People in positions of power often ask tough questions. In our experience, this is certainly true of anyone on the financial team who has the ultimate say over purchasing decisions.
Unfortunately, salespeople are rarely invited to the internal budget meeting to discuss a potential purchase. Typically, you work with your stakeholder to prepare a business case, and the stakeholder attends the meeting. That’s why it’s crucial that you prepare your stakeholder to anticipate the kinds of tough questions that decision makers usually ask about benefit dimensions in a standard business case.
Let’s take a closer look at a common and often tricky benefit dimension: labor savings. Labor savings can be achieved in a variety of ways, including:
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Reducing head count
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Reallocating resources
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Deferring hiring more people
So if your stakeholder is taking a business case containing labor savings to the finance team, make sure that they have considered these scenarios. Make sure that they have a response ready if the approvers ask if they are prepared to lay people off. Alternatively, make sure that they can confidently state that they will not need additional staff in next year’s budget.
Similarly, if your business case includes top-line revenue improvements, you must ensure that your stakeholder can explain how the changes you’re proposing will drive revenue increases. Remember, companies are already doing many things (or should be) to increase revenue, so the burden will be on you to prove that your changes had an effect on sales.
An ROI tool can be especially helpful in drilling down into the specifics of proving various benefit dimensions -- especially considering that many salespeople feel their companies prepare them more for conversations around features and benefits rather than aspects of competitive differentiation. According to a Corporate Visions survey reflecting the responses of more than 700 business-to-business (B2B) marketers and salespeople from around the world, around 25 percent of reps reported feeling the most tension during conversations about:
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Justifying financials
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Negotiating with purchasers
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Effectively conversing with executives
This demonstrates a clear need for sales organizations to properly enable their salespeople with solutions that can help them in these three areas. For example, ROI tools help reps easily identify how much savings the prospect will see and how those savings will be achieved. So, when the CFO asks, “How will you save half a million dollars in labor?” the stakeholder can say, “We plan to eliminate eight jobs.”
Frequently, stakeholders return from the budget meeting armed with many requests for alterations in calculations and benefit dimensions. (If that happens to you, here’s why you should not panic.) Again, an ROI tool can also be very helpful when you have to go back and adjust your calculations.
Decision makers ask tough questions because they’re in charge of making changes that will affect the entire company. Once you understand how they think, you can anticipate their concerns. That puts your stakeholder in a position to successfully defend your business case and, ultimately, win budget approval.
How do you prepare your customer to defend your business case and secure budget approval? Share your thoughts in the comments section.
