Sales 101: How to qualify a business opportunity

A great player once said, “you miss 100% of the shots you don’t take.” While that is technically true, in the business world, every shot comes at an opportunity cost. You always have limited resources, be it human bandwidth, money or time, and it’s incumbent upon you to make a judicious choice on where to deploy those resources. So given a choice of taking the proverbial shot at 2 different nets, you have to estimate your relative chances of success from each and make your choice. Of course, you may not always get it right and there may be “buyers remorse” - that’s normal in the game of business. Now that we have established a baseline, there has been a framework that I have employed in my career to determine the right way to approach an opportunity. And I broadly categorize into 3 reasons why you should “bid” given an opportunity and 2 reasons why you should not. So in the order of reasoning…

1. Bid to Win - this is the most straightforward reason to bid for a deal. There is an opportunity, you are confident in your ability to execute it and believe there is a reasonable chance to win, because of your solution or technical superiority, your relationship or your commercial competitiveness. It makes absolute sense to rally the troops and go all out for a win.?All the best!
2. Bid to Engage - this is not that obvious. There is a customer or a business segment that is on your or your organization's wish list. It makes perfect sense to go after them, but the opportunity at hand may not be winnable, because of lack of capability, solution/commercial/relationship superiority of the competition or just that you are not able to dedicate the right organizational resources to the pursuit. But you still want to make a go at it because you believe that it will at least enable you to engage with the technical and commercial buyers in the customer organization and make a good impression and/or establish relationships that you can build upon. It will also enable you to sense / sniff out the next opportunity that affords a better chance at landing the account. Yes, it may feel like wasted effort in the eyes of some, but I would recommend going for it!
3. Bid to Learn - now this is a really tricky one and may need a bit of self-reflection and lot of persuasion of the management and extended teams to execute. The opportunity is not winnable as your organization has no real capability in-house or through partnerships and customer is not as forthcoming to engage, but it’s an opportunity in an up-and-coming area where there is tremendous future potential and really aligns to the vision you have. And you believe that rather than trying to experiment and cook up things in a vacuum, this is an excellent way to build and test out your hypothesis against real customer data and real-world scenarios. And you never know, if competition is in the same spot, the customer might as well look at the innovative thoughts and investment mindset that you bring to the table and just might go with you!

Now let’s get to the other side of the story - when to avoid bidding...?

1. Bid to keep busy - this is quite obvious. As an individual it is your prerogative to do what you want with your time. But it’s virtually a crime to waste organization resources or even your own time and efforts that could be best spent elsewhere if the only reason you are attempting an opportunity is because you have nothing else going on and want to look busy. Please give it a pass. In fact, in certain instances, you can be honest to your customer on why an opportunity is not up your wheelhouse and that builds better credibility and trust.
2. Bid to keep the wheels turning - now this is the other extreme, and while rarer, I have seen it happen in corporate situations. The person who has control of the team decides to sweat them on an opportunity because they feel the team is idle. This may be legitimate if you can make it a Bid to Engage or Learn situation. Else just don’t force people to burn midnight oil!

Now that we have gone through multiple scenarios, I would like to hear your thoughts on this sales strategy framework. What has worked for you? Are there any distinct ones that I seem to have missed out? Fire away…

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