No business desires to lose any of its potential customers. However, no business can cater to every type of customer, all with varying requirements, budgets and preferences. Therefore, no business can avoid losing potential customers. What differentiates a successful business from its unsuccessful counterpart, however, is the ratio of sales lost over sales won. The lower the number of sales lost over sales won, the more successful the business is in converting its leads and opportunities into customers. Nevertheless, lost sales can be, at often times, a blessing in disguise. Understanding the reasons for lost sales and translating them into sales won is what a lot of businesses are striving for nowadays. And what better tool to help in this regard than a good CRM?
Role of CRM
When using a CRM to track a lead, the last stage of the sales process requires classifying the potential customer as either a sale won or sale lost. Since this whole process is recorded in the CRM in use, the data gained can be analyzed to give comprehensive results as to the various dynamics which affect the sales process of the business and the decision making of customers during that process.
Those results can help the sales team in better understanding how to approach new leads as well as in following up on lost customers. Therefore, CRM can be used to provide a better service to the potential customers of a business. Use of CRM to track lost sales, analyzing the data to be able to be more successful in converting leads and opportunities to customers, decreases the ratio of sales lost over sales won and, hence, may result in increasing ROI of the CRM implemented.
Method to Record Lost Sales
Lost sales can be tracked using the won/lost field that is already available in the CRM. Furthermore, the CRM can be configured to produce more comprehensible results by adding an additional field where the reason for the sale lost would be stated. Here, the user will identify the reason for the lead or opportunity not being converted into a sale won. This field will prove helpful when analyzing the reasons for sales being lost by the business.
In this field, some of the most common reasons for sales lost will be identified and listed as options for the outcome reasons. Some of the most common reasons for a sale lost might include:
- Budget is not sufficient
- Unable to decide
- Wasn’t initially intending to buy
- Poor service
- Another seller offered better price/product
Apart from the common reasons, an option can be provided by the name of ‘other’, in case that none of the already reasons specified are the correct one in any particular case. A custom field would also be provided which will have to be filled in case that the ‘other’ option is selected.
The additional fields for tracking lost sales can be added by your CRM administrator. However, in the rare case that he is unable to do so, there are CRM experts available who can do so.
Care should be taken, however, when setting options as they should neither be too generic that they give the least idea of the specific reasons for the sales lost. Neither should they be too specific that they make data analysis extremely difficult.
Tracking Sales Won
Having explained the importance and method of lost sales tracking, it would also be worth mentioning how a company can track sales won. Not only does this require a process similar to the one for tracking lost sales, however, it also carries benefits that can be reaped concurrently to the process mentioned earlier. These benefits include a better understanding of the reasons for the customers actually engaging in a sale/purchase process, so that it can be the focus of the sales team when approaching new leads or opportunities as well as following up on lost ones. Another benefit would be that the business will be able to focus on the advantages that it has and, hence, will be able to align its strategies and tactics along those advantages.
As mentioned before, the procedure for tracking sales won is similar to the procedure for tracking sales lost. All it requires is a custom field where the reason will be mentioned after the opportunity has been marked as a sale won. In that custom field, some of the most common reasons can be provided as options. Some of these options would be as follows:
- Pricing within budget
- Good service
- Offered a good bargain
- Go-to vendor for that particular product/service
- Urgent need of the product
Furthermore, an option of ‘other’ reasons can also be kept. For that option, an additional custom field would also have to be provided, where the particular reason for the case will be specified. However, like in the sales lost case, the reasons provided shouldn’t be too generic or too vague and neither too precise.
Role of SugarCRM in Tracking Lost Sales
Sugar by SugarCRM is not only a highly customizable CRM solution, but is also an efficient tool for data analysis. Reaping the benefits of the scale of customization that it offers, Sugar can be used to track sales, regardless if they are won or lost. That can be done through the exact same methods mentioned above, by utilizing existing as well as custom fields for recording sales as either won or lost accompanied by the reasons for the outcome. It can be made mandatory to give a reason for the outcome of the sales process, with some of the most common reasons provided as options. Sales representatives can, then, select the most appropriate reasons for the specified outcome. Sugar’s robust reporting feature can, then, present the collected data in the form of comprehensible reports.
In order for this tracking to work, however, robust reporting would be required. The data of how many sales lost and for what reasons wouldn’t be sufficient to give the business any direction on what strides to make in the future. This data would have to be processed into actionable reports for any progress to actually take place. Reporting would not only provide the business with the ratio of the sales lost over sales won, but would also outline the main reasons for potential clients either shifting to competitor businesses or not making the purchase at all. These reasons would also be ranked according to popularity.
Sugar offers very useful reporting features, producing comprehensible and to-the-point reports. Furthermore, the functionality of these features can be enhanced by combining it with the various SugarCRM integration options available.
Tracking lost sales would be a business’s own way of ‘learning from its mistakes’. Combining it with a CRM would provide businesses with required reports regarding sales won/lost in an efficient and effective manner. Therefore, if you have not implemented this functionality in your CRM yet, then you might be losing out on crucial information. Don’t have a CRM? Go for SugarCRM without a moment’s hesitation!