Do You Know the Financial Sales IQ of your Sales Team?

Suppose at the next sales meeting, you gave this quiz to the sales team to measure their Financial Sales IQ.

How well would they score?

1) Describe how the products you sell make or save the customer money?

2) What is cash flow?

3) What are the five elements of a great business case?

4) How would you use Internal Rate of Return (IRR) to help close a deal?

5) How does risk analysis speed up the sales cycle?

Research has shown that budgets are moving from the IT organization to lines-of-business leaders. Gone are the days of “pitching” products. Business leaders scrutinize investment decisions and requiring sales teams to show how their offering makes or saves the company money.

Product focused sales teams are doomed to compete on price and survive on low margins.  The future belongs to those sales teams who can apply a product portfolio to solving business problems and express the benefits as financial outcomes. The beauty of this approach is three fold:

  • Products come and go, but financial sales skills are timeless
  • It aligns the seller with how the business leader makes investment decisions
  • If focuses the seller on what executives are really buying — low risk cash flow

So, what’s the Financial Sales IQ of your team?

About the Author

Mike Welch is the CEO of Welch Global Consulting (WGC). WGC’s Sales Performance practice is dedicated to improving the sales effectiveness of enterprise sales teams by enabling sellers to express the business and financial impact of their offering to close more sales. 

Contact Us

If you would like to improve the Financial Sales IQ of your sales team contact us via: phone (970) 292-6600; email, or visit

Quiz Answers

1) It is foundational for every seller to know how their products make or save the customer money.  For sales teams with large complex portfolios, it can be challenging to define benefit areas. WGC created a methodology called Portfolio Mapping that defines “impact areas” — areas of the business where a portfolio can make a financial impact.  The Portfolio Map is a seller’s roadmap to unlocking value in the customer’s business.

2) Cash flow is money the customer pockets as a result of investing in the sales team offering.

3) The five elements of a great business case are: Net Present Value (NPV), Internal Rate of Return (IRR), Payback, Risk and Elasticity.  See our blog post on Creating a Business Case

4) IRR measures the total return (the efficiency) of an investment and it is used to compare alternative investments.  When a seller can show there is a greater IRR for their offering versus other options, the purchasing decision is much easier.

5) Executives making investment decision worry about risk i.e. what if the projected benefits (cash flow) don’t happen as expected?  If the risks are perceived as high, the investment is put on hold or canceled. Sellers who take steps to reduce risks and ensure that cash flow benefits will happen as projected, remove a huge obstacle in accelerating the sales cycle.  See our blog posts on Reducing Risk


Creating A Great Business Case Is Like Creating A Work Of Art

The role of an executive decision maker is to allocate capital in a way that produces the greatest return for shareholders.  The objective of a sales team is to convince an executive, typically in the form of a business case, that investing in their solution is the best use of capital.

The elements of a great business case are like tesserae, the small individual tiles that form a mosaic. When a master craftsman composes the pieces of tile to a vision, a work of art is born.  No single tile can be a masterwork; each tile projects only a fraction of the vision.  It is when all the tiles are orchestrated into a predefined pattern that a mosaic forms a work of art.

Similarly, the tesserae of a great business case are: the Value Created, the Return, Payback Period, Elasticity, and Risk. If any of the pieces are missing, incomplete, or out of order (picture left) the vision of the business case never materializes and capital is invested elsewhere.

In the hands of a master salesperson, these simple tiles can be orchestrated into a business case work of art (picture right). Sales craft is deftly organizing the tiles into a mosaic that answers the question, “is this investment a good use of capital?”  If the answer is overwhelmingly yes, the sales cycle collapses dramatically.

Let’s look at a simple example to capture the concepts before applying it to a sales situation.  Suppose a buyer is considering an opportunity to purchase a piece of antique furniture that needs minor repairs. The piece costs $10K including repairs, and once restored will fetch up to $24,000 in a market with a throng of willing buyers. The buyer estimates the entire process will take about six weeks. Let’s organize the pieces of tile (table below) to create a picture of this investment opportunity.

