6 Tips for Selling To the CFO

How to Sell to the CFO

Sales professionals engage many stakeholders within each company that they pursue. Early in the process, these discussions focus on understanding and meeting customer challenges. However, once the sales professional addresses these needs, they encounter a different conversation. They begin to discuss the financial ramifications of moving forward with the solution. Therefore, sales professionals need to be prepared for conversations concerning how the solution will fit into the customer’s budget and ensure they are ready to tackle the challenge of selling to the CFO.

In many cases, this “pencil-to-paper” conversation moves beyond nuances like delivering insights about customer needs or discussing ease of implementation. To move forward, the CFO must see economic value in the solution.

Pros and cons become pluses and minuses.

In this final and most difficult mile of the sales cycle, sales professionals must help the customer make a compelling case to the CFO to close the sale.

Sales professionals must participate in the due diligence required to develop confidence in the solution. The skills for doing so are different than those needed when connecting solution capabilities to business challenges.

Here, we look at the factors that sales professionals need to consider when selling to the CFO. These considerations are critical for ensuring that the sale survives through the final stages.

Understand the Range of Reasonability

The CFO wants to gauge the solution’s return on investment (ROI). This number matters because it represents the financial value of the product or service. An ROI helps measure the benefit of the solution in comparison to alternatives. However, it is difficult to project a defined ROI. Therefore, the best strategy is to put edges around the playing field with a range of projected outcomes.

The sales professional’s goal should be to get the stakeholders to agree that the ROI is between “here” and “there.” This approach builds credibility by using examples in the middle. As a result, sales professionals can show that there’s a rate of return within a reasonable confidence level.

Building this range requires relevant data. The CFO wants to see that the projections stem from comparable circumstances. That is, the sample data used to justify the ROI must come from not only similar industries but similar challenges with at least two or three significant parallels.

If there are not enough similarities to the customer’s world, then sales professionals should maintain the dialogue to learn what does connect.

The sales professional’s objective is not to prove that they’re right or that their projections are certain. The objective is to provide a sufficiently credible argument that keeps the customer engaged.

Credibility is crucial because the finance team will take every opportunity to discount the solution’s return based on the risk incurred. Therefore, helping the customer become comfortable with a level of risk can help improve the solution’s viability.

Know When ROI Applies and When it Does Not

An evidence-based, projected ROI is the most effective measurement for compelling the CFO to finalize the deal.

However, in some cases, an ROI does not apply. Some solutions provide value that is not quantifiable.

For example, some solutions improve efficiency or accelerate workflow. In these cases, projecting a meaningful ROI is not possible. Therefore, sales professionals should not attempt to force an ROI projection where it doesn’t exist. Doing so will diminish credibility and trust.

Despite this, many sales professionals feel compelled to offer an ROI. They fear that not providing one will result in disqualification. In these scenarios, it’s important to remember that:

The CFO makes decisions based on more than numbers. They also make decisions based on logic. Therefore, if the solution makes logical sense, they can often move forward without an ROI.

In these instances, the sales professional needs to show that the solution fits within the budget. Doing so provides the CFO with the comfort of knowing that the sales professional has considered the solution’s impact on the business.

Finance teams don’t like surprises. Moreover, the due diligence required to budget for a solution takes time. The more the sales professional can participate in these efforts, the less they’re asking of the CFO.

Starting the conversation with evidence that budgetary concerns have been addressed means that the finance team has a shorter path to the sale.

Finding a place in the budget means engaging in a dialogue. Sales professionals need to speak with someone familiar with the budget. They need access to someone authorized to approve purchases. This person is not always on the finance team.

Many companies work with a rolled-up budget, meaning that each division, separated by function or geography, is responsible for their budget. Therefore, sales professionals should seek the owner of the appropriate budget rather than the CFO. If there is no room in the budget, sales professionals can ask, “Is there a process for handling costs that are outside of the budget?”

Contact us to discover how to improve your team's dialogue skills to better sell to the CFO, and all members of the executive team.

Start Early

Professionals must start the finance discussion early in the selling process. Each customer has different financial goals. Different revenue streams offer different margins.

Types of revenue vary. Some revenue is episodic and therefore less predictable, other revenue is recurring.

Customers have specific financial needs, and learning them late in the process risks the sale.

Sales professionals must understand how the customer thinks about the investment criteria. They should attempt to collaborate with the customer on drafting a proforma model.

A belief in the solution and a commitment to spend are not always compatible. For example, a customer may believe in the value of a solution and choose not to purchase.

The reason: they understand that the ROI will come long after they’ve spent the money to fund the solution. These unsynchronized flows are the inherent risk of growing a business. Without sufficient working capital, a company may fund too much growth before it earns the revenue from those efforts.

