripping discussion between Scott Knudson and Trenton Romph on The Win/Loss Podcast, which you can listen to right here!

Since recording, Scott has joined LULA as their Sales Enablement Director, and Trenton has taken on the mantle of Head of Demand Generation at Equals. Congratulations, guys!

As someone who has been deeply embedded in the product marketing world, I've experienced the roller coaster ride that comes with wins and losses in a company.

It can be a moment of panic when you realize why you're losing – be it due to product features, pricing, sales processes, or marketing strategies.

I’m Trenton Romph, Head of Marketing at Clozd. I recently sat down with Scott Knudson, our Head of Sales Enablement, for an insightful discussion on the value of win/loss analysis for product marketers.

We explored various strategies and hurdles faced by professionals looking to leverage win/loss analyses to improve key performance indicators (KPIs) such as win rates, sales enablement, product roadmap, marketing efficiency, competitive intelligence, and churn and retention.

In this article, discover how a solid win/loss program can be a game-changer, and how the approach to solving these problems needs a shift in perspective.

Let’s jump right in.

The importance of win rates for Product Marketers

At Clozd, we primarily cater to product marketers. These people often focus on company positioning and messaging, training sales, and ensuring marketing is targeting the right channels with the right content. When done effectively, these tasks naturally increase the number of successful deals or 'wins' a company secures.

A recent study by PMA highlighted that product marketers rank win rates as the top KPI. This is a logical correlation since product marketers are intimately involved in key company functions that directly influence sales.

Why companies struggle with win rate analysis

However, in our experience, many product marketers and others in a company lack a solid understanding of their win rate. A crucial question arises: how can you have a top KPI if you don't measure it or fully comprehend it?

The ambiguity of measuring win rates

We believe there are several reasons why this disconnect may exist. First, there isn't one universally accepted method of measuring a win rate, which can lead to ambiguity and confusion. On the sales side, teams focus on specific metrics because they're deeply ingrained in the culture. However, on the product marketing side, the same pressure to maintain stringent monitoring of KPIs may not be present.

The challenge of CRM hygiene

Second, we have observed that many companies struggle with maintaining clean and accurate CRM hygiene. While investigating Salesforce, we have often come across records that should never have been created or remain open years after a sale has fallen through. Mismanagement of CRM data can lead to distrust and inaction when it comes to win rate calculation.

The hurdles in accessing necessary tools

Finally, many product marketers may not even have access to the tools necessary to calculate win rates. CRM platforms like Salesforce, while useful, are neither free nor cheap. Many product marketers do not have a license to use these tools, or if they do, they face difficulties in creating reports or deciphering cluttered and messy data.

A potential solution: Clozd’s win/loss program

Here at Clozd, we work towards addressing these challenges with our win/loss program. We offer a platform that enables not just win/loss analysis, but also pipeline data analysis, quickly providing valuable insights. We believe that access to such tools and data can help product marketers make more informed decisions and, ultimately, improve their win rates.

Understanding win/loss analysis

Win/loss analysis may seem like a foreign concept to some, but I find it best described through an interesting analogy. I often compare it to a gymnast's journey towards winning a gold medal at the Olympics.

Imagine this gymnast's ultimate goal is to perfect her balance beam routine. She practices diligently but also invites a coach and other experts to observe her in action. They provide her feedback like, "You rotated too far to the left," or, "You jumped an inch too far," or, "You were too aggressive in that leap." The gymnast takes these inputs, watches herself and others to learn, and iterates her performance to improve.

Just like the gymnast, companies should seek to understand why they win or lose. That's where win/loss analysis comes into play. It involves talking to buyers about both won and lost deals to identify factors that influenced the outcome.

It's not enough to look at sales metrics and infer conclusions. For instance, if you notice your company is struggling to close large-sized Enterprise Data deals, you might be tempted to attribute this to pricing. Perhaps you might dive into your Customer Relationship Management (CRM) software, pull up a report filled out by sales reps, and see a trend towards losing deals because of price.

However, this high-level view isn't giving you the full picture. Is it purely the dollar amount that's causing the loss? Our data shows you're just as likely to lose a deal because of the way your pricing and packaging are structured. It could be your pricing terms or the pricing model itself, like annual or monthly contracts.

Merely putting in more effort or attempts isn't always the solution to winning more. This point is especially relevant in marketing where the instinctive response to low win rates is often: "We need more pipeline."

However, the root of the issue may not always be the lack of opportunities but rather the lack of insight into what differentiates a winning deal from a losing one. That's where win/loss analysis proves invaluable; it helps identify those acute factors behind buying decisions and reveals what needs fixing in the process.

Many businesses tend to resort to the ‘work more’ approach when they're not winning enough. They think the solution is making more sales calls or hiring more sales reps. However, there are two ways to win more – you can either get more 'at bats' or you can learn to 'hit the ball' more effectively. I personally believe it's crucial to focus first on growth through improving the win rate.

How to calculate win rate

Understanding how to calculate your win rate is essential for any business. At Clozd, we calculate it in two ways – win rate by opportunity count and win rate by revenue.

Calculating win rate by opportunity count is fairly straightforward. You take the number of won opportunities and divide it by the total number of closed opportunities. For instance, if you have 100 closed opportunities and you won 50 of them, your win rate is 50%.

Win rate by revenue, however, gives you a different perspective. Let's say you have 100 closed opportunities representing a million dollars in the pipeline and you win 50 of them. That gives you a 50% win rate. But if the 50 you won only amount to $100,000 in revenue, your revenue win rate is only 10%.

Such a scenario reveals a potential issue – you might not be closing large Annual Contract Value (ACV) deals, suggesting a possible weakness in enterprise sales.

Understanding both ways to calculate your win rate is important, as each provides unique insights. Solely focusing on one could give you a false sense of security or lead to incorrect assumptions about your business' performance.

