What’s Your Competitive Win Rate?

Davis Mountains State Park, Texas; photo by the author

Win rate is deceptively complex, as Dave Kellogg describes in his excellent blog post on the topic. Depending on how one goes about calculating win rate, it can easily be overstated.

Doubly complex is competitive win rate, perhaps the most misunderstood and misused of all sales metrics. I’ve lost track of the number of times in the last few months that I’ve heard something along the lines of, “We rarely lose competitive deals.”

Allow me to translate this statement:

“We win most of the deals in which we participate and for which my sales team adds competitors to our CRM.”

Uh oh. It turns out competitive win rate doesn’t tell you what you really want to know, which is, “Of the prospects selecting me or one of my competitors, what percentage am I winning?” because:

At best, this methodology for calculating competitive win rate is a so-so measure of sales execution in head-to-head opportunities only. If the metric is under 50%, you know you have a problem, shortcomings be darned. But if the metric is over 50%, you really don’t know what it’s telling you about the extent to which you’re outperforming the competition.

Another approach is needed for gauging marketing program and prospecting effectiveness vis a vis the competition; specifically, to understand and quantify the deal flow that isn’t making it into your sales cycle.

I recommend engaging a market research firm to survey your ideal customer profile about buying behavior and intent and vendor brand perception. From this you can learn why prospects aren’t engaging in a serious evaluation of your company, or why they chose a competitor without considering you. Market research explains three important buckets:

The best companies conduct market research on a regular basis because they recognize that the competitive landscape is always evolving. Combined with a traditional competitive win rate analysis, you’ll have a strong understanding of your competitive reach and your sales performance in head-to-head opportunities—and how to improve both.

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Chief Customer Officer at Brightflag. I write about issues relevant to and situations faced by SaaS companies as they scale.

Chief Customer Officer at Brightflag. I write about issues relevant to and situations faced by SaaS companies as they scale.