How to Make Profit from Lost Sales

Analysing your sales pipeline is a great way to improve your sales process. Use sales funnel management and simple CRM tool like Base or compare SugarCRM vs Salesforce and learn how to profit from lost sales.

In sales, the fate of the runner-up is no fun. When a long sales cycle ends in defeat, it can seem like a fate worse than death. Your company has invested the same effort, and perhaps funds, as the winner but without the payoff. However, there are treasures to be mined from sales rejection, if you have the right perspective. Seen in a different light, every loss is a mini case study that can be stored and drawn upon to your advantage.

Take a page from Avis – being number two can work for you.

When you work like a dog during the proposal and sales process, only to lose at the end, prospects “feel” your pain. Some will even tell you why you lost the sale. And therein lies the prize: you’ll gain knowledge of how to improve your sales pitch the next time. The would-be client also gets to see how committed you are to improving.

Proceed with care.

There are mixed feelings about how to ask for feedback after you’ve lost the sale. Some buyers will take the time for a short face-to-face interview but many won’t – especially while the deal is still being sealed with your rival. However, wait a few weeks, and even those who are reluctant to give you criticism in person might fill out an easy online survey if it’s short and professionally presented. Let would-be customers grade you important issues such as how well you understood their business issues, your value proposition, and your sales proposal or presentation. Finally, would they consider doing business with you in the future? Recommend you to others?

Take advantage of the ugly baby syndrome.

No one will tell you to your face that you have an ugly baby but they might tell someone else. If you can afford to hire a third-party to do the analysis, the answers might be more forthcoming and truthful.

Make it standard practice.

Get in the habit of deconstructing every lost sale, not just the big ones. There are two benefits to this approach. First, it puts the spotlight on the entire sales team and not just an unfortunate few. To make sure everyone benefits, you don’t want to focus only on the near-victories of your top sellers or the missed opportunities of the least experienced sales reps. When “post-mortems” become second nature they cease to be personal. It’s not about one person’s mishaps but what the whole team could be doing better.

If you simply can’t do a post-mortem in every case, cherry-pick those accounts that will yield the most fruitful information. What is the main goal of conducting the loss analysis? If you learn that you are consistently losing sales in the last stage of the process, that’s very valuable indeed. There’s also a golden opportunity to find out why your competitor won.

Do ask salespeople for their input.

The salespeople involved are usually not the ones who should conduct the lost-sale survey. They can never be completely objective. Failure is not part of a salesperson’s DNA so they tend to get a little prickly about the subject. Still, their opinions count for a lot. Salespeople gain valuable insights about buyer motivation and purchasers’ personalities that should be taken into account before going back to ask for feedback. Company owners and marketing managers should glean as much as they can from the salespeople involved in conducting an interview or survey.

At the same time, salespeople can also benefit from promptly sharing bad news, so that key people in different parts of the company can help a salesperson deliver better content and materials to prospects. Many CRM programs are now equipped to capture win-loss data.

Ask about sales that have been put on hold.

Sales leads that have moved through the pipeline only to put on hold indefinitely are infinitely frustrating to all salespeople. But they have also become a factor of life in a sluggish economy. After a certain period of time, consider them lost sales and start the process of asking for feedback. Even the rejection that happens early on can be used for good. It’s far better to know sooner than later that you are losing sales at the proposal stage.

See if the winner wants to partner.

Yes, they are a competitor. But is there some cooperative marketing you could be doing in the future? It’s become common and advantageous for small companies to band together to secure a bigger sale. And large companies have been known to align with entrepreneurs who are on the cutting edge of their field. The bidding process gives you a chance to scout out not just competitors but potential partners.

Finally, even when you’ve lost a big account, remember, there are worse things than failure: fear, for one. If you don’t ask why you lost the sale, you’ll never know. Being humble in defeat helps you to respond rather than just react – and come back stronger.

Extracted from the article published  by Susan Greco 24 October 2011