Friday, March 16, 2012

The Executive Relationship (Part 1 of 3)

Introduction

When I made the transition to a sales role in 2005 after 18 years of sitting on "the other side of the table," I was part of a team that sold a single, highly technical product.  After some time had elapsed, I had a lot of trouble comprehending how a product that had immediately recognized value by the target user community also had such a high degree of difficulty getting a check to be signed.

What I discovered started me on the journey from technologist looking at the business and trying to attach myself to anything that would allow me to demonstrate value to a businessman looking at technology as a means to accomplish one or more strategic goals.  Along the way, I began to understand that if you want to catch the ear of the person signing the check, you have to be able to demonstrate financial relevance.  After all, if they are going to spend $500,000 on your solution they are going to need to believe that they will get an equal or greater amount of quantifiable value in a one year period.

Fast Forward

Some time after that initial epiphany occurred I completed the circle by amplifying what I had learned during the previous years in sales with what I knew as a technologist.  This marriage of concepts helped me to understand why so many technology sales professionals struggle to articulate the value of their offerings without the resorting to a feature / functionality "fire hose" of information (with the assistance of a pre-sales engineer).  The reason is this: while technology pitched in this fashion can gain you the agreement that your solution adds value, without the ability to tie the technology into the overall IT strategy you will face an uphill battle every time.

Let me reiterate by rephrasing: I am not saying that it is impossible to sell based on feature / functionality.  What I am saying is that, when I was in my first sales position, we were constantly chasing budget to make a purchase.  We did close deals, small and big, but the amount of effort that we expended was exorbitant.  This was due to the fact that feature / functionality sales is an uphill battle save for the most highly commoditized solutions (e.g. email) simply due to the fact that the people responsible for signing the purchase order are going to keep their defenses up longer than they should.

IT Strategy

Why is that?  The problem, essentially, is that sales people are notorious for trying to close the deal.  After all, their ability to pay their bills is dependent on them reaching their quota.  But instead of trying to understand how the executives at their accounts approach their jobs, they instead go for this feature / functionality sales play under the incorrect assumption that it is the easiest route to closing a deal.

The faster route to value happens when the salesperson starts to think like the CIO rather than expect the CIO to think like they do.  And this begins by understanding how IT strategy is devised - this helps the salesperson understand and appreciate what the CIO considers to be important and more rapidly establishes credibility in the relationship.  When this occurs, the defensive barriers that were previously raised get lowered more quickly allowing a true partnership to be formed.

It should be noted that the ability to close the deal still depends on the ability to demonstrate a quantifiable return on investment with a payback period of less than 12 months.  Additionally, financial metrics such as Net Present Value (NPV) and/or Internal Rate of Return (IRR) may be required.  But without the establishing of the senior level relationship, you will never be invited to the table to pitch these figures in the first place.

Part 2 of this blog entry will continue this topic by examining how IT strategy is devised and implemented.

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