Selling to the CFO - A Key to Revenue Growth
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Selling to the CFO - A Key to Revenue Growth
“6 Keys to Consider”
Over the last 18+ months, hardly a day goes by that I do not see a LinkedIn post or have a conversation with a revenue leader that does not highlight how critical the Chief Financial Official is to the majority of SaaS purchase decisions - at least those that go through an official “buying process”!
Throughout 2023 the majority of companies became much more cautious in procuring and investing in new SaaS products and reducing the expense associated with those products being renewed. In fact, the majority of companies began a diligent process to identify, eliminate or consolidate SaaS platforms that were not being utilized, not delivering tangible value and/or were a point solution that had features and functions that existed in more strategic, cross-functional platforms that were certain to remain deployed across the company.
As a result, a majority of “SaaS procurement” processes were modified to ensure the final review and approval of new purchases and even renewals went through a CFO review process.
This additional level of review reverberated across the industry. Marketing organizations updated messaging that resonated with “financial buyers”. Sales organizations dusted off their “value based selling” playbooks to enhance their ability to create value propositions that resonated with executive financial decision makers - often the CFO!
There is never a "single" right approach to gain CFO approval to purchase a SaaS solution. However, I thought it might be valuable to provide a few insights and best practices developed from talking to several CFOs over the last twelve months.
1️⃣ Know the potential customer’s business financials cold (DO THE HOMEWORK)
👉 If the target prospect is a public company read the last four 10-Qs and their last 10-K
👉 Listen to the latest earnings release conference call
👉 Identify the top "3" income statement items from the above your solution can impact
👉 Letter to the Shareholder from the CEO is the "strategic priority roadmap"
👉 If private - search and listen/read to any media that the CEO and/or CFO has been quoted or appeared
2️⃣ Establish an "internal champion" that is a trusted “CFO” resource
👉 CFOs will not move forward without an internal champion(s) who has fully vetted the solution and projected ROI
👉 Having a champion that speaks "the language of the CFO" is very important to the ROI message being trusted
👉Confirming that the resources to deploy the solution and mobilize adoption are on board will increase the CFO's comfort with approving the investment
3️⃣ Have the “Return on Investment” ready that is validated by the below three factors
👉 Use the target prospect company’s financials and operating environment
👉 Use "similar company" case studies and use cases with proven ROI
👉 Best practice is to have the ROI validated by an internal champion(s) before presenting it to the CFO
4️⃣ Know the company’s "investment return threshold"
👉 Time-based - validate the expected return timeframes (> 1 year not as strong)
👉 Internal Rate of Return - every investment is competing for the same capital measured against internal hurdle rates
👉 "Time Savings" is a much harder "ROI" sell to a CFO unless it impacts one of the items in #6 below
5️⃣ Align your solution to an "approved strategic initiative" that has an existing ROI approved by the CEO, CFO and/or Board of Directors
👉 Solutions that enable or contribute to the highest priority strategic initiatives that are approved and budgeted will receive much higher consideration
👉 Selling the “vision” and “potential” for non-approved projects is an important competency in “early categories” but a difficult model when selling to a company and CFO for the first time
👉 Getting an early adopter product that is not budgeted in front of and approved by the CFO requires the department’s senior executive’s full support in concert with a “budget reallocation” strategy from another project or investment that was part of the planned and approved budget
6️⃣ CFOs love "ROI" that is generated by hard financial results that can be measured in $$$
👉 Increases Revenue
👉 Decreases Expenses
👉 Enhances compliance or reduces risk
👉 Increases Customer Satisfaction (Internal or External)
👉 Increase Company Value (EV:Revenue multiples impact - like companies)
If you are a finance leader reading this week’s newsletter - I would love to hear from you what other criteria you use to become comfortable with a material SaaS solution investment?!
If you are a Go-to-Market leader reading this week’s newsletter - I would love to hear from you what other strategies or tactics you use to ensure the financial value of your solution is easily understood by a CFO?!
For the love of SaaS!!!
Benchmarkit in partnership with the SaaS CFO is conducting a series of executive dinners in 2023 to enable our community to learn, share best practices, and engage with their industry peers.
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