When composed in this fashion, individual business case elements combine to form a complete picture of the opportunity.  As we analyze the investment, the first element is Value Created.  By investing $10K we create $14K in value ($24K- $10K). Is $14K in value good?  The answer is, it depends.  How much value could be created if the $10K stays in the bank? Are there other opportunities that could create more value?  If there are no better alternatives, we can say positive value is good, but we are only seeing one tile of a mosaic.

The second element is the Return, which measures the efficiency or total return of the investment.  Investing $10K created $14K in value, which is 140% return ($14K / $10K).  Is 140% return good?  Compared to getting 1% in a money market, 140% is spectacular; however, we still can’t see the whole picture.

The third element is Payback, which is the length of time it takes to recoup the original investment. In this case, the payback is projected to be six weeks.  Is a six-week payback good?  Obviously, the shorter the payback period the better and six weeks would be considered short; however, we don’t have a sense of how much risk is involved to achieve the value created, the return, or the payback.

With the fourth element, Risk, the business case mosaic begins to take shape.  Risk evaluates the likelihood that the benefits of the business case will materialize as expected.  In this case, can the antique piece be repaired and sold within six weeks?  If a contract to purchase the furniture were in place prior to making the investment, the risk would be extremely low. But what if there are complications and the piece does not sell for $24K as planned?

The final tile of the business case mosaic is Elasticity, which measures how much the sales price can vary and still yield a reasonable return.  For example, if the minimum desired return is 20%, how much can the sales price vary and the investment still yields 20%?  The answer $12K (profit $2K/ $10K = 20%), which means the elasticity of the investment is 50%.  In other words, if the antique piece can be sold for at least $12K (50% of the target price), the investment is still worth pursuing.

Each tile plays its part in creating a complete picture of the investment. Investing $10K in antique furniture would:

  • Create $14K in value
  • Generate a 140% return
  • Payback the investment within 6 weeks
  • Be very low risk
  • Be viable within 50% of the target sales price

The tesserae form a mosaic that provides the investor with enough information to make a buying decision.  Assuming the buyer is confident in the underlying data, the decision to invest is easy.

The business case concepts in this simple example apply equally to an executive evaluating a proposal from a sales team. If the team assembles the business case tiles into a complete picture of the opportunity, and the investment makes economic sense, winning is significantly easier.

In our example, the value created by investing in the furniture happened in a 6-week period.  When a business invests capital in a solution, the value created is typically realized over several years, which must be accounted for when assembling the tiles of the business case.  In other words one must consider the time value of money in the analysis.  If you hated math in college, hold off on collapsing into an algebraic seizure – there are no equations to solve – stay focused mosaic concept.

To account for the time value of money, finance aficionados created an approach called Discounted Cash Flow analysis. At first glance the concept may seem overwhelming, but stay with me, once the pieces are explained you will realize it is not rocket science.  The elements of the business case are the same, but with two minor changes to account for the time value of money as per the table below.

To illustrate the difference, let’s switch the context of our example to a sales team presenting a solution and a business case to the VP of Human Resources (HR).  The company interviews hundreds of top tier scientist from around the world each year.  Currently, candidates are flown to the home office for interviews.  The VP of HR is considering investing $1M to equip branch offices with video conferencing so candidates can be interviewed via video rather than flying to head quarters. Not only would it lower travel expenses, it would allow the company to interview more qualified candidates without worrying about travel expenses.

Working with the VP of HR, the sales team documented that candidate travel expenses are over $4M annually.  With video conferencing in place, the VP of HR feels confident that 23% of the travel expenses could be eliminated, which equates to $920K in travel savings per year over the next five years.  Now the sales team must organize the tiles into a mosaic business case (Business Case Chart below) that accounts for the time value of money. Let’s analyze the mosaic to see what it reveals about the investment opportunity.


The first thing one notices about the business case is that the $920K in travel savings (cash flow) is received each year for five years, which is the estimated life of the video conferencing solution. Unlike the antique furniture example where value is created once – when it is sold – video conferencing continues to create value over five years.  Because the benefits (travel expense savings) are received over time, we can use a discounted cash flow analysis to account for the time value of money. The table below provides a description of each element of the business case.



