B2B companies that track the performance of their demand generation efforts often categorize the outcomes of potential deals as wins, losses, or no decisions. In many cases, no decision is a catch-all category that is used for all potential deals that aren’t successfully closed or lost to a competitor.
Research has shown that no decisions occur frequently. For example, the 2015 Sales Performance Optimization survey by CSO Insights found that between 20% and 28% of forecast deals result in no decisions. In this research, the term forecast deals referred to sales opportunities that were sufficiently “ripe” to be included in revenue projections for a specific fiscal period. Sales Benchmark Index takes a broader view of the issue and has estimated that 58% of the typical sales pipeline will stall or result in no decision.
There are two fundamental problems with the won-lost-no decision framework, one of which is that the no decision label is inaccurate 100% of the time. When a prospective customer does not buy (either from you or from a competitor), the prospect is making a choice to either remain with the status quo, or use internal resources to “fix” the status quo in some way. Whichever the case, the prospect has made a decision, and we need to evaluate the outcome accordingly. Calling this outcome a no decision can easily lead us to view the cause of the outcome as simple inaction.
The second problem with the no decision label is that it is too generic to inform marketing and sales leaders what really caused a prospect to opt for the status quo. This is important information because it enables us to identify the causes that we can affect and to separate those from the causes that are beyond our control.
For example, a prospective customer may choose to stick with the status quo because your offering and those of your competitors don’t provide enough value to justify making a change. If you’re experiencing a significant number of these outcomes, it’s likely that you’re targeting the wrong prospects or that your lead qualification process isn’t revealing the “lack of fit” as quickly as it should.
Or, you may have prospects that decide to remain with the status quo because they don’t recognize the real value that your solution would deliver. In this case, your marketing content and/or your selling process may not be adequately communicating value to your prospective customers.
In both of these scenarios, you can reduce the number of what are typically called no decisions, either by using a better definition of your target market or a more rigorous lead qualification process, or by improving your ability to communicate the value that your solution will provide.
In other cases, prospective customers may decide to stick with the status quo because of events or circumstances that are beyond your control. Some examples would include:
- A change in company leadership that results in a shift of strategic priorities
- A downturn in the financial performance of the prospective customer that results in tighter controls on spending