Win/Loss Strategies for Customer Success

Wins are great and losses are a bummer–but win/loss analysis is a magic wand that can help you boost renewals for the long term. Here’s a 4-step process to get the most out of your win/loss analysis.

Step 1: Divide your closed opportunities in 3 buckets: straight renewals, upsells, and losses.

This requires more effort than it seems since you can have both a loss and and an upsell for the same opportunity: for instance, the customer dropped some of the volume on the original opportunity [loss] but also decided to add another product line [upsell]. Track (and analyze, as described below) all losses, even if they are accompanied by upsells that compensate for them.

Step 2: Categorize upsells and losses by root cause.

Typical root causes include the following, and you can add your own, too:

Organic customer-driven change (e.g. license volume went up or down based on the customer’s business success);
Customer need fit (e.g. the customer was mis-sold or over-sold, resulting in churn; more rarely, the customer was under-sold, resulting in a no-brainer upsell)
Product-driven change (e.g. product quality was poor, causing churn, or on the other hand the customer loved a new product and asked for it)
Support experience (e.g. poor support caused the customer to go to the competition, or on the contrary great support encouraged the customer to purchase a higher level of service)
Customer success experience (e.g. the CSM missed churn signals, or on the other hand introduced the product to another function within the customer)

Be ruthlessly honest for the root cause exercise. It is tempting to ascribe every win to the brilliance of the Customer Success team, and every loss to a bad economic environment. But if you want to make useful process changes you really need to stay away from politics and go for the facts. You may even want to conduct the categorization jointly with other teams.

Step 3: Analyze renewals to identify the ones that required extra effort.

Many organizations only look at losses and upsells. I think it’s very useful to also look at the renewals that went through without change. Which ones required particular effort? Why?

Step 4: Make appropriate changes.

This is the most important step since it will build better processes for the future. For instance:

You see a pattern of selling to customers with a poor solution fit –> change how the marketing and sales teams qualify new opportunities.
You are experiencing significant churn because of product or service issues –> press for fixes and upgrades.
You see that you had significant upsell opportunities for customers that fit a certain profile –> augment your playbook to highlight how to go after this type of upsell.
You find that a certain product feature is particularly “sticky” –> train the CSM to encourage customers to use it.
You have a lot of small losses, compensated by a few big wins –> review your account assignment and compensation strategy, assuming you are interested in minimizing the outflow.

Do you conduct win/loss analyses? What recommendations do you have to share? Answer in the comments, please.

(And if you need help setting up a structure to conduct win/loss analysis, please ask.)