Seasoned Loss Prevention executives know that when attempting to acquire funding for a new LP initiative or solution, they must be prepared to answer some tough questions and possible objections from their CFO, as well as other senior executives. A common best practice to prepare for these objections is to consult others within the company who have had experience going through this same capital request or budgetary process. Often times coworkers can share the objections or tough questions that were previously asked of them. LP professionals can use that knowledge and anticipate other similar scenarios, then practice viable responses.
What if an LP professional does not have someone to consult?
Here is an opportunity to review some common questions and objections LP executives may encounter when asking for budget allocations or capital for a new or upgraded LP initiative. For illustration purposes, we’ll use the installation of Nedap’s EAS system with RFID capability as the LP initiative being proposed.
CFO Question: What are the operating costs?
LP Executive Answer: “Rather than continuing down the path of standard EAS, Nedap’s system is much more intelligent. It will allow us to use the EAS system as more than just a deterrent to theft, as it provides Retail Analytics. However, any slight increase in costs when compared to our current LP solution will be more than covered by the increase in sales we will realize due to having product on the shelf as a result of the reduction of theft, as well as the added benefits of RFID technology. Therefore, this LP solution is well-suited to ensure we reach our break-even point within the first 10 months of the fiscal year.”
CFO Objection: We have other priorities right now. Maybe next year!
LP Executive Answer: “We understand that one of the biggest challenges of any senior executive is how to justify spending capital on an LP solution, especially when shrink has improved over prior years. However, it is important to note this LP solution doesn’t only reduce shrink. It also reduces labor, provides crucial insight into what is being stolen so we can ensure proper replenishment immediately, and provides a wealth of other analytics that can be used by operations, marketing, and Loss Prevention. Since all of these areas are priorities for us, it is imperative to integrate this LP solution. By reducing theft, we will decrease turnover, increase average transaction size, and increase same store sales over last year. With this improved in-stock position, customer satisfaction will undoubtedly improve.”
Ever heard these common objections?
- I don’t want to burden the store employees. The have enough to do!
- This LP solution will NOT improve sales.
- That sounds like a huge operation! We don’t have the capacity for that right now!
- This LP solution requires additional hardware and capital expenditures.
For the answers to the above objections and more ways to win over your CFO, click here to download, “Winning Over the CFO – A Practical Guide for Loss Prevention Executives” by Nedap Retail.