What is Number of Lost Deals?

The Number of Lost Deals KPI counts the number of deals that your sales team hasn’t been able to close over the last period. In short: prospects that have finally decided to not become customers.

This can occur for a variety of reasons:

  • a potential customer received a superior offer from a competitor,
  • poor timing,
  • or maybe the prospect simply stopped replying.

This doesn’t necessarily mean your sales team is performing poorly, as some opportunities might not be qualified to turn into clients. However, you might want to hold a discovery call to filter out any unqualified leads. This way, you will show the most accurate number and, consequently, get a more realistic conversion rate.

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Why is the Number of Lost Deals important?

While the period considered in this KPI will vary between businesses, the overall metric remains important regardless. After all, new deals are how you make money, so you’ll want to know how many potential customers you are losing–and how to start converting them.

Apart from the number itself, it can also bring you some more insight into the performance of your latest actions. If this number is increasing, you might want to reconsider your sales strategy to boost your conversion rate.

As with many other KPIs, your Number of Lost Deals can provide an indication of the strength of your sales and marketing efforts. Knowing the reasons your leads are abandoning deals will also give you direct insight into those areas of your product or business model you need to improve. For this reason, it’s vital to collect data on the status of your deals, whether they succeed or fail.

How to reduce the Number of Lost Deals

Because this is a “negative” KPI, it’s important to recognize its causes as problems, and also recognize the specific solutions to remedy these problems.

Based on this article from Dataflo, here are some reasons that potential customers might abandon a deal before finalization, and what you can do to address each problem:

  • Qualify your leads! This is why it's of utmost importance to define–and refine–your ICP (ideal customer profile). Targeting the wrong profile, or not firmly establishing one to begin with, can result in business and customer not seeing eye-to-eye.
  • Follow your leads! If you have a promising lead, keep at it! Be sure to pursue your leads with targeted ads and content.
  • Re-evaluate your product offerings to make them more competitive. If potential customers abandoning your company for competitors’ happens frequently, it’s absolutely worth reevaluating your pricing/services combo. What can be adjusted in your offering to make it more compelling than your competitors’ offerings?
  • Find out why a potential customer abandoned the deal. Even if it's not your fault, it’s essential to gather data as to why your deal collapsed. For example, if the website crashed while your customer was paying, this is a serious UX glitch that needs to be addressed immediately.

Other KPIs similar to Number of Lost Deals include:

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