Are You Learning From Your Losses?

Broker Business Development   Written by Robert Tolar - Word Count: 802
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"It's not my fault", you say. "The other guys undercut our price and we couldn't compete." No one likes to admit that they lost a major sale. Denial in the face of the significant loss, however, denies the sales team, and in fact the whole company, the opportunity to learn from the loss experience. Hence the case for a formal process of loss review. The practice of "loss review" is the most easily ignored aspect of learning from our selling experiences.

A formal loss review process should include participation by all parties to the sales campaign and should contain, at minimum, these seven steps:

Sales Management Debriefing Call - on the customer decision-maker. The purpose of this call, of course, is to obtain the customer's assessment of our sales campaign. At least as importantly, however, is the opportunity this call creates to commit your company to continuing to be a key supplier to the customer and to position yourself for the next major opportunity. This call should be made by at least a second or third level sales manager and is often best done without the participation of the sales team that lost the deal.

Memo To Sales Management: When you have conducted the debriefing call, ensure that the sales team and first line management get immediate feedback on the results of the meeting. It is critical to close this information loop quickly so that the team can begin their recovery planning.

Sales Plan Review - For large opportunities in major accounts there should have been a written sales plan in place. The account team and first line management will conduct a "post-mortem" review of the opportunity action plan to assess the validity and viability of the sales plan, the degree of execution against the plan and any mistakes or omissions in the plan.

Opportunity Analysis - Many firms utilize a formal process of analyzing major opportunities. These schemes generally involve scoring a number of attributes of the opportunity to assess the attractiveness of the business, the firm's competitive position and the strength of the sales team's relationship with the decision-maker(s). This opportunity analysis should be reviewed and dissected. The key question here is "Should we have pursued this opportunity in the first place and did we forecast it accurately?"

Traps and Pitfalls - An honest evaluation of the lost sales campaign will almost always turn up traps and pitfalls that arose. Most often, these are perpetrated by our competition. We need to document these, select the ones that were most influential in the loss and publish the list for the sales team's future reference and for the education value to the full sales force.

Customer Knowledge - The question here is, "How much did we really know about the customer's business and the need that was being addressed in this procurement?" Reviews of your customer overview, decision process, organization charts, decision power base, etc. will all contribute to this analysis. If you have a formal routine or document for recording your customer overview knowledge, that should be reviewed in detail, holes identified and plans set forth to avoid this mistake in the future. Our perception of customer knowledge should also be tested during Step One, above, the sales management debriefing call.

Lessons Learned - Here are some of the questions that should be addressed in this phase:

ü What positive selling behavior should we continue and encourage?

ü What selling behaviors must be changed immediately?

ü How could we have avoided or neutralized the traps and pitfalls?

ü How could we have improved our value proposition to resonate more fully

     with the customer?

ü How could we have changed the decision ground rules to our advantage?

ü What actions must we take to avoid this loss in the future?

Recovery Planning - This leads us to the most important aspect of the loss review process - figuring out how to recover from the loss. A "mini planning session" with the full account team at the end of the loss review can be used to identify the business opportunities remaining, document the current environment and develop a detailed action plan to win the future business.

I do not suggest that a loss review is an entertaining exercise. If, however, we can avoid blame assignment and enter into an open and honest evaluation of the sales campaign, we can derive at least as much educational value from a loss review as from a win review. I encourage you to establish a formal process of evaluating your losses and take advantage of the knowledge you can provide to your sales organization therefrom.

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Robert Tolar has 25 years of experience in the information technology industry. Bob developed and field tested the strategic account planning methodology in the late 1980's and launched his own business, Robert Tolar Marketing, in 1993. Bob has held a number of sales management positions with companies such as General Instrument, Wang Laboratories and Data General. He has experience as the VP of Strategic Accounts, VP Sales and Marketing for a technology start-up company and Field Marketing Director for a Fortune 500 company. For additional information about Robert, Robert Tolar has 25 years of experience in the information technology industry. Bob developed and field tested the strategic account planning methodology in the late 1980's and launched his own business, Robert Tolar Marketing, in 1993. Bob has held a number of sales management positions with companies such as General Instrument, Wang Laboratories and Data General. He has experience as the VP of Strategic Accounts, VP Sales and Marketing for a technology start-up company and Field Marketing Director for a Fortune 500 company. For additional information about Robert,



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