This post was published in the Wall Street Journal's CIO Journal.
After almost two decades of selling business infrastructure to technology companies, I thought I knew it all. But since spending the last two years on the other side of the table as the CIO/CTO of CBS Interactive, I realized how much I didn’t know about selling to enterprise IT.
The way to truly understand how and why an enterprise purchases technology is by gaining the ability to understand how IT departments at medium to large-size organizations work, how decision-making actually happens and how vendors can avoid getting in their own way.
Based on my experience on both sides, the following guide aims to help salespeople and companies become more efficient for both their clients and themselves.
Be clear what it is you do
A pitch, whether from a small startup or a multinational corporation, should always concisely state the following:
1. Description: What the offering specifically does, how it’s different from competitors and how it can help a CIO. Ideally this includes some tangibles, such as screenshots or performance graphs.
2. Validation: What stage the product is at and who else is using it.
3. Process: How can the offering be purchased, what the typical on-ramp looks like, and how much it costs.
Here’s a mock example of a good pitch:
Super Interconnect provides a next generation fiber interconnect that is 10x the speed of existing interconnects. Super Interconnect makes it possible for your web and application servers to quickly access backend resources such as databases, thereby significantly reducing latency to customers. As you can see in the attached graph, we offer 25x the price/performance of 10gigE, and are a year ahead of other nextgen fiber interconnect technologies.
Super Interconnect is a young company, however we all come from networking companies such as Cisco and Juniper, and are well funded by top venture capitalist firms Accel and Sequoia. A few of your peers such as PepsiCo and Walt Disney Company are actively using Super Interconnect and can serve as references.
We sell our product direct to IT organization and can work through your preferred resellers. A typical POC takes 30 days to deploy with minimal time by your staff. Super Interconnect is priced at $1K/server, a 300% significant $/gbps savings over 10gigE.”
If an introductory pitch can’t cover this basic information, IT professionals will get the sense that a meeting will likely be painful and will want to avoid it.
Also, if a company is new and doesn’t have a product yet, it’s best for the vendor to be honest and say that they are in a research phase. Instead of polling a number of CIOs, vendors might consider finding and collaborating with a domain expert that knows the next thing an enterprise will need. Hype and vision won’t sell.
Time is not the answer
Virtually every contact a CIO receives has the same ask: for a meeting or phone call. As most CIOs’ schedules are crammed, realize that coffee, lunch, drinks, dinner and events are particularly tough requests. So instead of asking for the CIO, who is not even the best decision-maker on a lot of new technology, vendors should ask to talk to the right experts in a CIO’s organization.
For startups in particular, sales and business development executives love to have big brand names and titles in their pipeline. Even when it is clear that a product is not a fit, they still push hard for a meeting in order to justify their own value to their management chain. This can reflect badly on a startup, so salespeople need to work to find the right targets and measure success not by the amount of meetings, but by how many prospects are moving into the next step in the sales funnel.
Bypassing IT is not realistic
Selling directly to a line of business and bypassing IT is not realistic. IT is generally with the program, supportive of cloud applications and no longer a roadblock like in years past. And lines of business need to have their tools integrated with their company’s overarching systems as well as be in compliance with security and Sarbanes-Oxley policies.
Treating the IT department like a speedbump signals that the vendor does not value what IT thinks. Lines of business typically partner with IT, and a deal takes agreement between the two.
Understand the IT culture
While IT vendors spend their time trying to sell to IT departments, they rarely have anyone on staff that has actually worked in an IT department. IT departments have a certain culture and the best way to sell to them is to understand how they work.
When a vendor secures a meeting, it’s in their interest to show up early, be on their best behavior, dress and act professionally and make sure not to reschedule unless a significant life event occurs. Once a vendor has the attention of IT management, they should tell it like it is and then try to close a deal. There are quite a few vendors that don’t answer direct questions regarding features and pricing.
Startup companies need to make sure to spend more time talking about how their passion is solving a customer’s problem, than about how their idea is “awesome.” The history of the company and its various pivots can be interesting, but only within the context of how excited the founders are to solve a business problem for a customer.
IT managers are generally loathe to give any feedback since it usually engenders hostility. Quite often, what a vendor is selling is not a good fit for a particular enterprise. Particularly for startup founders, learning this can be quite emotional. It is important for founders to contain that emotion and try to learn exactly how a product needs to shift in order to meet the needs of an enterprise customer.
The best way to get feedback is to ask specific questions. For example: What is it that the customer likes and doesn’t like about their current solution? How hard would it be to move to a new solution? And is it realistic that the customer would move to a new solution or will they simply wait for their existing vendor to add the missing features?
The flip side
Enterprise IT is guilty of wasting vendors’ time in order to learn what’s going on in the industry and to keep options open. A question I used to ask when I was on the vendor side of the table was, “What’s the last product you bought and what was the process like?” If no one can answer, the IT group is clearly very conservative and a vendor should come back in a year after they have found and closed some early adopters.
In the next part of “How to Sell to the CIO,” I will discuss the sales process.