Sales Funnel ROI vs Poker Odds: Making a profitable decision

Pot odds decisions are one of poker’s most elementary, yet it is one of the most common mistakes made by  players at all levels. I have always thought about how to justify a business case using calculated “pot odds. The easiest explanation of how to calculate pot odds is to compare the total number of unknown cards to how many “outs” you have, and then do some simple division.

Usually pot odds are calculated in a serious manner when 3 community cards are dealt to help your hand, called the “flop.” Two more rounds of betting occur, when the “turn” card is dealt and then the “river” card is dealt..
For example, if you are dealt a  flush draw before the turn of a Texas Hold ‘em game, there are 47 unknown cards, (52 minus your 2 pocket cards and 3 on the board).  Of those 47 cards, 9 are the same suit as your flush draw.  So 38 cards will not help you, while 9 will give you the flush hand.
Your odds are :  38/9, or more simply, 4.1  odds against making your draw.
A good poker player will only call a bet in this case, if there is already 4x that amount already in the pot.  So if you were playing a game of \$5/\$10 limit, then there would need to be at least \$40 already in the pot to justify your calling that \$10 bet to see the river. Get it?

Measuring pay for performance ROI is no different.

Last year we were responsible for getting an outside sales team over 300 meetings in 14 months, ultimately contributing to 4 million in sales and closed

deals with a cost of under 250k! 16:1 ROI.

What’s the added value of building a growing  pipeline – especially with a pay for performance model? Would you bet on 1 closed deal from 10 sales appointments? Would calculated pot odds be that transparent?

10 thoughts on “Sales Funnel ROI vs Poker Odds: Making a profitable decision”

1. Tim Keene says:

Great post, Kyle. Everyone knows a strong pipeline is the only way to make sure you’re always on quota, and it can’t hurt to add another tool to your belt to bring in qualified prospects. Especially with big ticket items like tech solutions, even one or two closed deals from a lead gen campaign can make a big difference.

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2. Now I know why I can’t afford to play poker at your table!

You said “My goal is to play the law of averages as opposed to blind luck, in determining whether or not calling a bet is a profitable decision.” How many sales people use the opposite approach when planning out their sales activity and plan?

Enjoyed looking at a sales problem through your goggles Kyle. Great to see you jumping into the blogging fray. I am looking forward to reading more of what you have on your mind.

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3. Hi Kyle,

Congratulations on getting your blog started. You’re off to a great start. Remind me not to play poker with you!

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4. Fascinating post my friend. Looks like you had a very successful year! Congratulations. Oh and I think I’ll stick to reading. 😉

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5. kylebedard says:

Thanks everyone for the comments. I really appreciate it.
Filled w gratitude,
Kyle

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6. qalixaannouncements says:

Hi Kyle, “Measuring pay for performance ROI is no different.” . Can you explain more on this statement ?
I will also like to hear more upon your statement “Last year we were responsible for getting an outside sales team over 300 meetings in 14 months, ultimately contributing to 4 million in sales and closed deals with a cost of under 250k! 16:1 ROI.”
, as I was unable to understand it clearly.
Good post, otherwise.

— Isabella from Qalixa Announcement Team

Note : we have just launched first version of Qalixa at http://www.qalixa.com, offering to you now B2A, which is simply Business for All. Registrations are free at the moment.

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7. LeadSpark generates sales demand for clients in the form of sales meetings on a pay-for-performance basis. We combine a strict top-down sales methodology with an advanced customer relationship management (CRM) system to locate, qualify, develop and organize sales appointments for your sales force.

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