Winning and Losing

For any business, being able to retain customers is one thing but understanding why you weren’t able to conquer the ones that didn’t make the purchase is just as important.

From my years of experience conducting market research, many companies seem to focus solely on business they do have (which is great) but forget about the sales they should have made but didn’t.

I have devised a simple and practical, yet effective, do-it-yourself market research strategy which any business can implement in-house. It’s called the Win/Loss Analysis and forms the first chapter in our series, Market Research Made Easy (watch this space!).

Understanding why customers didn’t choose you but someone else is central to this analysis. When you’re asking the ‘ones that got away’ as well as your usual customer base, you are essentially combining a competitor analysis, a customer satisfaction survey, your company’s own brand perception among your customers, and at the same time highlighting areas of the business which require much needed improvement.

How did the idea of the “win/loss analysis” originate?

  • After having worked with numerous clients over the years, we found ourselves talking to their customers about not only what worked well for them but also what didn’t work well for them.
  • We then translated this into asking lost sales (i.e. people who obtained quotes or made an enquiry but didn’t proceed with a purchase) why we didn’t win their business
  • The analysis from these two groups then presents significant opportunities for companies to improve operations at all levels.

Why ‘winning’ and ‘losing’?

  • It’s very simple: we needed to examine the differences between getting the sale (winning) and not getting the sale (losing).

What are some of the key outcomes of the analysis?

  • This process can pick up significant issues; for instance the importance of inventory control or a company’s ability to provide the right training to deliver their product or service, or any problems relating to the sales function such as quote turnaround times etc.
  • Companies can also identify and communicate the how and what of their competitive advantage and unique selling proposition (USP).
  • And, just as important, it can identify operational issues such as service protocols and make sure they match customers’ expectations.

What are some the things to consider when doing your own Win/Loss Analysis?

  • Don’t be afraid to ask your customers tough questions (e.g. what did we get wrong or what can we do better for you?).
  • Make sure your questionnaires are consistent; it is important to use the same questionnaire for your customers so you can compare the results.
  • You don’t have to ask many of your customers or lost sales; 10 in each group is usually enough.
  • Make sure the questions are relevant to your customers and you are prepared to make changes based on those findings; good or bad.
  • Let your customers know what changes you plan to implement in your company, product, or service offering in response to their answers. This can translate into more customer loyalty.
  • Don’t let your ego get in the way; it’s not about you … it’s about your company and, importantly, your customers.
  • Once the analysis is done, be sure to follow-up any changes and measure how effective those changes are with your customers. Do this over regular intervals.

Don’t wait.
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What is inhwa?

Historically, ancient Korean dynasties adopted an extreme form of Confucianism, introduced by the Chinese around 108 BC, to control citizens and safeguard the government by discouraging individual thinking or acting. The Choson dynasty later formally introduced a class system and officially prescribed etiquette kingdom-wide. These mandated manners are the foundation of a circumstantial morality system. Only those citizens that followed the conduct prescribed by the Confucian government were regarded as morally upright and proper, while those neglecting to do so were regarded as immoral and socially sanctioned.

Korea is widely regarded as the most Confucian nation worldwide, an important factor when considering engaging or interacting with the Korean business world. A hierarchical structure is deeply rooted in Korea’s authoritarian and militant history. Today, Koreans still relate to each other in a class system guided and defined by particular etiquettes and customs.

When engaging with Korean people in a business context (e.g. a business venture), understanding and respecting local custom and cultural norms is directly correlated to that venture’s success.

In order to establish a positive relationship, Korean culture demands the maintenance of stable environment of kibun, which can roughly be described in terms of pride, face, mood, or state of mind. Disturbing others’ kibun, by disregarding social hierarchy, giving negative feedback, displaying emotions or openly criticising someone is considered extremely impolite, as it disrupts the harmony between people. Koreans are willing to go to great lengths to maintain their and others’ kibun. This conditional cultural reflex can have detrimental effects on business ventures, as negative information may be withheld or softened for the sake of maintaining inhwa and not disturbing the other party’s kibun. Furthermore, a violation of a business partner’s or one’s own kibun might make the development or sustaining of positive, long-lasting relationships impossible and could potentially be very costly to the business.

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