Adding win-loss analysis to your product management toolbox may be the single most effective change you can make
I love it when listeners suggest topics to explore on this podcast. One of those is win-loss analysis. This traditionally is considered a sales tool to understand why a customer chose or rejected a product. However, savvy product management groups recognize it as vital analysis for improving products and the customer experience.
To explore the topic, I talked with Mike Smart who teaches organizations to conduct win-loss analysis from a product management perspective and also manages the entire analysis for organizations. He is a product management practitioner and founder of Egress Solutions, which helps companies implement product management best practices that build and launch successful products.
Summary of some concepts discussed for product managers
- [2:03] What are the benefits of conducting win-loss analysis? The emphasis on win-loss analysis is traditionally on understanding the sales process. This is valuable, but by incorporating product management perspectives in the analysis, great opportunities for success are created. During a win-loss analysis, we can ask customers about their perceptions of the product, the strength of the value proposition, how they judge the return-on-investment (ROI), etc. Their answers help us understand the effectiveness of product messaging, the priorities for the product roadmap, and how they are using the product. It gives us the opportunity for “ah-ha” moments to learn how customers think about the product and the entire customer experience.
- [7:01] Who should manage the win-loss analysis process? We suggest that sales people not be the ones in charge of the process. They have established a relationship with the customer through a B2B sales process. If the customer likes the sales person or dislikes him or her, in either case it will be difficult to get fully honest responses from customers. Instead, product managers or a third-party should conduct the analysis. Third-parties are often used because of their unbiased position.
- [8:53] Is win or loss analysis more important? We suggest a balance, analyzing as many wins as losses. Comparing and contrasting the two situations provides additional insights. For example, many times we can identify the resistance that prevented a win, allowing for a messaging or product improvement that results in more future wins.
- [10:20] Why don’t organizations conduct win-loss analysis? Organizations have a lot of moving parts and it gets pushed off the list of things that must be done. Often a disruptive force is the catalyst for conducting win-loss analysis. For example, a new competitor begins winning deals that the organization expected to be theirs. Such events cause leadership to ask why the organization wins business and why they lose. Win-loss analysis answers those questions. Don’t wait for the disruptive force. Start incrementally by reaching out to customers and conducting formal exit interviews to collect information and identify patterns.
- [13:50] How can we conduct an effective win-loss analysis? Start with executive sponsorship. We find the CEO or VP of Sales make the best sponsors. Ensure total transparency that all functions – engineering, sales, marketing, etc – understand why the analysis is being done and provided progress as the analysis is done. Then create a list of customers to contact with an equal balance between wins and losses. Formulate the questions to ask customers. We find short online surveys with 10 questions that can be answered in about two minutes is the best way to begin. At the conclusion of the survey you offer the customer the opportunity for a follow-up phone call, providing an incentive to increase response rate. Target a list size of 100-200 customers. Done properly, a 25% response rate for taking the survey is reasonable. Once data is collected from the surveys and the phone interview, consolidate the data and identify patterns. Look for divergent and convergent points of information. This will lead to specific recommendations, which should be supported by actual statements from customers. Including this customer perspective will help you gain support from people in the organization to make the changes needed. Over time as you engage customers for win-loss analysis, you’ll see shifts and trends that provide extremely valuable information for product management.
- [18:27] What questions are you putting on the surveys? They are light-touch questions. For example, did you experience the sales process in a way that conveyed an understanding of your business problem; did you see a demo; were you given a price proposal; rank order aspects of the customer experience (such as product features, price, etc.); would you recommend the product to friends; what offered you the greatest benefit; etc. The last question is the request for a follow-up, such as, “For a $50 Amazon gift card, can we follow-up with you by phone to discuss these questions further.” The survey data provides a start at understanding the customer’s experience and the phone interview allows us to get a deeper understanding. We find we get a very good pool of information from 50 survey responses and 25 interviews.
- Mike’s group for implementing product management best practices, Egress Solutions
- Connect with Mike via LinkedIn
“Failing is an option here. If things are not failing you are not innovating enough.” -Elon Musk
Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.