Increase in Lost Deals | It's not that lost deals have increased, but that the structure has become unwinnable
Lost deals
A loss begins not on the day the deal is lost, but on the day you stop being able to win.
When lost deals increase, many companies suspect their sales team.
Is the proposal weak?
Is the closing too soft?
Is there not enough activity?
However, in companies that are truly in danger, the problem lies outside of the individual sales staff.
There are opportunities.
Proposals are being made.
Meetings are being held.
Even so, for some reason, you cannot win.
In this state, it is not that the sales team has become weak.
The company's way of winning has begun to collapse.
A lost deal is not just a result.
It is a sign that the business is gradually becoming unable to win in the market.
Companies that treat this as a lack of sales effort will break down even further.
Symptoms
When lost deals start to increase, the first thing that happens is not zero orders.
There are plenty of proposals, but only the win rate drops
You are invited to competitions, but lose at the very end
Business negotiations move forward, but there is no decisive factor
Even for deals that were won, there are more discounts and relaxed conditions
Even when asking for the reason for the loss, it ends with 'it was a comprehensive judgment'
Sales staff are active, but cannot state a repeatable path to victory
At this stage, both the field staff and management can still make excuses.
"The competition was strong."
"The budget didn't match this time."
"The timing was bad."
"It was a matter of chemistry with the person in charge."
However, when lost deals increase, what you really need to look at is not the individual reasons.
It is that why you lost can no longer be explained as a structure..
Companies that can win can explain why they won.
Companies that start losing can only talk about why they lost based on individual circumstances.
This is the first fork in the road.
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A scene from the field
At one point, I was looking at a list of lost deals in a sales meeting.
Looking at the number of cases alone, it wasn't hopeless yet.
Leads were coming in, and sales negotiations were moving.
So, on the surface, it could have been dismissed as just "a slightly poor yield."
But when lined up, there was a common atmosphere.
Initial response is not bad
Proceeds to proposal
Remains in competitive comparison
But loses at the end
The more a deal is lost, the more ambiguous the opponent's deciding factor is
Even though there are sales reports, the "why we can win" is thin
The most dangerous thing was not the number of lost deals.
It was that even though losses were increasing, there was no common understanding within the company of "where we are losing."was.
Sales says it's the competition's fault.
Marketing says it's the quality of the leads.
Product says it's a problem with the appeal.
Management wants to make it a problem of motivation.
No one is completely wrong.
But no one was addressing the structure that made it impossible to win.
What to do in that state is already decided.
Increase the number of proposals.
Increase the volume of activity.
Increase the number of meetings.
Increase the number of reports.
In other words, companies that have started to lose first increase their "amount of movement" rather than their "amount of thinking."
This makes them even less likely to win.
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Why it happened (structure)
The reason an increase in lost deals is dangerous is not because sales performance worsens.
It is dangerous because the company has a structure that cannot break down the reasons why it can no longer win.It is dangerous.
There are three reasons.
1. The conditions for winning have not been defined
Many companies treat won deals as "deals won through hard work."
But what is really needed is not a record of hard work.
Organizing the conditions for why you were able to win.
Which customer attributes make it easier to win?
Which issues does it resonate with?
What kind of decision-maker makes it easier to get approval?
What is the differentiator from competitors?
Under what conditions can it be closed without a discount?
Companies that have not organized this cannot replicate their wins.
Naturally, they cannot analyze their losses either.
As a result, all lost deals are treated as "bad luck with individual cases."
But in reality, it is not about individual cases, but rathersimply entering the market with vague competitors and vague conditions.that is all it is.
2. The target is too broad
Companies with increasing lost deals generally have too wide a scope.
They try to sell to everyone.
They try to respond to every issue.
They try to go after deals even when the conditions do not match.
At first, this looks like an expansion of opportunities.
But in reality, you are just spreading yourself into areas where you have little chance of winning.
When the target expands, the proposal becomes diluted.
When the proposal is diluted, you lose in comparisons.
When you lose in comparisons, you can only compete on price.
In other words, an increase in lost deals is often not due to sales weakness, but rather
a weakness in strategy that fails to decide 'where to win'.
