Has business case and business value been misunderstood?

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Its has been an interesting observation of mine to see how many times a sales person thought they had a deal won, and then at the last minute the deal doesn't close. There are obviously many reasons why this could have happened, and generally there has been something missed in the sales process by the sales person causing the deal to be lost.

There is one situation I see come up often where the sales person seemingly has done all the correct things as per sales protocol and still has no feasible explanation why they lost the deal. In particular this is occurring when a financial justification has been provided which clearly shows it to be a no brainer to make the purchase, but yet the customer did not proceed with the purchase.

Does the financial business case presented win the deal?

When conducting a root cause analysis of the loss, what you may discover is that the deal which is committed was hanging off a business justification provided to an individual or small group of individuals, who could personally benefit from using your products. It would for sure make their life so much better, and they did show imense enthusiasm to buy your products or services. So you have a hook and a keen sponsor and a decision maker on your side. Even if there was no budget your sponsor is so keen they themselves build a business case to make the purchase. Seems like a slam dunk. Now all was needed is the CXO office to sign off. Then the news arrives that the request has been declined and they need to build this cost into next years budget. This scenario leaves many sales mangers struggling to understand why the customer would not buy with such strong financial justification. "WHY? WHY? WHY?"

Mixing up business case with business value.

When digging deeper under the hood, you may never get your sponsor to explain fully what actually happened behind closed doors.

However when I have spoken to many C suite executives it was interesting to learn how there was misalignment of such purchases with the mission and top priorities of the customer. What I was able to learn that on closer scrutiny, despite the strong business case, an out of budget cycle purchase was not something any board wanted to encourage. It shows lack of foresight when planning the year. Why was this purchase not able to be planned for? So the focus becomes about the company mission and priorities to deliver on that mission. Bringing value to the business would entail positively impacting the mission and top priorities of the company. For sure a business justification by a data center manager would be strong to make the purchase, but does it impact in a positive way the trajectory of the company's mission, and in doing so does it align with the companies top priorities aligned to that mission. If yes then it would bring business value. This is not to be mixed up with business justification, which is more closely associated to a transaction. So the question arises, were you aligned with the company mission and were you actually delivering business value. You may look back and examine some wins you have made and conclude that you won the deal using the business justification. However did that win come because by some coincidence it delivered business value. There are not many sales strategies that I have seen which specifically target making a business value impact. There is all too often a confusion by sales people they are presenting business value, when in fact they are working on a business justification to make a transaction.

Digging in the right place.

In my conclusion, to increase the chances of getting a sale, one must know more about the customer mission and priorities. I does not mean that you always need to engage with the C-suite to make a sale, however when working with smaller groups of people in the customer, work with them to ensure that their enthusiasm to buy your product is supported with a business justification which presents your solutions as delivering business value, by enhancing the mission and top priorities of the customer. Don't be surprised if the deal is not closed if these are not aligned.

Remember this, business justification is aligned to approving a transaction. Showing an enhancement of business value is aligned with making a decision to purchase.

Hope this was useful, always welcome comments and suggestions.

Mickey Bharat - Sales and Corporate Strategy Scholar.

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