What a CFO Needs to Hear Before We Pay for Outcomes

If your outcome-based pricing proposal hit my inbox, it would likely get rejected. Not because the concept is wrong, but because the attribution is lazy.

Here’s the good news: I’m going to tell you what folks like me need to see to accept these proposals. I’m having these conversations right now with clients.

Why me? I’ve spent my first 10 years in working in Finance at Fortune 500 companies. Did four years as a full-time CFO at owner-led companies. Started a fractional finance firm where I’ve advised about 100 founders over the past 20 years. Wrote a book about it.

Your starting point is attribution.

It’s All About Attribution

I need a direct link between the work you do for me and the percentage you seek. The weaker the link, the less likely I am to accept it. Don’t make me work too hard to figure it out or I’ll just recommend to the buyer we move on to other proposals. We’re busy folks.  I’ve got a 100% acceptance rate for these kinds of recommendations.

First thing to do is to choose your metric wisely.

Two metrics are sacred to CFOs: Cash and EBITDA

Cash and EBITDA are the scoreboard for the entire business. Every department, every initiative, every hire contributes to them. If this is your angle, be prepared.

Cash is solvable

Cash is already solved by investment bankers. If they raise a round or sell my business, they get a piece of the proceeds at the close. Only if they are successful will we get our money and they will get theirs. Works 100% of the time.

EBITDA is far harder to prove

EBITDA is an entirely different story.

When you walk in and say you moved the needle on our EBITDA, I’m skeptical. You need Supreme Court-level evidence to convince me. Most vendors don’t have it. You’re competing with dozens of people who work on that number every single day.

The other big problem for you is that you have zero control over that metric. We decide to fund new initiatives out of our operating cash flow and that tasty payoff you were envisioning goes away, even if you did your part. You have no remedy to recover what you felt was yours.

So change your tactic. Go after something you can control and measure. This benefits you and it will protect your payout.

Go After What You Can Clearly Own

Target something specific and attributable. Timebox it.

Here’s two examples on the revenue and expense side of the business.

Revenue-based attribution example

1. You introduce a sales program
2. We adopt it
3. We win identifiable new clients over an agreed-upon time period.

Now we can connect your work to a measurable result. I can fix my liability and calculate return on investment.

Propose something reasonable. Something like 10% of the first six months of new recurring revenue. I’m open to that conversation.

But don’t ask for 20% of MRR that lasts forever.

Here’s why. After six months, our account management team is adding far more value than you are. Sales is about capture. You can claim value in the capture period. After that, I’m attributing results to our efforts, not yours.

Expense-based attribution example

Want to participate in my EBITDA growth? Help me wring hard costs out of my system.

Suppose you offered to examine my insurance costs. You tell me you’ll prepare a no-cost analysis that will reduce my annual premiums by $10,000 or more at an acceptable level of risk. You want 20% of that cost savings when the new, lower premium bill is due.

This is very interesting to me. You’ve boosted my EBITDA so you’re getting your participation. You’re taking the risk of not hitting the minimum annual premium reduction. It’s directly attributable to your work and you’re asking for a reasonable cut. I’d say yes to this.

Think about how you could apply this approach to costs that really matter: payroll, IT, service delivery, product development. The list is long.

Know the boundaries of your contribution and price within them.

Talk to the Right Person at the Right Level

What if you’re not selling to founders but people at large companies? Know who you are talking to.

A Fortune 500 CFO won’t blink at a proposal that saves a million dollars. Not when the top line is $60 billion. That number is a rounding error.

But those companies are organized into divisions. Those divisions have their own controllers and financial analysts. Their budgets are smaller. Your proposal matters more to them.

There’s another benefit to finding these people. Early in my career, I was a financial analyst at Colgate Palmolive. I recall a marketing vendor reached out to me after speaking with a brand manager I supported. He was the only one who did that.

So, I listened. I liked it and recommended we go with them. I had no authority but huge influence. He got a $500,000 contract.

Find that person. They want to hear from you.

Start Small, Build Credibility

Value pricing is new to a lot of buyers. Finance people are skeptical by nature. We’re about the furthest thing from entrepreneurs.

Don’t lead with your most aggressive proposal. Win a quick, clearly attributable result first. Build trust. Then expand the relationship.

More and more firms will adopt outcome-based pricing. That means finance will get more skeptical, not less. We have a lot of influence over decision-making.

The vendors who built credibility early will have an edge over those still trying to convince us with vague claims about EBITDA improvement.

Start with quick wins. Earn the right to propose bigger ones.

What’s Next

Value pricing is gaining traction, and that means financial professionals are going to see more of these proposals, not fewer.

The vendors who win outcome-based deals aren’t the ones with the boldest claims. They’re the ones who did the homework to prove exactly what they’re worth.