Tech companies almost always target the CIO or other top IT executive in their sales efforts. It’s the way things have been done for many years—and it’s largely ineffective.
The main problem with this approach is that CIOs and other IT executives usually have the authority to do what was done last year: budget constraints give them very little room to spend on newly-identified solutions that you provide. They also are bombarded by your competitors and every other tech vendor, so it’s easy to let vendor calls go to voicemail and to ignore those emails.
But there is a better way: target the CEO. Here are 5 reasons why this is a good strategy.
1. Targeting the CEO Provides Access to Funding
“No budget” is the easy way for potential clients to get rid of vendors, and every corporate executive is constrained by budget realities. Everyone, that is, except for the CEO. You read that right. While the CEO is responsible for delivering results, only the CEO can decide—at any time—to reallocate funds from one department to another. No other executive can decide to take funds from one place and give it to another.
“When the priority of a company is all about growth, you can find the money to make that happen.”
Getting new funds is no slam dunk: CEOs will do this only for initiatives that are strategically important and align with their top priorities. But if you know the CEO’s agenda and can get access, you have the keys to the kingdom.
“IT organizations always have budgets. They typically range between 1% and 2% of the company’s revenues. But what we’ve been able to tap into beyond those budgets are the line-of-business executives’ budgets, also the CEO agenda,” says Salesforce President Kevin Block. “When the priority of a company is all about growth, you can find the money to make that happen.”
By getting on the CEO agenda, Block says Salesforce is able to access pools of funding beyond regular IT budgets.
2. Targeting the CEO Beats the Competition
It’s unlikely your competitors know how to effectively engage CEOs—yet. Doing so requires both access and a collaborative approach that’s hard to pull off without senior-most executive involvement.
Let’s face it: most CEOs don’t get involved in sales in any meaningful way unless they have to. But when CEOs do get involved, the impact is powerful.
“I can probably rattle off dozens of CEOs that [the President and I] are having to constantly interact with and collaborate with and creating these transactions,” says Salesforce.com CEO Marc Benioff, whose company is successfully targeting CEOs in its sales efforts. “I think it’s really unusual and that’s why we are really selling more enterprise software than Oracle or SAP in the applications area.”
3. Targeting the CEO Bypasses the Naysayers
Enterprise technology purchases involve, on average, 15.5 people in a purchasing organization, according to IDG Research. Half those individuals are within the IT department and the other half are within individual lines of business.
Good luck trying to merely identify all the players, much less getting them all to agree. Typically, if any one of these 15.5 people has an objection to your product/service, you’re sunk.
On top of this, in the typical large enterprise, corporate survival demands that managers be more concerned with not making mistakes than with innovating. With the risks of new technology implementations so well documented and widespread, corporate bureaucracies hunker down and reject intruders. After all, the downside to any individual is worse than the potential upside.
There is only one person who can wrangle all the necessary players to consensus—and is responsible for innovation—and that person is the CEO. In short, what the CEO wants done, gets done.
4. Targeting the CEO Accelerates the Purchase Decision
Enterprise sales seem to stretch on forever. It’s no wonder, with those 15.5 corporate people each needing to vet and approve any new idea. Each of them has their own priorities and politics, and the chance for your proposal to keep moving along those 15.5 desks is slim.
It’s best to have a champion who can nurture your proposal through the layers and decision-making process, or simply have the authority to complete the deal on their own.
Of course, the quality of your champion determines the success of your pitch. Is there anyone you would rather have champion your proposal than the CEO?
5. Targeting the CEO Gets you Past the Gatekeepers
Sometimes, you know that a company would be a perfect fit and truly benefit from your solution, but you simply can’t get in the front door. It’s incredibly frustrating, but completely common.
From your potential customer’s view, it’s a necessary evil: without effective gatekeepers, they would collapse from the weight of all the people trying to gain access to decision makers.
But for those few who bypass the gatekeepers and effectively align their solutions to CEO priorities, they will find the gatekeepers falling in line behind the CEO. If you start at the top and get buy-in from the boss, everything falls quickly into line.
In my own company’s experience, we frequently target Chief Marketing Officers. But in a few cases when we couldn’t get a call back and had a specific, compelling case for their company, we took our case directly to the CEO. That happened this week with one of the world’s largest shipping companies. I just received a faxed back order form from the CEO for $14,000 with no questions asked, bypassing everyone else in his company.