In every market and economic environment, there are winners and losers. In the past year there have been a disproportionate number of companies losing due to the macroeconomic changes. That said, losing does not have to be a foregone conclusion. By adapting your go-to-market strategy & tactics, organizations can avoid leaving money on the table whether we’re operating in good times or hard times.
There is a big risk to not adapting your approach. Following the same playbook and tactics that you relied on over the previous 12 to 24 months can have large pitfalls when there are changes in market conditions, technology, and the competitive landscape. However, by using the data you have at your disposal wisely, you can adapt your strategy and focus on where you have the highest chance of succeeding.
Successful companies adapt by applying win/loss analysis data to macro- and microeconomic circumstances, clearly identifying where they are losing & where they could be closing more deals successfully.
They also conduct win-loss analysis across the entire revenue cycle. It’s not just for new business sales, it should be applied to renewals and expansion sales too. Armed with this knowledge, go-to-market leaders can make data-driven decisions and allocate resources to avenues that yield positive results.
Timely analysis is critical or you risk repeating mistakes and not reinforcing efforts where you are winning. Not doing win-loss analysis means that you are unwittingly making this quarters problems next quarters problems too.
Of course, we’d rather you avoid that mistake and we’re here to help provide some guidance on how to use win/loss analysis to adapt and win more.
Metrics to Review
First let’s look at the metrics you will want to review in your Win/Loss analysis. You’ll want to analyze a few data sets in order to get a complete picture of where you are winning and losing.
Win / Loss Analysis for New Sales you will want to analyze:
- Industry vertical
- ICP
- Persona / Role
- Use cases
- Cohorts
- Closed Lost and Won Reasons (which should include data on when you lost to a competitor)
Churn Analysis and analyze churn by:
- Key segmentations of your customer base
- Cohorts
- Industry Vertical
- Persona / Role
- Downgrades vs outright cancellation
- Use cases
Win / Loss Analysis for Expansion Sales:
- All of the above data points
- Upsell vs cross-sell wins and losses – are you selling to new stakeholders or only upselling to existing ones as an example.
- Contract duration of clients who you have won deals with and those you have lost (said another way, identify if there is a trend around when clients are more likely to expand their usage).
Once you’ve analyzed this data you will begin to see historical trends on where your organization is having the most success and where you are having the least.
While this information is a great start, there is a bit more work to be done in order to identify exactly how you should adapt for the next month and quarter. Next you will need to put Win/Loss into context of the current macro and micro circumstances.
Putting Win/Loss into Context of the Current Macro and Micro Circumstances
In order to ensure we are all on the same page, let’s define macro vs micro economics. As Investopedia explains it “Microeconomics is the study of how individuals and companies make decisions to allocate scarce resources. Macroeconomics is the study of an economy as a whole.”
Macroeconomics considers factors such as economic growth, inflation, and changes in employment rates.
At this point, if you are asking ‘So how does this knowledge influence how you will adapt?’, you are asking the right question.
Let’s start by looking at macro conditions through the context of the historical data that the Win/Loss analysis is providing as well as what macro level research can provide to help forecast future trends.
The first step is to review the verticals and industries that make up your prospect and customer list and conduct research that will help you answer the following questions:
Which industries are disproportionately impacted by current economic factors? Identify which industries are growing and which ones are flat or shrinking.
What industries are experiencing increases and decreases in employment rates.
This information can help inform decisions on where your marketing, sales and customer success efforts should be concentrated.
For example: Let’s say your top three verticals are Healthcare, Travel Industry and SaaS and much of your revenue growth comes from user based licenses.
Your Win/Loss Analysis revealed that while you are winning new business in each vertical at a similar win rate, it also reveals that ACV for Healthcare and the Travel Industry are higher than SaaS. As shown in the data below, it also showed you that SaaS ACV has actually dropped because new contracts do not include as many user licenses due to layoffs in SaaS companies.
What’s more is that NRR has held steady in Healthcare and Travel, while SaaS has dropped. Most of your revenue churn is coming from SaaS companies in the form of contract cancellations and downgrades to fewer user licenses.
So now you have part of the picture, but you still need further information to help forecast trends going into H2.
This is where research on macroeconomic trends comes in. Your macro level research has provided data that shows Healthcare and Travel industries are growing and that SaaS will likely continue to experience decreases in growth, hiring freezes and layoffs.
The combination of lagging indicators through Win/Loss analysis and leading indicators of macroeconomic trends provide a more complete data set that will help you to make well informed decisions on where to focus your efforts.
While at this point we should have a pretty solid understanding of our circumstances and where we need to adapt, there are still some missing details before we have a complete picture.
Next, we need to review microeconomic factors that could affect the decisions we make on our H2 strategy.
Microeconomics considers the decisions made by businesses regarding resources, pricing, and approaches in how business is conducted. Factors that affect the micro economic environment in which you operate include:
- Regulatory changes that benefit or hurt certain industries.
- Changes to the competitive landscape.
- Product and service decisions made by your company.
- Pricing decisions.
These elements need to be taken into consideration when planning for future quarters as it can have a direct impact on where you will have more likelihood of winning and losing.
As an example, let’s say that your organization is in the Cyber Security industry and your Win/Loss analysis has revealed that you are often losing to a competitor because of pricing and missing functionality. Now let’s say that your organization is going to be releasing features that close this functionality gap by the end of Q2.
This combined information can help you decide on what deals and existing clients you focus on where you know you are competing against this competitor. It also can help you update your messaging to specific personas to ensure that your value proposition includes communication about the outcomes your product can now help to achieve with this added functionality.
This can also help you plan with your Deal Desk and sales leadership on what terms you are willing to negotiate in order to avoid losing deals over price. With this information, organizations can quickly qualify out opportunities that are not viable due to budget and pricing misalignment. Conversely, they can quickly negotiate and approve discounts in order to quickly close deals before the competitor does.
At this point you should have a pretty clear picture on the reality of your current circumstance and where you have a higher likelihood of winning in the next two quarters.
In terms of the cadence at which to run this type of analysis, it partly depends on the length of your sales cycle and where you sales cycles sit on the continuum of transactional vs enterprise however, broadly speaking I’ve found that running win/loss analysis with deal data on a monthly basis is essential while pulling in analysis from macro and micro economic factors on a quarterly basis is sufficient. This of course can change if there are material changes and each leader should assess what cadence makes sense for their business.
If you’d like to explore HOW we apply these check out our post on 7 Steps on How to Use Win/Loss Analysis to Improve Performance.
Adapted from the original post authored by Elizabeth Italiano on GTM Advisors site