Armed with these insights, win/loss analysis takes the driver's seat, enabling you to ask and answer critical questions about your company's performance and strategies. Why are you winning 50% of deals but not securing significant revenue? Is it an enterprise-fit issue? A lack of training for enterprise sales? Are your sales reps underperforming?

Win/loss analysis illuminates the path to answering these questions, guiding businesses towards improved strategies and greater success.

The pitfalls of pricing

Consider this: the 'pricing' option on CRM picklists is often a vague and sometimes misleading representation of the issue. Sure, it indicates that price was a factor to some degree, but was it the total cost of implementation that was too expensive, or was the packaging not tailored to the buyer's needs? Did the buyer feel that the value of the goods and services did not match the listed price?

Additionally, there could be other key factors influencing the loss, like a poor sales process. Sales reps might not want to acknowledge this, attributing the loss to pricing instead by saying, "The client chose a cheaper competitor."

In reality, it's very easy for a buyer to tell the salesperson they're "just on a budget right now", resulting in the sales rep marking 'no budget' or 'pricing' as the reason for the lost deal. This shows us that the 'pricing' picklist option often does not provide a complete understanding of why the deal was lost.

The impact of thorough win/loss analysis

Win/loss analysis must go beyond the CRM picklist or internal rep feedback. The key is to dive deep into buyer insights. When win/loss analysis is performed rigorously, it can yield significant results.

For instance, Gartner's study shows companies that conduct rigorous win/loss analysis can improve win rates by as much as 50%. Accenture also shares a study that indicates an average win rate increase of 18% for companies conducting thorough win/loss analysis.

To put this into perspective, if you have 100 million in annual sales revenue and a 20% win rate, a 10% improvement in that win rate (meaning you increase to a 22% win rate) adds an additional 10 million in annual sales revenue.

That's the power of win/loss analysis – it provides a roadmap to winning more by highlighting the levers – be it sales, marketing, or pricing – that need to be adjusted to engage more buyers and close deals.

Improving your win rate: Two approaches

Once you've understood your win rate and know how to measure it, the tricky part is effectively increasing it. We advocate for a dual approach to impacting win rates based on the feedback from your analysis.

First, you can fix the negatives – immediately address any glaring issues or red flags, like a sales rep not following up properly. Secondly, you can optimize the positives – double down on your strengths and what's already working well for your company.

Personally, when it comes to choosing whether to fix the negatives first or to enhance the positives, I would prioritize fixing the negatives. Buyers are fickle and emotional, and a single poor interaction can lose a deal. It's crucial for sellers to understand exactly what lost them a particular deal and then rectify it.

Doing win/loss analysis the right way can significantly impact your win rate. Especially when you're trying to do more with less, increasing your win rate is an effective strategy to achieve more with the same resources.

Unleashing win/loss program potential

The contemporary world of product marketing is dynamic, exhilarating, and often overwhelming. As a product marketer, you may find yourself inundated with insights about why you win or lose, and then realize that there's an enormous challenge in front of you. However, the secret lies in a shift of perspective, notably in the context of win/loss programs.

A common pitfall is to hoard all the feedback and believe that it’s your sole responsibility to solve all the problems. While it is crucial to be the linchpin collecting all the win/loss feedback, it is equally important not to silo this information.

Understanding the dynamics of your product, sales process, or marketing strategies is not enough. The reality is that you don't know everything about the background, complexities, or potential consequences of certain decisions. A better approach is to distribute the data to the relevant stakeholders, encouraging them to focus on enhancing win rates in their areas of expertise.

A win/loss program should ideally serve to provide more insight into specific aspects where you suspect improvement could impact win rates. It’s a journey of guided exploration, not a solitary endeavor to find a magical solution to all the company's problems.

The power of data-driven decision making

Most leaders will act when presented with compelling data. Everyone appreciates a data-driven approach to problem-solving, especially when it aids in making better business decisions. This approach resolves the problem of dealing with the 'squeaky wheel' where one-off complaints or suggestions might divert entire strategies.

As a product marketer, your role is to build a convincing case to improve your win rate by providing clear, concise data to facilitate sound business decisions. By delivering comprehensive data that helps various department leaders perform better, you create a win-win situation.

Emphasizing the voice of the buyer

The most critical data in this process is the feedback from the buyer. Their perspectives can reveal vital insights into your business operations, strategies, and offerings.

One example is the story of SmartBear, a customer of ours. They had initially been selling to a very technical buyer type. However, as the market shifted towards less technical buyers, their sales demo, which focused on a particular feature, became less effective. The feedback from these new buyers highlighted their need for a different feature – one that SmartBear already had but wasn't showcasing. As a result, they adjusted their demo strategy, which quickly impacted their win rate positively.

This illustrates the importance of buyer feedback in gaining a detailed understanding of market shifts, buyer preferences, and the effectiveness of your sales strategies.

The path to improved win rates

To get started with improving your win rate, you first need to determine your win rate. Even if you’re dealing with a vast pipeline or unclean CRM data, segmenting your funnel based on products, regions, or price ranges can help pinpoint where potential issues lie.

Next, consider building a comprehensive win/loss program if you don’t have one already. Collecting feedback from your buyers and non-buyers is pivotal in understanding why you're winning or losing deals. This process may require investing in resources, but the payoff in insights and strategic decision-making is worth it.

Finally, while evaluating your win rate, ensure you focus on improving the areas you're weak in and perfecting the areas where you excel. This dual approach can lead to a significant enhancement in your win rates.

Final thoughts

A successful journey towards better win/loss programs involves not only learning but also implementing effective strategies based on comprehensive data. Remember, a winning strategy requires constant evaluation, adaptation, and a keen understanding of your buyer's needs.