To Maximize Growth, Align Sales and Finance
During two recent business seminars, I asked groups of CFOs, “How many of you reduce your sales leader’s forecast by 25% or more each month?” Without exception, every hand went up, with many gesturing even higher, indicating they need to discount forecasts even more heavily. Once the laughter subsided, I followed up with, “Why?” Here’s what I heard:
- The sales leader’s forecasting track record is inconsistent.
- Our CRM system provides incomplete data or doesn’t integrate with other systems, leaving us in the dark.
- Customer buying behaviors have shifted dramatically since the pandemic, throwing all forecasts into question.
- Our goals don’t align – CFOs focus on cost efficiency, while sales leaders aim for revenue growth.
Fundamentally, we’re just different: CFOs are natural skeptics, while sales leaders are optimists, believing every call will close a deal.
If ever there was a time to reduce friction between CFOs and sales leaders, it’s now. After a period of caution and retrenchment, CFOs are just as eager for growth as their sales counterparts. Surveys reveal that across the middle market, CFOs prioritize top-line growth over profitability by nearly four-to-one. The clearest route to growth lies through the sales leader. According to a National Center for the Middle Market study, improving sales force effectiveness and retaining profitable customers has more impact on growth than any other factor – 45% more than operational efficiency, 60% more than entering new markets, and more than 2.5 times greater than innovation. Little wonder that over 87% of CFOs report plans to focus more on customers and customer experiences.
Time are ripe, but what’s the way forward? To achieve meaningful progress, CFOs and sales leaders should consider four key strategies.
1. Invest in Sales Training and Development
Investing in training sales teams delivers faster returns than almost any other expansion activity. This is particularly important now as customer buying patterns evolve and buyer demographics shift. Investments should aim to create a “hybrid” sales force skilled at both virtual and in-person selling. Yet, when CFOs are asked how they would allocate additional sales investment, they typically prioritize expanding headcount over training or upgrading CRM systems. This persists despite the fact that three in five CFOs acknowledge that their teams worry about COVID-era restrictions affecting their ability to meet targets. This signals that upskilling existing staff for hybrid sales models might deliver greater value.
2. Enhance Forecast Accuracy and Transparency
Measuring the strength and value of customer relationships through tools like business relationship assessments and CRM systems is crucial. A majority (60%) of CFOs in middle-market companies admit they lack the data to assess customer relationship value effectively. Sales leaders echo this sentiment: while 88% agree that strong relationships significantly impact business, only 24% report using consistent processes to manage and improve these relationships, according to internal research by the Candice Bennett firm. By developing shared metrics and processes for assessing and strengthening relationships, CFOs and sales leaders can improve both forecast accuracy and collaboration.
3. Focus on Strategic Relationships
The most profitable accounts are often also a company’s best customer relationships, making them a natural focus for CFO-sales collaboration. Research shows that even high-performing relationships typically operate below their full potential. Indicators such as strategic discussions, personal rapport, and mutual time investment often fall short. CFOs and sales leaders can work together to measure and maximize the potential of these relationships, extracting greater value.
4. Use Common Data and Objectives to Bridge the Cultural Divide
Misaligned incentives are often the cause of the finance-sales gap. CFOs’ pursuit of profitability goals is often divorced from sales targets and incentives. The two teams may stop pointing fingers and start working together by merging tech stacks, establishing common KPIs, and building unified dashboards. CRM system upgrades can further lower friction and improve performance when combined with more extensive initiatives to promote alignment.
Relationships First, Processes Second
The CFO and sales leader wield significant influence over their company’s ability to execute strategies through process-driven efficiencies. With CFOs increasingly focused on understanding customers and sales teams striving to re-energize relationships strained by the pandemic, this is the perfect time for these two critical leaders to align their efforts. Together, they can drive the measurement and growth of the “relationship capital” essential for sustainable enterprise success.
