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Think About Sunk Costs
How much time you have invested in an opportunity is never a good reason to stay on an account. If the sale is dragging on and the likelihood of success is minimal, the art of sales is knowing when to walk away.

For a printing company owner, a decision to buy a new press versus keeping an old press can provide a good example for how printing sales people should be thinking. Assume you still have money to pay on the old press, but you find you can make a lot more money on a new press. If you abandon the old press, the money you owe is “sunk”. The same principle applies to your company’s sales efforts.

At what point do you walk away from a sales opportunity that you have spent months on to pursue another opportunity? The lost time on the abandoned opportunity is “sunk.” Knowing when to walk away from a deal that is costing you too much time for the reward is one of the key skills that are seldom taught to professional salespeople.

For salespeople, a basic principle of account and opportunity targeting is understanding how much time and effort it will take to close the deal. As in business management, scarcity of resources necessitates trade-offs. The scarce resource, in this case, is time. Any decision that involves a choice between two or more options has an opportunity cost. Calculate the opportunity cost of choosing one opportunity over another based on time and payback, is an art as much as it is science and will often separate top from average performers.

Joe Rickard is a sales training leader and consultant in the graphic communications industry. He is the founder of Intellective Solutions LLC, a provider of consulting services as well as customized sales and sales management training. Contact Rickard at (845) 753-6156, jrickard@intellectives.com, or visit www.intellectives.com.