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Birth of a Salesman

Increasingly, finance chiefs are being asked to talk to customers. Is this wise?
Alix Stuart, CFO Magazine
May 1, 2002

We expect to be profitable by the fourth quarter of this year," confides Extensity Inc. CFO Ken Hahn as he loads one of his most popular presentations onto his laptop. Soon, a neat bar chart appears to illustrate the software company's progress from a $7.8 million quarterly loss in early 2000 to the current quarter's $2.7 million net loss.

Part of getting profitable meant laying off 23 percent of the staff last year, but Hahn insists the company's growth prospects are still sound. "We didn't sacrifice R&D," he says, "and we're being very careful about cash." And about Extensity's stock price, down to about $2 after trading at $8 last May?

"It's just what the Street thinks about the sector as a whole, not us in particular," Hahn says, noting that one analyst has just picked up coverage on the company, and several others are interested.

It's the kind of story CFOs might expect to share with anxious investors, but in these uneasy days, Hahn finds potential customers clamoring for the pitch as well. Despite the improving profit picture, he says, "I've fielded more customer calls on our financial viability in the last two quarters than ever before."

He's not alone. Indeed, after a season of slumping revenues, many CFOs, particularly in the troubled tech sector, are being called upon to reassure potential customers of their companies' financial health. Often, their mission is to convince customers the company will be alive and well a year from now.

"What they ask is: 'What's your background, where are you going as a company, and what can you do for us?' " says Bobby Kocol, CFO at $2 billion Storage Technology Corp., a data storage solutions provider. With revenues flat last year and concern about competing technologies, Kocol has become more active in building customer relationships.

As part of StorageTek's new Executive-to-Executive program, he's now calling on his share of the company's top 50 clients, hoping to become a high-level liaison for them. "It's a two-way street," he says. "[Customers] get to see me and see where we're going strategically, and I get to go right to the source and learn from them as well."

In fact, if a potential customer has concerns about the viability of a company, the CFO is the ideal person to bring along on sales calls. "For the sake of credibility, it's better to bring in the CFO than the CEO," says Paul DiModica, founder of DigitalHatch Inc., which specializes in technology sales training and business development for high-tech firms.

CEOs, he says, tend to "get lost in the vision discussion." CFOs, on the other hand, can back up the vision with facts, making customers more comfortable about the company's future health. Of course, timing is key to making the group sales call work well. "I always teach salespeople not to bring in another executive until they have one or two meetings with the client," says DiModica. "Otherwise, it looks like they're too anxious."

Selling to the CFO
When the customer for a product is the CFO, the seller's CFO can end up coaching the sales team on how to make a compelling business case for their products. Hahn, for example, spent a business quarter helping his sales and marketing team sharpen up an ROI tool, and brought them up to speed on CFO lingo (like "VAT" instead of "European value-added tax").

At Nonstop Solutions Inc., a supply-chain optimization software maker, CFO Pete Papano observes salespeople's presentations in workshops and "critiques them in a nice way," he says. "I remind them that other CFOs are going to ask about measurement and risk, and that they should double-check their figures before going in, since even a small mistake detracts from the validity of a presentation."

Indeed, some former finance executives have even found second careers in such coaching. Rich Vaswani, former CFO of Clark Construction Group, now spends up to 12 days a month presenting business acumen programs to sales organizations around the world with The Executive Conversation, a provider of customized executive engagement programs.

"The Executive Conversation shows sales professionals how to link their message to issues [finance] executives care about by learning how to locate, interpret, and use financial data to identify trends and opportunities," says Vaswani.

Making inroads at a company where sales reps may regard the CFO merely as the budget-cutter can take some effort. "You might meet resistance, but if you take the time to ask open-ended questions of your colleagues, you usually get good feedback," says Mike Yonker, CFO of digital projector designer and maker InFocus Corp. At a recent sales-awards dinner, for example, he says, "I made sure to corner the top three winners and ask, 'Which [product features and promotions] went over well and which didn't?' "

The answers allowed Yonker to confirm the usefulness of some initiatives and to think about ditching others. He has also built relationships in less formal ways, including rock climbing and sumo wrestling with sales reps at a sales meeting and team-building event.

Such relationships are critical to his role as CFO, he says, because "if I want to do a great job talking to Wall Street, I've got to get out and see what the sales force is doing."


Closer links between finance and sales can also hold direct financial benefits for a company. Nonstop CFO Papano was recently debating the worthiness of a project to enhance the company's software products with an application that would let customers interact with their suppliers over a shared Web site, rather than the traditional faxes. "The customer CFOs I talked to said that would be nice, but as I chatted with them, it became pretty obvious they weren't willing to pay for it," he says, since "they were under the impression that anything you got from a Web site should be free." With that insight in mind, Papano scrapped the project, saving "at least a million dollars" in development costs.

Given the similarities between selling to customers and selling to Wall Street, in fact, StorageTek's Kocol recently arranged for salespeople to train the 12 members of his finance department on the message they should be giving customers. "I look at it from the standpoint of succession planning," he says. Plus, there's nothing like a little free advertising. "If we can have as many people in the company talking to customers as freely and openly as possible, that's how we can grow revenue."

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