This week on The Buyer’s Seat, I interviewed Drew, a former CFO with about 20 years of experience in retail and financial services, and a member of our advisor network.
As you know in your selling efforts, we’re now starting to spend more time with our colleagues in finance, than we traditionally have in the past. So brought Drew onto the podcast to talk about why that is and how we should be changing our sales approach for this new environment.
Here are the three key takeaways from the conversation:
1. CFOs are getting involved in tech purchases of all kinds, OPEX, CAPEX, the like. And the reason for that seems to be that some of the things that we sell are more enterprise in nature. So we are impacting more of the business and CFOs are now more integrated into the business than ever before.
2. As sellers in CFO conversations, think through what we need to add to our story. Look at ROI, upfront spend, IRR, and NPV. Think through creatively how we can construct the deal. Does it need to be front-end, backend? How do we smooth out the investments? How can I address its’ impact on accounting? Its impact on risk and audit?
3. You should see and present yourself as an expert in your industry. Technology investments are new territory for CFOs. Tell them what their competitors are investing in, educate them on trends, and address their concerns.
Panel Discussion Highlights
One of the things we see in the marketplace is that in a major enterprise decision there are at least six different stakeholders involved. And what we see happen normally on the sales-side is we engage with technology, and then at some point, we loop in finance, or maybe the client loops in finance, and we don’t want to.
How would you advise we navigate that? So in your experience, do the tech departments, the sellers engage you at the right time? Should they engage you earlier, later?
I think you start out with tech for sure, but sometimes you also take the meeting where you can get it. Knowing what the CFO is interested in can help. And the CFO can be like Switzerland, they can be a neutral convener, really just trying to drive returns and efficiency. That’s what they care about. And so they can be useful that way because it’s a 360-degree approach and these decisions aren’t made in silos.
I think what helps your case with the CFO is addressing: How does this impact the P&L? How can I help reduce risks? Is it global or is it a local solution and how can we stage this out? Can I make it worth it in terms of size? How can we co-invest and help decommission products potentially? And do we have an architecture that will work?
There’s always the ideal state and then there’s the context of the actual corporation and it’s never as clean as sellers would like. And so the more, if you can get a conversation with the CFO, you’ll probably get a different view of that context in architecture, which round out the edges and help you fine-tune your pitch a bit to the technology organization.
It’s interesting. One of the things I think that has forced, some of those conversations has been the pandemic and all of a sudden everybody needed to jump on digital transformation in a hurry and looking at that and revisiting some of those past requests and is the infrastructure standing up for that or not? One of the theories is there’ll be a whole rash of tech investment and putting the CFO in the middle of all of that because of the changes in business strategy. So do you hear that within your network?
Yes. Changes in business strategy and then enterprise risk management is an evolving area in corporations, especially outside of the financial services industry. It’s probably a newer topic and something like the pandemic puts that front and center. So yes, changes in the business model and accelerates all those trends that were already happening and then also risk. And it’s been a huge real-time a test of this risk management systems and cyber risk and everything else. And so that will entail, we need to do business differently because we can no longer just count on being in person in the data center to make this happen.
if I’m used to selling to CIOs and now I’m starting to sell more to CFOs, what are some other things that I should be prepared for?
if you had in your mind an ideal “this is how we’d land the account and this is how we would roll out,” there’s usually going to be financial constraints. And so figuring out new ways to stage the investment in your product, but still get the returns is something a CFO is going to be thinking about— those financial metrics you mentioned they’re really just risk, financial risks.
How can we help smooth out that boom and bust investment cycle depending on the industry? What are the touchpoints with my ledger in my accounting system and you can have the best product in the world, but if it puts in jeopardy financial reporting or there’s going to be a bunch of work by the accounting team to make the system implementation happen? That’s usually something people don’t think about and accounting teams are small, and that can be a big bottleneck and that’s what the CFO is thinking about. And so a project won’t go forward unless they’re satisfied.
Are there any more pain points of the CFO that a seller can confront head-on? Knowing these bottlenecks can really shift the conversation.
One thing I’d point out is that inside organizations employees don’t have as much time as people think to really dig into what their competitors are doing or how their competitors are investing. And I mean, they would love to have time to do that. They’re usually involved with a million internal things. And so if you’re an IT seller and you know what’s going on in the industry, then you should pay attention to competitors.
Publicly, organizations need to disclose certain information. Just a little bit of work looking at what companies present on their IRR websites, such as the presentations on what their priorities are and what they’re investing in. And usually, the CFO is saying here’s the dollars and it’s all public. By aggregating and presenting that information, that’s value-added information that’s all public and that’s one way sellers can really help these internal financial stakeholders around the edges. It allows them to look at their systems and their needs in a different light.
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