Unlock your Clients’ Hidden Value

As you may know, many companies have the potential to “Unlock
Hidden Value.” I wanted to share some research conducted by the team at FinListics Solutions.  This research reveals that across a wide range of industries, better performing companies are over 50 percent more profitable and about  the same amount less working capital! That is something to jot down.

The research revealed some of the variance in profitability and working capital is due in part to differences in product and services mixes,  goals and strategies. Nonetheless, the potential for improvement is substantial— a good thing for a solution provider. For example, for the average company the cash flow improvement from closing 50 percent of the profitability gap per $1 billion in revenue is: Retail $1.2 million; Industrial $3.4 million; Communications $4.2 million;  Insurance $2.9 million; and Banking $7.1 million.

So how much of this hidden value do your solutions help unlock?And with so much hidden value why don’t more clients find it?

May sound like a simply question. But how many times have you visited a client and been impressed and thought they have probably written the book on best practices. And visited other clients in the same industry and wonder how in the world they stay in business?

So here’s a FinListics Sales Biz-Tip…the answers to these three key questions are imperative for unlocking hidden value:

• What is the compelling reason to change?
• What to change?
• How to change it?

As we all have seen in good times, motivating change is challenging. A good example is a pharmaceutical company, for example, had several block-buster drugs with billions of dollars in revenue and gross profit margins close to 90 percent. There appeared to be few compelling reasons to change the management of areas like manufacturing and supply chain management and shared services.
Both drugs are now off-patent, revenues and profitability have plummeted and the new product pipeline is not very promising. The company is motivated as always to find the next block buster drug. But has also undertaking initiatives in areas that during the good times received much less attention.

The current business environment is providing many compelling reasons to change as is many executives’ expectations that there will be no return to the “good old days” anytime soon, if ever.

Many clients are expecting us sellers to act even more as trusted advisors and provide insights in to “what to change” and “how to change it.” The low lying fruit like mandated cost cutting has already been picked by most clients. The next phase requires a fundamental change in business processes like sales and marketing, product development, customer service, operations, supply chain
management, human resources, finance and accounting information technology, and even how the company is financed.

What are the one maybe two areas the client is experiencing the most pain or benefits the most from improving? From a business process perspective, what are the root-causes of the pain or challenges in improving – “what to change?” What are the consequences if change is not made? It is crucial that you be able to articulate your solutions’ business benefits and not just feature function benefits to building a credible executive-level proposition on “how to change it.”

And you know the team at FinListics is here to help you— help your clients answer these questions and unlock their hidden value.  So, Think of us as your sales helping hand!

Making it Up in Volume means Get your Passport Ready!

Companies are focused on growing revenues. Great! Many are finding to grow means expanding into emerging markets like Brazil, Russia, India,China and Korea. Passport ready to go! Just one catch. Profit margins in these markets often are allot lower than existing margins. Say what?  Research conducted by FinListics, for example, shows the average margins in Asia-Pacific are 25% to 50% lower in industries like consumer products, high-tech, industrial and retail. A US based payment provider currently has 80% of revenue from domestic customers and 20% outside US. Domestic sales for the last five years has been low single digits and in some years negative. Sales outside the US are growing 15% to 25%. A key strategy is to focus on international grow to boost the top line. One drawback is the international margins are half of the US margins! For this company and many others there are many reasons why margins in new markets are lower like disposable income, mix of products and services, infrastructure, etc. The fact is margins are lower and growing in these markets without a change in the business model will grow the top line but will lower the return on the business.

How many of your clients are facing the same challenge?  That is balancing top-line growth with profitability and return. If so, and most are, this is a great opportunity for you as a solution provider to help your clients manage overall performance.

Do you know your clients’ strategies for growing with lower margins? How do your solutions help improve performance in other areas of say the domestic business to compensate for the lower margins in new markets. Can you help your client build a sales, delivery and service model that is commensurate with lower margin products and services but still provide a good return.

Think about it. The operating model for selling laptop computers must be allot leaner and quicker than the one selling customized super computers.

Open your Ears to Corn Prices! A FinListics Industry Analytics Insight

The Cost of Corn a Concern to your Food and Beverage Companies? You bet! Why? The rapid and sustained increase in energy prices has impacted Food and Beverage companies who are now challenged with both an increase in production costs and reduced supply of corn, a key processing ingredient that is in high demand from energy companies looking to produce the more economic ethanol fuel.  So keep your ears open to corn prices! ( A fun fact from the FinListics’ “Consumer Product Goods” Industry Analytics.)

Hey… Do you know your Client Goals? (Hint) It’s not cutting costs!

