CFO… More like CF “No” Officer In Today’s Market
We preach no fluff, so let’s cut to the chase. CFOs are in no mood to approve any new spend in the current market climate.
Put yourself in the shoes of your CFO. Interest rates keep climbing, meaning any debt on the business is costing 2-3x more than years prior. Other company’s budgets are also tightening which might lead to your revenues declining this year. Costs are up due to inflation. All of this screams cut all discretionary spending and become the Chief Financial NO Officer to any and all incremental budget requests. So what does this mean for your business?
If it needs CFO approval:
#1. You’re in trouble
#2. See #1
#3. For any hope of getting it approved, you better have every single piece of the puzzle already solved and be able to clearly articulate that there will be a positive ROI
We all know BANT (and if you don’t, it stands for Budget, Authority, Need & Timing) but BANT was more of a speed bump to decision approvals the past few years vs. the border control checkpoint it is now.
Budgets were wide open and less scrutinized, as long as you could justify growth. Authority was loose and more people had decision making power. Need was less defined and more often got confused with want to haves vs. must haves. And timing was of the essence, every company was growing and if you weren’t acting fast you would find yourself being passed by competition.
BANT in today’s market environment looks more like
B A N T
So, let’s focus on what we CAN control and not the overall market picture. How can we ensure our sales approach is foolproof to prevent extended and delayed sales cycles?
This can be broken down into a few different areas.
- Laser focus on The Who
- As Buyer Friendly As Possible
- Leverage tech
#1: The Who
Over the past few years, things were easier in the sales process with fewer approvals needed and folks were looking to add services and tools in order to grow revenue at all costs. This meant poking that sweet spot of “I have a product that will help you grow,” and then you have their attention.
It is now time to get back to the basics and hone in on the ideal customer. Anything outside of that is wasted money and time spent by your sellers. With as hard as it is to close new business currently, the last thing anyone needs is wasted time. Hone in on your ideal customer profiles and don’t deviate away from them. In fact, your ideal customer profiles for new business might be existing customers to whom you can sell more business to.
#2: As Buyer Friendly As Possible
If it is not crystal clear yet…. This is currently a buyer’s market.
Anytime you’re on the opposite end of the market, you need to make the process as easy as possible for the individual to say “yes” and choose you. Let’s take the housing market from 2020/2021 as an example. Hot Sellers Market.
As a buyer, if you wanted the property and were interested in purchasing the home you would:
- Provide a cash offer
- Offer above asking price
- Limit the inspection period window or forego it completely
- Get personal and tug on the heart strings
Great, but we definitely are not talking about the housing market, so how does this apply to my business?
- When drafting your contracts, offer longer payment terms to potentially get the deal across the finish line. This will give the prospect more wiggle room within their set budget.
- Do a review with the legal team. Are there areas on the contract that typically get redlined causing multiple back and forths? Nothing kills momentum in a deal more than a bloody contract negotiation. If concessions can be made on legal verbiage for the foreseeable future, do it.
- Perhaps offer a discounted price for a longer, multi-year contract, so that the spend in this fiscal year isn’t as high and is an easier pill to swallow for the prospect. While conversely, you are locking up more secured revenue for the years ahead.
If you aren’t doing these already, are you even selling? But seriously, get to know your prospects and figure out what makes them tick.
#3: Leverage Tech
Leveraging automation in repetitive workflows can save human headcount, reduce errors and keep processes moving. Look for places in your organization to optimize first. Find the bottleneck. Find the inefficient processes. Then once they’re optimized, automate it to scale.
If you find the bottleneck and it can be automated, bingo. If it can’t be automated, add some technology to reduce the workload on the individual(s) causing the bottleneck. If you can’t do that, consider adding bandwidth to keep the pipes flowing.
It sounds so simple because it is. Humans have a way of complicating things. Let’s prioritize simplicity and efficiency in 2023. Help out your CFO and don’t waste their time asking for more money. Instead, help them by doing what is in your control to increase your revenues and productivity while decreasing costs and driving efficiencies wherever possible.
Still don’t know how to actually do any of this? Give us a shout. We can negotiate and work within your budget, even if you don’t have room. 😉
Let’s get to work.
Prescriptive Profits #21