a sales rep closes an opportunity, she should always indicate the
reason for the lost sale in the CRM system. Why? Management can help
teams fill gaps and ultimately improve win rates by properly addressing
the underlying issues behind these lost sales. Let’s look at some best
practices for tracking lost sales in your CRM.
Setting up Tracking for Lost Sales
While nearly any CRM will have a field for Won/Lost, not many come
pre-configured to indicate the reason for that win or loss. Luckily,
adding that field is a quick and simple process. You can either have
your CRM administrator add the field, or, if he or she is less
experienced, ask your CRM partner to add it for you. Consider
accompanying that dropdown menu with a description box to keep even more
detailed information on why the deal was lost. Voila — you are ready to
Start by brainstorming some common reasons for lost sales. Here are a few to get you going:
- Poor Follow-up
- Wrong Decision Maker(s)
- Lack of References
- Lack of Expertise
- Lack of Resources
- Column Fodder (Not a true competitor, you were just brought in as an extra bid)
- Wrong Target
- No Budget
- Insufficient Budget
Are there any reasons specific to your business? Add them to the list, but be careful of two major pitfalls:
#1 Being too generic
Don’t categorize a lost sale with something as generic as “bad fit”. Bad
fit could mean anything — it wasn’t the right cultural fit, the deal
was too big or too small, the project wasn’t right for your skillset.
For the best metrics, steer away from bad fit classifications and other
overly generic reasons.
#2 Getting too granular
Just as you want to avoid being too generic with your lost sales
descriptors, you also must be careful not to get too granular. An
overabundance of values doesn’t necessarily translate to better
insights. Too many variables will simply create analytic chaos.
My suggestion would be to start by tracking your major reasons for
lost sales plus a category for “Other”. Once you start running reports,
you’ll get an idea of which of these categories are used most and which
no longer apply. Go back and look specifically at your "Other" category.
Are there any common themes? If your administrator added a description
box to your CRM, you can gain deeper insights on the "Other"
opportunities from those notes. If you’re noticing a pattern with the
miscellaneous lost sales, you can create a new descriptor to address the
status. Then, delete unused or unwanted categories. The more you
streamline your descriptors, the more clear-cut and accurate your
reporting will become.
Pulling Reports for Your Lost Sales
As you track your lost sales, start thinking about the kinds of
reports you want to pull. What would be most helpful to know? The most
basic of these reports is probably a pie chart or graph of opportunities
with the status “Lost” so you can break down the reasons behind the
losses. You may also want to consider adding reports for situations
where a sales rep did not enter the reason for the lost sale, because
let’s be honest, SOMEONE is going to mess up your perfectly planned
tracking. Pulling a report on uncategorized Lost opportunities will help
you fill analytics gaps and hopefully remind the rogue sales people to
get on board with the program.