3 Ways to Gain Competitive Advantage by Analyzing Lost Opportunities

The disciplined use of a well-designed, well-implemented CRM solution will generate droves of data about the sales and pre-sales processes in your enterprise. If you have a well defined process, you can chart the sales process from its inception (as a cold-call, sales pitch, web click, and/or marketing campaign), to the first order, shipment, and invoice. However, what is actually more interesting is looking at those processes that don’t make it to the receivables column. Concentrating on the customer interactions that don’t lead to sales can become more valuable than gold. Performing an analysis on lost opportunities can help turn your CRM system into a powerful continuous improvement tool, as well as profit center.
Let’s look at a few ways we can take lost opportunities and use them to gain an edge over the competition:
i) Catch Up On Housekeeping
Customers ‘know’ when they’re dealing with an efficient, well managed organization. We all feel an intrinsic level of security and confidence about a company when we don’t need to constantly repeat personal information on the phone, or when a company is pro-active about disseminating order information and/or changes.

‘Housekeeping’ is just a generic term used to refer to the improvement of the inner workings of the enterprise. For example, do a root cause analysis of every lost opportunity in a given time period and Pareto the list of causes. You will undoubtedly find some common threads. Here are some possibilities:
  • Personnel Issues: Maybe you’re losing sales because of a certain department, or sales person. This might be an area where you need to invest in some training, re-organizing, or trimming.
  • Content Issues: Maybe you’re losing sales because you’re sales people don’t have enough product data, or can’t differentiate themselves from competitors. This might call for new communication processes with marketing, or updates to your existing sales processes. 
  • Mechanical Issues: Are you just losing sales because of something trivial – like your order entry system is unreliable? Or your web site is convoluted? Mechanical issues like these are easiest to identify, but not always the cheapest to fix. Regardless of cost, these are lost opportunities that are completely within your control. Make the investments you need to be successful and eliminate mechanical problems.
Once you have your list of housekeeping items, start working through each item. Keep going until you’ve finished, then generate the list again. Like actual housekeeping, this process never ends.

ii) Improve Your Market Knowledge
Kodak and Blockbusters are great examples of companies that started out on top, but couldn’t hold on for the long haul. It’s probably the greatest fear of any enterprise – fading into irrelevancy. Both of these companies failed for primarily the same reason – lack of market knowledge and awareness. Kodak didn’t see how much digital technology would disrupt their product offerings and Blockbuster figured out too late that content, convenience, and ease of delivery are more important than physical locations and selling popcorn and candy.

Understanding every opportunity lost to the competition is a crucial analysis. It needs to be done as objectively as possible, showing no bias to your own enterprise and/or products. In every lost opportunity like this, the facts are simple – you lost a sale to another company the does or make the same thing. The difficult question is – why?
Do your best to empathize with your customers and reverse-engineer their tastes and preferences. If your competitors can do something better than you, figure out what it is and adjust. Adapt. Use a loss to a competitor as the ultimate teaching tool. Try not to repeat mistakes and never stop paying attention to what else is happening in your market.

iii) Make Incentives Work For you
Let's be honest, incentives, especially monetary ones, motivate companies to work harder, to win. Lost opportunities provide a great place from where to derive new incentives. Once you know how and why you’re losing sales, incentivize the appropriate points on the sales cycle to fix the problems. This is a great morale booster for staff as well – it shows personnel that they intuitively know how to make the company better, which in turns increases their confidence, loyalty, productivity, and effectiveness.

Your CRM solution can tell you many things, some good, some bad. It’s always nice to hear the good stuff, but if you really want to improve and get better, then focus on the bad stuff. Look at lost sales and lost opportunities as teaching tools and roadmaps that can be used to educate, improve and strengthen your enterprise.