These 4 Financial Documents Hold The Key To Selling In A Down Economy

Anand Shah is cofounder and CEO of Databook, a revenue technology company.

Warren Buffet famously said, “Only when the tide goes out do you discover who’s been swimming naked.” And the current tide is leaving the tech industry more exposed than any other sector. Hiring is frozen, job cuts are here and corporations are reining in their spending as they wait to see what’s next. Businesses want to be sure they have enough free cash flow to sustain operations through another period of uncertainty. Whether it will be six months, twelve months or longer, no one knows.

What we do know for certain is that the tech sales environment is simply harder. A vendor today must prove itself capable of a five- to ten-times over return on their solution. In other words, if you’re pitching $1 million to $5 million deals, you need to deliver $10 million to $50 million in returns for your customers.

This intense environment means that a generic demo is no longer enough. Sales teams must demonstrate how their solutions will drive customer outcomes with validated customer references.

Thankfully, disclosure laws for public companies make the task a little easier. The documents that companies are required to file contain valuable data that can guide sales professionals toward a better understanding of their prospects and customers. That knowledge, in turn, can reveal important insights into which solutions a customer needs, what kind of business outcomes they need to achieve and which buying groups will be most interested in engaging.

Four financial documents, in particular, are crucial to a deeper understanding of prospects. Here’s how to interpret them to add insights to the sales process:

1. The Profit And Loss Statement (P&L)

A company’s profit and loss statement, included in mandatory quarterly 10-Q and annual 10-K filings, is a snapshot of financial health. In these statements, companies balance income streams—that is, sales revenue—against expenses such as employee salaries, rent and product costs, with the goal of growing cash month to month and year over year. To grow those profits, companies can generate more income, cut costs or some combination of the two.

Sales teams can use the P&L to ascertain how their solutions could help customers grow profits based on specific pain points and urgency. They can also determine the ideal timing for engagement based on whether companies have a fiscal year set differently than the traditional calendar year.

For example, on the revenue side of the equation, studying income streams from specific initiatives or decisions within a company to see how they’re trending over time can reveal gaps between goals and earnings that sales teams can address in their presentations. Comparing revenues with competitors’ performance is another way to reveal areas where prospects may need new solutions.

On the expense side, a close study of companies’ direct production costs and administrative overhead can reveal where they need to cut back and find new efficiencies. Solutions that streamline or speed processes or ways to source raw materials less expensively can resonate.

Additionally, the 10-K includes a section on risk factors revealing a company’s top challenges and shortcomings. This information isn’t likely disclosed in marketing materials, but it’s invaluable. Sales teams can develop use cases that directly address risk factors, proving their solutions’ strategic relevance.

2. Proxy Statements (SEC Form DEF 14A)

SEC form DEF 14A, also known as the proxy statement, enables sales teams to see the details behind executive compensation at any public company. The proxy statement typically includes not only executives’ overall compensation but also their short-, medium- and long-term incentives and how performance will be measured.

This information can yield key insight into priorities for specific individuals and their teams. Incentives trickle down through companies, so everyone within a particular division down through middle management is likely to be aligned on the same objectives and metrics. When engaging with individual buyers, sales teams can address specific performance metrics as detailed in the proxy statement to help prove how their solutions will help meet goals and produce measurable success.

3. Major Event Updates (SEC Form 8-K)

This filing is required as needed whenever companies have major news investors need to know about, including changes in executive leadership or earnings guidance, layoffs and mergers and acquisitions. An 8-K filing can shed light on whether the deal is at risk or whether new personnel has decision-making power.

These interim filings also serve as timely updates to annual and quarterly reports—which is especially helpful in the current volatile economic environment. Sales teams can adapt their strategies according to information in the 8-K reports to reflect the latest conditions within the organization, establishing credibility and up-to-date expertise.

4. Earnings Call Transcripts

While the annual report provides a high-level view of strategic priorities, transcripts of earnings calls reveal how initiatives are playing out at a granular level. While not legally mandated, many companies hold these calls to provide context for their mandatory filings. Top executives typically speak and take questions from an audience of investors, analysts and the media. They provide updates on projects and outline progress toward goals, discuss performance vis a vis current market conditions and share plans for activities on the immediate horizon.

Sales teams can use this information to bring immediacy to their engagement with prospects. They can identify specific projects to attach to and specific teams to target. Questions from the earnings call audience and the company’s responses can also surface important revelations about where investors perceive weaknesses or potential challenges. Addressing those specifics demonstrates that sales teams are well-versed in the company’s needs and have a solution that will adapt to fluctuating circumstances.

From A Seasoned Sales Rep, For Sales Teams Everywhere

Successful B2B selling requires more nuance, knowledge and skill than ever before. Knowing how to use company documents can help sales teams unlock their advisory potential. By delving into company documents, sales teams can demonstrate how their solutions connect with specific priorities, challenges and opportunities – earning trust and sales.


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