Overcoming The Fear of Selling to the CFO
Anyone know a good Chief Financial Officer (CFO) joke they’d like to share?
Here’s one. Joe managed a large account that required him to interact periodically with that company’s CFO. Joe dreaded these meetings, and would prepare meticulously with spreadsheets, slide shows, and any other supporting material imaginable. One day Joe gets a call from his day-to-day contact in the account informing him that a scheduled meeting would need to be postponed because the CFO had a heart attack. To which Joe replied, “You mean he has a heart?”
Many professionals who sell high-value B2B solutions will share Joe’s feelings and frustrations, but there’s no easy way around this obstacle. Once the cost of a purchase starts bumping-up against a certain amount, or if contract terms start to drift outside of the normal, you can bet the CFO will become involved. The CFO may become involved earlier, even just to have the finance department sign off on contracts. That is the CFO’s job. Getting through and effectively selling to the CFO is your job.
Let’s use a medical analogy – a bit strange, perhaps, but bear with me. The pain is that sales people fear selling to the CFO, and become uncomfortable when the CFO gets involved. But the pain has to be cured, or you won’t be able to do your best work of selling the product or the service. Simply:
- You need to understand the CFO.
- You need to be able to view the world from the CFO’s perspective.
- You need to position your product or service as a solution, a compelling way to solve their problem and meet their needs.
Start with learning your CFO’s priorities. CFO magazine, a specialized web journal, recently published a good summary of general company financial priorities for 2014. Some or all of these will affect your potential customer. Raising some of these issues with your contact at the company, or even directly with the CFO, will be very useful. You can find the article at http://bit.ly/1drpcIC.
Outlook 2014 starts with what might be called the “Big Two” of CFO concerns, the Affordable Care Act, better known as “Obamacare,” and regulatory changes. CFOs will have opinions on whether Obamacare and specific new regulations should exist. But in the real world they exist, and have to be taken into account. Your job is to find out how much of a handicap they pose for individual companies, or the companies think they pose, and what impact this will have on the money available to spend on your product or service.
Technology is cited as a CFO interest, including “cloud” computing. Data security is a major factor. A company does not want to lose confidential information, or, even worse, make the news because it has lost this information. This is not good for business.
CFOs will be interested in currency risk, particularly in the many companies involved in foreign trade. If costs are locked in at the time of a contract, a volatile currency might greatly lower the value of a contract to a company.
These are all realities for the company, for the CFO, and for you. But the article provides a piece of good news for those selling to companies – curing the pain may be less challenging than you think. Six out of ten CFOs of growth companies are setting higher growth targets for this year.
Your job is not done. You need to find out more about the particular CFO and company. Ask your contacts in the company. Simple, but it can be quite effective. They should even be pleased you are making the effort. One excellent first question is to ask how big a contract has to be before the CFO becomes directly involved. When does the CFO have to approve the contract? What role will the CFO play under different contract conditions?
Are you selling a “budgeted purchase” — was it planned before hand with its need recognized. Is the purchase “unbudgeted,” with the need suddenly apparent? In this case there might be less time for the purchase to be studied, and you may have a better chance of quick approval. The material you found on the web may be able to tell how well the client’s financial plan is being implemented. No plan ever works perfectly, but how well is this company keeping up with its current plan? It won’t hurt to ask.
You are going to want to do outside research to learn what you can about the company – at least some before your first meeting with the company. Check the company web site. Public companies have to issue periodic reports. Their web sites should have these reports. You can find their Securities and Exchange Commission reports at http://www.sec.gov/edgar/searchedgar/webusers.htm. Private company information is harder to find, but the larger ones will have web sites. Some places to start researching a private company, or a public company, are attached as the appendix to this column.
Armed with information on the company and the CFO, you now have to relate your product or service to company needs. You have to make a case that what you call your solution actually is a solution to helping the company meet its growth targets.
Start with the core issue, money. What is the ROI, return on investment – in English, how much more money will they make by purchasing your solution? Almost by definition, the ROI will have to be better than the alternatives. Products and services both have ROIs. What is the total ownership cost for products? Basically, what does the product cost above the initial cost? Is your solution something that would be “capitalized” (paid for all at once) or “expensed”, paid for when the expenses actually occur? Capitalizing lowers profits at the start. Expensing lowers profits for each period the expense occurs, but by less each time. Can billing for your solution be adjusted to fit into the most convenient schedule for the client? If not, you will have to make a stronger case for what you are offering.
Finally, how will the product or service help the CFO lower risk, which is one of his or her main jobs? The CFO wants a product or service to help decrease any number of risks to the company. These risks fun from the relatively minor risk of more work, to major threats to the company.
The role of the CFO in a company is a reality you have to discover and map to be effective at sales. It is one part of the basic need to focus sales on what the customer needs and wants.
Appendix: Research Sources
Below are some databases to use in researching companies. They are subscriptions services, and often not cheap. But they may be worth the cost. You might also be able to use some of the sources at a public library or university library.
- Bloomberg Finance Markets – http://www.bloomberg.com/
- Business Source Premier – http://www.ebscohost.com/academic/business-source-premie
- Capital IQ – https://www.capitaliq.com/home.aspx
- Factiva – http://www.dowjones.com/factiva/index.asp?link=factivacomURLdirect
- Hoover’s – http://www.hoovers.com/
- OneSource – http://www.onesource.com/corporate/
- Priv Co – www.privco.com
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