In the past week, I’ve talked to three customers about a common challenge for sales organisations: the ability to create believable business cases with their clients. And if there’s one thing that will scare a CFO out of your corner, it’s the lack of a believable business case.
So how do you create one? And which KPIs do you include? ROI? Pay-Back? Something else?
To better understand this, I spoke to a CFO friend of mine. Combined with some nifty tools from the Value-Based Selling methodology, his advice will make a big difference for your salesforce. But before we get to that, we need to start with the hidden resources already available to you: your existing customer cases.
The problem with most customer cases
Here are a few typical sentences from IT industry customer cases.
“Shortly after the implementation of … we saw considerable improvement”
“We have become much more effective and (the vendor) was very service-minded throughout the process”
“Of course, we measured our top KPIs before and after, and we are very happy with the results”
Can you spot the problem? Try to see for yourself how many tangible benefits you can find hidden in the quotes above.
How does the customer define “considerable”, “effective” and “service-minded”? What are the tangible results of the improvement? What are the top KPIs, how did the solution contribute to the results and how did that impact the business?
Salespeople don’t write customer cases. Maybe they should.
Next week, I’m working with a customer’s CSO to improve their customer cases. We talk to the clients who have participated in their existing customer cases and dig deeper into the content. We compare tangible improvements to the industry average, track those improvements to the bottom line and calculate Break-Even, ROI and NPV. Then we develop questions to create realistic business cases with future customers.
You have the case. Now how do you talk to the CFO?
CFOs have been burned on at least one IT project before. The implementation took twice the time, the cost skyrocketed and the new systems don’t communicate well with the existing infrastructure. No wonder they’re sceptical of salespeople’s promises. That’s why you have to be humble about your claims and open to adjusting your case.
KPIs to rank projects
The CFO will look at a few things to prioritize one project over another:
- When can he expect Break-Even?
- What is the ROI? (No, it’s not “ROI after a year” as many seem to believe. You measure ROI as a percentage)
- And now for the little-known KPI: what is the Net Present Value of the project? When was the last time you included an NPV calculation in your final presentation to the CFO? He needs it, so you should provide it.
Those are the most important KPIs. I’ve written a blog on NPV and I recommend visiting Investopedia to improve your financial literacy.
Other important considerations
The CFO will also want to consider these points:
- Does this project fit our strategy?
- Does it solve an operational risk?
- Does this improve our customer relations?
Be patient and join forces
When you include the KPIs and considerations above in your future CFO conversations, you will be miles ahead of the competition. The likely outcome of such a conversation will include the CFO running the numbers and discussing with internal stakeholders. This is where you offer your help. You should be able to ask the right questions in the right places in the organisation. That puts you in a unique position as someone who can contribute to the customer’s business. And that makes you hard to beat.
Get started today
If you suspect that your customer cases could benefit from an upgrade, send me one today. I’ll take a look, find the hidden tangibles and help you ask the right questions to improve it.
In most organisations, marketing or journalists will write the cases. Some prioritize style over content. Others do focus on the content but are unable to discuss what’s beneath the surface. You need someone who can dig into the information and who understands how that information can enable the next sales conversations.
For my customers, conversations with CFOs are difficult. But they don’t have to be.
If you have ever failed in getting the CFO aboard a project, this is a game-changer.