6 Issues with WinLoss CRM Reason Codes

Summary / TL;DR: Win-loss codes coming out of a CRM system, unless governed and mandated, can contain issues so significant that, oftentimes, making any meaningful decisions from them is a bad idea.

When we meet customers for the first time, we will always ask if they have had in the past or currently have any kind of win/loss program in place.  When we hear that they do, or have had in the past, more often than not, this consists of the sales team filling in what’s called a win/loss code in the CRM system. So we’ve all come across these kinds of programs before. And today I’d like to talk to you about our views on the 6 key problems of win/loss codes as your sole win/loss program mechanism.

  1. Consistency: Sometimes the completion of the win/loss code is not mandated, sometimes it is completed, sometimes it’s not completed. And there are no rules or consistency as to why it may be completed or not completed. So when we look at the data coming out of a system, we have to ask ourselves, why was this particular deal chosen to have a win/loss code completed for it? And this fundamentally makes the whole foundation upon which any of the conclusions that might be drawn to be somewhat shaky.


  2. Dependability: At the end of the day, we’re typically asking a sales team, or sales individual, to complete a win/loss code for a transaction that he or she has been intimately involved in, sometimes for many months. And we’re asking that individual to discard any cognitive bias that they may subconsciously or consciously have to complete that reason. More often than not that doesn’t happen. There’s lots more on this site where we talk about the problems of cognitive bias and the benefits of inductive research versus deductive research. We talk about cognitive bias. Not in a negative or a pejorative way. We talk about cognitive bias in a matter of fact way. We all have it. We all bring it with us and we don’t know we have it. So when we are required to fill in the lost code, maybe, just maybe, we’re going to listen to things that we want to hear and discard the things that we don’t want to hear.


  3. Specificity: When we look at these win/loss reason codes, typically, we’ve seen, you know, ten to fifteen items that might be in there – product, price, loss of executive sponsorship, poor qualification – that’s one of our particular favorites. One of the problems that we have with this lack of specificity is what does that win or loss code selected actually mean? Let’s take, for example, price. It’s a very common one that we see, particularly in the case of a loss – “We lost because of price”. So what do we do with that information? What does it mean? You know, as a wise man once said, there’s a very big difference between “It’s too expensive: and “I can’t afford it.” Now, both of those sentiments might ultimately end up manifesting themself as the loss code “price.” But in the case of “It’s too expensive,” the customer is making the assertion that they don’t see the value in whatever it is you happen to be selling. However, the statement “I can’t afford it” means something quite different. It means “I like what I see. I just simply don’t have the money to be able to purchase it.” However, both these two very different sentiments cascade up into the single word “Price.” And therein lies the problem with the lack of specificity for these loss codes.


  4. Dimensionality: Think about your average B2B sales cycle. Almost always, they never last less than three months – sometimes they can last many quarters and involve multiple people on your side, from sales to sales engineers to pre-sales consultants to contract negotiation, to finance – engaging with multiple people on the client side – from final sign off people to final decision maker people to influencers, recommenders, detractors, procurement. And we’re asking that this complex engagement, whether it turns out to be a win or turns out to be a loss, can all be completely summarized with a single word. “We won because of product”, “We lost because of price.” No – we don’t believe that this is the case. We believe that a complex B2B sales engagement is very different from a typical B2C transaction, where we look for these kinds of win-loss codes. A B2B transaction requires something more deserving of it than just a single word.


  5. Nuance: This is perhaps one of the more complex considerations when it comes to evaluating the efficacy of win/loss coast. And when we say “not nuanced”, what we mean is they’re not assessing a particular factor that led to a win or a loss on two dimensions. So when we do our surveys, we ask, let’s say in the case of sales and market engagement, we ask the question in the case of a win. “How much did that factor the marketing and sales engagement factor contribute towards the win?” That would seem a very reasonable thing to ask. However, we provide a scale of minus three to plus three. And on the negative side, we also ask the question, “How much did that factor detract away from the win? Because what we often find is there are elements of your whole offer that actually can work for you, even though you might have ended up with a loss – or against you, even though you might have ended up with the win. And how useful would it be to know that? How useful would it be to know your strengths and your weaknesses, your strengths, even in the case of a loss and your weaknesses – even in the case of the win. Perhaps we can put more emphasis on those the next time around, we put more emphasis on our strengths and we shore up those weaknesses.


  6. Actionability: This is perhaps a consequence of the first five, but is certainly a shortcoming with all the problems that come with win/loss codes. With all the issues around the quality of the data, the believability of the data, the nonspecificity of the data, the lack of nuance in the data, the lack of dimensionality in the data – with all those problems. Then what use are they? What decisions can we make as a result of reading a win/loss report at the end of the quarter? Oftentimes we find not many at all, oftentimes we find no decent decisions being made at all. And if decisions are being made, sometimes these are multi-million dollar product direction decisions or multimillion-dollar price incisions are being made in the back of the data, that has very suspicious foundations.

So we’d love to be able to say, “Hey, when lost codes in the CRM system, that’s better than nothing.” Well, you know what? In some cases, it’s not. In some cases, if they’re really poorly implemented and they have no governance and they have no structure, they have no dimensionality. You might be better off not having them at all. You certainly might be better off not making decisions often.

And that’s why we believe the only way to win/loss is to have a formal win/loss survey and interview program in place. Whether that’s something you do yourself or that’s something you use a firm like SteelPoint Research to do.

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