Even though the business case mosaic has a few more tiles to account for the time value of money, the end result is identical to the simple furniture example.

Each element of the business case plays a role in helping the VP of HR understand the opportunity.  When some of the tiles are missing, it creates risk, which leads to lower close rates. One can argue that the real job of the sales team is to provide the decision maker with enough information to make a decision.

The question for the VP of HR is this:  are there any other investment opportunities to invest $1M that will yield $2.1M in value, generate a 79% IRR, obtain a payback in under 14 months, with the same level (or lower) of risk, and an elasticity of 37%?  If the answer is no, the executive has a fiduciary responsibility to seriously consider the investment because it generates a significant return.

While a business case mosaic will never adorn the walls of a Roman Basilica, in the hands of a master salesperson it is certainly a work of art to an executive making an investment decision.

Read More »

Isn’t The Entire Sales Cycle Really About Reducing Risk?

Have you ever delivered what you thought was a strong business case to an Executive only to hear “we will think about it”? If a compelling business case is so powerful, how could anyone say no? There are only three reasons an Executive would say no to an overwhelming business case:

  1. The firm is in financial distress.
  2. There is an alternative investment that is believed to offer higher returns and less risk.
  3. The Executive perceives there is risk in the cash flow, materializing as portrayed, in the business case.

If the firm is in financial distress, it means the sales team didn’t qualify the opportunity up front. If there is an alternative investment with higher returns and less risk, the customer should choose that option. When an Executive says no to a strong business case, 99% of the time it is because he or she perceives risk in the cash flows.

Let’s illustrate with your money. There is a ground floor opportunity to invest in a new vending machine business coming to North America that dispenses high-end consumer electronics such as smart phones, music players, and tablets. These machines will be placed in airports, hotels, shopping malls, etc. The investment is $250K and the company is pitching a monstrous business case with a payback of 10 months, a Net Present Value (NPV) of $1M, and an Internal Rate of Return (IRR) of over 100%. Before mortgaging your home to fund this investment, let’s look at the risks. For starters:

  • Will consumers really purchase consumer electronics from a vending machine?
  • Who controls where the machines will be placed?
  • What are the costs associated with placement?
  • How long have the machines been on the market?
  • What is the breakeven sales point?

Without solid answers to these questions, would you invest in this opportunity? If your answer is yes, it’s Darwin’s way of saying you should not be trusted with money under any circumstances. More than likely, I am guessing the answer is no. Why? Because there is a perceived risk that when the $250K leaves your checking account, it will never be seen again. Let’s change the scenario and reduce the risk.

Suppose the company providing the vending machines had 10 years of market experience in Europe with over 5,000 machines and had conducted extensive research in North America on what works, what doesn’t, revenue per machine, and had hundreds of success stories, etc. Further, what if the company had an exclusive agreement with Apple where new products would be available through vending machines two weeks earlier than in stores? How does this change the perceived risk of the investment? What was a huge perceived risk has been dramatically reduced because the vending machine company supported its business case with facts, research, success stories, and a unique value proposition.

Sales teams tend to shy away from discussing risk with customers when presenting a business case, but they shouldn’t. Why? Because any seasoned executive evaluates risk on every significant investment decision. Avoiding the discussion doesn’t change the facts. Let’s pause for moment. Take a deep breath. Prepare your mind to receive some career altering insight.

If the primary reason executives don’t act on a compelling business case is the perceived risk in the cash flows, doesn’t the entire sales cycle boil down to reducing risk in the business case? Stop and reread that last sentence until it seeps into your being. Once this concept takes root into your gray matter, the end result is a sales chart that resembles a hockey stick.

Let’s look at a server virtualization example. Datacenters use server virtualization technology to reduce the number of physical servers needed to support the business. For example, reducing the number of servers from 300 to 36 and saving $2.8M. In this scenario, there are two approaches to presenting the business case: 1) using “industry averages” or 2) using the customer’s data in a risk adjusted business case.

