How to Perform Win/Loss Ratio Calculations & Why You Should

If you work in sales, we don’t need to tell you that conducting regular lost sales analysis is an essential part of doing business. Win and loss reports provide valuable insights into team performance and help sales leaders identify areas for improvement that can guide strategic decision-making. But, exactly what is a win/loss report, what should one include, and what is the most beneficial win/loss ratio formula for zeroing in on the metrics that matter most?  

In this handy guide, we’ll discuss the value of performing win/loss ratio calculations and provide a step-by-step guide on how to conduct your own. 

What is a Win/Loss Report?

In short, a win vs. loss report is a document outlining the number of deals won versus lost by your sales team, indicating their success rate in closing deals and converting potential customers into paying customers. Of course, in the bigger picture, there’s much more to it than that. 

The best win/loss ratio calculations also consider prospect and customer sentiment and identify patterns that provide insight into what works — and more importantly, what doesn’t — so you can make the right improvements. To be successful, you’ll need to carefully scrutinize the details of all the deals you’ve won and lost. Analysis of these numbers will help you reveal:

• How your products and services are perceived
• The effectiveness of your sales strategies
• Gaps in sales training and product messaging
• Whether your unique selling proposition aligns with prospect needs
• Competitor products and features that are jeopardizing sales
• Product development opportunities
• Customer satisfaction levels

Before we delve further into the details of win/loss ratio calculation, it helps to have a firm grasp on the basics. So, let’s review the basic terms and win/loss ratio formulas. 

Win Rate

A win report tells you how many prospects you’ve turned into paying customers:

Won opportunities ÷ total opportunities = win rate

Win/Loss Ratio

A win vs. loss ratio report measures how many deals you’ve won and lost in a given time frame, excluding deals that are still open in your sales funnel: 

Won opportunities ÷ lost opportunities = win/loss ratio 

The Value of Win/Loss Ratio Calculations

Companies that conduct detailed win/loss reporting witness revenue increases of 15% – 30% and up to 50% improvement in win rates. However, thorough analysis of win and loss data provides you with way more than bottom-line statistics. Effective win/loss analysis questions why deals were won and lost and what prevented prospects from moving through your sales funnel.

There are different takeaways for each department within your organization: 

Sales

Win/loss data can help you uncover areas of strength and weakness at individual, team, and organizational levels. The reasons behind wins and losses can be leveraged to foster new learning opportunities for your sales reps, enhance team cohesiveness, and improve the entire sales process to win more future deals. 

Marketing

Detailed win/loss reports highlight aspects of your brand that potential customers appreciate and highlight areas of weaknesses. Marketing teams can use this information to fine-tune messaging, adjust campaigns, and create better content that showcases your company’s strengths and unique selling points.

Product Development

Data-rich insights from win/loss ratio calculations equip business leaders with the information they need to make better product decisions and investments. Knowing what works, what doesn’t (and why!), and what makes your customers happy is essential in designing new products and product features.

Where Win/Loss Calculations Can Go Wrong

Win/Loss calculations are extremely valuable for evaluating your overall sales performance. However, in some cases this calculation alone does not have enough data to provide actionable information for sales teams and leaders to adjust their sales process accordingly. Understanding the ratio of deals that you win and observing the trends is the first step, but the missing link in this data is the “why.”

This is why Challenger developed the feedback survey tool, Loop, designed to capture in-flight buyer feedback throughout the sales process. Loop, combined with win/loss calculations, gives sales leaders an understanding of the reason a deal may be headed for the danger zone, or can reassure sellers they are on the right track.

The Loop approach comprises four steps:

1. Collecting Data: Gathering information from customers during deals is critical to progress, and engaging with prospects when feedback is mutually beneficial is better for both parties. With traditional feedback tools, the surveys are launched after a deal is won or lost, which can compromise the integrity of the data because when the deal is lost there is little incentive for the buyer to fill it out. With Loop, surveys are sent at all stages of the buying process which not only allows your sellers to get insight into how the buyer is responding to the sales process, but allows them to pivot as necessary.
2. Analyzing Data: Identifying patterns and trends in win/loss data uncovers valuable insights that drive increased sales and revenue. For example, knowing that 84% of customers report their buying journey taking longer than expected could be helpful in finding ways to shorten sales cycles. 
3. Sharing Insights: Sharing insights and best practices with your sales team can significantly improve performance. For example, if you identify that 90% of buyers don’t let you know when they encounter problems, you can work on strategies to integrate more effective check-ins and follow-ups (this is where Loop comes in). 
4. Taking Action: Improving the overall sales experience is a top priority because research shows 73% of consumers find customer experience more important than price. Therefore, implementing changes to improve the sales process can increase your win rate and the size of every deal.