3. Trying to cover up losses through operations
This is also dangerous.
When lost deals increase, many companies try to cover them up with volume.
Increase leads.
Increase calls.
Increase meetings.
Increase proposals.
However, if you increase volume while the structure remains unwinnable, you only increase the volume of losses.
Moreover, the more you increase volume, the busier the front line becomes.
When they get busy, the screening of deals becomes lax.
When screening becomes lax, the number of deals that are even harder to win increases.
And the reasons for losing become increasingly scattered.
With this, the company enters a state of
'losing, but not knowing why they are losing.'
Once it reaches this point, the problem is not the sales process.
The way the business fights itself has collapsed.
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How to judge
When you see this state, the first thing you should do is not blame the sales team.
It is not to tighten sales management.
It is not to increase the number of proposals.
What you should do first is
redefine 'what kind of company we were that could win'.
You should look at the following five points.
In which customer segments is the win rate dropping?
Against which competitors are losses increasing?
Under which proposal conditions is discounting becoming necessary?
What is the difference between the deals won and the deals lost?
In the first place, are the deals you are currently pursuing ones you should actually be winning?
The important thing here is not to pick up every single lost deal.
Especially when you start losing, trying to analyze everything will only scatter your focus.
What is needed is
not to look at the entire market where you can no longer win, but to identify where you can still win instead.
Therefore, the judgment should be as follows.
First, categorize the lost deals by common conditions
Next, extract the deals you are still winning
Based on the difference, re-articulate your company's winning strategy
Do not expand into conditions where you cannot win
Before trying to cover losses with volume, narrow down the conditions for winning
What you should do when lost deals increase is not expansion.
It is selection.
Companies that cannot make this choice here will next lower their unit prices, and finally, even degrade the quality of their customers.
Result
If you can treat lost deals as a structural issue at this stage, you won't have to blame all your losses on 'sales problems'.
Deals you can win and deals you cannot win will be separated.
You will see where your competitive advantage is disappearing.
You will see what you should not be pursuing.
In other words, before increasing orders, you will have a standard for reducing losses in place.
Conversely, if you only increase activity volume here, the company will further learn how to lose.
The team will get tired, proposals will become thin, and only the price will drop.
And in the end, you will start dismissing it by saying, 'The market is tough for us.'
But in reality, it is not that the market is tough.
It may just be that you have been standing in a place where you cannot win all along.
This is the turning point when lost deals increase.
It is not about strengthening sales.
It is about whether you can narrow down where you can win.
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Standards you can use tomorrow
1. Do not end the reason for a lost deal with individual circumstances
If lost deals ending in "there was no budget" or "the competitor was strong" are increasing, that is dangerous.
The losses have not been organized as a structure.
2. If you cannot state the conditions for winning, the path to victory is already thin
To whom, with what, and under what conditions can you win?
Even if you increase the number of projects without being able to verbalize this, reproducibility will not return.
3. Do not increase volume too much in a phase where you have started losing
Before increasing the number of cases, categorize what you are losing to.
Filling the gap with volume can wait until you see a path to victory.
4. An increase in lost deals is sometimes a strategic problem, not a sales problem
It is dangerous to start thinking by attributing it to the individual ability of sales staff.
What is truly collapsing might be the definition of where you are fighting.
A lost deal is not just a story about dropping a project.
It is a sign that the company is gradually becoming unable to win in the market.
Do not dismiss this as a lack of effort by sales.
That is the next standard.
This loss does not stop here.
Next, if you read "Price Drop | [Business] Once discounting increases, the business loses its initiative"
it will connect to where a company that can no longer win starts to escape into pricing.
If you also read the past article "[Management Strategy] 5. Do not 'expand' your target. The moment you narrow it down, sales stabilize", it should become even clearer why lost deals increase as you expand to opponents you cannot win against.
This series is designed to allow you to follow the order in which a company collapses through business, organization, and accounting. Please follow if you want to keep up with the continuation.
If your company is showing similar signs now, I would appreciate it if you could 'like' this to save it for later.