I’ve developed this unusual habit of getting up early on weekend mornings to review financial statements (or as we refer to them in the US, 10-Ks and 10-Qs). I grab my backpack and sneak out of the bedroom, doing what I can to not wake up my wife who often has a cat on either side of her. One of both of the cats usually take notice and then do what cats are known to do…nothing. I walk past my freshman daughter’s room (she rarely awakens as she is typically doing her art until two or three in the morning) and then past my man-child’s room (he’s only 12 but nearly six feet tall). I make it to the coffee pot to turn it on, checking the time to estimate whether my wife will wake up before it shuts off in a couple of hours or if I should plan to bring her coffee in bed that morning.
I’m not a stock broker, though a number of my friends can never quite remember what I do for a living and assume it has something to do with investing. I am a consultant in the enterprise software industry and among the many roles I play, I am a business value analyst—pretty exciting, eh? In this role, my job is to connect technology solutions to business value. Ten to fifteen years ago, that mostly meant delivering a return on investment (ROI) analysis based on current state data for the prospect and forecasted future state based on the proposed solution—quantifying how it was going to reduce costs, increase labor productivity and/or drive revenue.
ROI analysis is still an important exercise for cost justifying a technology acquisition, but technology vendors have come to realize that better understanding their prospects’ business initiatives, through research and discovery, is paramount to better positioning their solutions against the competition—technology competitors, providers of unrelated solutions competing for the same budget dollars, and “doing nothing.” Naturally, many of these vendors expect their sales teams to handle this work. It is certainly reasonable to expect sales professionals to understand their prospects and even more reasonable for the account executive that manages two or three accounts—skim the annual report, listen to the earnings release calls, set Google alerts for customer news, etc. But for the sales representative managing a territory or a dozen or so accounts, this becomes more challenging, given all of the other demands that fracture their time.
Analogous to having a solutions engineer draw up a technical architecture, design a custom demo, or build a solution configuration, our clients can tap in to me and my colleagues as “financial sales engineers” to collaborate with a prospect on an ROI analysis, construct a compelling deal structure, compare solution options in an executive financial summary, or research and draft a business alignment review (what we affectionately call a BAR). So, for better or worse, I find those quiet hours on the weekend mornings to be well suited for the focus it takes to look at a 10-K.
The Business Alignment Review
In a nutshell, a BAR provides a business overview of a company. They are often customized to the given sales motion, but typically include the corporation’s business model, their stated business initiatives, financial insights from their key financial statements, peer and industry comparative benchmarks, and a SWOT (strengths, weaknesses, opportunities, and threats) analysis. The purpose of the BAR is to uncover actionable intelligence so that the sales team can drive a more relevant conversation in the prospect’s lexicon and about what matters most to their executive management. Here are two examples:
Insert your own style and call-to-action strategy, but hopefully you get the idea. Generally speaking, companies want to grow revenue and reduce costs, and enterprise software solutions support some form of labor productivity, cost reduction and/or revenue growth. Telling a customer that you can help them reduce cost or increase revenue is a given…a bit of a “wah wah.”
In summary, framing the value of your solution in the prospect’s language shows that you did your homework, that you understand their business, and that you may have a solution that can not only support their key initiatives, but help your sponsor’s career growth (and bonus potential).
…and, if you don’t feel like getting up early on the weekends to look at financial statements, TFP is here to help.