In this approach, the datacenter manager requests a quote for server virtualization and the sales team – quivering with excitement – cranks out a bill of materials and price. The team presents a “business case” to the datacenter manager and his boss the VP of Operations. The presentation goes like this:

  • To virtualize 300 servers, the investment is $540K
  • Companies like yours typically get a consolidation ratio of 1:15
  • The industry average ROI is 150%

At this point, the VP of Operations is assessing the risk in her mind:

  • What does “typically” mean?
  • What if the consolidation ratio is lower?
  • How do I know the industry average is applicable to my datacenter?
  • There is no way in hell I am signing off on this.

The sales team finishes the presentation and visualizes ink involuntarily shooting from the VP’s pen, through space, onto the contract. Instead, the VP thanks them for their time and parts company with “we will think about it.” The sales team convulses with shock and horror. No kidding, would you sign off on $540K if this were presented to you? I didn’t think so. Before we look at the risk-adjusted version, let’s address the issue of “sales delusion.”

In some cases, the VP of Operations will leave and do her own analysis and reach a conclusion that server virtualization is a good investment. The only value the sales team is providing is a MARGIN FREE quote. Here is where the delusion comes into play. The sales team will believe the sale was closed due to their uncanny business acumen and craftily constructed business case. In reality, the team added ZERO value and closed a deal on price with no profit. Will someone please make the pain stop?

In this approach, when the datacenter manager requests a quote, the sales team closes for discovery. The team collects detailed information about the customer’s datacenter, documentation, current CPU utilization, runs diagnostics, and reviews other aspects of the datacenter. The team presents a risk adjusted business case like this:

  • We interviewed key datacenter personnel and documented the current state environment.
  • A diagnostic analysis of the current environment shows a 7% CPU utilization.
  • Through server virtualization, CPU utilization can be increased to 80%.
  • But to be conservative, we based the quote on a consolidation ratio of 1:15.
  • Additionally, the analysis uncovered that data storage could be virtualized as well.
  • An investment of $740K will yield a risk-adjusted payback of 13 months, a NPV of $2.8M, and an IRR of 125%.
  • Further, if we cut the business case by 50%, it yields a payback of 27 months, a NPV of $1.5M, and an IRR of 59%.
  • Unless you have an alternative investment with a higher return and less risk, this is a great investment.

Do you see the difference? When the VP assesses the risk, she concludes the risks are minimal because the sales team factored the risk into the business case. Using a discovery-based sales approach leveraging the customer’s own data resulted in a bigger deal with higher margins. No delusions here. So the answer is yes, the entire sales cycle really does boil down to reducing risk.

About the Author
Mike Welch is the CEO of Welch Global Consulting (WGC). WGC’s Sales Performance practice is dedicated to improving the sales effectiveness of enterprise sales teams by enabling sellers to express the business and financial impact of their offering to close more sales.
Contact Us
If you would like to improve the Financial Sales IQ of your sales team contact us via: phone (970) 292-6600; email, or visit


Where Does Cash Flow Come From?

For no good reason, a mystique surrounds the concept of cash flow. Yet cash flow is quite simple, and learning how focusing on cash flow can increase close rates and collapse sales cycles is no different than learning any other skill. Once you commit yourself to mastering it because it’s important to your career, thinking about cash flow will quickly become second nature.

For our purposes, net cash flow is simply cash the customer can pocket as a result of investing in what you are selling. Cash flow has only two sources: cash saved (cost reduction) or increased profit (via revenue growth). In other words, ask yourself this question: “How will my offerings (products or services) help the customer make money or save money?” If the customer cannot connect what you offer to making or saving money, they generally won’t buy.

There are variations on these two sources of cash flow such as customer retention and productivity. Increased rates of customer retention translate to more revenue (increased profit) and lower support cost (cost reduction). Increasing productivity means doing more with less (cash saved).

