Salespeople can learn a lot by observing poker players. Every gambler knows who wins each hand of poker: the player who possesses the highest value set of cards, or who is the last remaining player if everyone else folds. However, a more challenging question is: in each hand of poker, who comes in second?
The correct answer is: the player who folded first. That player invested the least in a losing hand, and therefore lost the lowest amount compared to the other players.
Unfortunately, some salespeople would make poor poker players. They often invest too much time and resources trying to close sales opportunities that offer a low chance of success. According to one recent survey1, salespeople lose more than half of their sales opportunities, on average, either to direct competitors or to buyers deciding to do nothing at all.
Refusing to fold
Why do sellers pursue poor quality opportunities? Some of the most common reasons include:
- Fear of pipeline reduction – often, managers evaluate salespeople not only by how much they close, but also by the value of potential opportunities they are working on. Many salespeople are reluctant to leave an opportunity because that will reduce their cumulative pipeline value, which reflects negatively on them.
- You can’t win if you don’t play – too many salespeople treat sales opportunities like lotteries: even if they have a low chance of winning, they continue to play, in hope of being awarded the business. These sellers do not realize they are squandering their most limited and precious resource – time – in too many unqualified deals. Their win rate would be likely to improve if they invested more time in higher qualified opportunities.
- No objective standards – too many salespeople lack a clear set of evaluation standards for deciding if they should exit a sales opportunity and rely on qualitative readings of buyer behavior. Emotional instincts and intuition can be useful, and should not be ignored, but they are insufficient to predict sales success consistently.
- Poor evaluation criteria – too many salespeople use insufficient criteria for determining if a sales opportunity is qualified and worth further investment. The most popular set of opportunity qualification criteria is BANT: Budget, Authority, Need and Time. Many sellers believe that if a buyer can provide clear answers to BANT criteria, then that opportunity is worth pursuing. Unfortunately, using BANT alone can be misleading, and result in poor qualification decisions.