B2B SaaS Shoot Out—Knock out your competition
The US women's soccer team beat Spain yesterday and are headed to the quarterfinals against France this Friday! They were expected to win more easily, but Spain had a good game plan and flustered their normal style of play—they knew their competition.
It’s been a while since I’ve watched/played the sport, but it immediately drew me back in. The last 24 hours, I’ve been reminiscing...thinking back to watching my heroes in '99. Who can forget Brandi Chastain's world cup-winning goal—ripping her jersey off in an uninhibited, celebratory moment?
Did you know that Chastain (right foot dominant) took that penalty kick left-footed? Chastain had faced the Chinese goalkeeper earlier the same year—and Gao Hong had "psyched her out." She missed the PK. That's why, when she stepped up in the world cup final, she took the kick left-footed...to throw her competition off.
With Q2 coming to a close, all this World Cup play has got me thinking about how companies are facing their competition. How did they do this past quarter? How many know exactly why they won and lost the deals that they did?
And how many have a plan for understanding their prospects’ buying decisions?
Less than 20% according to Pragmatic Marketing.
Let’s take B2B saas businesses in the $10-50m ARR journey or around 100-500 employees. They’ve got initial scale, they’re pretty mature by startup standards, they’ve got competition in a clear market category—these companies should be running a formal Win/Loss program!
Win/Loss programs are no brainers for these companies from a numbers perspective:
Up to 50% improvement in win rates
15% to 30% increase in revenue
5% higher sales quota attainment
Almost double YoY revenue growth
This has all been validated by Gartner.^
Win/Loss programs strengthen your relationships and give a positive impression of your brand in the market. And, lastly, don’t you want to get inside your buyer’s head?
When you can see your business from the perspective of your prospect, then you can:
Understand their criteria for selecting your product over similar offerings
Uncover drivers for winning new business
Identify areas for improvement in your sales cycles
Find out how your value proposition is meeting the needs of the market
Learn about unmet customer needs and new development opportunities
Discover how you and your competition are perceived in the marketplace
This has been validated by Ox.^
A proper Win/Loss analysis will provide game-changing feedback to your company. And I mean game-changing. It will impact the key dials of your business: your win rates, ASPs, and velocity. Our clients have walked away with clear direction on:
Which parts of the business they should beef up (e.g. higher velocity, lower ASP pipeline? Or lower velocity, higher ASP deals?)
Which pipeline source, verticals or ecosystems they should double down on for better win rates (or because they simply can’t avoid them)
Which competitors they should be concerned about*
*Competition is one of the most fascinating psychological parts of the business (IMHO). Many companies like to pretend they don't have competitors (investors get pretty tired of hearing this). Others, in more crowded markets, try to position against all of their competitors...when there may only be one or two they need to worry about.
And still others get laser-focused on one competitor because of an acquisition, or new product/product feature, or maybe because the competitor is the behemoth that everyone loves to hate. I’m not against a small dose of in-group favoritism—it adds to the cohesion of your company culture. But, too much isn’t healthy...and worse, what if you’re wrong?
What if your #1 competitor...isn’t your #1?
In psychology, there’s a notion called reflected appraisal—a group of people come to think of themselves in the way they believe others (or the market) think of them. I’ve seen companies so worried about their “#1 competitor” that the entire company starts to feel the FUD. Reps start attributing losses to this competitor, even when the competitor wasn’t in the deal (confirmed by a neutral party win/loss interview).
This is so damaging because it distracts you from the reality of the market and the business. It can, for example, take you away from markets that you’re actually winning because you think you need to find new ecosystems or sell larger enterprise deals to hit your growth targets.
Companies need to consistently interrogate their beliefs about their business. Be aware of your biases, take the time to dig into the data and validate that data so that you understand why you win and why you lost.
So how do you do this?
Well, here’s a brief slide deck on how to run a B2B SaaS Win/Loss analysis program. A program like this will combine quantitative and qualitative discovery:
You’ll need to tap into your CRM data*
You’ll need a neutral party to call your lost prospects to figure out which of your competitors they chose and why
*Note that, in general, people regard themselves as better than they are (it’s called positivity bias) and this is often reflected in your sales reps’ win/loss data on the lost opportunity in CRM. Wins are most often a result of great sales execution, whereas Losses are a missing product feature or a pricing issue.
Establish your goals upfront and test your hypotheses. Are you looking to improve win rates? Are you concerned about competitors? Are you trying to validate new product areas? Are you wondering where to invest more to dial up your predictable revenue?
When you've got a rigorous, high-quality win/loss program running, you’ll be wondering why you haven’t been doing this all along.
Again, here’s the slide deck if you’re looking for the high-level “how” behind a B2B SaaS Win/Loss analysis program.