Consider this situation: An RFP arrives or an opportunity is uncovered, and after a little consideration, we know that our odds of winning are low. Perhaps the Solution Fit is weak, or we lack coaches and/or knowledge, or the engagement rules are too stringent. In any case, we know we should pass on the opportunity, which for many of us is really hard to do. After all, it's better to have something in the pipeline than nothing, right?
When we pursue low-fit opportunities anyway, the impact can be significant. We use our most precious commodity - our time and our team's time - knowing we are most likely going to lose, which is discouraging to everyone. It's important to remember the value of saying "no". We can use that time to proactively pursue opportunities that we have a better chance of winning.
There is another negative impact to consider - providing a weak or insufficient proposal doesn't exactly create the strongest impression for the prospect. It might be better to avoid making a poor impression, and wait until the fit or opportunity is better in the future.
Keep in mind that saying "no" can also lead to a "yes". If the rules of engagement are slanted to the point you feel you cannot win, you could offer a compromise,
"Thank you for the chance to compete for your business. We can see based on your process that the fit between our companies may be weak, and we have decided not to participate. However, if we could do our homework with some of the key constituents and present our response to the decision team, we would be happy to engage".
This is particularly impactful if you are a market leader whose presence would be missed if you choose not to compete.
Beauty is in the eye of the beholder, and so is the attractiveness of a sales opportunity. There is no one answer to the question, "If the fit is poor, should we pursue this opportunity?", but we should all be considering how to best use our most precious resource - our time.