Sales is Like Poker : Know When to Fold & Know Your Strengths to Maximize Winning
I had a CEO who used to run an annual company Texas Hold ‘em poker game - not with real money, but employees could win good prizes. It was his way of getting to know individual personalities at the 50 person company. He was the dealer and everyone else played once a week for 5-6 weeks or until you ran out of chips. He always said that employee’s real personalities come out during poker. People filter in meetings, but after a round or two of poker, you get to know who people really are.
A few years into playing, a colleague of mine came over to me, after I lost in round 2, and said that he could tell that 1) I have played cards before and 2) I don’t know how to play poker properly. He said, “You play too often. Understand the likelihood of winning the hand and fold if winning is not high enough. You may miss out on a few pots that maybe you could have won due to long-shots, but you’ll stay in the game and win more than you lose.” Two years later, I won the whole tournament using that strategy. That same year, I was asked to join a different division to help reinvent how that division’s sales team operated and executed, because they simply weren’t selling anything. That’s when I took my new poker skills to sales.
The first thing I did was figure out why the team wasn’t closing. The activity was there per sales rep: 300 emails & calls per week, 5-10 proposals, and regular negotiation calls; but then the Opportunities wouldn’t close. What I learned was it was the wrong activity. The Sales Reps were playing too often on accounts that we were never going to win. Sending out 300 emails each week to companies that weren’t ever going to close was a waste of everyone’s time. The team didn’t know what they were looking for, and even when they had basic criteria, they made exceptions too often. When they would have a discovery call, they didn’t ask the right questions to properly qualify whether it was a closable account or not. Ultimately, they would spend hours and weeks on an account that I could have told them wasn’t going to close before the first email went out.
Now I’m going to tell you how we started closing good, profitable accounts within 2 months of adjusting sales team operations and strategy, while decreasing the sales cycle from 7.9 months to 2.1 months. It mostly comes down to thinking about Sales similar to a poker game. I know, its not exactly like a poker game since sales isn’t gambling (or at least it shouldn’t be), but there are quite a few similarities. The main similarities are 1) know the potential of your individual hand, and 2) know when to fold. Disclaimer: I do realize that sales is not like poker when you bluff in poker. We’re not talking about those types of hands in this situation.
Lead Scoring: Should you play this hand at all?
The first thing was designing a lead scoring system that took profitability, winning attributes, and long-term company vision into consideration. This would tell us who to pursue based on the likelihood of winning the account. If I could focus our Sales Team’s time on accounts that we are more likely to win, we would increase sales productivity, decrease sales cycle, increase closing ratio, and increase average contract value. (All which we did accomplish.)
In poker, lead scoring is like deciding whether to fold before the dealer lays down his/her first three cards (the flop). Before even seeing what the dealer has, a good Sales Rep can determine if this hand is even worth it based on the initial information that determines likelihood of winning. A well thought-out lead scoring system will tell me if the hand (aka the prospect) is worth playing.
First, I dove into Salesforce reports, interviewed Sales Reps, and talked with Account Managers. Why did we win? Why did we lose? What were the patterns? What were the attributes of our best clients? What were the attributes of our worst/least profitable clients? I also ran an updated competitive analysis and figured out our competitive differentiator. I then shared the data, my findings, and my recommendations with the Managing Director and President to ensure our lead score would align with company goals, profitability, margin expectations, and overall long-term vision of the division. We started small with 5-7 defined attributes and over time built a robust lead scoring system to determine the best leads that would lead to the greatest chance of winning. We errored on the side of creating a targeted, but wider net, until we had more data to analyze.
Instead of emailing 300 companies a week, we focused on 20-25 qualified leads per week. We ignored 75% of the leads we scored because the chances of winning and being profitable wasn’t good enough. Limiting leads to 20-25 per week allowed time for greater personalization, which also increased response rate. It wasn’t worth the Sales’ Team’s time to spend on companies that were long shots. Lead Scoring solved the first part of the sales problem… is this hand even worth playing? Now that we determined it was worth playing, it was up to the discovery call to determine whether the dealer’s cards were good enough to continue playing.
Discovery Call and The Flop
The Flop is the Discovery Call. It’s the part of poker where you have 2 good cards (or at least decent cards) and the dealer has laid down 3 (the flop). It’s giving you additional knowledge on whether to fold or keep playing. Folding early is good, because you’re not wasting time on accounts that won’t ever close and/or aren’t a good fit for your company. It also gives you a better winning percentage long-term (aka increased sales productivity and better chance of hitting your annual quota).