You’re probably wondering exactly how Challenger Loop collects all that data. Our platform uses best-in-class natural language processing and artificial intelligence to collect information using evaluation criteria based on the latest Challenger research into B2B buyer behavior and seller performance. Sales leaders can leverage this data to:

• Assess the competitive landscape 
• Leverage sentiment analysis
• Determine the impact of specific topics on overall buyer satisfaction
• Evaluate trends in sales performance over time
• Analyze sellers’ skills and identify coaching opportunities
• Flag and address churn risks
• Adjust strategies in real time before deals are lost

Step-by-Step Guide to Win/Loss Ratio Calculations

Creating a win/loss analysis template might appear simple at first glance. After all, you already have a heap of win/loss data on your CRM somewhere. So how hard can it be to bundle it all together? 

While running your own win/loss report is not impossible, it can be confusing — and incredibly time intensive. That said, if you’re researching how to perform win/loss ratio calculations manually, here are the steps you’ll need to work through. 

Step 1: Define Parameters

The first step is to define what constitutes a win and loss. In addition to recording whether a sale was closed, other priority metrics could include:

• The size of the deal
• The type of product or service sold
• The length of the sales cycle

Step 2: Calculate Your Current Win vs. Loss Ratio

To make a realistic and measurable plan for future improvements, you first need to know where you stand now. Using the win/loss ratio formula above, you can work out your win rate and win/loss ratio relatively easily, provided you have accurate data on the following:

• Total number of opportunities
• Number of won opportunities
• Number of lost opportunities

It also helps to know the number of open opportunities still in the sales funnel, although this isn’t necessarily essential for calculating a win report or win/loss ratio report. 

Step 3: Outline Goals

Before you start conducting research to gather data, you need to decide what information you need, so goal setting is essential. Some examples of common sales goals include:

• Strengthening value propositions 
• Improving the effectiveness of existing sales strategies
• Improving the features and benefits of products and services
• Developing a better understanding of buyer behaviors
• Identifying gaps in customer service
• Reducing churn rate
• Getting ideas for new products and services

Step 4: Write a List of Questions

Compile a list of questions to help uncover information pertinent to your goals. The themes and topics you cover will likely be wide-ranging. You might consider asking people:

• What attracted them to your products and services
• How well you catered to their needs
• What they liked most and least about the sales process
• How they gauge your industry reputation in relation to competitors
• Which other companies they considered
• Whether they would recommend your products and services
• If their buyer experience met their expectations
• The primary reasons for choosing/not choosing your company

Step 5: Gather Data

Gathering data manually without intelligent software can feel like a Herculean task. And in many ways, it is. There are several logistical considerations to factor in before you even begin asking your questions. You’ll need to think about:

• How many people need to give feedback – Not everyone will want to take part, so you’ll need to ask more people than you need to ensure an adequate volume of data. 
• Which prospects and customers to approach – You’ll need feedback on a fair split of won and lost opportunities.
• How you’ll collect the data – Online form submission vs. phone/in-person interviews, etc. 
• Where any in-person interviews will be held – As well as how long they’ll be, and who will be the interviewer.
• Whether you offer incentives for participation.

Step 6: Compile Your Win/Loss Report

You’ll need to conduct in-depth statistical analysis if you’re to derive meaningful data points and be able to act on the findings. The results of your win/loss ratio calculations should be presented in a single document that’s easy to share between sales, marketing, product development, customer service, and customer success teams.

Win/Loss Ratio Calculations Made Easy with Challenger Loop

If all of this sounds a bit intimidating, that’s because it can be — there’s no sugarcoating that. But with Challenger, it doesn’t have to be difficult.

Not only does Challenger Loop remove all of your data collection, analysis, and reporting headaches, our unique win/loss analysis tool provides many additional benefits over alternative solutions:

• Real-time analysis – Our data incorporates candid B2B customer feedback throughout the purchase experience in real time.
• Qualitative data – Rather than relying on quantitative data alone, Challenger Loop places a strong emphasis on qualitative feedback from in-depth interviews.
• Beyond the basics of win vs. loss – Challenger Loop can pinpoint specific messaging and strategy failures that contribute to outcomes and present solutions to address them.
• Integration with sales enablement tools – The Challenger platform is designed to integrate with sales enablement tools to help sales reps adjust their approach in real time based on buyer feedback. 
• Actionable insights – We can provide your organization with clear recommendations for how to improve messaging, strategy, etc., to drive meaningful change at scale. 

Ready to get in the loop? Schedule a demo today and discover how to create a truly differentiated purchase experience for your prospects using our world-class win/loss analysis tools.