Have you ever been in a meeting where someone is presenting (hopefully not you) to an executive level audience, and it is obvious within a few minutes that the senior executives have “checked out” of the meeting, or worse yet left or cut the meeting short? Why would that happen? One of the primary reasons for this reaction is that the presenter isn’t speaking their language. And, when I say language I don’t mean English or German, or Mandarin, I mean the language of business in their industry.
This phenomenon isn’t limited to presentations either. All too often, marketing and sales communicate in language of features, functions, and specifications. This is appropriate when connecting with someone that speaks that language as well, but not when communicating to executives. When you are selling your solution to a prospective customer, it’s imperative that you know your audience and speak in their language.
Business leaders typically fall into one of three strata when it comes to communications:
- Functional or First Line Management
- Business Management
- Executive Management
Functional or First Line Management
Functional leaders or first line managers typically communicate in a more technical manner. They are looking at how a solution can meet their specification including what features and functions it delivers. They have a job to do and a specific set of objectives to meet, and they want to know how your solution will help them to do that. This is the level where most sales and marketing collateral is targeted. This level cannot be ignored, but it is not sufficient in most circumstances to close the deal.
Business management is where financial responsibility for an area of business is held. This can range from being responsible for the P&L for a line of business or geography to financial accountability for sales or marketing. In a smaller company this may reside solely in the President, but in larger companies these are typically the Vice Presidents or General Managers.
Because they have financial responsibility for the success of the business, they think and communicate in financial terms. They want to know about revenue impact, reduced cost, time to benefit, business risk, and bottom line how your solution will impact the financials of their business. They typically aren’t interested in the features of your product and they rarely will be interested in a demo. They want the business case in financial terms. They want to know how much you can improve their business and how you can prove it to them. Proving it doesn’t mean showing them how the product works, it means showing them how their business will operate differently and providing evidence and proof. That evidence and proof can come in the form of benchmark data and studies, but ideally it comes in the form of references and case studies from other similar customers.
Often these people are referred to as the financial buyer or the sponsor. Whatever you call them, they need to see a professional and practical economic business case with proof. Investing in your solution can impact not only their success or failure as a business leader but their bonus.
One would think that once you have the business leader bought into your business case, that the deal is yours, right? Not always. In larger enterprises, and especially publicly traded companies, there is another level, the executive management team.
Not all business cases need executive management approval, but when they do it is crucial that they convey a very solid financial justification. This is often the domain of the CFO. As the stewards of the money, it is their job to make sure that the company is making the best investments for the stockholders. Thus they will be comparing various initiatives and investments and assessing for each the overall impact on the company. They will be considering things like the expected impact on stock price, market share, EPS (earnings per share), and other wall-street metrics.
Since the job of the CFO is to invest in the best initiatives across the company, they will often reject what seems like a solid business case in favor of other initiatives that have a stronger impact on the company’s overall financial metrics. Just because your business case met the minimum hurdle rate, had an acceptable ROI, and a short enough payback period doesn't mean that it will be approved.
However, you can all but be guaranteed that not having a quantified business case will doom your proposal.
Often you won’t have the opportunity to communicate with this level, especially if your
Bottom line is you need to understand the various audiences that will be consuming your value proposition and be sure to craft your message appropriate to each of the audiences. The technical message is suitable for some, but certainly not all of the people that you will need to communicate with. The higher up you go within an organization, the more likely they are to communicate in business terms and that includes building a quantifiable business case including financial metrics for success.