This challenge illustrates how budgets reflect more than money — they reflect activity, with each investment that a company makes tracing back to a person or team.

These individuals are responsible for driving value from resources. Doing so takes time. A new solution will demand more of their time. Therefore, they may agree that the product or service has value, but without the necessary human resources to realize that value, the customer will have no room to move forward.

Start at the End

Place the most important information first. This strategy is common sense but not common practice. Too many put the critical information at the end.

While this might appear to “set the stage” for an impactful finish, in truth, it wastes time. Executive summaries belong up front where the CFO expects them.

When sales professionals are selling to the CFO they should to know that they’re working with someone who understands the value of direct communication. Otherwise, they will be hesitant to engage in a solution that will require continued communication with the sales professional after implementation.

Putting critical information first is a strategy that resonates with the principles of recall. The serial-position effect shows us that it’s easier to recall the first and last items in a series. Memory recall follows a U-shaped curve where information in the middle fades.

Sales professionals should use this insight by front-loading the core value proposition. Restating the value proposition at the end can help reinforce the message, but CFOs want the punchline before the setup. Moreover, if the CFO is compelled early in the conversation, they’re more likely to listen to what follows. Sales professionals need the customer’s sustained attention because solutions today are complex.

Finally, this concept also correlates to the importance of first impressions. People make early judgments, then they reinforce those judgments by focusing on characteristics that confirm the first impression. Shape thinking early by stating the value early.

Keep it Simple

Long-winded descriptions diminish the listener’s confidence. Sales professionals need to make their point and make it in a concise manner. Presenting too many figures and analytics illustrates a lack of confidence.

Exhaustive descriptions of economic value appear desperate. As research from Princeton University explains, “The public trusts impartiality, not persuasive agendas.” Letting clear, concise numbers speak for themselves implies impartiality.

Simplicity is also important because what is simple sticks. However, too often the messaging becomes long. The reason: sales professionals work hard to prepare for a meeting with the CFO and tend to demonstrate this preparation.

The CFO is not interested in the effort. They are interested in the results.

Sales professionals need to learn to edit their messaging. Author George Orwell famously penned 5 Rules for Effective Writing. It’s no coincidence that three of these five rules advocate simplicity. Orwell writes, “Never use a long word where a short one will do," "If it is possible to cut a word out, always cut it out,” and “Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.”

Finally, short messaging makes the value of the solution less abstract. The CFO has many priorities and responsibilities. Abstract thought demands too much from the CFO. Sales professionals must remember that the dialogue is only one chapter in the CFO’s day.

Simplicity does all the work for the listener because it asks them to connect fewer dots. Simplicity sells.

Articulate Alternatives

Explore the opportunity costs. A choice to buy is more than a decision to spend time and money on a solution. It is a choice to forego all other alternatives.

Sales professionals must demonstrate that they have considered this characteristic of buying. For example, they must illustrate the costs associated with the most popular alternative: the status quo. The choice to simply remain “as is” represents the single largest challenge for sales professionals today. Therefore, sales professional must come prepared to demonstrate the value of the solution in comparison to the status quo.

If the sales professional doesn’t illustrate that they have considered the alternatives, then the CFO is left with this task.

With so many priorities, finance is unlikely to assume the responsibility of weighing options. This analysis is important because resources are limited. The CFO needs comfort in not only the outcomes but the methods used to estimate those outcomes.

Finally, sales professionals should use realistic alternatives. Choosing unrealistically poor alternatives only diminishes the sales professional’s credibility. Instead, it’s more effective to acknowledge the benefits of the alternatives and why the solution presented is in fact better.

Miscalculating the alternative’s value can be as detrimental as miscalculating the solution’s value. Making the sale to a CFO requires the sales professional to convince the CFO that they have thought through how the solution will impact the business. Credibility is crucial.

The Takeaway

Engaging different stakeholders means becoming conversant in different vocabularies. The vocabulary of finance is different from that of operations or IT.

Sales professionals need to be prepared for this dialogue. They need to bring relevant, evidence-based examples to outline a range of expected outcomes from a purchase.

If the solution cannot be tied to specific ROI figures, then the sales professional must participate in the due diligence that illustrates the nonquantifiable value of the solution in comparison to alternatives. They must take these steps early. Every customer is working within different financial parameters. Winning the sale means knowing these details early when they can be addressed.

State the value upfront in clear economic terms that satisfy the CFO’s need for measurability. Like a tagline, the message should be simple and free of all nonessential information. Finally, illustrate the solution’s value in the context of alternatives like the status quo and other right-sized options.

Want to learn more about how to sell to the CFO? Contact the Richardson Sales Performance team today to learn more.