Tech firms – Selling to the c-suite 101
The world is changing and for many tech firms selling to the c-suite is the way to stay in play. And yet many tech players are still trying to play the old game, particularly those operating in the B2B space. Such firms are characterised by marketing ‘features’ to mid-level IT management, often with an aspiration to engage with the CIO.
Out in the field, the sales staff can be found playing cat-and-mouse with their adversaries in procurement. Over time the sales operative discovers the path of least resistance / easiest commission. This tends to push the discussions towards the base of the value stack and away from solutions that would get the attention of senior executives
This low value procurement model is inefficient and value-crushing. I think its days are numbered, though I don’t know how many days are left. The problem is that neither do you if you are a tech player that operates in this way. Thus you are exposed to substantial risk. Again, this model tends to result in cost-based, rather than value-based, purchasing decisions. So, profit is invariably left on the table.
As stated, the world is changing and tech firms are not immune. Major forces include:
- The shift towards cloud-based service delivery. This will lead to radical transformation or even dismantling of the IT function.
- The shift away from a steady-state business climate, where past success is a strong indicator of future success, to one of increasing uncertainty and volatility. This heralds the end of multi-year big ticket tech sales.
- The movement towards a utilisation / consumption-based model will change the nature of B2B sales. It is likely that sales in its current form will fade away with service becoming the new sales. And thus service professionals becoming the new salesforce.
- IT budget allocations are increasingly being dispersed beyond the IT function, thus rendering the CIO with having less spending power and influence in the buying process.
- Channel players are starting to see the value in moving up the value stack by endeavouring to offer business/digital transformation services. This seeming rise of the channel will erode the margins of the traditional infrastructure providers and possibly even those of the business-tech players
My view, and that of an increasing number of tech marketers and sales leaders, is that in order to avoid disappearing into operational obsolescence, the goal of tech sector marketing and sales is to establish credibility and relevance with the c-suite.
The theme of trusted advisor has been bandied around for several decades. It’s a healthy aspiration to have. But I suspect for all tech firms, the easiest path to trusted advisor would be to buy a Big 3 consulting firm or a Big 4 accounting firm. And if that is not an option, then it would be wise to drop the trusted advisor aspiration / delusion.
But there is good news because:
- What with the demise of strategic consulting, the big advisory players are racing down the value stack into your space. Their problem is that they cannot do technology delivery, whereas you and your partners can.
- Nobody as far as I can see is doing c-suite sales and marketing effectively in the tech sector, so the bar is low in terms of c-suite expectations.
So what can you do to stand out as a potential partner to senior executives. Here are some examples based on my own experience of working in this space.
Think relational capital
The quality of your relationships with your target markets will determine your long-term success. Think of those relationships as collectively being an asset class. Smart organisations focus on growing assets, rather than on profitability. Focusing on profitability is like failing the famous marshmallow test.
This is not easy particularly when the financial markets are expecting your organisation to focus on short term profits. Therefore, we cannot ignore profitability. But to ensure your organisation is braced for an uncertain future, you are encouraged to build your relational capital.
Sales is of course important. But if your account managers behave like piranhas, particularly around quarter / year end, then you will end up spending a significant part of each year destroying your relational capital asset. So profitability, whilst seen as lag indicator of performance, might also be seen as lead indicator of capital destruction. Again sales and marketing leaders would be wise to focus primarily on growth in respect of relational capital. It is working for Amazon.
And more isn’t always more. I have chaired many exec dinners for tech clients. Whilst the seniority of the guest is important, the volume of guests is less so. At this level, a sheep dip approach is unwise. Beyond a certain number, the quality of the interaction drops and in turn so does the opportunity for relationship building.
Rework the sales model
The beauty of traditional sales is its clarity. Sales professionals are in my experience the most focused of businesspeople and this gives them energy that can be quite uplifting. However, it can become quite negative when the salesperson is under pressure to hit short term targets. Or when they have secured a meeting with a senior executive and are expected to walk away with a suitcase full of leads.
Sales managers could alleviate some of this cognitive burden by taking a longer view in respect of the relationship cycle when the targets are senior executives. Similarly, forcing your sales team to spend much of their time selling their projections to their sales manager is wasting their cognitive capacity. This will only work of course if the sales team is built upon a platform of trust, rather than a boiler-room model.
Also the practice of playing musical chairs with the accounts each year does nothing for the account managers or the clients / prospects. This again is a form of relational capital vandalism. Ideally account managers and their contacts would develop deep connections. This of course runs counter to the idea of institutionalising the relationships, so that the company retains control of the clients. This approach serves no one. If your best people leave with your best clients that is indicative of some deeper problem your organisation faces.
This is an easy observation for me to make and a nightmare that you perhaps must live with because of the changing ‘strategy du jour’ that results in territories being reallocated around regions, nations, sectors, client value, aspirational top 100, or what your CEO had for breakfast.
Again, relational capital is at stake here.
Dancing around a contract was the model for the industrial era. Establishing and maintaining trust is critical for c-suite engagement in the digital era. Key elements of trust are credibility, reliability, intimacy, relationship duration and client-centricity.
Trust cannot be bought. It must be earned. And the time-to-trust is not under your control, though you can accelerate it by focusing on these key elements of trust.
Move beyond solution selling
Sometimes your products, solutions and services are not really understood in terms of what the client needs or wants. Often the salespeople might as well be reading from a script or specification when they engage with the buyer.
At a senior executive level, buyers are going to grow impatient with your standard discovery questions and step-based approach to forcing a close.
Also, many senior executives will argue that they do not have a problem that requires a solution from you. The key point here is that there is a tsunami in the form of digital disruption heading their way, and if they wait until they can see it it will be too late.
