PWin and Why it’s Important

Not another Metric!

Running a small business is a constant learning curve.  Things that you almost instinctively know from the start, but are either a bit too daunting to embrace, or simply don’t get to the top of your ‘in tray’, are common. 

For me, one of these was the concept of a PWin.

I knew that it was important concept from my time in the corporate world, but I just couldn’t find time to think about how it applied to my business.  Finally however, I decided to get to grips with it, to demystify it and apply it practically, and I’m glad I did.

PWin considerations don’t have to be a gamble, but nor do they need to be a maths problem!

Will We Win?

The probability of winning a sale, or PWin, is an important metric for any business to consider but, for a Small/Medium Sized Enterprise (SME) or a Micro SME, it can be existential.

And I use the term existential because the consequences of getting it wrong, particularly when you have few clients to start with, are very significant and could put you out of business. 

So, arguably, understanding the concept of a PWin is one of the most important factors in deciding whether to devote resources, cash and time to the pursuit of an opportunity. 

But it doesn’t have to be a complex mathematical formula.  It doesn’t need to involve spreadsheets, pouring through accounts or forensically analysing the successes and failures of your competition. 

In its simplest and, arguably, most practically useful form, a PWin percentage can be more of an art than a science, derived following consideration of a number of factors.

It’s a Team Sport

Deriving a useful PWin involves analysing specific factors and assessing the likelihood of closing a deal. But considering this in isolation from your co-workers can lead to the wrong answers.  It is always better to seek their views as this enables and empowers the people around you and will help to achieve a sense of buy-in within your company which is often visible to potential clients looking at your organisation.

While methods and formulae vary across businesses (and believe me there is plenty of daunting academic guidance out there), the following key elements are common and have worked for us at IWH:

·         Qualification Criteria:

 This means working out a way to evaluate the fit between your prospective client's needs and the product or service you are offering.  You should consider factors such as budget, time to deliver the product or provide the service, your capability and capacity to match their expectations, their appetite for innovation, their decision-making authority and alignment with what you consider to be your company’s ideal customer (have you done that last bit yet?)

 ·         What Stage is the Sale at?

It is useful to understand where in the sales process you are.  Are you prospecting, in the discovery phase, active capture or straight into a proposal, negotiation or closing?  

Different stages will affect your PWin but in general, if you re-assess your PWin regularly, at each stage in the sales process, update what you understand to be your client’s requirements and match them with your own offerings, your PWin will be higher.

·         Sales Activities:

Assessing the sales activities undertaken, including calls, meetings, presentations, emails, demonstrations and follow-ups helps to gauge the level of engagement and interest from the potential client and influences the probability of a successful outcome. 

But it is a judgement call.  If there is little interest in a product or service, I’d recommend either walking away altogether or reshaping your offering based on the feedback you’ve received.  The rule of thumb here is that the more positive engagement you get from a potential client, the greater your PWin. 

The minute it becomes a one-way pitch driven by you, it is almost certainly doing more harm than good however.

·         Competitor Analysis:

Time spent evaluating the competitive landscape and understanding the strengths and weaknesses of your competitors, particularly with respect to the same opportunity is valuable and will give you a strong indication of PWin. 

A simple SWOT analysis is easiest and everyone will get it but, whatever method you use, be brutally honest, as it is sometimes easy (and reassuring) to believe your own sales pitch!

·         Historical Data:

If you have it, you can use historical sales data to identify the buying patterns and trends of the potential client.  Analysing past wins and losses (both yours and your competitions’) can provide valuable insights into the likelihood of success in similar situations too.

Use a system of metrics that work for you and your team.

Use Meaningful Numbers

No one understands a PWIn of 27.6%. 

In our experience keep your estimates of PWin to quarters (25%, 50%, 75%).  This is, of course, a subjective call but these degrees represent levels of confidence that are more easily understood among your team.

And so …

In the highly competitive world of sales, small businesses need every advantage they can get to succeed.

There are almost always larger, more established companies chasing the same business as you so embracing the need to consider PWin is an important factor in making sure you devote appropriate levels of resource and investment into the pursuit of an opportunity.

A more subjective, less data-driven approach allows you to focus resources and thought more on what the PWin tells you rather than the process of calculating it to several decimal points.  By considering factors such as qualification criteria, sales stage, sales activities, the competition and historical trends and data, small businesses can make informed decisions, allocate resources effectively, and manage risks.

Additionally, embracing the culture of collectively when considering PWin enables and empowers your team, improves sales forecasting and, ultimately, increases your chances of closing deals successfully.

Give it a go, there is at least a 50% probability I’m right!