Small business strategy question: What causes you to lose a sale?

This blog post is part of a series on 100 small business strategy questions that an entrepreneur can ask themselves to help them grow their business profitably. Click the link above for the master list of 100 questions and find the growing series of blog posts discussing each question.


When a sale is made, you can break out the champagne and celebrate! Money has come into the business to pay for its operation (and hopefully to put a little into your pocket too). And wise businesses dissect those sales successes over and over to help understand the elements that came together to make it successful.

But not every prospect interaction ends in a sale. Many (perhaps most!) end up without a sale. The smartest businesses take time to dissect THOSE “failures” as well. (I use the term “failures” here very loosely because not every lost sale is a failure. I just used it to mean the times when a sale doesn’t occur).

Here are some ways you can dissect why sales weren’t made:

  1. Take a sampling of prospective buyers from a previous period of time. For example, examine all lost sales in the last month or examine the last 10 prospective buyers who didn’t buy. You need to either do this on an ongoing basis and handle just a few at a time (which is good if you are a sole proprietor or a freelancer or something) or you need to grab a batch and do them all at once in a big “fail-fest”. This sample should be of anyone who interacted with your business but definitively chose not to buy from you (as opposed to people who are in your sales funnel who haven’t bought yet). It’s not a perfect science to find these people because there are some slow pokes that you should take a closer look at… they’re the ones who keep claiming that they’ll buy but never do. I’m being someone general here because every business is different so you’ll have to find the definition of a lost sale that works best for you.
  2. With this list of people in hand, figure out where they were in the sales funnel when they chose not to buy. Usually, this will be people who were your leads who asked not to be contacted anymore and it will be prospects who were presented with your offering and said “no” and couldn’t have their objections overcome.
  3. Hopefully you recorded the reason they gave to not buy from you. (If you don’t record the reason, start doing so immediately!) Examine them carefully. and look for patterns over a period of time.
  4. Next, look at different factors like: How long were they in your sales funnel for? How did they interact? With whom did they interact? What information did they receive?
  5. Also, compare their progress through your sales funnel with the progress of your successful sales. Many times, you’ll find that there are a lot of clues here. The people eventually say no, for example, might bring up price earlier than anyone else or they might take longer to progress than the ones who became buyers, or they interacted in a certain way with certain staff members.
  6. Look for patterns. Try to find what is similar about people dropping out at these earlier stages and how is it different from people who progress through your sales funnel and end up buying from you. Look for common questions; common phrases, common pathways; skipped steps, etc.

You will eventually find some common factors. You might not discover all of them immediately. But with each time you do this, you’ll learn more and you’ll become more adept at spotting a “non-buyer” long before they even know they are non-buyers!

As you do this exercise over and over, you’ll discover that you can quickly and easily divide people into two groups: People who never should have been in your sales funnel in the first place and people who should have been there (because they are part of your target market) and just didn’t go through with the sale. When you divide people into those groups, it becomes even easier to find the problem areas.

Once you have identified the problem areas (which probably won’t happen the first couple of times you do this exercise), you can create a game plan to fix them.

Published by Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and other books.

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