One thing I’ve observed about successful salespeople is that they have a knack for creating confident stakeholders.
Why is this an important skill? The stakeholder is already sold on buying your offering. However, often this person does not have final say over purchasing decisions. He or she also needs to convince the finance team to invest in your solution.
Here’s what you need to understand about people who work on finance teams. They’re not swayed by emotion. If you want to persuade them, lead with numbers and calculations. This is why we advocate attaching a business case to your proposal. A standard business case works extremely well for deals that require you to clearly show the customer the value of benefits they can expect to see.
To streamline the process of creating a standard business case, businesses sometimes opt to use an ROI tool. This can be helpful, because a standard business case involves collaborating with your stakeholder to outline such benefit dimensions as labor savings or revenue increases.
For example, let’s say your solution offers the stakeholder’s company the following benefits if they buy from you.
- Labor savings: $1 million
- Sales increases: $0.5 million
- Software savings: $300,000
- Hardware savings: $200,000
All told, that’s $2 million in benefits. However, in a standard business case, you’ll likely collaborate with your stakeholder to tweak some of these numbers. For example, let’s say that, during your discussions, the stakeholder expresses doubt that you’ll actually be able to achieve $1 million in labor savings. Your job is to find out what their reasoning is and help them understand how your offering will help them to achieve those savings.
Depending on how that process goes, you might also end up working with them to adjust the numbers until they feel comfortable with the calculations. Again, using an ROI tool can make this process a great deal easier and more efficient, as it should allow you to systematically work through those calculations and generate a Business Case Report by clicking a button. The business case then becomes the cost justification needed by your buyer to obtain budget approval.
Why do stakeholders often ask to change the numbers to reflect lower estimates? If the finance team signs off on this purchase, then the pressure is on the stakeholder to actually achieve those results. Naturally, they want to feel secure about the promises they’re making.
Also, bear in mind that some of your promised benefits will not be too easy to quantify. For example, your solution might promise revenue increases. However, the company is likely doing a number of things to increase revenue -- when the company sees an uptick, everyone will jump in to take credit. Accordingly, the stakeholder might want to be conservative about estimating revenue gains.
As a salesperson, your job is to fully prepare your stakeholder to go into that meeting with the decision maker. This could involve several weeks of negotiation about benefit dimensions. And it could also include preparing the stakeholder for any curve balls. For example, imagine the stakeholder and CFO get to the end of the meeting and the following dialogue occurs.
CFO: “I see that this proposal shows that investing in this solution will save us $2 million in your department.”
Stakeholder: “Yes, that’s correct.”
CFO: “Okay, great. I’m happy to sign off on this purchase. However, since we’ll be saving $2 million in your department by investing in this solution, I’m going to cut your budget by that same amount. Do you still want this project to be approved?”
When stakeholders hear this, they sometimes come back and ask you to discount even more from the business case. If this happens to you, don’t panic. This is a normal part of the process and in fact can be a good sign that the deal is still moving forward.
It can still be very frustrating for salespeople to make further changes to the business case, especially since they’re so close to closing the deal. However, since it’s not likely that salespeople will ever gain an audience with the finance team, it’s important to give your stakeholders as much ammunition as possible to make sure their meeting goes well. Work with them to come up with reasonable calculations and understand the nuances of how you plan to achieve each benefit in the business case. The more they know, the more confident they’ll be, and the better chances you’ll have of gaining the respect and approval of the ultimate decision maker.
[Image via Flickr / mrcolinlim]