CFOs Making Customer Retention, Flexibility Top Priority

The job of a chief financial officer (CFO) can be as much art as science.

That’s true when, for example, macroeconomic conditions take a downturn and the CFO must determine how far a company can accommodate customers who may be having a hard time.

“We invest in folks in the sense that, ‘We know you’re having a tough year, we value the relationship, and we’re willing to bend on price this period or do some discounting here or there,’ to try to make it work for them and hopefully get that back in goodwill and higher retention over time,” Florence Healthcare CFO Cooper Anderson told PYMNTS.

Macro Adjustments

Anderson joined the company in August 2020. Today, Florence Healthcare — which is a clinical trial software company that helps research sites manage their documents, data and workflows — serves 10,000 research sites in 45 countries.

While the business is less cyclical than others, customers are still feeling squeezed, he said. Some of the biotechs, for instance, have started to see capital dry up. And after years of exceeding its new booking targets, Florence Healthcare is now running at about 80% of its target for the year.

In response, Anderson has made some adjustments such as setting a cash flow target and implementing management plans that will help the company respond quickly to challenges.

“We’re still focused on growth but doing it in a smart way where we are aware of our risks if we don’t hit the bookings in a quarter, and we’re able to make adjustments in certain ways that are, hopefully, minimally disruptive,” Anderson said.

Micro Accommodations

More customers — especially smaller ones — are also asking for changes in the billing cadence.

Some want to pay quarterly rather than upfront, defer bills into the next fiscal year or switch to a consumption, rather than flat-rate, models so they can get a better handle on usage.

Florence Healthcare is keen on working with them, Anderson said. At the same time, the company makes sure they don’t overextend themselves.

“So, it’s a combination of those things — trying to use some empathy and think about the customer’s pain points and [determining] how does this still be a win for me but meet their needs,” Anderson said. “We try to be flexible and work with folks in that sense.”

Strategic Opportunities

While managing these and other issues, today’s CFOs are often expected to be more of a strategic partner with the CEO than they were 10 or 20 years ago, Anderson said.

“So, I actually spend a surprising amount of time involved in overall company strategy and in different areas, including product and R&D,” Anderson said. “That makes it fun for me, too, because you really feel like not only are you reporting the news but you’re potentially making the news too.”

Something that helps CFOs spot opportunities is the trait of being curious and taking time to see things in the business and explore “down rabbit holes” to understand on a deeper level why those things are happening. That’s something that’s been helpful to Anderson and his peers, he said.

“I find I, a lot of times, turn over my biggest epiphanies or insights through random little rabbit holes that I go down — ‘This looks a little weird. Why is that?’” Anderson said. “Then, I go down in there and I find something that’s actually pretty profound.”