Chapter 15
Business Case Whiteboards
Not everything that can be counted counts and not everything that counts can be counted.
—Albert Einstein
As it relates to sales, Einstein's quote is instructive in two ways:
1. If you want to use metrics or key performance indicators (KPIs) as part of making a business case for your products or services, they had better be ones that matter to your prospects and that are highly relevant to their strategic goals and objectives.
2. Business value derived from a product or service cannot be measured solely in a qualitative fashion; quantitative benefits are also important considerations.
When it comes to the quantitative counting, at some point in the sales process (usually in the later stages), your prospect will need to justify the purchase of your product, solution, or service to the bean counters, who may include the CFO, controller, or other members of upper management who control the purse strings. In many cases, providing this data is merely a formality; your buyer needs to check a box that you have provided some sort of ROI or TCO (total cost of ownership) data to back up the decision. This is just more ammunition your champion needs when freeing up budgets controlled by others.
As it relates to our fictional prospect—Foody's Fresh Foods—we know their upper management and Board of Directors have a number of strategic goals and objectives. The key is to count the value of Cool Road Trucking's benefits in a way that maps directly to these objectives. Foody's wants to increase net margin from 1.5 percent to 2 percent, and they see margin increases in fresh foods (produce, meat, fish, etc.) as a way to get there. And increasing shareholder value is predominantly a result of bottom line revenue increase. So when it comes to putting together a business case, these are two KPIs that are natural first candidates.
Putting together a business case is most often done using spreadsheets or ROI calculators. In fact, entire companies have been built to provide web-based ROI tools that enable the buyer to simply go online and input their own data to make a business case without the salesperson's involvement. We believe, however, that this couldn't be more antithetical to the philosophies of customer intimacy and knowledge ownership embodied by whiteboard selling. “Disintermediating” the seller is the last thing you want to do when trying to foster a bond with your prospect. If you are going to present a business case, do it in person, and with full knowledge ownership (or in this case “data ownership”). Remember, one function of trusted advisor status is that you have taken the time to learn your prospect's business and have complete knowledge of the key metrics that will drive their success. Your first reaction may be, “How am I going to memorize all of the numbers and metrics in this kind of whiteboard?” In the next section of this book, we will provide some proven strategies on how to quickly memorize any whiteboard content, and master the whiteboard in less than two hours—guaranteed!
In fact, we contend that the content of a Business Case Whiteboard is secondary to the impact of your capability as a salesperson and the message it sends to your prospect about the lengths to which you will go to understand their business and earn their trust and confidence.
In the following Business Case Whiteboard example, we have modeled how just two of Cool Road Trucking's unique capabilities will directly drive two of Foody's KPIs—net margins and bottom line revenue. Let's take a close look at each component of this Business Case Whiteboard, how it flows, and why it is effective.
1. The title of the whiteboard should include “Business Case” and the part of the business or KPI you are focusing on. In this case we are only focusing on how Cool Road Trucking will benefit the sales and net margin of berries, just one of dozens of fresh food categories. By focusing in on just one of many fresh food categories, we achieve two things; first, we can potentially justify a switch to Cool Road by savings and benefit in one category alone; and second, we select a manageable amount of data that can be mastered in a single whiteboard. More comprehensive ROI and TCO data for other fresh food categories can be provided in a spreadsheet or other tool as a follow-up. Remember, the point of a Business Case Whiteboard is “shock and awe,” not boiling the oceans of data.
2. The next part of the whiteboard is the assumptions of the business case. It is absolutely critical that you lay out data points and other metrics that you and your prospect 100 percent agree on. In this case, much of this is straight math driven by two key metrics: number of planned store openings and average sales of berries per week per store, both data points supplied by Foody's. The other data is simply math derived from these metrics, as well as industry-accepted figures related to spoilage rates and product shelf life. When using industry data, you will need to provide substantiated sources of this information and get agreement from your customer that these metrics are accurate and acceptable for use in the business case. It is critical that you secure agreement from your prospect (either through e-mail or a phone call) that your business case assumptions are agreeable before you show up to deliver your Business Case Whiteboard. Otherwise you will go down a rat hole debating the accuracy of the assumptions before you get into the really valuable part of the discussion—the measurable benefits of your offerings.
3. Key capabilities. Select no more than two or three unique capabilities that deliver measurable value relative to your prospect's key performance indicators. In this case Cool Road is focusing on reducing spoilage in order to both increase revenue and increase net margins.
4. Value delivered. This is one of the most debatable parts of the business case, because it assumes that your prospect buys into your claims that your solution “reduces x by y” or “increases a by b” and so on. It is important to have well-substantiated data points to back up your claims of savings or other gains derived by specific capabilities. In the hypothetical business case, Cool Road engaged an independent research firm to measure spoilage rate reductions tied to the TempTrust system installed on all of its refrigerated trucking systems. TempTrust is designed to evenly distribute cooling through the container to reduce spoilage of different food types. The findings were documented in a published study that was picked up and featured by FridgeRoad magazine, which lends credibility to the data points. The second capability, Less-Than-Truck-Load, allows smaller refrigerated trucks to pick up specific types of goods and deliver them to central distribution facilities faster for expedited delivery to stores, instead of sitting on pallets awaiting larger trucks to be filled. The data point of 22 percent reduced spoilage was backed up by a documented case study of another Cool Road Trucking customer, Food-All-Right, which substantiated this benefit in a reference story.
5. Projected savings. The final part of a Business Case Whiteboard is simply projecting spoilage savings (and thus increased revenue) based on Foody's store growth plans. Probably the most impactful metric is that when you reduce the $100k lost net annual revenue of berries due to spoilage by the annual reduction in spoilage delivered by Cool Road Trucking systems, Foody's can increase net margins on berries to 2 percent, which exactly matches their stated business objective.
The most frequently heard objection to putting together a Business Case Whiteboard is that many sellers simply lack solid metrics and proven ROI/TCO data for their products or services. We can't really help in this category, other than suggest you work with your existing customers to come up with any type of measurable benefits you can leverage. Remember, the real value of a Business Case Whiteboard is not so much in the content, it's in the fact that you took the time to put it together, memorize it, and have the wherewithal to present it to your customer without the use of a spreadsheet or other tool.
ACTIVITY
Using an account in the later stages of the sales process, complete a
Business Case Whiteboard using the blank template opposite
Figure 15.1.
