A lost opportunity or deals lost is any deal that's dropped off a sales cycle before making it to the final conversion process. It's a lead who declined to buy your product or service.
This can happen for various reasons, such as the customer deciding not to purchase the product or service, the deal falling through for another reason, or the customer going with a competitor's offering instead.
This doesn’t necessarily mean that your sales team is underperforming—just that some leads won't convert. When you engage with MQLs or leads on the first call, filter out unqualified leads to get a more accurate picture of conversion rates.
Keeping track of your company's sales metrics is a great way to know sales performance. The overall strategy works if you can maintain a low number of lost deals.
But when it comes to sales, it is better to identify what stage your strategy has been lacking and then try to fix it.
How to find a qualified or sales-ready lead?
There are several strategies that businesses can use to find qualified or sales-ready leads.
When the salesperson is looking to close a sale, they must ensure that the Marketing Qualified Lead (MQL) is high quality. That's why it's so important for marketing and sales to agree on what makes a sales-qualified lead (SQL).
The marketing team qualifies MQLs based on certain criteria and removes junk leads as much as possible.
After that reaches the Sales team, they talk to the leads and understand if they are qualified leads. Once sales qualify the lead, they are called Sales Qualified leads.
So all leads passed on to the sales team are not quality leads.
Marketing and sales can determine whether or not a lead is ready for contact by looking at certain criteria:
- One common approach is to use targeted marketing and advertising campaigns to reach potential customers who are likely to be interested in the company's products or services. This can include using tools like customer segmentation and demographic analysis to identify the best audience for the company's message, and using various marketing channels, such as social media, email, or paid search advertising, to reach those potential customers.
- Another approach is to use lead generation tools and techniques, such as landing pages and forms on the company's website, to collect information from potential customers and identify those most likely to be interested in what the company offers. This can include asking potential customers to provide information about their needs and interests, their budget, and their timeline for purchasing.
Stages of losing a deal
It is important to know at which stage deals are being lost,
- Beginning stage - If the deal is lost at the beginning of the process, it doesn't make sense to analyze it because so many factors might have impacted it.
- Closing stage - If it is in the closing stage, it is important to analyze why this is happening, where you are lacking, and why prospects are losing interest in the deal right before the closure. As a result, you can learn where the real problem lies and improve the approach toward deals.
- Negotiation stage - If the deal is lost at the negotiation stage, it can be challenging for your organization which loses out on an important revenue opportunity and wastes valuable time.
Deals Lost - What could be the reasons?
Understanding "the real" explanations for why we lost a deal and implementing best practices to prevent that from happening again will give you insight into how to qualify opportunities, reduce pre-sales costs and increase the likelihood of deals won.
The reasons why sales deals fall through at the closing stage vary widely depending on your business sector. But here are the most common reasons for deals lost,
- The customer decided not to purchase the product or service. This can happen for various reasons, such as the customer changing their mind, deciding to go with a competitor's offering instead, or simply not having the budget or need for the product or service.
- The deal fell through for some other reason. This can include issues with pricing, delivery, or other terms of the deal that were not satisfactory to the customer. It can also include technical problems, such as a website malfunction or a glitch in the CRM system that prevented the deal from being completed.
- The customer went with a competitor's offering instead. In a competitive market, it's common for customers to compare different offerings before making a decision. The deal is lost if a customer decides to go with a competitor's offering.
- The sales team did not follow up on the lead. In some cases, a potential sales opportunity may be lost simply because the sales team did not follow up on the lead in a timely manner or did not adequately engage with the customer to address their needs and concerns.
- The lead was not qualified properly. In some cases, a potential sales opportunity may be lost because the lead was not adequately qualified, and the sales team did not realize that the customer was not a good fit for the company's products or services. This can happen if the sales team does not have adequate information about the customer's needs and preferences or if they do not use effective qualification and discovery techniques to determine whether the customer is a good fit.
It is essential to know the reason for Deals lost to improve the sales strategy, as it is one of the essential metrics every sales leader should measure in any CRM like HubSpot CRM, Salesforce, and Pipedrive.
How to visualize Deals lost?
In Dataflo, we segment Deals lost by count, revenue, and reasons, which will help you analyze this metric more thoroughly.
Take a look at the data visualization for more on how to track Deals lost in a Dataflo dashboard.