After yet another desperate claim from an exasperated Sales team that we were losing deals because of presumed product gaps, I decided that I needed hear it first hand from the customers.
I look forward to the days when I can sit with our Sales team on a regular basis (at least quarterly) and formally walk through our wins and losses. I say this somewhat selfishly because I have seen our company overreact repeatedly to lost deals. There is a tendency to find scapegoats and Product is often an easy target.
I know we have sufficient features with clear benefits to close new deals (our win rate is actually pretty high) but it still stings when a customer chooses a competitor. Nobody likes to lose but we need to reflect on these events in a productive way. We need to be truthful with ourselves and learn from our losses.
What drove this decision
A battle was already brewing between Sales and Product around a set of "must-have features" that had been distracting me from the real roadmap priorities.
In fact, I had been cornered a number of times over the past few months, typically by a Sales manager stomping around the office, still sore after getting the bad news that we lost another opportunity.
But warning bells were going off for me after hearing what seemed like unfounded claims that the deal fell apart because our product fell short in a certain area. I was especially curious about one deal in particular which we apparently lost to a couple of vendors with whom we never compete.
Something didn't make sense about these claims and I wanted to reconcile my own hunches with those coming out of Sales.
The decision: Schedule discussions with the lost prospects to learn more about their exact decision criteria.
The Sales team has been winning and losing deals for a long time but aside from our Reps recording one of a dozen pre-defined "reasons" in our CRM, the team had never spent any cycles capturing the details of the sale - and certainly had not been sharing the broader stories in a broader venue.
Our best opportunity to circle back with a lost prospect would have to be soon after they told the bad news. We had 2 such losses in the past 2 weeks and I scrambled with the Sales team to set up separate calls with each prospect to get the rest of the story, from their own mouths.
Plan of attack
My suspicion in both cases was that my Sales team had misinterpreted the customer's needs. In both cases, our folks had assumed that it had been a particular feature or set of related features that our competitor offers that had been the deciding factor. I was skeptical, but mostly because I didn't think our Sales team had a complete grasp of the other offering and were being hasty to find a scapegoat.
We scheduled conversations with each prospect and I had the Rep and their Sales manager sit in, mostly to listen. I shared my hypotheses with the Sales folks up front - specifically that I thought we would ultimately get feedback from the customer that was different from the conclusions they had drawn.
I also made it clear to them that I was motivated by a desire to learn and had no intention to lead our witnesses.
Interview 1st prospect about competitor's tool
We had been hearing more and more about one particular competitor product in our sales cycles. They (the competitor) knew we didn't have an answer to it and wisely used their own product as a land mine to trip us up. I don't want to take anything away from our competitor but it was clear that they were intentionally guiding prospects to focus on this tool even when the prospect wasn't struggling with the set of problems it solved.
I've seen the tool and it does provide some attractive features. Until recently, we had been assuming that 1 feature in particular was winning over prospects. But the deal notes from our own Sales Rep on this opportunity pointed to something else.
We learned that our assumptions were wrong - the customer was struggling with a completely different problem.
In a 20-minute conversation with the prospect, we walked through their decision process and ultimately came to the competitor's offering. When prompted to identify the actual pain points and how well the competitor's tool matched up with those pain points, we learned that our assumptions were wrong - the customer was struggling with a completely different problem.
After thanking the prospect, I reviewed the outcome of the call, as gently as I could, with the Sales team to make sure they understood the real criteria of the customer's decision. The new information was indeed valuable and we would have to incorporate the findings into our own product strategy but it was also important to set expectations appropriately inside the company so as not to unnecessarily exaggerate our presumed product gaps.
Interview 2nd prospect about broader needs
The second opportunity was apparently lost to vendors that we never see in our typical sales cycle. That seemed to me to point to a fundamental misunderstanding about what problems that customer is looking to solve.
We ran through a similar post-mortem conversation with this prospect who was all too happy to share their issues again. I find it easy to start conversations with decision makers around their pain and struggles. And even though our Sales team had just spent weeks courting them, they approached this new conversation with our Product team with unexpected enthusiasm.
Our Sales team had clearly wasted way too many cycles chasing an unqualified opportunity AND had drawn unnecessary attention to a presumed product gap.
Since this customer had not yet made a final decision, we steered the discussion to what had separated us from the remaining vendors. What I heard was at the same time validating and frustrating. The customer had legitimate needs but ones that would never be solved by the type of solution we had to offer.
The good news for me was that this lost deal was not going to impact our own ongoing product decisions. The bad news was that our Sales team had clearly wasted way too many cycles chasing an unqualified opportunity AND had drawn unnecessary attention to a presumed product gap.
Both prospects were not only willing to share with us but actually quite impressed that we would take the time to learn from our lost deals. I would like to think that this customer feedback will only accelerate our plans to formalize our win-loss analysis discussions in the months ahead.
I'm also hopeful that our Sales team will start to acknowledge that they sometimes misread the prospect's ultimate decision and will refrain from rushing to hasty conclusions. Perhaps only time and ultimately, more losses will tell.