4 reasons why you can’t rely on your CRM’s win-loss data

Introduction

A question that often comes up when you are Revenue leaders is if yes or not you hit your quotas, and why. C-level & board ask the question. CRO and VP Sales ask the question. Ops ask the question. Salespeople also ask the question. To answer the question, the first normal instinct is to go analyze CRM data. But CRM is good to tell you what happened, not why it happened. This changes everything. Not knowing why you hitted or not your quotas prevents you from reaching them in the next period. You can’t trust your CRM as closed-lost reasons are biased, not actionable, not exhaustive and don’t actually explain why you lose or win. It’s too innocent to take relevant actions to improve win rates based on your CRM closed-lost reasons. Worse, wrong decisions could be made.

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You get only one part of the story

Let’s take a concrete example. Sales rep A lost a deal today and he needs to change the CRM’s stage from “Offer sent” to “Close lost”. When he does that, he is asked to fill in some fields, especially the “closed-lost reasons” one. What he usually sees is a dropdown list of reasons. After thinking for a few seconds on the question, he selects one of the reasons. Then he can close the CRM’s deal page and start tackling other opportunities.

When the key question mentioned above shows up, Revenue leaders and Ops go to their CRM and analyze the reasons why they lose deals in the period. Then, a little voice inside their head is saying the analysis from CRM is wrong. Here is why:

Reason 1: There is a big bias as you only asked your salespeople to explain why they lost

This is a logical reason. Revenue leader makes the mistake of only asking their salespeople why they win or they lose. When a sales rep is asked to fill in the CRM’s closed-lost reason at the end of the sales cycle, he mentally replays the game. However, he is emotionally involved. If your sales cycle is superior to 2 months, it’s even worse because he could forget some key actions that led to the loss or to the win.

Although analyzing data and the lost reasons is a common best practice for top performers, it’s impossible to be 100% objective when you:

• Handled the different conversations;
• Thought about the pricing;
• Launched key objections to win the deal;
• Took time to differentiate from your competitors;
• Forecasted the deal

Also, let’s say your salespeople ask their buyers why they decided to launch or not the collaboration. Buyers won’t be disposed to share full transparency as they don’t want to go back in the selling process. They don’t share 100% of honest opinions as : 

• They want to avoid conflict and hurt feelings
• They don’t see the person who asks for feedback as objective and independent.

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Reason 2: Close-lost reasons mix up the cause and the consequence. 

The consequence is “no news from the prospect”, “lost to competitor X” or “decision to do nothing”. The causes could be multiple decision drivers. In reality, you analyze the consequence of a lost deal in your CRM. 

Your analysis is based on what happened rather than why it happened. It is key to know what happened. But not sufficient at all. How can you expect to win more, increase win rates and understand where your revenue gap is if you don’t have “decision drivers” data in your CRM?

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Reason 3: Close-lost reasons are not actionable

Let’s take some example : 

• A closed-lost reason “Product” is not telling you if the issue was “UX/UI”, “Integration”, “Missing features”, etc.)
• A closed-lost reason “Competitor” is not telling you what exactly did your competitor to win over you (it could be a lot of of multiple reasons)
• A closed-lost reason “Pricing” is not telling you if it was overpriced, if the pricing wad not explained clearly or if the pricing was not suited to your buyer’s situation
• A closed-lost reason “No budget” is not telling you what really happened within the walls of your decision-makers’ offices. It could also be a false reason that your buyer told you to justify. It’s easy to say “we don’t have a budget anymore”, right?
• I don’t even mention the closed-lost reason “Sales” that is not an option as you precisely ask your sales to fill in these reason

Ask yourself how you can improve your GTM

To know if your reasons are actionable, take your last quarter and find the top 3 reasons why you lose. Then ask yourself the question: “Can I implement 5 concrete action plans to increase my win rates?”. If you can”t precisely answer the question, then you need to launch a win-loss analysis that deserves respect.

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Reason 4: Selling is multi-faceted. You only ask for one or two reasons.

You actually don’t win or don’t lose for only one reason. There are multiple decision drivers that impact the final outcome of your buyer. Taking into consideration only one reason (as it’s the case in most of the CRM) is giving you only 15-20% of the full story.

B2B selling could be complex. One only driver doesn’t influence 100% of a deal's outcome. In reality, you have 4 to 6 decision drivers with different levels of influence that impacts your probability of winning or losing.

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Rely on CRM’s win-loss data is a pain

These 4 reasons explaining why you can’t rely on your CRM data to win more deals have huge impacts : 

• You are not close to your buyers and their voices
• You are able to make bad decisions. As Raphael Bourkris, VP Sales from Didomi explains to us, his company almost took a massive product decision (change in product features) due to a reason a sales representative filled in to explain why he lost a big deal. This costs you money and performance.
• You lose the opportunity to win more deals and your win rate is not improving
• You have lots of blind spots

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Launching robust win-loss analysis as a final step to your sales cycle

Best B2B companies are performing win-loss analysis to tackle the 4 reasons mentioned above. They make sure they understand all the reasons why they lose and win deals. Launching a win-loss analysis by asking your buyer in addition to your salespeople is the first step. You also need to mix quantitative feedback (surveys) with qualitative ones (deep interviews to understand the buyer’s journey). 

Win-loss needs to be 100% objective and focused on drivers to be actionable. At the end of the journey, Revenue leaders that launch continuous win-loss analysis improve their GTM tactics and make sure they never lose without really knowing why.

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Conclusion

Best B2B leaders create their Product, Price, Marketing and Sales strategy based on win-loss. The key thing about B2B selling is knowing why you sell and knowing why you don’t sell. It’s the starting point from which you can elaborate your tactics. Although CRM data is vital, you need to complement it from the voice of your buyers. If you want to improve your conversion rates, you need to combine data from your CRM with external buyer interviews and surveys.