In practice, the “product” being sold is immaterial. What’s relevant is how the product being sold will make or save the customer money. Consider a real estate example. Bob recently invested in a commercial building that generates $100,000 in annual rental income, while expenses on the property are $75,000. That leaves a net cash flow of $25,000, which Bob can pocket. This one-sentence example provides four profound business insights about cash flow:

Net cash flow = cash in (rent payments) – cash out (expenses)
• Every decision Bob makes about this property is heavily influenced by the impact on net cash flow
• Bob ALWAYS wants MORE net cash flow
• Bob will invest in any risk-adjusted solution that substantially increases net cash flow

Salespeople who fundamentally shift thinking (and talking) from “feature techno-babble” to cash flow (or business) impact, experience profound impacts first experienced as executive relevance. Virtually every executive will consider a solution that produces low risk cash flow. Let’s look at three technology examples from Datacenter, Contact Center, and Healthcare.

Datacenter: Server Virtualization

Datacenters use server virtualization technology to reduce the number of physical servers needed to support the business. For example, reducing 200 servers to 10 by leveraging virtualization technology will save the datacenter millions of dollars. The cash flow, in this case from cost reduction, comes from lower energy, hardware, software, maintenance, and labor costs associated with managing fewer servers. The cost reduction formula is (current server costs – proposed server cost = cash flow from savings).

Contact Center: “Screen Pop” Computer Telephony Integration (CTI)

A revenue generating contact center has a primary objective to close more sales. A screen pop provides a contact center agent with call context prior to answering the call. Call context may include information about who is calling (customer profile) and why (the offer). When an agent has call context prior to the call, close rates increase dramatically while usually also chewing up less time per call. In some cases, a 1% increase in the close rate can generate millions in additional revenue. The cash flow, in this case additional profit, comes from increasing revenue through higher close rates. The profit formula is (profit at new close rate – profit at old close rate = cash flow from additional profit).

Healthcare: Radio Frequency Identification Technology (RFID) Tags

The aging baby boomer population has created a shortage of nursing staff. Hospital administrators allocate budget every year to hire more nurses. But, what would be the impact of making the existing nursing staff more productive? In short, the hospital would not have to hire as many new nurses. Nurses spend as much as one hour per day looking for equipment such as pumps wheelchairs, and carts. Radio Frequency Identification technology (RFID) tags can be attached to virtually any piece of equipment to broadcast its location. Nurses can instantly locate equipment via their smart phone, which increases productivity by millions of hours per year. The cash flow, in this case cost reduction, comes from increasing productivity thereby reducing the number of new nurses that need to be hired. The productivity formula is (number of planned new hires – the number full time equivalents gained from increased productivity).

These examples clearly illustrate where cash flow comes from by demonstrating how the technology (product) will make or save the customer money. When the spread between the investment and the net cash flow becomes significantly weighted toward cash flow, close rates increase and the sales cycle collapses.

At this point, you should be experiencing a brain shattering epiphany akin to the moment when you first realized how life begins.

“If I demonstrate how my products and services positively impact the customer’s net cash flow, my close rates will sky rocket, my bank account will exceed FDIC limits, my boss will be promoted, and my children will throw rose petals at my feet.”

Congratulations, the pure light of cash flow logic has torn asunder the dark veil of technobabble. The great mystery of the origin of cash flow has been revealed. Take a moment and enjoy the Dopamine rush coursing through your brain.

Before closing, there may be some readers who are careening headlong toward catatonic stupor over the statement “the product being sold is not really relevant.” Before slumping into a state of neurogenic motor immobility, let me make two points. First, if a product is truly superior, it will provide unique functionality that will produce more cash flow than the competition. All that is required is proof. The second point is this, HOW you sell is more important than WHAT you sell. Let me illustrate.

Salesperson A has a superior product compared to Salesperson B. Salesperson A communicates benefits in technobabble terms. Salesperson B communicates benefits in cash flow terms. Who do you think will close more business? If you chose door number two (Salesperson B), you are correct Sir/Madame. Even with a weaker product, Salesperson B will mop the floor with Salesperson A through better sales craft (how they sell). In short, Salesperson A will simply be outsold nearly every time. While product commoditization quickly neutralizes product advantages, sales craft based on generating increased cash flow is ALWAYS a competitive advantage because it creates differentiation—based on you!

