Turn Your Losses into Wins

Win/Loss Interview

by Terry Stidham

No one likes to lose business. The resulting empty feeling of losing a hard fought battle can be devastating. This is especially true if you lose a deal in one of your key accounts that was projected to close at a 75% rate or better. This can be an extremely disappointing time for you and your sales manager.

When you receive the news your initial reaction is to tell your client that they are making a mistake. They certainly must have missed something in your proposal! Your competition must have omitted something or misled them. They are making a BIG MISTAKE if they proceed with anyone other than you. Maybe your sales manager is asking you to set up a meeting in an attempt to unravel the deal. The extreme emotions that follow this bad news are all over the map. Most people in sales have been in this situation. The fact of the matter is the longer you are in sales and business development the more times this will happen. Sure we want to win every deal. And we all believe we should win every deal. But it is unrealistic to believe that we will have a 100% hit ratio. So let’s make sure we make the most from a lost sale and prepare better next time. 

This particular transaction may be lost but let’s be smart about learning from the loss. Instead of calling your client and telling him that he is not so bright let’s take the high road. Let him know that you value your relationship and apologize for not advancing a proposal that met their needs. Ask for a debrief meeting where you and maybe your sales manager can understand where your proposal feel short. If possible ask for a line by line explanation comparing your offer to the winning proposal. In many cases the client may not be willing to get into this detail but it is worth asking for. You want to learn what is the primary reason why you lost the business. And the only way you are going to get to the real reason is to act in a professional manner. Acting out of emotion and attempting to undo the deal during this debrief session is not a good idea.

Remember, the most important long-term goal and benefit of win/loss is to increase a company's new business win rate. This is achieved through an improved understanding of how a company's sales team, products, and services compare with the competition during the sales process. Other benefits include:

• Identifying a company's strengths and weaknesses
• Improving the effectiveness of sales presentations
• Determining key drivers for closing new business
• Using prospect feedback as a training and performance evaluation tool for sales and other presentation team personnel
• Formally sharing prospect perceptions across all areas of an organization to enhance product and service development
• Benchmarking and tracking a company's sales effectiveness, products, and services against the competition's

In-depth Win/Loss interviews with your prospects, customers, and defectors can help you discover answers to your most important business questions, including:

 
• What are the real reasons why you are winning and losing deals?
• What key market trends are you missing?
• What are your best and worst practices?
• What key features are helping you win?
• What key features are you missing?
• What is most important to your buyers
• How do the decision criteria differ based on the type of buyer?
• How are your competitors positioning themselves with your buyers?
• What do your competitors say about you to buyers?
• What training opportunities are you missing?
• How can your sales tools, marketing collateral, and presentations be improved?

 

Getting to the bottom line reason for the loss should be your primary objective. This information will not only better position you for future business in this account. It will also provide valuable feedback relative to how your competition is winning business. You can be sure that this competitor will show up in other accounts you are calling on. It will benefit you to gain as much competitive information as you can in this debrief session. Additionally, your client will appreciate your professional approach to losing this deal. This, of course, assumes you legitimately want to understand how you can better serve the account by learning from this loss. If done properly you will enhance the business relationship with your client and place you in a good position to pick up the business next time around.

Selecting a Consultant

The CFO and the Consulting Market                                                                                 

Ritobaan Roy recently wrote about how CFO's select consultants or consulting firms. He says, "The consulting industry has had an upswing; none more so than the Big Four as the market polarizes towards extremes in lean times. For the CFO hiring a consulting firm, looking only at cost though is short-sighted.

                                                               

 

Looking only at costs of hiring consultants may not work out well for the CFO

It has been a good crisis for consultants. The Management Consultancies Association (MCA) in the UK recorded a 5% growth in fees earned in 2011 and 2012. Demand for consulting services from the private sector went up 14% in 2011 and 10% in 2012 which made up for public sector austerity.
 

But this growth in business has been skewed. There are either the big brand firms or specialist, boutique firms that are taking on much of the work. Tom Rodenhauser, managing director of Kennedy Consulting Research and Advisory, thinks that the 20 largest firms will dominate revenue share in an industry estimated to be worth $200 billion globally today. “The irony is that as consulting markets have polarised and the middle has grown thinner, clients have been left searching for firms with a mix of local experience and global contacts,” says Fiona Czerniawska at Source for Consulting.

However, Christopher McKenna, a historian of the management consulting industry at Oxford’s Saïd Business School, is skeptical that the middle market in consulting will fade away. “In lean times, service markets always tend to polarize towards providers who differentiate themselves strongly and providers who commoditize certain services. When good times come back, there is plenty of opportunity again for mid-market players to make a profit.”

 

Size Versus Quality

Size will matter as consulting firms push themselves to provide the widest possible range of services spanning disciplines such as tax, risk assessment, strategy, operations and technology. This is where the Big Four firms, traditional auditing firms that have now morphed into consulting firms, will have an advantage. Mike Dobby, partner at Deloitte’s financial transformation practice, says, “Clients are getting better at bundling non-core services and outsourcing them to, for instance, Indian IT services firms. That has created intense price competition. But what we can do better is offer services that can look at deeper, more connected issues that affect the client’s business such as the tax dimensions of changes in a firm’s reporting and analytics.”

But size makes quality assurance that much more difficult. While a global brand is shared across countries, there can be quite a difference in the quality of the consulting brains on offer. Clients are frequently surprised when they hire a big brand firm in another country with confidence and then find out that the consulting expertise in not up to par.

As the Big Four firms expand into new service lines and geographies, they develop global tools and methodologies so that the work they produce is of a common standard. But this doesn't work all the time. Mark Hutchinson, partner at KPMG, says it can sometimes be a challenge to maintain uniformity in quality of service and human resources across many locations. “It’s tough to standardize quality when local prices vary so greatly. It also depends on the work. If a client in a low-cost market needs work that requires expertise from a high-cost market, there can be a tension in making the economics work and delivering what’s needed. But I could equally say this of any other multi-national enterprise,” he adds. McKenna agrees: “It's unrealistic for clients to assume a perfectly uniform standard of services across markets and countries. The large consulting firms could do this but then would have to increase their billing rates dramatically, something clients in those countries would not be prepared to pay for.”

Not Just Cost

These factors make it all the more important that the CFO invests in the right consultants and wisely. And much goes wrong in what CFOs hold dear – the price of the service. “If the company’s procurement staff is incentivized to simply drive down costs, then that’s a mistake when it comes to engaging consulting services. The key consideration should be the value that can be delivered, not just price that is paid,” says Alan Leaman, CEO of the MCA.

 

Looking at deriving value for the long run helps too. Bernd Brunke, executive committee member and CFO at Roland Berger Strategy Consultants, advises CFOs to treat consultants as intellectual sparring partners, not just a service to be procured. “More and more CFOs see this additional value that notably small teams of senior consultants with a certain depth of experience can offer."

 

At the end of the day, the CFO should choose the right tool for the right job. “In my experience, when CFOs look at consulting services, they tend to hire individual consultants or contractors for cost considerations,” says Michael Knott of M-Comm Consulting and former partner at Booz and Accenture. “If it’s an incremental change, this could work. But for large, transformational changes, it is more cost effective for the CFO to hire an established consulting firm even though it may be more expensive. Often, the consulting firm can play the role of an unbiased change agent and help drive big changes through.”