In sales, closed lost is any situation where a prospect has formally declined to complete the sales process and make a purchase or sign up for a contract. It is the opposite of closed won, which is any situation where a deal has been successfully closed and a prospect becomes a customer.
Just as with closed-won, closed-lost is a term typically found in customer relationship management (CRM) tools like Salesforce. Here, marking prospects as closed lost gives sales teams a point of reference that they can use to access important information and metrics. Marking lost prospects as closed lost also prevents other problems such as overinflation of the sales funnel and inaccurate sales performance reports.
There are many reasons why a closed-lost situation might arise. Whether it’s simply a case of a prospect changing their mind or a more complex issue such as a decision-maker inside your organization deciding to terminate a deal, it’s important to record it.
Analyzing Closed Lost Deals
Of course, if you have to mark a prospect as closed lost in your CRM, it’s an opportunity. Yes, you lost the sale. But now you have so much material to learn from. Analyze the journey through the sales pipeline and see where there’s room for improvement.
You can break this analysis into categories:
- Pricing objections
- Timing issues
- Poor product fit
- Competition
Your CRM will likely offer you space to mark a reason code or make notes about the outcome. Then, you can use this data to create reports that highlight the most occurring reasons.
For example: if a lot of your deals are lost due to budget constraints, you’re either reaching out to the wrong prospects or you need to adjust your pricing. You might even just offer payment options instead of one upfront payment. The point is, you have data to work with.
Another reason to track your closed lost prospects is for future opportunities. Some of your closed lost prospects may come around later, after being disappointed by the competition or increasing their budgets.
To this end, consider keeping a “closed lost with potential” list as part of a strategy for nurturing leads over time. Check in a few months down the road through an email campaign or a quick text.
In the end, sales leaders can use closed lost lists in their win-loss analysis. The insights they gain there can help feel sales enablement efforts and prompt future training. Yes, closed lost might feel like a failure or a dead end, but in sales, as we know, everything, even closed lost, is an opportunity for future success.
Closed Lost Opportunity Explained:
FAQs
"Closed lost" refers to a sales opportunity or deal that was pursued but ultimately did not result in a successful sale. This might be due to budget constraints, competitive offerings, or mismatched needs.
In sales, closed-lost refers to going through the entire sales journey, which could last months or more, and having the prospect decide against the sales. A disqualified lead is a prospect who never makes it into the actual funnel. This is because the sales rep decides the prospect is not actually a good prospect.
Yes! You should always follow up with a prospect who has made it that far through your pipeline. Circumstances can change. Budgets can increase. A competitor can let the prospect down. Set yourself a reminder for every prospect marked as closed lost for a follow up text, email, or call.
Analyzing closed-lost opportunities helps identify where sales processes can be optimized, product positioning, objection handling, and customer feedback. Ultimately, this leads to better strategies for future sales efforts.
Steps may include conducting a post-lost analysis, capturing reasons for the loss, updating CRM data, nurturing relationships for potential future opportunities, and refining sales tactics based on insights gained.
