Losing a sale hurts. You've poured time and resource into procuring the lead, but, at the finish line, they simply don't bite. Wouldn't it be nice if you could figure out why those prospects aren't converting? What if there was some sort of metric that you could track to figure out why leads are clawing their way out of your pipeline?
Guess what? There is! It's called closed-lost reason, and most CRMs come pre-configured with a closed-lost reason field.
Today, we're going to talk about this closed-lost reason field and why you should be diligently entering and tracking sales loss.
What is Closed-Lost Reason and Why Does it Matter?
The closed-lost reason field lets sales team members describe exactly why a sale wasn't closed. So, whether a sale fell through due to competitor pricing, poor timing, or any other factor, closed-lost reason gives sales managers the means to get analytical with their lead failures.
For sales team members, closed-lost reason is a great way to track lost sales potential, while also taking a post-loss deep-dives into specifics — which may give them insights into critical issues. For sales managers, closed-lost reason is a great way to track loss, bucket sales issues, and track team-specific failures.
Let's take a look at some of the ways that tracking closed-lost can help your sales team achieve broader growth.
By tracking closed-lost reason, you're creating a more transparent sales environment. The closed-lost reason is an almost spiritual field. You have to dig down, be truthful, and figure out why you lost a lead. It's tough! No one wants to admit fault, and certainly, no one wants to spend time writing it down. But, by making team members be honest with themselves and management, you can help promote an atmosphere that's truly open.
High-performing sales teams are 2x more likely to promote continued training! But, where do you find coachable material? Well, closed-lost reason is a great place to start. If managers see negative sales trends coming from this field, it's critical that they sit their team down and talk about why it's happening.
After all, closed-lost reason is a coaching goldmine. Every single failure is listed in rich detail and managers can pour over every interaction to get a better sense of team, individual, or R&D weak points.
There's a reason that 74% of companies think that coaching is the most critical role of front-line sales managers — it works!
Sales aren't always lost due to sales team failure. In fact, MOST sales aren't lost due to poor sale team performance. Figuring out what specific issues are leading to lead loss is a crucial part of sales team management. Closed-lost reason can tell an organization a TON about why sales are falling through the cracks.
- Are competitors running a heavy smear campaign against you?
- Do they have better prices?
- Are they offering something that you aren't?
All of these issues can be passed off to upper-level product development.
- Is your product having specific issues?
- Is there any negative product press?
- Is there something that your product should be able to, but can't?
These sorts of issues can be passed off to R&D, which can help them make improvements.
Maybe sales isn't the issue. There could be marketing issues.
- Is your product getting insufficient marketing attention?
- Is the marketing team setting unrealistic expectations?
- Are there issues with coupons and deals?
Really, closed-lost reason lets managers bucket specific issues to be passed off to other teams, or, of course, used within sales to provide coaching opportunities.
If you aren't tracking closed-lost reason, you should be! Imagine being able to discover the source of all lead loss! Now, imagine being able to track, analyze, and correct those issues. That's what tracking closed-lost reason can do for you! Win/loss reporting has been a major component of sales success for years, but many organizations simply fail to accurately track closed-lost reason. But, deciding to track that little metric can growth hack your sales team to success.
Are you looking to redefine your sales team using value-driven analytics and cutting-edge sales techniques? Contact us.