Uncovering 9 Closed Lost Reasons + Winning Sales Strategies

There is nothing worse than having to mark an opportunity record in your CRM as "closed lost." The second-worst prompt is "closed lost reason." The field in your CRM may have a drop-down menu, so you can easily document the reason you lost the deal. It stings a little to acknowledge that another salesperson won the client's business. It is proof your competitor did something different, something that gave them an edge in creating a preference. 

Here will look at nine reasons for marking deals "closed lost" and the sales strategies that will turn your experience into future wins. These strategies will help you understand the behavioral changes you can make to win more deals . But before we get started, it's important to know that everything is your "closed lost" fault . To make these successful sales strategies work, you must believe that you, not your client, were responsible for the loss. 

Here are the nine common closed lost reasons examples:

1. Pricing
2. Competition
3. Lack of budget
4. Long sales cycle
5. Lack of a decision-maker
6. Poor follow-up 
7. Unresponsive contacts
8. Cheaper solution
9. Lack of internal consensus

Pricing 

Your decision maker told you that your pricing was higher than any of the other offers. They said your price was 8 percent more than the closest competitor. There are several reasons your higher price led to the closed lost status. The first has to do with when you disclosed your pricing, and the second is the failure to justify the higher price. You can use these sales strategies plan as part of your B2B sales process. 

Sales Strategy 1: When you have a price higher than your competitors, you are better off disclosing that early in the sales conversation. Now you have the whole sales conversation to use the second strategy.

Sales Strategy 2: Because you have informed the B2B buyer your price will be about 8 percent higher when compared to your competitors, you can explain how you invest the additional eight pennies to ensure they improve the strategic outcomes they need while pursuing lost customers. 

SEE: Your Higher Price is an Advantage

Competition

You are never going to win all the clients you want; you will win all the clients that want you closed lost. In competitive selling, the contest isn't between your company or your competitors. The real contest is between the salespeople competing for the client's initiative. If you lose to a competitor, it means you didn't create enough value or confidence, and your contact bought from someone who did. 

Sales Strategy: If you are not already practicing a modern, insight-based sales approach, adopting one will provide you with a competitive advantage. Creating more value and trust will reverse these losses and help you achieve your sales goals.

Lack of Budget

In The Lost Art of Closing: Winning the 10 Commitments That Drive Sales, the third commitment is the Commitment to Change. In this stage, you ask your client if they are committed to making a change and if their organization is prepared to invest the money, time, and effort necessary to support it. 

Sales Strategy: Never use BANT. But continually qualify your client by observing their actions. There is never a reason to go all the way to the point you could mark a deal lost closed without having asked about the money. Ask during a second meeting.

Long Sales Cycle

There is a saying in sales: Time kills deals. This is inaccurate. Time doesn't kill deals, but no forward progress often ends an opportunity. The most important factor here is your ability to control the process for your potential customer.

Sales Strategy: In Elite Sales Strategies: A Guide to Being One-Up, Creating Value, and Becoming Truly Consultative, there is a chapter about facilitating the buyer's journey. If you lead the client, you will reduce these losses. 

SEE: Here are eleven ways you give up control of the process

Lack of a Decision-Maker

It's difficult to reach your goals when you lose deals in B2B sales. Clients have their pain points, and we have ours. No access to a decision-maker is our pain point. Even though companies prefer to build consensus, you need someone with authority to sign a contract and fund the initiative. 

Sales Strategy: After a second meeting, a meeting where you created value for your contacts, you can ask, "Who do we need to be able to move forward, and when should we brief them about where we are now?" B2B salespeople who ask this question to improve their win rates. 

Poor Follow-Up

I don't believe in follow-up. I believe you should never leave a meeting with a client without having another meeting confirmed on their calendar. Otherwise, you will need to buy new tennis shoes to chase your contacts down, as you'll be running hard. 

Sales Strategy: Never leave a meeting without another meeting in place. If this is a problem for you, it means you are not trading enough value that your client can agree to the next meeting. If this is true, you need a new approach. 

Unresponsive Contacts

Of all the reasons for closed lost deals, this one is the worst. When contacts stop responding, it is almost certainly because you are no longer being considered. If your sales approach doesn't create enough value for the client, this could be the result. Another reason could also be the fact your client had already picked who they wanted to buy from but had to bring in three companies as part of their buying process. In this case, you were never really in the running and didn’t change anyone’s mind in your meetings. 

Sales Strategy: You've lost control of the buyer's journey and are missing commitments. It is easier to ask questions about how you are doing and if your client is tracking, even if it comes with a tiny bit of conflict. 

Cheaper Solution

There are always cheaper solutions available to your clients. A lot of buyers believe the lowest price is the greatest value. Improving your conversion rates will require a strategy from the One-Up book: triangulation.

Sales Strategy: The short version of this strategy is teaching the client about the concessions they make when they underinvest in getting the better results that caused them to explore a new solution or partner. 

Lack of Internal Consensus

Too few sales organizations have any sales enablement around the often critical outcome that is consensus. Of all the closed lost reasons, this one may not be your fault. When people disagree about change or what they should do to improve their position, their initiative dies, and your reasons for sales opportunity goes with it. 

Sales Strategy: You can ask if this initiative has support from everyone who will be weighing in on the decision. You can also ask if your contacts will need a unanimous agreement and if someone in leadership is already backing the initiative. 

Uncovering the nine closed lost reasons examples can help reasons for lost sales opportunities understand why they lose deals and how to adjust their sales strategies. Using the strategies here will improve your win rates, the most important outcome salespeople and sales organizations should pursue.