Walking away from the biggest opportunity you’ve had all year? Walking away from an opportunity where you’ve already invested weeks or months cultivating the relationships and building your proposal? Taking yourself out of the game?
For most sales professionals, these are some of the hardest decisions to make. But they can be the decisions that make or break your year.
They can be the decisions that keep you from wasting time – investing valuable resources on opportunities you can’t win or spending countless business development dollars on a deal that’s barely profitable.
Why do sellers waste time on questionable pursuits, and how do we focus them on the right deals?
Legitimate Pursuit or Fishing Expedition?
Recently a client shared that they lose, on average, 60% of their deals to no deal at all. Some of these may start out as real opportunities. But many are fishing expeditions. The others evaporate over time due to internal or external forces.
Either way, valuable sales dollars get spent chasing mirages… beautiful oases that don’t exist.
This same client shared that they know their chances of winning increase dramatically if they shape the deal early in the sales process.
What does this mean if their competitor got there first? The inverse is true, and their chance of success has decreased dramatically. At this point, they are column fodder for the procurement process. They’re short of a major competitive misstep – spending valuable sales resources on an opportunity that is already hardwired for someone else.
We have clients who offer products that are highly valuable to some segments and merely a commodity product in other segments. For example, one client offers a service that is fairly like others in their industry. The main difference is that they offer a consistent global platform where their competitors do not. They enter domestic deals very carefully because their differentiator only really matters to customers with an international presence. If they sell domestically, their margin is far less than what they can achieve globally.
The Psychology Behind Hanging On
Why do we have these conversations with clients? Because salespeople struggle to walk away from opportunities. Their go-getter mindset can signal disaster if they are chasing opportunities they can’t win.
How is it that a salesperson who wants to optimize sales ends up wasting time in the zone of unrealistic possibilities? There are a few reasons:
- Optimism Bias: Basically, it’s psychological. We humans have an innate optimism bias toward the future that makes us believe that things are going to work out in our favor in the long run
- Negativity Bias: Retrospectively, we lean toward a negativity bias. We remember the bad (that one opportunity that could have been…) far more than we remember the good
- Victim of Sunk Costs: We often tend to honor sunk costs. If we’ve invested time or resources, we want to see it through. We believe we must see it through regardless of whether the likely outcome justifies the cost
Converging on the Right Deals
Top-performing sales leaders are helping their teams focus time on the right opportunities and walk away from the wrong ones. This requires that we put some structures in place that challenges our psychology and our sales DNA. Here’s how to take the emotion out of the decision.
- Use an established set of qualification criteria and score each deal. Develop this qualification criteria based on experience and what leads indicators of success and failure in your selling environment. We recommend the POP framework that considers whether the opportunity is POSSIBLE (real), OPTIMAL (profitable), and PROBABLE (well positioned for your organization to win). Require that scores be supported by specific customer evidence.
- Set parameters for what scores need to be met to continue pursuing the opportunity. Minimize exceptions to the rule. Not every opportunity is misunderstood Cinderella.
- Establish a cadence of regular opportunity reviews where team members and managers challenge each other on opportunity strategy and viability. Hold opportunity leaders accountable – challenge the qualification score. Focus the conversation on developing strategies to win opportunities. Engage members of your organization who are not invested in the opportunity. They won’t have a bias. Ask them if they agree with your qualification and your strategy.
- Establish checkpoints throughout the sales process to re-evaluate the opportunity. This is critical in longer, more complex sales where information changes and evolves. Tighten the criteria as you move closer to the customer decision. When should you have known that you were either well-positioned to win or didn’t have a chance? Make a list of those points, and evaluate your opportunities against them.
- Consistently re-prioritize active opportunities. Look at qualification scores, potential, and the time/resources you need to invest. If you are considering walking away from an opportunity, think about where you can refocus that time to win other deals.
- Conduct win/loss analysis. This can be formal or informal. You should consistently analyze your approach and the customer signals you received throughout the sales process. This helps effectively refine how you go-to-market. Use these learnings to further refine your qualification criteria and sales strategies.
Knowing when to walk away is hard. Walking away is even harder. But what’s worse? Missing that real opportunity because you were too busy.
Remember the immortal words of Kenny Rogers, “Every gambler knows that the secret to survivin' is knowin' what to throw away and knowin' what to keep.” So, we keep singing… “Know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run!”
Contact us to discuss ways to keep your sales organization focused on the right opportunities.
About The Author
Rachel understands what makes salespeople tick. She specializes in strategies that drive the change needed to produce results. She has managed many sales force transformations, helping sales leaders realign organizations and define new selling models. She has partnered with many organizations across industries to design and deliver sales training, coaching, and change management programs. Rachel has a knack for crystallizing complex concepts into a single picture with high-impact messages.