About the Author
Mike Welch is the CEO of Welch Global Consulting (WGC). WGC’s Sales Performance practice is dedicated to improving the sales effectiveness of enterprise sales teams by enabling sellers to express the business and financial impact of their offering to close more sales.
Contact Us
If you would like to improve the Financial Sales IQ of your sales team contact us via: phone (970) 292-6600; email, or visit


Want To Close More Business? Then Start Selling Low Risk Cash Flow!

One of the most powerful concepts that any sales professional can learn is the concept of low risk cash flow. The concept is simple, rather than spew techno-feature-babble – focus on how your solution will make or save the customer money (cash). When an executive can invest in a solution that generates substantial positive cash flow, and the risk is low, the purchasing decision is a no brainer. Let’s demonstrate the concept with $50K of your money.

What if I was to tell you that before finishing this blog, you were going to write a check for $50,000 dollars to someone named Tom whom you never met?

This is the point where you say, “keep dreaming.” Before dismissing the idea as alcohol induced rambling, at least review Tom’s offer:

• My friend Tom has a $1.7M Bugatti Grand Sport L’or Blanc sports car.
• It is the fastest production sports car in the galaxy.
• It is in perfect condition, has 10,000 miles, it is not stolen, and the title is clear.
• The bank payoff is $49,999 dollars.
• He will sell it to you for $50,000.

You are probably thinking there is a catch or that Tom is somehow mentally impaired. As it turns out neither is true, Tom is in the middle of a nasty divorce that makes the Vietnam War look like a meditation retreat. Tom has been ordered by a judge, as part of the divorce settlement, to sell his beloved Grand Sport L’or Blanc and spilt the proceeds with his ex-wife. Selling the Bugatti for $50K will yield $1, which he plans to personally deliver to Hell’s successor along with creative suggestions on what to do with the windfall.

Assuming this scenario is true, would you cut a check for $50K? Absolutely! Why? Because you may know Tom’s wife and the financial benefit from the investment is so overwhelming and the risk is so low, you cannot afford not to. What if you don’t have $50K? Not to worry. Any bank on the planet would fund a $50K loan using a $1.7M car as collateral. Why? Because the car is worth nearly $2M and the loan is only $50K, so there is virtually no risk to the bank.

This scenario highlights several interesting points about making investment decisions:

• The decision to invest is really an assessment of the risk.
• The risk is if you make the investment, will you get a return?
• With a book value north of $1.7M and an investment of only $50K, the risk is extremely low.
• It doesn’t matter if you want to purchase a sports car, or even if you don’t like them – the return is too high to pass up.
• It doesn’t matter if you don’t have the money – you can use the car as collateral.

This is the exact process that an executive goes through when evaluating a capital purchase. The great thing about selling low risk cash flow is that every executive wants to invest in it. It doesn’t matter if the executive is not in market for your offering. It doesn’t matter if there is no budget available. It doesn’t matter if there is a spending freeze. If you can demonstrate that investing in your solution will generate significant positive low risk cash flow, an executive will find a way to make the investment happen.

The reason most salespeople are not closing more business is because they cloud the conversation with techno-feature-babble rather than simply expressing the value of their offering as low risk cash flow. So, if you want to close more business, stop with the techno-feature-babble and show the customer a clear path to low risk cash flow. Your customer will love you, your boss will lobby for a raise on your behalf, your coworkers will stare in awe, and your offspring will beam with pride.

Two Things Executives Need To Know Before They Will Buy From You


Hey Mac you wanna buy some blinking lights?

Imagine hosting a dinner party with friends and enjoying a great rib eye and a glass of Pinot Noir when the doorbell rings.Upon opening door you see a stranger who begins, “Hey Mac you wan ‘a buy some real estate? I got this great little property – it has a good roof, nice flowers, and a remodeled kitchen.” Before you can speak, the stranger hands you a purchase agreement and says, “just sign at the bottom of page three.”At which point, you politely hand it back, close the door and return to your glass of Pinot.

