For every successful deal, there are multiple lost opportunities that never see the light of day. Losses aren’t shared as readily as wins. And, that’s natural.
No one wants to lose out on a deal, least of all your reps. But when you treat every loss as a failure, you’re missing out on a chance to build a more motivated, productive, and effective sales team. With the right approach, you can minimize the damage and reap some serious benefits.
Today we’re taking a look at what you have to gain by rethinking how you handle losses, plus a few tips to help you maximize the ROI of lost opportunities. Let’s get into it!
Why losses aren’t failures in sales
The word failure is often used to describe something that doesn’t meet expectations. If we apply this definition to the world of sales, and treat each lost opportunity as a failure, we’re subconsciously telling our sales teams we expect them to win 100% of their deals.
It sounds ridiculous, right? We admit that loss is a necessary part of sales but then develop negative responses to losing.
The truth is, if you ignore losses or use shame and guilt as a motivation tactic, your negative impact as a sales leader may be more far-reaching than you realize. Let’s explore some of the consequences organizations face when they mishandle losses.
The integrity of the sales process suffers
Reps feel the impact of lost opportunities in their bank accounts. They don’t need additional guilt, humiliation, or pity to get the point across. These tactics aren’t just ineffective, but they also pave the way for a “cover up” sales culture. In a cover up culture, teams are more likely to brush missteps under the rug instead of mining them for valuable insights.
This not only hurts the trust between you and your team, but compromises critical components of your sales process, like CRM integrity and forecasting. “How can you have an accurate forecast if your reps are terrified to lose— and share the truth if they do?” says Todd Caponi (source).
If every loss is seen as a failure to be held against a sales rep, losing becomes a vicious cycle. Think about it, if your sales team is reluctant to flag at-risk opportunities or hesitant to ask for help handling objections, they’re more likely to lose important deals. Then comes more shame, and the cycle starts all over again. Failure begets failure.
Less opportunity for reps to learn from their mistakes
Lost opportunities contain valuable information. But, it’s difficult to highlight a source of shame. How can reps thoughtfully examine what went wrong, and why, if they feel like their personal failure is under a microscope?
If your team believes any data they bring to the table will incriminate them, they’re deterred from gathering and sharing valuable information when deals don’t materialize. This is a huge missed opportunity— especially since these insights can vastly improve your sales process, identify gaps, and prevent other reps from making the same mistakes.
Being able to detach emotion and objectively analyze undesirable outcomes is critical in the face of complex buying journeys.
When reps are contending with gatekeepers, champions, influencers, blockers, and decision-makers, lost opportunities may require a more nuanced explanation than “getting outsold.” You’ll never identify areas of improvement if your reps are too afraid to talk about their losses.
Reps can’t perform at the top of their game if they feel stressed, burnt out, or undervalued after every lost opportunity. As individuals, we each have a hierarchy of needs. In order for us to be truly engaged and successful at work, we need to feel like our needs, ranging from safety and security to reliable pay, are being met. Sales teams are no exception.
“Psychological safety is so key in sales if you want the best (and most accurate version) of your teams,” says Zoë Hart, Community Manager at Spekit (source). When morale suffers, so does motivation, productivity, engagement, and ultimately retention:
- Happy employees are 12% more productive and unhappy workers are 10% less productive (source)
- A single disengaged employee can cost a company about $3,400 in lost productivity for every $10,000 in salary (source)
- 74% of actively disengaged employees are actively looking for alternative employment or watching for openings (source)
- 29% of sales professionals cited stress as the top reason for turnover(source)
The benefits of reframing loss in sales
Instead of treating every loss as a failure, we recommend reframing losses as learning opportunities. If, as a sales culture, you bake this mindset into your onboarding, training, and management style, you’ll notice a dramatic shift in how your team operates.
Let’s look at some benefits of reframing loss as a positive:
Actionable insights and teachings become more readily available
Lost opportunities can also afford some valuable takeaways, from competitive intel to how to improve your product, process, or both. “The fact that the prospect made a buying decision is actually a big deal (win or lose), and if you can get any insights into why they chose a specific competitor that is also worth celebrating,” says Tom Burton, Co-Founder and COO of LeadSmart Technologies (source).
Your team can also gain insights from no decision at all. “Sometimes we’d celebrate a loss in terms of moving on from a client who never made a decision. Awareness of the sunk cost fallacy is a loss with a win. What are the commonalities amongst the opportunities that close without a decision? Another opportunity to embrace and learn,” says Tony Caponi (source).
Quick tip: Before parting ways with prospects, ask for a 10-minute sync— not as a last ditch effort to convince them to buy, but to learn what your team could have done better— both from a sales process and product perspective. “We as the leadership team actually call folks to understand why we won or why we lost. And we learn a lot more from that in how we can incorporate it into our sales process,” says Angela Donato, Mid-market Sales Manager at Spiff.
A more supportive and collaborative sales culture.
A supportive, collaborative environment isn’t just a “nice to have”—86% of salespeople consider sales culture important to job satisfaction, and 88% say sales culture is important to meeting their overall sales goals (source).
How you respond to lost opportunities actually says a lot about the culture on your team. You can either berate, punish, or shame reps for “failing”, or signal that you still value effort, learning, and continuous improvement— even if it doesn’t result in a sale. Instead of hoarding information, it will motivate your team to pass along helpful suggestions and strategies more freely.
Quick tip: More than half of sales reps rely on their peers to get tips for improving— 44% look to their manager (source). Demonstrate that weaknesses and gaps are opportunities to get better by putting your own on blast. Instead of always coaching as an expert, try showcasing a skill that you yourself want to improve. Then practice with your team and gather feedback.
“I’ll never forget the impact of one of my leaders hopping into practice with our team and super humbly screwing up. It sent a massive signal to us all: it’s safe to learn here,” says Jordana Zeldin, a sales coach (source).
Leave the door open for future wins
Not every lost opportunity is a permanently closed door— unless, of course, your reps are internalizing lost deals and treating them as failures. If your reps live in fear of losing deals, they’ll be more likely to have a heightened and emotional reaction to rejection. In a culture that runs on fear of failure, a rep is more likely to take their frustration out on the prospect delivering the news.
If you train your reps to build rapport with prospects and treat them with respect throughout the entire sales cycle, you’re setting them up for future success. Whether the prospect moves into a more senior role, changes companies all together, or revisits your solution down the road, it pays off for reps to have left on positive terms.
When a lost deal doesn’t mean personal failure, the stakes are immediately lower and reps don’t suddenly see the prospect as their adversary. This makes it much easier to maintain friendly and open communication.
Quick tip: Operationalize call reviews. Set aside dedicated time to review lost opportunities together and in one-on-one meetings. Get your team comfortable talking about their shortcomings so it becomes second-nature.
Lost opportunities are frustrating for both you and your team. While you can’t control every deal, you can control how you respond to loss as a culture. To maximize the ROI of losses, treat them as an opportunity to improve your insights, culture, and processes. Find what you need to improve and course correct, so you can avoid repeating the same mistakes. Remember, the faster you fail, the sooner you can learn and move on.
Spiff is a leading sales commission platform that automates commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. The platform enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams.