Selling Successfully to the CFO
This article appears in our Q3 2022 issue of Finance Transformation Magazine. To download the issue, click here
Andrew Codd, CEO of AVF Worldwide and President of Finnetics®, helping finance teams do more of the right things more often, discusses how Sales teams can successfully sell to the CFO without giving them an allergic reaction.
Whether in my role as a former business area CFO, producer of the award-winning #sitn finance podcast or president of the Finnetics® SaaS solution, I continuously hear from CFOs that they hate being sold to.
In fact, one previous guest on our podcast described CFOs being sold to as akin to triggering severe allergic reactions in them manifested by symptoms such as: CFOs becoming restless, distracted, or looking for ways to make a quick exit from the Sales pitch to find some antihistamine tablets to prevent them breaking out in hives.
Similarly, I can also sympathise with the Sales teams who are on the other side of such encounters, from whom I've also heard many laments, particularly when they had gotten a deal to within touching distance of the finish line, where the economic buyer was ready to buy, the sales team were already mentally spending their commissions cheques, only for the customer's CFO to blindside them and pull the plug on the whole deal!
And to compound matters the risk to the mental health of both CFOs and Sales teams is only going to get worse as CFOs are increasingly becoming part of digital transformation sales pitches either directly, because CFOs in some customers are the ultimate budget holders of such expenditures; or indirectly because CFOs are being brought into such conversations for other governance reasons.
Therefore, I encourage you to think of this article as an initial bridge to better connect CFOs and Sales teams for more win-win outcomes, so that CFOs suffer less allergic reactions from being sold to, and dare we say, might even feel some benefit from being part of such conversations with Sales, and likewise for the other side, to protect the sanity of Salespeople who are seeing their deals fail at the final hurdle.
This bridge to successfully sell to the CFO has three key steps:
1. Do your Homework
Although a lot of businesses have CFOs who talk about their financials in a similar way, each CFO has their own unique way of evaluating financial value. So, before speaking to the CFO, do a little homework on the financial objectives and metrics that matter to them.
Are they focussed on cost savings, freeing up working capital, building-up their balance sheets or driving top-line revenue? Does the CFO have to talk to public investors, so phrasing outcomes in terms of EPS savings/enhancements might be beneficial. Or do they report into a Group structure or have a lot of debt, so EBITDA, opex vs. capex, or debt covenant impacts might be a better way of communicating how your product or solution helps them achieve such objectives. Interestingly a recent survey suggested only 11% of CFOs felt that salespeople always or very often did their homework1.
2. Be Precise
Make sure that your solution towards the metrics that matter is backed by a detailed financial report with supporting analysis and precisely quantified benefits. Provide the CFO or their team with a financial model so they can precisely understand any assumptions that surround your analysis.
A value-add might be to even have it evaluated by your own CFO, a senior finance team member, a CPA, or even bring them along to talk to or answer any questions on the numbers as this will demonstrate some attempt at an independent evaluation as to the 'true and fair' view of your solution's business case.
3. Don't Sell
CFOs aren't impressed with flashy marketing material, pretty brochures or even seeing great financial returns. In fact a key error Salespeople make is focussing too much on the financial returns and not enough on the impact their solution has on risk mitigations which is another key component of the net present value (NPV) formula essential to corporate finance decisions.
CFOs have to optimise and balance many competing objectives and they do this by evaluating both the risks and returns across a number of perspectives to drive the best NPV for their organizations.
Think about it, CFOs might have in front of them three deals to review: the first could be yours, perhaps some cyber security software to reduce phishing risk; the next might be some sales training to increase revenues from their own inside sales team; or even a recurring maintenance contract that will save 10% on utility bills.
So if the CFO decides on your cybersecurity solution how can you help them communicate to the other senior executives and budget holders in their company why your deal was approved and not those for other business areas?
So present your solution as creating balanced value across various risk and return dimensions such as:
• Cost savings
• Increased productivity/utilisation
• Competitive advantage
Increased Reliability of Operations:
• More accurate forecasts
• Increased availability/throughput
• Preserve current capabilities
Legal/Regulatory Risk Mitigation:
• Improved compliance/due diligence
• Improved awareness
• Reduction in risk of fines/damages
Product Risk Mitigation:
• Minimise credibility loss exposure
• Business continuity
• Improved quality/less rework
And for some additional bonus points, no solution is a perfect fit. It may sound counter-intuitive but openly discuss the potential drawbacks from investing in your solution.
Ultimately CFOs will be impressed, and conversely, you and other Sales leaders will become less frustrated, if you present to them in a way that shows you've done your homework on the metrics that matter to them; you're precise; and finally that you've given them a balanced, realistic and accurate perspective of your product or solution, upon which they can balance competing objectives to make and communicate the best risk/return decision for their organization.
1 Positive Momentum (2022)
About the author: Andrew Codd
Andrew is an ex-CFO, bestselling author, award-winning podcaster, speaker, coach, trainer, and now as President of Finnetics® works with CFOs who have been busy digitalising their teams yet finding stakeholders are not fully satisfied with what Finance are delivering from them. This article is inspired by the Selling to the CFO Bootcamp that Andrew has established in conjunction with a proven Sales Training provider.