Win/loss ratio: What it is and how to calculate it

What is the win/loss ratio?

The win/loss ratio evaluates the success of your company’s performance in competitive situations, like when making a sale. You calculate it by dividing the number of wins (e.g. successful sales) by the number of losses.

Win/loss ratio = Number of wins / Number of losses

If you wanted to evaluate performance regarding the total number of opportunities (both won and lost), then you’d use the win rate instead, which divides the number of wins by the opportunities.

Win rate = Number of wins / Total opportunities

Simply put, the win/loss ratio quantifies the relationship between the number of wins and losses, and it helps you understand your competitive position in the market better – as well as assess just how effective your strategies are when compared to your competitors’.

A higher ratio indicates more wins than losses.

Importance of knowing your win/loss ratio

What are the benefits of calculating your win/loss ratio?

It helps you understand how your performance stacks up against that of your competitors, and reveals whether you’re leading or lagging in the market.
It helps you identify your competitive advantage, from product features to better customer service.
A low win/loss ratio can also help you find weaknesses, including where you can improve, be it your product or your pricing.
By understanding where you perform best and where you can improve, the win/loss helps you know where to allocate resources.
The win/loss ratio sheds light on how your company is positioned in the market.
If a low ratio is due to your product being less attractive than someone else’s, this knowledge can guide product improvements, allowing you to improve usability or address pricing concerns, for instance.
By analyzing why you win or lose against your competitors, you can gain insights into what customers are looking for, which helps you refine your value proposition and create products that meet your customers’ needs.

Win/loss ratio calculation

If you’re managing a sales team at a software company, you might want to assess their performance over the past quarter. But how to calculate win/loss ratio?

During this period, the team pursued 60 potential deals. Out of these, 35 were successfully closed while 25 were lost to competitors.

The win/loss ratio of your sales team would be: 35 / 25 = 1.4

This means that, for every deal lost, your team successfully closed 1.4 deals.

A win/loss ratio above 1 indicates the team is winning more deals than they’re losing, so take this as a positive sign of how effective they are.

A ratio of 1 means an equal number of wins and losses and a ratio below 1 shows there are more losses than wins.

While a ratio of 1.4 is already good, there’s always room for improvement. You might analyze the lost deals to understand why they weren’t successful and use that information to refine your sales strategy.

You can also use the win/loss ratio as a benchmark for future assessments. If the ratio increases in the next quarter, your team is improving. If it decreases, it could indicate your team could do with more training or your strategies may need tweaking.

But how exactly can you apply the win/loss ratio in competitive analysis?

Win/loss analysis vs. win/loss ratio

While a win/loss ratio is useful for tracking performance over time, a win/loss analysis focuses on understanding and improving the factors that influence those results.

After all, this analysis allows you to understand how people buy and why they did or didn’t choose your product.

In essence, you’ll want to find out your win/loss ratio, since it’s a great starting point for identifying performance issues, and then explore that further through win/loss analysis.

How to act on win/loss data

Applying the ratio practically allows you to gain actionable insights and make better informed decisions. But how do you handle the data and what should you be doing with it?

Segment the data

You can break it down by customer size (e.g., large enterprise or SME), industry, geographic location, etc., which helps you to identify patterns that may be unique to your segments.

In addition, you’ll want to look at the competitors you win and lose against most often, since this helps you spot strengths and weaknesses.

Analyze the reasons for win/loss

Group win/loss reasons into categories like pricing, product features, and relationship with your customer – doing so allows you to prioritize areas for improvement.

You should also try to spot patterns in why deals are won or lost. For example, if pricing is a reason for loss, you might need to review your current strategy.

Benchmark against competitors

Compare your strengths and weaknesses with those of your competitors based on data. If you win because your product integrates better but loses on price, you know your advantage is in the quality of the product – all you may need is to revisit your price.

Get customer insights

You can use your win/loss data to understand what leads someone to make a purchase, which can help you tailor sales pitches and align yourself better with what customers are looking for.

Make sure you collect feedback from prospects and customers about why you won or lost the deal, as these insights often reveal issues that may not be evident otherwise.

Train your sales team

Win/loss data is also helpful to offer targeted training. If your sales reps lose because they can’t articulate the value of your product, for example, they may need additional training on how to communicate its benefits more effectively.

The data also allows you to create strategies that address the reasons for loss.

Track progress over time

Make sure you’re monitoring win/loss rates and tweaking strategies as needed, as well as reanalyzing data every now and then to see whether the changes you implemented are working.

Collaborate with others

Win/loss data is useful for cross-functional collaboration. You can share it across different teams (e.g., sales, marketing, and customer success), since they can greatly benefit from those insights as well. For instance, marketing can use it to understand why competitors’ messaging is resonating more with customers.

Example: Applying win/loss ratio in competitive analysis

Imagine a SaaS company that has three main competitors in the market. Their goal is to improve competitive positioning and increase market share.

The company tracked every sales opportunity over six months, noting wins and losses against Competitors A, B, and C.

They also calculated win/loss ratios:

Competitor A = 1.8
Competitor B = 0.9
Competitor C = 1.2

The company’s analysis found that losses to Competitor B were due to lower pricing and a specific feature missing in their product. Wins against Competitor A were because of their superior customer service and a strong product fit in the market.

So, which strategic action did they take?

They adjusted the pricing to be more competitive.
Developed the missing feature.
Increased their marketing efforts in the field they outperform Competitor A.

After applying the changes, the outcome was that the win/loss ratio against Competitor B improved to 1.1 within the following quarter, and overall sales increased by 15%.

In short

Understanding the win/loss ratio is important to refine your strategies and drive growth, since it offers insights into customer behavior, market trends, and areas you need to improve. And, by analyzing both wins and losses, you can learn from mistakes, celebrate strengths, and make data-driven decisions.

As we saw, the win/loss ratio can be used to help you improve your competitive positioning – want to learn more about how to do this?

Then our Competitive Positioning Playbook is perfect for you.

Inside, you’ll find everything you need to carve out your competitive niche, including how to get buy-in from stakeholders, how to reposition where things aren’t working, and insights from competitive intel experts.