139: CFO Test
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Hey, 👋 Scott from The Sales Mastermind here. Today’s edition only takes 3 minutes. The final sign-off often comes from the CFO, who rarely talks to vendors and often actively dislikes salespeople. Then deals fail because your Champion isn't equipped to pass the CFO Test. Let’s talk about it. Today we’ll cover:
Storytime After multiple discovery sessions with six stakeholders across three teams/departments over two months, my coachee's deal was on the cusp of approval. Until a competitor weaselled their way in and forced a competitive “audit” with an attached business case. Everyone was frustrated. During the discovery call with the other agency, the Champion decided they were a bad fit, and my coachee knew the audit process was their weakness. But the CFO pushed to include the second agency for comparison purposes. However, my coachee knew something the other agency didn’t. He knew how to structure a business case to pass the CFO Test. He knew CFOs want the business case to use their numbers, stats, and ratios as evidence for the need to change and the expected outcome. And that the evidence must be directly tied to the business's priorities or strategic direction. Without tying the numbers to a business priority, or worse, presenting qualitative evidence instead of quantitative, most CFOs will reject any budget request without a second thought. So my coachee built a slide deck for the Champion to present that included all of the above:
We knew it was a strong audit/business case because the Champion took my coachee's deck and presented it verbatim to the buying committee, including my coachee's business colours and logo. The outcome: my coachee has been given a verbal for a large retainer to close before month-end. Who is the CFO? CFO stands for Chief Financial Officer, and their job is to ensure a business uses its money as efficiently and effectively as possible. Most CFO’s default answer to a request for budget is “No”. Salespeople rarely get access to the CFO and instead have to rely on their Champion and the business case to defend the budget request. CFO’s typically come from an accounting or finance background. So they trust numbers and need everything presented that way. CFOs, or the Finance department, are usually the final hurdle to budget approval and moving one step closer to closing the deal. CFO Test In a perfect world, elite sellers want to present to the CFO themselves. However, we don’t live in a perfect world; more often than not, we must support our Champion in presenting the most compelling business case they can. The CFO Test is a framework elite sellers use to stress-test their Champion and make sure the business case is ready to present. The main steps are: Quantitative Compatibility CFOs care about high-level initiatives that will help with revenue, cost savings, and/or risk reduction. And they need it presented quantitatively.
Make sure to ask your Champion: “When you present this to your CFO, what initiative or metrics will you use as the driver and expected outcome?” If necessary, follow up with: “Would your CFO actually approve the deal based on those numbers?” Anticipate Pushback CFOs are sceptical by nature; it’s their job. Champions should expect pushback and be ready for it. Ask your Champion: “Based on previous approvals, what do you expect your CFO will push back on?”
“And what else?”
“And what else?”
Budget Trade-off (where possible) Most budget requests are out of cycle, meaning they aren't planned for, and no budget is approved before the business case is presented. Therefore, the strongest business cases also include a potential trade-off where the Champion gives something up to move your deal forward (for example, cancelling another agreement or postponing a different initiative). This part of the CFO Test is great if you can, but not required. Ask your Champion: “If you had to, are there any approved budgets, new hires, or other projects you could cancel to get some of the budget for this deal? Or are you completely tapped out?” Final Step In summary, the CFO Test is often the final hurdle for budget approval, and elite sellers make sure their champions have a stress-tested business case before they present to the CFO. This newsletter was inspired by Chapter 10 of my colleagues at MySalesCoach's book "Deconstructing Discovery" - click here if you want your own copy (<< This is an Amazon affiliate link; you pay the same price, and I get a small payment from Amazon if you buy after clicking) If you can’t personally pitch your business case, help your Champion by stress-testing their plan to pass the CFO Test. Sometimes the plan is ironclad; most of the time it needs a few tweaks. Until next week, PS When you're ready, here are three ways I can help you get out of the founder-only sales trap:
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