Thus at this level, your people need to move beyond solution selling to provocation / challenger selling. But this will only be possible if they understand what form this tsunami is taking and how one prepares for it. Your offering will sound even more impressive when the associated benefits are articulated in the context of this existential threat.
Farming trumps hunting
Chasing new logos is exciting. But as you well know the cost of opportunity creation is reduced and the likelihood of success is higher when engaging with existing clients, assuming the perception of your brand is positive. All companies are facing an existential crisis. Nobody knows what lies ahead and very few are equipped for an unknowable future. Legacy organisations come to mind, not least because of the risk they associate with transformation. But this also applies to start-ups and established web-centric companies.
So, you might as well pursue those with whom you already have a relationship. Or at least make them a priority if you are in growth mode. Those tech players that get relational capital will see the logic in this.
Revisit your brand
Your branding investment over the years has come at a cost, ie. you are likely well known for what you sell, but not for what you would like to sell. Difficult to have a strategic CxO conversation if the prospect associates you with distributing memory chips or implementing call centre solutions.
Analysts and investors also have difficulty in disassociating what made you successful from what you aspire to sell. I have seen many established players venture into new and higher value services, only to revert to hardware components at the slightest of frowns on the analyst’s face.
If you decide to go down the thought leadership route, then try to avoid copycat and diluted versions of what HBR or the Big 3 are saying. Most CxOs are already exposed to their thoughts. Your ability to move the minds of your clients and prospects will determine your time-to-trust.
Don’t squander the meeting
On those occasions where your people acquire a meeting with a CxO, it is important to be clear on what the goal is. That goal should be to secure another meeting. Forget what you have to sell. This is a golden opportunity to start the process of establishing trust and growing high-grade relational capital. Selling to the c-suite is thus a misnomer. At least when we compare it with the predatory tricks-based, sleight of hand methods associated with B2C and low-end B2B.
Again, it is important that you don’t ask discovery questions as it implies that you haven’t done your homework. Plus it is not the best use of your prospect’s time. Better to share your perspectives on how the world is changing and how organisations in general need to respond. At some point, the prospect might ask what you are doing in this space. Be able to offer some thought leadership related to what you sell without it being product-specific. Go too deep on your products and services too early and you might inadvertently paint them into a corner in the buyer’s mental vendor landscape that is reserved for irrelevant players. Develop a sense of what your prospect cares about by spending as much time on their issues as the conversation allows.
You have done a great job if you have in some way or other moved the mind of your prospect. If they start to see the world differently because of you, they will need you to help them rebuild their organisation around this new model.
Don’t alienate the CIO
The role of the CIO has been the subject of debate for at least a couple of decades. But we are coming to crunch time as the consumerisation of enterprise IT coupled with cloud-based delivery mechanisms enable users to deal direct. There is a need to have a group of people ensuring that enterprise data and security matters are being managed, but in terms of managing devices, servers and in-house developed apps the IT function is shrinking.
Those CIOs who continue to behave as IT managers are at risk. But those who see the value in data as an asset class and who lead the charge in respect to digital / business transformation have a very important role to play.
I have watched technology companies flit from revering the CIO to ignoring them as they chase IT budget redirected to the rest of the business
Based on the type of CIO you are dealing with, you must decide how you allocate your relational energy. I would strongly suggest that you do not alienate the CIO. At the very least, they have the power to potentially block your advances into the organisation.
I would in fact encourage you to play a role in helping your target CIOs become brand ambassadors in the boardroom. In many cases, with just a little bit of coaching the CIO could transform from senior technologist to tech-savvy business executive.
If you intend to engage with the c-suite, your approach to events and content needs to elevate accordingly. Whilst it is good to have people in your organisation who are happy to lend a hand producing a piece of content or chairing a dinner event, there is a risk that taking such an amateur approach might backfire. There is no reason of course why your people cannot learn the requisite skills and behaviours from the professionals. And of course your organisation may be of a size where you can employ dedicated people to cover everything from pre-event planning through to post event communications. I often find myself working with organisations where this is their core business. Hiring a private room in a nice venue is a very small subset of what is needed to create a remarkable CxO experience.
Upgrade the salesforce
As mentioned, as we transition from the industrial to the digital age, the very nature of selling technology products and services is changing too, along with who is selling them and to whom.
You might consider partitioning your salesforce into traditional sales, ie the model you have used successfully up until now, and hopefully will for some while into the future, and next generation sales, where there will be an emphasis on the c-suite.
These two groups will require different attitudes, behaviours and skills. You can recruit with these in mind and / or you can upskill your existing team. Though not that all of your old-school ‘order takers’ want to / are able to make the transition.
Again build a management model that encourages the best outcomes. Judging success by the number of CIOs your salespeople coerce into signing up for your tech leader summit might be a mistake if they don’t show or arrive in a resentful mood. In effect, you would be rewarding your salespeople for turning brand-neutral prospective buyers into brand-hostile adversaries.
Ensure you build a management model that integrates sales, marketing and product development. Your salespeople are your organisation’s sensors out in the field. Ensure there is a way to capture their observations so that your messaging, product development and events/content strategy can be tuned accordingly. This becomes an acute issue when dealing at the c-suite level.
Recognising that you are likely operating at the sharp-end of the business, I have not wasted your time wrapping up possibly painful messages with shiny wrapping paper and a pretty bow. Hopefully you will see that my intention is to flag that the world is changing and to provide you with a sense of how you might respond.
In many respects, there isn’t anything new here, I have been involved in supporting tech sector sales and marketing for over two decades. The difference now is that the associated actions have moved from optional to essential.
The tech sector is the lynchpin that turns technology into value for business and society. The less friction we have at the provider – buyer interface, the more value is likely to be delivered by your organisation. This becomes even more important when selling to senior executives. Selling to the c-suite is a key competence for tech firms looking to thrive in the post-industrial era.