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What’s In It For The Person Paying The Bill?

by David Brock on April 20th, 2012

I received a frustrated email from a colleague the other day.  He described a sales situation—he’s selling a solution that creates a tremendous return for this customer.  The return is about 4 times the investment —  a business case that seems compelling on the surface.  But he’s frustrated because he can’t close the deal.

It’s actually a situation B2B sellers encounter quite frequently. We develop great business cases for “The Customer,”  a company or an enterprise.  But the reality often is, the value or the return accrues to one department or group, and all the cost and risk accrues to another group.  For example, in the case of my colleague, all the benefits accrued to an end user group.  The solution produced tremendous cost savings for a specific department.  The challenge, however, was all the expense, work, and risk was in the IT group  — and the IT Vice President simply was deciding not to make the investment.

Frankly, I side with the IT Vice President on this issue, his reluctance to agree to the solution is perfectly rational.  There was no value proposition for him, there was only cost, risk, and hassle.  One might argue that he should invest in this as a “good corporate citizen.”  But it’s a meaningless argument if it puts the attainment of his other goals and objectives at risk.  Why should he divert his resources and budget from a set of projects that he has committed to, and for which he and his organization are being measured?  Just because it’s a priority for one organization, is it a priority, is it more important than all the other initiatives the IT executive has on his plate.

This is a challenge to every B2B seller.  Too often we can create great business value for one group in an organization, but if all the stakeholder invovled aren’t aligned in the priority, if all the stakeholders don’t get value, then our deals get stalled.  And we are actually seeing this happening more and more in B2B sales.  Deals are getting stalled not because of the business case, but because the customer–the individuals, not the enterprise, aren’t aligned in their priorities.

There are a couple of challenges in these types of deal.  Consider:

How does the Vice President of IT get value out of this?  There are lots of ways to start addressing this–can the end user, getting all the benefit provide the funding/budget to the IT group so they can invest in this project and still meet their budget goals?  Can they get IT projects reprioritized so it is a top priority–by which IT is measured?  (Of course then there’s the risk of upsetting all those whose projects were deprioritized)

A great business case is insufficient to win.  Great value for the customer is not just value created and delivered to the enterprise, but value created and delivered to each stakeholder in the decision.  We can’t just create value for one and ignore the others, we have to have a compelling value proposition for everyone involved in the decision.  It’s our responsibility as sales people to make sure we understand what each individual values, and we that we align what we do with what each individual values.

This situation illustrates another major problem.  The most important stakeholder is probably the stakeholder who pays the bill—the stakeholder that has the greatest at risk in the decision.  The beneficiary of all the benefit — the customer we are selling to, may have only upside in the decision.  But the most important people are likely to be those that are paying the bill or have the most at risk.  We find this very frequently in IT project.  Much of the benefit accrues to the end user organization, all the risk, expense, hassle accrues to IT.  IT has to have a win in the decison to move forward.

Often, this problem is made more complex because many customers simply don’t know how to buy.  We may be working with a particular department or group of users.  We might get them excited and wanting to buy—but if other people need to be involved in the buying decision and aren’t, however much our “customers” want to buy, they just won’t.  Often, we have to help our customers know who should be involved in their buying decision and why.  Often we have to help them learn how to buy and organize themselves to buy.  In every sales situation, we need to assess the customer’s buying process–do they have one?  Are the right people involved?  Do they know how to buy, do they know how to make a purchase decision, and to they have all the people who are involved in that participating? 

There are very few complex B2B sales that don’t cross organizational boundaries.  If we are only selling to one buyer, we may win that buyer, but fail to get the order.  We have to sell to all the stakeholders. 

Finally, things have changed substantially in recent years.It used to be that if you created a compelling business case, the company would find the money to fund the project.  That’s no longer true.  Companies are being very selective in their investments, they aren’t investing in every project that has a great business case, they are only investing in projects the are aligned and directly contribute to the top 1-2 strategic priorities of the company.  Even if you have all the stakeholders aligned–if this specific project isn’t directly tied to the top 1-2 strategic priorities, the project will most likely not go forward regardless of how compelling the business case.

For each of your deals, consider:

  • Are you selling to all the stakeholders?
  • Is there compelling value to each one?
  • Can you clearly state what’s in it for the person paying the bill or incurring the risk?
  • Does your customer know how to buy and have they organized themselves to buy?
  • Does your initiative directly contribute to the top 1-2 strategic initiatives in the organization?

You have to meet all these criteria to succeed.

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2 Comments
  1. Thanks Dave, that’s really “spot on”!

    Your example shows perfectly, that it’s not only about selling to the executive stakeholder and having a great business case, it’s selling to all impacted stakeholders. That requires not only to have a business case which is attractive for all of them, it requires also to have a shared vision of success with all relevant stakeholders – ideally before creating the detailed business case.
    It can always be, that one of the impacted stakeholders has a special risk which is not so obvious or feels not considered well enough – perhaps he/she has other objectives as well, not directly connected to the deal, but relevant for their decision.
    The example shows also, that roles are more than a title, that roles should reflect the functional responsibility and the altitude level. Then, it’s much easier for account teams to distinguish between different expectations and patterns, depending on altitude level and function.

    • Tamara, thanks–as always–for the comment. It’s critical that we remember that we have to create value for all stakeholders in the decision! Too often we overlook this focusing on one individual–whether the person with the highest title, our friends/sponsors. Unless we work with all the people invovled in the decision, we are not likely to win. Regards, Dave

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