You’re probably thinking the dinner host would have to be nuts to sign a purchase agreement on a property he has never seen from someone he has never met.Yet, thousands of times every day technology salespeople do exactly the same thing.They generate bills of materials and ask executives to sign off when there is no clear linkage to company business drivers and no business case to justify the investment.In essence the salesperson is saying, “hey Mac you wan’a buy some blinking lights?” Is it any wonder close rates are typically in the low 20s and most decisions are no decisions?

If you want to increase your close rates to north of 80% stop asking executives to sign contracts for “blinking lights.”Before an executive will buy from you they need to know two things:1) how will the solution support the their primary business drivers? And 2) what is the business case for making the investment? If you structure your proposals to simply communicate these two things, you might be driving a new sports car for the holidays.

Let’s tackle the problem, broken down into three parts: 1) The Executive Mindset, 2) Business Drivers, and ) Business Case.

The Executive Mindset

Let’s take a look at the executive mindset in terms of how executives make decisions…..We interrupt this program for an important message. The underlying assumption here is that you are talking to an executive. If you are not engaged with a line of business executive who has buying authority, the opportunity is not qualified. For salespeople who can’t qualify, it is nature’s way of telling you to look for a new profession. Now back to our regularly scheduled program.

Executives are paid to make investment decisions that create the most value for their company. Their criteria is simple:

·How does this investment link to my primary business drivers?

·How much does it cost?

·What is the return?

·What are the risks?

When proposals lack this basic information, they are summarily filed in the circular filing cabinet. No executive worth his or her salt is going to commit capital without understanding the economics and associated risks of an investment no more than our dinner party host would invest in real estate from a stranger sight unseen.

Business Drivers

So what is a business driver? If you reviewed the 10K statements of the S&P 1500 (yes I actually have), you will find that every company has plans to grow revenue, control costs, retain customers, and increase productivity.Why? Because these four business drivers are foundational to increasing company value for every for-profit organization on the planet.

So, one would conclude that marketing types and salespeople would want to show how their solution can help companies growth revenue, control costs, retain customers, and increase productivity. That of course would be too easy.Instead let’s use super cool jargon like: industry standard, industry leading, mission critical, ground breaking, 64-bit, SOA standard, SIP, IVR, CTI, super scalable, HD, high-value, routing at the edge, virtualization and interoperability.Is it just me? Or, is this insane?

News flash – executives don’t care about your mission critical virtualized interoperability blinking light. They care about growing revenue, controlling costs, retaining customers, and increasing productivity. So put away the 57 pages of Visio diagrams (it is ok, the convulsions will stop eventually) and simply demonstrate how your solution links to the customers’ business drivers.

Business Case

A business case is just another way of saying, if you invest X in a solution, you will get Y in return. Doesn’t it make sense that an executive would want to know this information before investing capital? You are probably having an eureka moment about now… “I need a business case so my proposals will close faster.” Congratulations, knowing you have a problem is the first step toward healing.

If you think about it, any capital investment should either make money or save money. Your job is to quantify the solution benefits and package them into a business case that expresses the return on investment. The elements of a good business case include:

Net Present Value (NPV) – the total value created by investing in the solution.

Internal Rate of Return (IRR) – the total return on the investment.

Payback – how long it takes to recover the investment.

Risk – what could happen to prevent the business case from materializing?

By showing how your solution links to an executive’s primary business drivers and quantifying the benefits in a business case, it becomes incredibly easy for executives to make a decision, which is why 80% close rates are very attainable. Let the healing begin.

About the Author
Mike Welch is the CEO of Welch Global Consulting (WGC). WGC’s Sales Performance practice is dedicated to improving the sales effectiveness of enterprise sales teams by enabling sellers to express the business and financial impact of their offering to close more sales.
Contact Us
If you would like to improve the effectiveness of your sales team contact us via: phone (970) 292-6600; email, or visit