Building the Business Case in Times of Uncertainty
I’ve talked before about the competition for funding within a business and how financial decision makers will choose to fund projects that have the quickest and most reliable ROI.
In the midst of the pandemic, cash is more precious than ever and many CFOs are unwilling to make investments unless they have a clear ROI AND a timeline on that return.
Unfortunately, many buyers are not trained to think in terms of building the business case, so they make technical arguments to financial decision makers. Regardless of how great the technical need, if the business case does not translate this need into dollars that a CFO can understand, the project will never get funded.
The Cost of the Status Quo
Your job as a salesperson is to collaborate with the buyer to build the business case. That starts with the cost of the status quo.
The Need Diagnostic has a section designed to build a business case by connecting the business need to the financial impact.
To do this, you might say, “I am not familiar with your economics, so perhaps you can help me. Have you found it difficult to quantify this need in terms of dollars?”
A. If they say they already have the budget approved, and you find it believable, proceed. No further cost/benefit analysis is needed.
You will later put your price on the table and determine if the approved budget is enough.
B. If they say the budget is approved and you don’t believe them, say “It’s great that you have quantified and gotten approval. That’s extremely rare and you are ahead of your peers. Are you willing to share – not your budget – but the analysis you have done with me?”
- If their business case is solid, proceed.
- If their business case seems weak, challenge their thinking and offer to help as in “C” below
C. If they have quantified, or begun a cost/benefit analysis, ask for the numbers. They may or may not need help with business case.
Be aware that many buyers don’t realize they need help, so you may need to nudge them in the right direction. Offer to help build a more complete cost/benefit analysis by saying, “Great work. You didn’t ask my opinion, but we get involved in building business cases a lot. Can I offer a thought?”
D. If they haven’t quantified, ask, “If you haven’t been able to quantify this or to build a business case, is it fair to say this will not be funded?”
This leads to them asking you to help – so it is their idea.
Guide them further by asking, “For whom is the business case being built? In my experience, the best way to build it is to co-build it with the person for whom it is intended. May I suggest a call between the financial decision maker and one of our cost/benefit gurus to co-build a cost benefit analysis?”
E. If at any point anyone pushes back – which is rare – you might say, “My experience is that most projects die in the business case. So, when we are asked, we help quantify the cost of the status quo and help build the business case. But I do not want to be presumptuous. It sounds like you don’t need a business case to get funding in this case?”
What if they say no
When we ask these questions, a common outcome is that the buyer will ask for help in building the business case. But if you cannot get a firm sense the budget is approved or if the cost of the status quo quantified, press the point by saying:
“I hear you when you say the business case is solid in your mind and in the minds of the funders and signers. We see projects fail to get funding so often that we provide assistance in that area. I do not mean to push it on you. But if we could assist you in shoring up the business case, did I hear you clearly, you do not need that sort of backup and this business case is already made in the minds of the funders?”
If they choose not to accept your help, you have two choices:
- You can choose to proceed at risk in the off chance you win.
- Politely decline to participate.
“Sally, this is probably going to sound harsh and odd. But where we aren’t involved in the diagnosis deeply enough to understand the business case, we decline to participate. Like a doctor, our first rule is Do No Harm. We do not prescribe without proper diagnosis.”
While this may seem like the last thing you want to do, you may find that the buyer switches roles and tries to sell you on the need to stay involved. In doing so, they open up to a discussion that does reveal that information you need to build the business case.
If they do let you walk away, know that you have saved yourself time to focus on prospects more likely to result in sales.
Looking for more ways to improve your sales conversations? Contact Steve today to discuss training for your sales team.