During a workshop titled "Turning Young Startup CFOs into Strategic Ones", the question arose on how sales teams could enhance their productivity, reduce the sales cycle, and expedite the time from lead to deal. Surprisingly, we found that one of the easiest ways to improve sales is by understanding the customer's CFO and what factors influence their decision to buy or sign a PO (Purchase Order). We came up with a list of questions to help with this.
- What is the potential EPS (Earning per Share) impact? Your product can either increase customers' revenues (e.g., through AI-powered behavior analysis) or reduce costs (e.g., through procurement process automation). Understanding the CFO's incentive is crucial since they may prioritize revenue growth for higher valuation or cost reduction for a more direct impact on EPS, particularly for public companies. Equip your sales team with this language to effectively convince the buyer, who ultimately needs the CFO's approval.
- What is the cash flow impact of your offering? Your sales team may present an attractive ROI, but the customer's CFO may be more concerned about cash flow. To address this, consider alternative pricing models that accommodate their cash flow constraints. For instance, I had a client who spread out the $250K cost of a machine over time and created $750K in value over five years, resulting in a 200% ROI. Without this flexibility, the deal would not have closed.
- What budget constraints does the customer have? It's essential to have a clear understanding of their current budget situation to ensure that you don't present an offer that exceeds their budget. If the customer is currently over budget, consider waiting for the next budget period to present your offer. Doing so can make the decision process smoother and more manageable. Otherwise, there's a higher chance that your proposal will be rejected by the customer's CFO.
- What is the decision maker's authorization level? Knowing the customer's PO authorization level is critical to avoid any administrative hurdles that may slow down or prevent the sale. For example, if your offer is above the decision maker's PO authorization level, additional levels of approval may be required, leading to delays or loss of the sale. Consider providing a discount to expedite the PO execution if the salesperson is aware of this beforehand.
Through our workshop, we discovered some valuable insights into understanding the customer's decision-making process, specifically regarding their financial objectives. By demonstrating how your product or service aligns with those objectives, you can establish trust, showcase your credibility, and boost your chances of closing more deals. It's crucial to keep in mind the CFO's interests and motivations and use their jargon to equip your sales team with the best tools to persuade the decision-maker to make the purchase.
