Communication is one of the obvious cornerstones of a successful sales career. You need to speak the language of the country where you’re doing business. You need to know and understand each industry’s specific lingo. You need to have a solid grip on the unique dialect of executives with different functional responsibilities. You need to be particularly fluent in the one language common to every decision-making executive.
And make no mistake, there is a universal language of business. It’s called “Finance.” Think of it this way: Regardless of the customer’s country of origin, SIC code, or job responsibility, every single one of them is in the money-making business! (Think about that for second… Let it sink in… They’re not on the job for the sheer joy of it. Like you, they want to pay the mortgage, go on vacation, provide for their families, etc. No matter how noble the intentions of the individual, he or she is ultimately in it for the money.
The implication here is that the most compelling value propositions will reflect the customer’s ultimate requirement to make and/or save money. Think about something along the lines of the following for every one of your proposals: “Investment in an ABC can give you a 79% ROI with a net present value of $140,000. You could pay for it in cash and break even in just over 2 years, or with the right financing, generate positive cash flow immediately.” (Who cares what an ABC is? I want one!)
Here’s a quick overview of 5 fundamental financial concepts every sales rep must know:
- Net Cash Flow – For any given year the amount you end up with after paying all the bills and collecting all the benefits (Could be + or -)
- Cumulative Cash Flow – The sum of all the cash flows for all the years included in your analysis
- Payback Period – The number of months it takes to recoup the initial investment
- Net Present Value – A calculation that enables an apples-to-apples comparison of investment alternatives in terms of the value of cash today vs. the interest-adjusted value of cash for various times in the future
- Internal Rate of Return – The most common calculation for Return on Investment or ROI
Subsequent posts will dive into more detail for each of the above. Meanwhile, if you can’t stand the suspense, fire up your spreadsheet and dive into the help files. It’s surprisingly straightforward. Gaining just a bit of financial know-how will do wonders for the power of your value propositions.
Outstanding post, Todd,
I work in the learning & development field and you have put into words my biggest criticism of the profession: trainers don’t understand even the basics of business.
What is ironic, tragic actually, is that the biggest complaint that most corporate trainers have is that their work is irrelevant and that the CxO level doesn’t take them seriously. Well, what do you expect when you don’t speak or understand the basic language of business?!!
Thanks for giving me more evidence, and ammunition, to carry on the fight.
Yours,
Leo
PS: hope you don’t mind me repeating my reply to a later post of yours. The more this is said, the better!
Leo,
Thanks for the additional feedback. And I don’t mind the repetition at all. In fact, when it comes to selling and matter financial, I applaud the persistence. Carry on!
Todd
You are absolutely correct. The universal language of business is Finance, It is driving force that keeps the businesses going.
So simple, isn’t it? Just HARD to do!