Now more than ever, sellers not only must know their client’s goals, but also how the company makes money—the relationships between revenues, operating expenses and assets both for current revenue levels and as revenue changes in the future. Leveraging this knowledge can help you sell more effectively and be viewed by your client as a value-adding partner instead of yet another transaction-focused vendor.

Here’s my case study based on a real client. The client is a retailer whose comparable store sales and profitability have dropped like a rock. Given this information and actions taken by many retailers, the tendency may be for a seller’s account strategy to focus on exploring with the client solutions that help reduce and better manage operating costs. That would be a BIG mistake!

 Several of the retailer’s publicly-stated annual goals, which were easily found on the client’s website are:

• 10% increase in revenue
• 15% increase in operating income

 So here’s the answer…This client’s primary focus: growing revenues NOT cutting costs!

If the goal is to boost operating income at a faster rate than sales, doesn’t this imply the need to cut operating expenses? With that said, we can still explore our cost-focused solutions, right? Wrong again. Turns out the retailer plans to leverage costs like those at the store and corporate which are somewhat fixed. 

 So does this mean the client would not be interested in exploring way to better manage expenses? They maybe but the primary focus is growing the business. Just like in our personal lives, we can only focus on so many activities. Good luck trying catch up on paperwork, clean the garage, build the fire-pit you’ve always wanted, take the kids to soccer, see a movie and, should I also mention, work on your advanced degree in a single weekend. Clients are the same. They, too, can only focus on a limited number of initiatives at one time.

 So now ask yourself how do your solutions align with a client’s primary goals?

Are your Solutions able to enABLE?

My Quick Biz-Tip Question: Are your solutions able to enABLE?

One of the most critical components to selling is a strong Value Proposition. A robust value proposition answers an important question: Are your solutions able to enABLe?

 Alignment – How is your solution aligned with the client’s key goals. This typically requires a deeper understanding of a client from a business-financial perspective as compared to, for example, only a technological one. And this often entails talking to others outside of IT, like the CFO and business process owners.

 For example, Wal-Mart has announced to investors goals to keep corporate expenses and inventories at lower rates than revenues. How would your solutions align with these kinds of goals? And who would you need to explore your solutions with that you typically aren’t engaging?

 Business logic – What is the business logic of how a solution improves performance? This goes beyond the worn-out references to the “tion” words: optimization, integration, collaboration, etc. It requires translating a solution’s feature/function benefits into a practical explanation of how they help a client better manage the activities within business processes and, in turn, how they strengthen key performance indicators (KPIs).

 Suppose you sell business intelligence solutions that not only increase the quality of data, but also make it more readily available, perhaps in minutes instead of days. This may sound interesting, but from a client executive’s perspective, the real question is: How are these solutions going to help me better manage my business?

 Lasting benefits – Building on your solution’s business logic, what are the lasting cash flow benefits and overall value to the enterprise? Answering this requires building a business case that includes the solution’s total cost of ownership (TCO), the lasting benefits in the area directly affected by the solution, and the solution’s impact on other areas of the enterprise. TCO is important. But for a solution to deliver an acceptable ROI, especially in these times, the business benefits must far exceed the TCO. How often do you work with the client to build a business case? And if you do, is it truly from an enterprise-wide perspective?

 Bottom line, a strong value proposition presents greater motivation for change. And remember, your greatest competition typically isn’t another vendor selling a similar product or service. Often, it’s the client’s other internal projects. That said, your value proposition must be stronger than your direct competitors—and the often even more formidable internal competitors.

My quick Biz-Tip!—Are your solutions able to enABLe?

Introducting FinListics

Hello! The expert team at FinListics Solutions  is pleased to announce the commencement of our new “Selling Value” blog.  We look forward to providing you with educational information in an entertaining format!

My name is CFOEd.  I will be working with the FinListics team to bring you Engaging and Enlightening Biz-Tips to Enable you to successfully “Sell the Value” of your products and services.

Our firm, FinListics Solutions is committed to providing value-added education, sales enablement tools and support for executive sales forces worldwide.  Through our innovative blend of technology and education, FinListics teaches “Financial Linguistics” to sellers so they can identify a client’s pain points, propose effective solutions, and articulate the benefit of that solution in financial terms to C-level executives.

FinListics helps professional sellers:

•  reduce time spent conducting client/prospect research
• engage in more meaningful dialogue with client executives
• better qualify/disqualify leads
• expand footprint with existing customer
• build sales pipeline more quickly. 

Our portfolio of clients includes: Accenture, Citi, Deutsche Bank, DHL, FedEx, HP, IBM, Infor, Manhattan Associates, SAS, UPS, Wells Fargo and many others.

I am pleased to announce the commencement of our new blog and look forward to providing you with Engaging and Enlightening educational information in an entertaining format! Welcome!