“Make it a double” barked Chris to the bartender to be heard above the restaurant din.
“Guess your boss came down on you pretty hard, huh?” said Jo.
“Well, I’m angry with myself more than anyone else for not being able to keep a two hundred thousand deal from evaporating” replied Chris.
“That’s why I wanted to buy you a drink, Jo” said Chris with a note of humility.
“I know you’re CFO of a publicly traded company and I figured you could coach me. You know…how to sell someone like you” whispered Chris as he began sipping his martini.
“Aren’t you the slick, seasoned sales exec my daughter married?” kidded Jo.
“Yeah I know but it seems like every deal these days lives or dies in the CFO office and I can’t rely on just selling to IT or the business manager any more” admitted Chris.
“Okay, so let me ask you. Why did you lose this deal?” asked Jo.
“The CFO felt our company was too risky to bet on” explained Chris. “But both IT and the business love the product and our people.”
“The way I look at things it all comes down to risk and reward. I know you’re a small tech company up against some big competitors who are a lot less risky in the CFO’s eyes” mentored Jo.
“Yes, that’s true but our product is more cost-effective, faster to deploy, and just plain better” countered Chris.
“We both know the best product doesn’t win, Chris. You have to find ways to raise the rewards and lower the perceived risk” urged Jo.
“Ok, I’m listening” said Chris.
“Well, on the risk side, did you try tying the $200k deal to specific results?” challenged Jo.
“No. I wanted my $200k PO not a bunch of little deals” Chris reacted.
“I’m not saying you have to make it a $50K deal. What I’m saying is to offer some guarantees. You know, like offering to credit back some percentage if you don’t deliver on the expected ROI” offered Jo.
“Now my CFO would probably hate that” replied Chris.
“True. But if your product is so hot why wouldn’t you stand behind it financially?” said Jo.
“I could explore that with our CFO but I know he’s not going to like it” Chris anticipated.
“Yes but it’s your job to make a deal between the two businesses so you have to bridge the two needs” counseled Jo. “Remember, it’s about lowering risk to the customer’s CFO and yours.”
“So what else besides guarantees?” asked Chris impatiently.
“CFOs talk to CFOs” said Jo in between bites of her bruschetta.
“So you’re saying I should’ve lined up a reference phone call or two with a peer CFO, right?” asked Chris.
“I already reference sold the VP/GM and the IT director but didn’t think to do that for the CFO” admitted Chris.
“Why not? CFOs will trust a peer over just about anyone else” remarked Jo.
“Ok, I’ll get our marketing VP to help me line that up” said Chris perking up.
“Then you also have to be prepared to open your books to the customer’s CFO” said Jo.
“Chances are the CFO already knows the business and techies want your solution but they just needs convincing that this isn’t a stupid vendor choice in terms of liabilities” continued Jo.
“Most startups brag about how much money they have in their war chest from the VCs or how big the company is. But, frankly, what impresses me more are profitability and cash flow” commented Jo.
“You see a profitable, cash flow positive company is actually a lower risk than some flashy, hot company that Gartner puts up on their magic quadrant slide as an innovator” gestured Jo.
“Well, I’m definitely competing against dozens of well funded startups. Maybe I should really play up our profitability rather than getting defensive on our so-so marketing” responded Chris.
“CFOs like profit and cash flow, kid” said Jo. “And you have to convince your CEO or CFO to be willing to show their books to your customer if they want the $200k deal” said Jo. “Of course, the books have to be worth showing.”
“Ok, I hear you” said Chris as the double martini was really loosening him up. “Now tell me more about the reward side since you did a decent job helping me on the risk side” said Chris with a smirk.
“Ok wise guy. The good news here is that you can sell benefits. CFOs do respond to rewards that the business unit will derive beyond just functionality” said Jo.
“What do you mean” asked Chris.
“Turn a negative into a positive Mr. Sales Executive” pressed Jo.
“If the customer’s CFO prefers to do business with a bigger competitor of yours just say that you can offer much greater responsiveness as a small, nimble company” aid Jo.
“Appeal to the CFO by saying that they’ll have far more influence on your company’s product roadmap and get much better service and support than they are going with the big player” said Jo. “I wouldn’t exactly say it this way but you could say the CFO’s company can ‘own’ or ‘control’ your company better than the big alternative.”
“I was actually deeply discounting to show the CFO we wanted their business and were hungrier than the big competitor” confessed Chris.
“You may still have to discount. Remember the issue of lower risk. But the point here is to turn the small size into an advantage when it comes to things like control, ownership, and responsiveness” elaborated Chris.
“Alright, Jo, you’ve been a big help here” sighed Chris as he thought of the new game he’d be playing here.
“I’ve already had to learn financial selling with tools like ROI and TCO” said Chris with a depressed tone.
“And CFO’s hate it when vendors waltz in pretending to know their business better than the CFO” retorted Jo.
“So don’t go in with an ROI/TCO analysis to the CFO. Yes, you should do that with the business/IT guys and bring along some customer case studies while you’re at it” said Jo as she finished off her chardonnay.
“What I’m saying is to emphasize all the rewards or strengths you bring” emphasized Jo. “For example, how have you helped other CFO’s deal with Sarbanes Oxley compliance? What have you done to help their capital and operating expense? Where can you show an undeniable contribution to revenue and profit growth?” pushed Jo.
“So don’t talk ROI/TCO. Talk value for money. And show them with real customers of yours. Preferably with customers that are in the same vertical” said Jo.
“Well that’s really not what my marketing VP and CEO are telling me” said Chris questioningly.
“Well they’re probably MBAs who respond to ROI/TCO stuff. Most CFOs are getting high skeptical of that. Remember, the CFO is all about risk. They are surrounded usually by optimists like the CEO, VP of Sales, VP of Marketing, and even VP of Engineering. All of them over promise and under deliver. And the CFO is the one who usually has to reset expectations….downward” said Jo as she motioned with her knife.
“Ok, so I hear you on the reward side by showing how we have actually done things to affect issues like compliance, hard costs savings, revenue growth, etc.” said Chris. “But that sounds like ROI/TCO all over again, isn’t it?” queried Chris.
“The difference is that you don’t walk in plugging in your customer’s supposed figures into your dumb little spreadsheet. Instead, you just present what you’ve done with other customers. We will run our own more own numbers anyway” advised Jo.
“Well, Jo, I guess I’m lucky to have such a terrific mother-in-law and a mentor” said Chris.
“Just keep my daughter happy and we’ll consider it a fair exchange” winked Jo.
|Lower Risk||Raise Benefits|
|Setup reference calls with CFOs||Be more responsive/flexible|
|Consider guarantees||Forget TCO/ROI; show case studies quantifying benefits|
|Open your books; profit/cash flow rule||Tie payments to results|