One of the most significant daily challenges to a sales professional is deciding which opportunity to work on today. To do this, you have to get your prioritization right, and that requires each opportunity to be valued.
This is even more critical when you are working many opportunities at one time and when the opportunities are at different points in the sales cycle and have different levels of importance based on strategy, revenue, product, etc. This exercise requires a significant time investment, and getting it right is crucial to focusing your effort where it will have the best payoff.
Putting a value on an opportunity is tricky. Our OPM methodology helps by defining two distinct types of value. An intrinsic value depends only on the probability of winning the deal and the position you are in the sales cycle. External value refers to the factors we mentioned earlier such as potential revenue, strategic importance, product relevance and others.
A nice analogy we use to explain intrinsic and external is a card game.
Card games can involve everything from speed to luck to strategy. And in every case, how you organize and play the cards that you’ve been dealt is different. Doing it well is critical to winning. Let’s look at a card game where all 52 cards are dealt to four players so each has 13 cards. When they are dealt, the arrangement is random, like this:
The first thing you must do is review what you’ve been dealt and, knowing the rules of the game that you are playing, decide the value that each card has for winning. In a game like Ninety-nine, where the face value is the critical factor in winning, you would sort your hand from highest to lowest face value, like this:
This organization wouldn’t really help in a game like Bridge that is based on the different suits of cards. There you would organize them to look like this:
Both of these sorting techniques use the simple external value of the card in the game you’re playing; that is, you’ve sorted them by highest face value to lowest for the game you’re playing. External value is just that – the face value of the card, either within the whole hand or within the individual suits. This is good to know, but it’s useless in playing the game. For that, you need to know the intrinsic value, and this depends on the specific rules applying to the game you are playing.
Using the Bridge hand, what order will you play your cards? That depends on where you are in the game and how many more chances to play you will have. The value of the card to be played at that moment will have little to do with its face (external) value, and a whole lot to do with how it will affect the outcome of the trick, and how that particular trick affects the outcome of the game (intrinsic value). In other words, how does it affect your probability of winning the game at that moment?
This is the intrinsic value of the card, the value it holds within the context of the game at that moment, and that value will change with each trick played. In some situations, your lowly Six of Spades might be more valuable to your ultimate goal of winning the game than your Ace of Hearts. That same trick at some other point in the game might have a totally different impact and you’ll play that Ace. This is the strategy of winning at cards.
It is a strategy that applies to directly to your success in sales. You must be aware of your opportunities (your cards), organize your portfolio of open opportunities (your hand) in a useful and coherent way, and work those whose intrinsic value is most likely to result in achieving your goal (winning the game).
The value of any opportunity on any given day to your overall success is not its external value, i.e. the size of the deal or the closing date or any other outside influence. It is the intrinsic value, the probability that you will win.