Don’t Even Think of Selling to Executives Without Understanding this First
This post is part of a new series we’ll be featuring from David McNicholas, Director of Strategic Business Development at Comstor US. Comstor is a recognized global leader in Cisco product distribution and an established provider of networking and advanced technology solutions. David is a recognized keynote speaker in the field of the financial impact of technology and executive strategic selling—and the creator of Executive Relevance Selling (ERS), a Cisco endorsed program (more on that below). David has trained and consulted data center, contact center, customer service operations professionals and specialists, as well as Fortune 1000 Executives all over the world on this methodology and discipline.
In my previous blog, I discussed the demise of solution selling due to the New World Sales Era of an investment-centric market. I put a stake in the ground that selling efforts must be driven to and at the executive level. To achieve this, you must be able to “improve business processes that drive the executive agenda defined by hard cash flows.”
But how do you know you’re experiencing the New World Sales Era? Have you heard any of these statements from customers? “We’ll make do with what we have.” “It’s not in the budget.” “Times are tough; we are not spending any money.” “I’m not the only decision maker anymore.” If so, you’re clearly selling in this new era.
Today, the business side of organizations is driving more and more IT decisions, while almost all IT decisions must be approved by top management to get funding. As a result, you must be able to get to the heart of the matter, which is (again):
“Improving business processes that drive the executive agenda defined by hard cash flows.”
To fully understand this definition and what it means to drive the sale at the executive level, we must first have a foundational understanding of corporate top management. The foundational executive attribute you need to very clearly understand to get started on selling to executives is fiduciary duty.
Corporate directors have a special and legal duty to their shareholders. They are accountable not only for the safekeeping of assets, but also for their efficient and effective use. Directors may not profit personally at the expense of, or contrary to, the corporation’s shareholders. Fiduciary duty is a legal requirement, which means a breach of this duty can result in a civil litigation.
At the top executive level in a corporation, any time precious cash is deployed the executive must always assume that he or she will have to formally answer to his or her fiduciary duty on how and why this cash deployment benefits shareholders. The executive also knows that built into that question is making sure the risk and return of cash deployment was acceptable or necessary for the shareholders’ benefit.
As a sales person, this means that if you can prove to an executive that your offering will drive incremental cash flows at low risk, and meet their discounted cash flow requirements, the executive has a duty to give it extremely serious consideration, or is obligated to move forward with your offering.
Low risk means that:
- You have proven that the cash flows will materialize
- The payback period is low risk (usually 14 months or less)
- The technology solution will work as presented
You also must quantify how your incremental cash flow driving solution will do one or more of the following:
- Get more business
- Keep more business
- Drive better efficiencies
In 2007, I conducted a contact center analysis for one of the biggest, most prominent military insurance and financial services companies in the country. Three and a half years prior to this analysis, the company purchased $3.8M in contact center technology. This incumbent solution worked well and the reliability was excellent.
Upon completion of the analysis, I was able to prove that by implementing my $8M solution the company would save $48M, compared to what they were currently using. In addition, the solution would increase customer service levels 20 percent with an overall payback of six months.
Despite a strong resistance of most (not all) of the IT project managers and contact center managers, the CEO informed the objecting stakeholders as follows: “Listen, we are not walking away from $48M for $8M.”
That sums up fiduciary duty perfectly.