The Real Cost Of A Lost Deal

WARNING: This short article speaks the hard truth about lost deals and poor win rates in B2B sales. 

It's the hard truth because anyone responsible for topline results who justifies the cost of lost or wasted revenue opportunities as just part of the cause, is wrong.

This includes all the deals you've submitted a proposal for that you didn't win. It means they either got picked up by a rival or reached a stalemate of no-decision. 

The fact is, if you're missing opportunities and losing major deals, you're bleeding profit. 

Make no mistake. This is legitimate income you could be banking. Instead, you're handing it over to the competitor who rolled in on the eleventh-hour and landed the account. The account, if you'd been working effectively, should rightfully be yours.

Or it's money you've chosen to leave on the table because of indecision or lack of progress. 

Either way, it's profit that's going down the drain.

So, what's the real cost of a major deal that's fallen over?

Let's break it down.

Money.

This is the dollar value of the deal in actual sales revenue.

You know the amount.

It was the hot topic of many sales meetings and a water-cooler favorite. It was the deal-of-the-century for the sales team and the envy of your peers at the social club.

It was the number that showed so much promise in your reporting for weeks or even months on end.

It was a mighty number, and now it's disappeared off the spreadsheet altogether.

Gone.

And in it's place a big gaping hole in your revenue forecast.

Time.

Think about the countless hours spent on research, engagements, presentations, proposals, negotiations, meetings, phone calls, reporting, and more meetings. 

All the 'busy-ness.'

If you tracked all the time invested in a proposed deal that went south and attached an hourly rate to all this activity, you'd be devastated.

Resources.

This includes all the people involved along the journey.

Anyone that made a PowerPoint slide, gave advice, attended a presentation, or ran the figures on the deal. That's colleagues from sales, management, IT, finance, marketing, and administration.

So we've got salaries, employee benefits, payroll, and insurance.

Then there are things like rent, phone, tech, stationery, and travel. 

Or special events and marketing campaigns custom-built to help secure the big one.

Do you have your calculator handy? The expenses are really starting to add up now. 

Then finally, we weigh in on the cost of wasted effort, and the emotional toll it has on your workplace.  

Energy.

These are the intangible elements of morale, productivity, momentum, confidence, culture, motivation, loyalty, teamwork, incentive, and reputation. All factors that impact the energy of your employees and how they feel about working for your organization.

The ripple effect of poor performance and lost business can have a slow drain on your people over time. 

It starts with small cracks in team dynamics, then hits you in sick-leave and turnover rates over the long haul. 

People ultimately want to be part of a winning environment - a culture that's inspired and purposeful. Too many lost deals, don't make for happy people.

So, you've invested all this money, time, resources, and effort on a lost deal. You might say it's just the cost of doing business. 

But what about the quality deal that's passing you by or dying on the vine because nobody's out there looking for it? The one you should be working on, but you're not on the case.

Shall we go through the list again?

Put a number to all of this, and you'll start to appreciate the REAL cost of a lost deal.

I implore you. Stop making excuses for bad results.

Look at your win rates. 

Look at the reasons why your deals are falling over and start to make strategies to reduce these outcomes. 

If you aren't winning a good majority of your workable deals, you are bleeding profits. And that's not smart business.