Selling Technology to CEOs
Information technology has moved up the corporate agenda and it is changing the way that companies do business. The problem, of course, is that companies are no longer falling over themselves to get the latest and greatest enterprise solution and frustrated sales teams are now finding that the door is closed. The most often cited reason is lack of budget but recent surveys have suggested that many companies are significantly under-spending on their annual IT budget. So the budget has been allocated but not spent or put another way, a potential business need has been identified but not met. To sell a solution which crosses inter-departmental boundaries, the only way that you can be sure that you are talking to the true budget holder is to go directly to the CEO.
Most enterprise technology companies currently look for live projects where budget has been appropriated and there is a clear 'way in'. If you are only engaging with your prospect at a time when it has already been designated as a project then it is probably too late. This is exactly what happened recently at a Data Indexing Technology company. The company had a revolutionary new product and had taken the decision to change its approach, moving away from the IT Manager as a point of contact to sell the business benefits directly to the CEO. At the last minute though, they panicked and reverted to the original sales method. True, they were able to get in front of an impressive number of prospective clients but they were unable to close a single deal. The reason? The project managers were reluctant to change what had already been put in place because months of work would have to be undone. A few even acknowledged that the solution would have been exactly what they were looking for but were unwilling, and more importantly unable, to adopt it.
To sell successfully at the enterprise level, technology companies need to engage with the ultimate decision maker as early as possible. Consider a scenario where your 'revolutionary' product improves productivity to such a degree that it renders several senior IT positions redundant. If your initial contact is not high enough, chances are the person who could (and possibly would) agree to the deal will not even get to hear of it. Enterprise technology by its very definition is implemented at the strategic level; in short it must save at least one of time, resource or heads. The challenge then is to present your product in such a way that it is a clear and explicit solution to a visible and quantifiable problem. And to get it on the CEO's radar screen.
The CEO is primarily and ultimately responsible for ensuring that analysts and shareholders see a positive trend in profitability. There will of course be long term strategic objectives but most CEOs are nowadays judged by their boards on quarterly performance. Remember also that whatever affects the company P&L often affects their personal compensation. If, at the end of the quarter, profits are down then the CEO must react.
The single biggest reason why sales people do not sell successfully to CEOs is because they do not pick up the phone and try. Do your research. Have their published profits gone down in the last quarter or the last few quarters? Is there a definable need for your product with quantifiable benefits? Would their technology environment support it (many a sale falls down here)? Another key point to remember is to be polite to their PA. It sounds obvious but without their support you won't even get through in the first place.
If they do implement change, most CEOs prefer to work in small increments rather than huge leaps. The skill of the sales person is to anticipate and get inside their reluctance and then change their mind. Crucially, they need to take control of the agenda and by setting the timescale throughout the selling process, the sales person can control the buying process. Walk them through the ROI and demonstrate the actual effect on profitability. If your product saves them time and enables their sales people to make 30% more calls per month, how does this affect the bottom line? What is their close ratio? If they meet with one in ten of the companies they call and close one in three of those deals then that's one extra client. If you're talking about an enterprise solution that's worth $150,000, then that makes $450,000 extra revenue per quarter.
The key factor to bear in mind at all times is to understand how your product intersects with the CEO's priorities. If you can show them a line item in their budget that will be eliminated you will have their ear. By demonstrating a quantifiable effect that your product will have on the bottom line you stand a chance of being that first company which kick-starts a major enterprise project, leaving your competition to pick in vain at the project managers. Don't sell on their fear but be aware of it. Remember, their dislike of being beaten by the competition to the detriment of their market share and, crucially, their profits is your opportunity.
Diane Seddon is International Marketing Manager for Optima Consulting Partners. Prior to joining Optima she worked in marketing for a UK-based IT company and has published several articles in the IT press. She has also worked as a Partnerships Liaison Co-ordinator with the New South Wales government in Australia and in project management for a London property firm. Contact Diane by telephone: +44 (0) 1483 683504; e-mail: firstname.lastname@example.org and visit www.optimaconsult.com .
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