Business
March 20, 2024
12 min read

CFO Pressure Cooker

Author
Justin Fite

60 days before you hit the CFO pressure cooker

Sales Leaders: You're expanding into an unfamiliar segment or vertical. Start a clock...you have 60 days until you are in the CFO Pressure Cooker.

In my world (SaaS), growth is seen to solve almost any and every problem. But you know what adds to problems? Slow, expensive efforts to grow.

Here's the scenario:

You're a sales leader of a solid company and you have real traction:

  • You've got more than a few customers (who are generally small)
  • You've figured out a good GTM motion, some marketing and some decent CX
  • Faster growth has now become desired/necessary (big surprise)
  • Everyone agrees that bigger-sized deals and some cross-selling would be better...let's go up market!

So you hire a rep or two to go get bigger customers and bigger deals.

Start the clock...you have about 60 days, before your CFO (the good ones) call you in and ask, "Why is this taking so long? Where is the pipeline?"

You are in the CFO PRESSURE COOKER.

Note, this is an absolutely essential feature for great companies; a CFO seeing ONLY reality, no sales distortion.

The reality of entering an unfamiliar market (segment or vertical) is slow pipeline growth and spending ahead of pipeline.

The challenges of expanding into new markets

As I look back on my approach, what is shocking is how quickly I committed to spending precious resources before I had enough insights to improve my reps' success.

Additionally, the reps saw my actions as essentially telling them: "Go figure it out, use what we already know, and magically produce pipeline from a market we don't really understand."

The real problem: We did not understand the new market well enough to make sufficient progress to match our sales & financial timelines.

Now, I know better: We must reduce the risk caused by ignorance of new markets.

The real solution: Don’t make new-market resource commitments without precise, usable and confirmed insights.

WARNING: False Confidence Ahead. It looks like this:

I know what I was thinking, "we have a few enterprise customers so we have good fit". Right? Wrong. While the most general problems might be similar between markets, the environment is VERY different, and let's be honest, we got lucky with those first few successes.

Some key differences in markets are obvious:

  • Long enterprise procurement cycles
  • Distinct, multiple departments that have a say and backlog of their own (IT, legal)

The small, subtle differences are what really hamper sales upmarket. Issues to understand look like this:

  • What is the terminology customers use to describe their problems and processes?
  • What are the key priorities surrounding that area of the business?
  • What is the technology stack that is most commonly used and how do “new solutions” fit?
  • How must potential customers consider things like security (SOC2), data management?
  • What are the customers' expectations of their vendors?
  • What have they tried already to solve problems in this area of the business?

What are the signs this is potentially happening?

  • Reps fail to get response to their calls and emails at the rate they were getting.
  • Rep calls seem to go “okay” but customers seem just a bit "flat" and do not progress.
  • Reps are surprised by the responses they are getting…like discovering competitors they have no insights into and facing alternate solutions they had not previously encountered.
  • Reps start questioning if their product is really good enough to sell.
The real risk: Reps are not seen as credible in the eyes of the new market prospects, they do not fully understand the problem domain, the customer needs or the best path forward.

How to steer clear of pressure from your CFO

What are the takeaway lessons here?

  • Do not commit expensive sales resources to markets you don’t have specific, up to date, validated insights. The same goes for marketing resources.
  • Start your pursuit by getting sound understanding of the new market through the eyes of your ICP.
  • Do this by objectively talking with ICP to understand their world and the problems they have, BEFORE you engage Sales & Marketing.
  • Don't use Sales cycles trying to collect this information. It's too expensive and very biased. This is because sales reps and sales calls are higher pressure and prospects' guards are raised; you won't get honest feedback.
  • Interviews start with the customer's take on the problem, not your solution to it.

Do this and your reps will start off with higher credibility that will quickly lead to prospects sharing more of their details. Your reps will then have much better success communicating your solutions. Solutions that fit + Credibility = Greater success.

And you just might avoid the CFO Pressure Cooker.

Written by
Justin Fite
Co-Founder