CFOs Aren't Buying Features — They’re Buying Impact
Every time a salesperson from a software company I was advising would tell me that the company had delivered a great demo I would ask, “What made the demo so effective?” Too often, the answer was, “The customer was blown away by our depth of functionality and configurability.”
Conversion rates from high functionality oriented demos can be quite high, but it is a fool’s gold… Many companies will make small purchases based on great functionality alone that specifically address a business or technology challenge. Surprisingly, many companies don’t even require a business case for small POC (Proof of Concept) projects. Essentially, companies will fund (metaphorically) science projects.
Feature/function demos can be very effective, as they can impress end users and project teams; however, while they can drive small pilot deals, they cannot drive major expansions or enterprise wide sales.
Frankly, it’s shocking that software companies are so naive that they believe that the demo that was good enough to sell a small pilot effort will be good enough to sell enterprise-wide deals.
So why do feature-focused demos that work so well at the pilot level fail under enterprise scrutiny?
The short answer involves who is making the buying decision. At the pilot level, the buying decision is often made at a departmental or regional level, while the enterprise decision is made by the CFO. The CFO cares more about ROI (Return on Investment) and business impact, while the project manager cares more about features.
Having a strong business case radically increases a salesperson’s win probability at the CFO level, because that is how the CFO measures success. This is why so many pilot deals don’t expand to be enterprise wide — the path to success at the pilot level does NOT transfer to the enterprise deal. To a CFO, a feature here or there is secondary to the overall value the product is delivering.
The best way to ensure that a pilot deal expands enterprise wide is to treat the pilot as if it was the enterprise deal: identify the unique capabilities of the software, demonstrate how they are delivering unique value and quantify that value within a business case.
In fact, studies show that having a compelling business case improves enterprise close rates by at least 50%. At MOIC, we feel so strongly in the value of the business case that we’ve not only made it a fundamental aspect of our Pipeline Grader application, but we generate it automatically from the discovery call transcript, so that we negotiate it with the customer.
If your sales team struggles to drive its sales directly through a business case lens, reach out to www.moicpartners.com and log into Pipeline Grader.
