Know when to fold 'em

Salespeople must recognize unprofitable business when they see it, and have the guts to walk away

By Tom Reilly -- Industrial Distribution, 9/1/2005

Kenny Rogers may be a legendary country western artist, but I think he knows a lot about selling. Consider his song, The Gambler: "You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run. You never count your money when you're sittin' at the table. There'll be time enough for countin' when the dealin's done."

His advice makes sense for salespeople, even though he was singing about playing poker. When it comes to customers, there are times you must "hold 'em" and there are times when you must "fold 'em." Let's talk about "folding" times.

Prisoner-of-hope accounts are those customers or prospects that continue to string along salespeople beyond the point at which the salesperson will get a fair return on his or her time invested. Maybe buyers do this to keep viable alternatives. Maybe they do it because they can't say no. Maybe they do it because they are indecisive.

I don't know their motivation, but I do know that there are some people out there who dangle the sales carrot before salespeople's eyes. And because most salespeople are optimistic, they want to believe they will get the order.

At some point, you need to "fold 'em." Cut your losses and move on. Maintain contact with the customer, but don't give him the intensity of a full value-added sales effort. Instead of weekly sales calls, cut back to monthly contact by phone, just to check in. Free up this sales time to invest elsewhere. Persistence is admirable, but persistence in the face of diminishing odds is fool's gold.

Another time to "fold 'em" is with the low-margin, high-aggravation factor customers that want your valuable resources but don't want to pay for them. Do you have unlimited resources to squander this way? There are customers that are expensive to keep and almost impossible to keep happy. This is the type of business you want the competition to have—as much of it as they can get. Then, take Napoleon's advice: Never interrupt an enemy when he's making a mistake.

In business, it's important to know what you must do; it's imperative to know what you must not do. This power of discernment prevents you from wasting your most valuable resource—your time. You can always get more money, but once you've wasted your time, it's gone forever. To be successful in sales, you must use your sales time productively in areas that will yield the return you are looking for. Just as you would not throw good money after bad money, why would you throw away something more valuable than money—your time?

Invest your sales time with viable and valuable prospects and customers. Learn to recognize when to "hold 'em" and when to "fold 'em." Know when to stay and play, and know when to walk away.