A main key to a good Discovery Call is researching the company ahead of time, so you’re focused on learning new information about them during the call and aren’t reiterating what everyone already knows. The research will also help tailor your conversation to what you can “guess” their specific needs will be. Being skilled at a Discovery Call is the same as having the skill to see which of the multiple possibilities you have in your poker hand…pair, straight, long shot flush? Having specific and targeted discovery call questions will help unlock the true challenges or opportunities your prospect has, identify which one(s) of your product or service offering makes sense, what the positioning of the sale should be, how to integrate your strengths and differentiator(s), and which relevant insight you can teach the prospect that is most relevant to their challenge. This consultative sales approach will increase the chances of your prospect scheduling a proposal or demo call.
Another key to a good Discovery Call is asking questions that intentionally will remove a prospect from the pipeline. You probably have a list of attributes that you weren’t able to research ahead of time that would have disqualified them from pursuing - for example, too low of a budget. The Discovery Call is as much about asking questions to identify how to best serve their needs, as it is about disqualifying them and determining whether you should “fold” after the call or continue playing. Let’s assume the Discovery Call went well and you now understand what challenges or opportunities to focus on for the proposal or demo call.
Sales Proposal/Demo Call and The Turn
The Proposal or Demo Call is the Turn. This is where the dealer in poker already is showing 3 cards, and now lays down a fourth. A proposal or demo call should be a conversation that is supported by a visual of some sort (slides or actual demo), but is still a fluid conversation that changes as the information changes. At this point of the sales cycle, you’re looking for final red flags but are assuming the prospect is a good fit. The chances of folding is still there, but it should be significantly less frequent because most of the “fold” questions should have already been asked during the Discovery Call.
As the conversation progresses around solving their challenges (note that I did not say “showing/telling features”), one of three things happen. 1) The cards (aka information from the conversation) shown is exactly, or stronger than what you expected, 2) the cards show a less strong hand than expected but still possible to win, or 3) the cards show that you’re most likely not going to win. The latter is when you fold. It is not worth Sales’ time if the information shared shows that the chances of closing is almost zero. Again, you have to know why you win and why you lose in order to identify this outcome. If the hand is exactly, or stronger than you expected, then keep going with your normal, planned conversation. If the conversation is showing you’re going to have a challenge in winning this, don’t fold. Instead emphasize generalized solutions to the challenge(s) or opportunities, provide relevant insights or stats, and then explain how your solution is best for solving the challenge(s). Many managers create battle cards that will give Sales Reps the information, stats and insights needed to address objections and competitor conversations seamlessly throughout the call.
Sales Negotiations and The River
The River in poker is when the dealer shows his/her last card and everyone knows all 7 cards that they can use: The dealer’s 5 cards and your 2 cards. I’m going to stop talking about sales relating to “poker and knowing when to fold”, but shift the sales-poker similarities to understanding the strengths of your cards. Your strengths and differentiators will be the key to closing the deal without getting into a price war. In poker, once all the cards are showing, it’s up to you to know what the options for winning are, and what your competitor’s options for winning are. Again, having a battle card with detailed competitive information will help a sales rep in real-time identify their options for winning the contract. This where during the sales process, it important for the Sales Rep to focus on the product or service’s strengths and differentiators, as it relates to the prospect’s challenges/opportunities, so the Sales Rep can convince the prospect that they hold the best hand (and they should buy from them).
Your “Tells” and Continuously Improving Your Results
The year I won the poker tournament, I was going into the final table and a good friend brought me aside and said, “you have a tell, its xxx.” A “tell” in poker is a habit that gives your hand away. Mine told the table when I had an average hand, which made my bluff less successful and my wins less fruitful. I went into that poker game being aware of my tell and eliminated it. Like in sales, improving your disadvantages will improve your conversion rates. I always recommend my clients use sales dashboards and record sales calls for many different reasons, but mainly to improve conversion rates between sales stages. Recording calls (and ideally, auto-transcripting calls) will help sales managers coach their reps to specifically call out where they can improve. Sales dashboards can help Sales Managers know which recording they should be focusing on for each Sales Rep’s individual improvement.
Just like improving individual results, it’s important to continue to improve and adjust sales criteria. I’m not a fan of making one-off exceptions for sales criteria around lead scoring or discovery calls. I am a fan of consistently evolving sales criteria, lead scoring weights, and refining discovery call questions to best address changes in the market, competition, product/services changes, and where we are in our company’s lifecycle. If I make an exception, I try to integrate it into the lead scoring system, making it worth fewer points, so it becomes a standard rather than an exception.
A good lead scoring system will make really important attributes worth many points, and “exception” or nice-to-have attributes worth few. It takes some practice to get the weighting system and sales criteria correct, but it will eventually allow you to trust that your Sales Reps are spending time on the right opportunities and will win more.
