The working list of reasons
- price above the customer's budget
- not our customer: the product does not fit
- chose a competitor
- postponed the decision: no deadline
- never reached them
- no need right now
- unhappy with lead times or terms
- somebody else makes the decision
- lost in the thread: we did not reply in time
The last reason matters most and gets recorded least, because admitting it is uncomfortable. It is usually the most expensive one.
Why the statistics come out meaningless
- The list has twenty reasons on it, so the rep picks whichever comes first.
- Nothing is mandatory: a record can be closed with no reason at all.
- No verification: nobody checks the reason against the conversation.
- The reason gets set at closing, by which time the details are forgotten.
We take twenty records marked «too expensive» and read the threads. If price never came up in half of them, price is not the issue.
How to make it work
- Cut the list down to nine reasons.
- Make the field mandatory before a deal can be closed.
- Once a week, check ten records against the conversations.
- Show the distribution of reasons at the weekly review: reps start recording honestly once they see the summary.
What to do with the result
- A lot of «we did not reply in time» means working on response speed.
- A lot of «postponed» means conversations end with no next step and no date.
- A lot of «not our customer» is a question for qualification, or for advertising.
- A lot of «chose a competitor» means the script needs a comparison in it.