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Focus on Corporate Governance Requires a Business-Oriented Selling Approach

Written By: Dave Stein
Published On: November 25 2002

Prepare To Sell At The Board Level

Today, more than ever before, if you are selling products or services that are critical to your prospect's success or for that matter, their very survival, your proposal will likely be elevated to the board of directors level for final approval. Why is that? Government, shareholder and press focus on corporate governance has put boards on notice that they are being held accountable for their oversight responsibilities. Those often include investments in strategic technology. And those boards are listening.

I know. I sit on the board of a public company. We are getting involved in product and service acquisitions and zooming into details like we never have before, especially relating to two areas: Risk and Return. And if it is your proposal that is being considered, you need to understand how they think so you can be completely prepared.

Getting Your Proposal Approved

Here are eight requirements for getting your proposal approved by the board.

  1. Make sure your prospect is qualified.

    It sounds like Sales 101, but I can't tell you how often sales teams pursue opportunities where they have no chance of winning the evaluation, not to mention getting their proposal approved by the board. You'll need to ask critical questions of yourself and your potential buyer and get answers that are logical, able to be corroborated, and provide you with a clear path to success.

    Since we are discussing boards of directors, here is a question for you: Do you know who sits on the board of the company to whom you are selling and what other boards of your customers or your competitor's customers they sit? I've won and lost deals based upon director-to-director recommendations, advice and influence. In one case, a renowned venture capitalist that sat on the board of our start-up wrote a letter to the chairman of a prospect's company, with whom he had worked in the past, in effect, "vouching" for us. Until that point, we were the underdog. It all changed with that letter.
  2. Prove your knowledge of your prospect and your own capabilities

    Boards want to know that potential vendors understand their industry, business, challenges, goals and strategies. They don't want generic solutions to what they believe are unique problems. They want to know you've taken the time and effort to completely assess their situation and have a vision of a solution, a plan to get it implemented, and the resources and experience to get the job done. In addition it is important that the board recognizes how well you know your own company, products and services, capabilities and ability to specifically address how you will contribute to their success.
  3. Know how the CFO, CEO and board counts money

    Credibility with senior executives is a key factor in getting their sponsorship for putting you in front of their board of directors. And credibility in front of the board is critical for getting that final approval. To earn that credibility you must, at a minimum, understand how they count their company's money. Is it Earnings per Share? Market share? Gross margin? Top-line growth? When you completely understand how your prospect counts money and therefore measures success, you'll have a foundation upon which to build your value proposition—in terms that apply to them.

    You'll need to provide the specific, quantified benefits you expect they will derive from your solution based upon your work with their people. In some cases, you may have to guarantee these returns or propose proceeding forward on a shared-risk basis.
  4. Understand your prospect's ROI requirements

    What exactly are your prospect's requirements with regard to Return on Investment (ROI) for the acquisition of products or services such as yours? Currently, its hard to get proposals adopted in many industries where they payback is more than 12 months. But there is a risk here. If your ROI appears too aggressive, you'll lose credibility. Boards know that there are no silver bullets for their challenges and problems. Don't come across as one.

    There may be pro forma ROI models that your prospect is required to use. If so, you'll need to get your hands on those early, so you can build business value within that structure during the selling process. In some cases, your own company's ROI model may be much more appropriate for the kind of product or service you are selling than what the prospect is currently using. If so, it becomes a selling tool and should a catalyst to bring the sales and evaluation teams closer together focusing on a common goal—determining how much value will be derived from that investment. There is a great piece on "How to Get Your Project Funded" in Appendix 2 of How Winners Sell.
  5. Get in front of the board if you possibly can.

    You want to be in control of your destiny—in this case, the opportunity to present your proposal to the board. If you have been selling too low, you'll have no one with enough credibility and influence to get you that opportunity. A lower-level manager will have to present your case to their boss, who may then have to make your case to the CFO or CEO, who will take it to the board to get it approved. You are so far removed in that situation, that the likelihood of success is remote. Your messages will be muddled, your value proposition diluted. It's like the old game of telephone.

    If you have an influential ally at the executive level, and they can't get you personally on the board agenda, they may be able to make your case themselves, with coaching and guidance from you. The CFO or CEO are obvious candidates.

  6. Directly and proactively address risk

    Part of the responsibility that boards, CEOs and especially CFOs have is assessing, balancing and mitigating risk. That has never been more of an issue than it is right now. CEOs, CFOs and boards are under tremendous scrutiny. They know that no matter what you are selling or who you are, there is some risk associated with your offering. It's their job and responsibility to assess that risk.

    Instead of pretending that risk doesn't exist or that the board won't see it, be forthright. Discuss in your proposal and in your presentation of the risks that have been jointly assessed by yours and the evaluation team. List them, rank them and most importantly demonstrate that your company is prepared to work with your prospect to mitigate any and all, now as well as when they arise later on.
  7. Your proposal

    The board wants an accurate, compelling and concise proposal to consider. Not fifty or one hundred pages. More like ten. Don't get me wrong. You should have reams of backup documentation available for every board member at your presentation, but get to the point in your proposal. It should contain and executive summary, a restatement of their top-level business requirements (in their terms), an ROI summary, a statement of your capabilities, critical milestones by which progress can be measured, several references whom the board would recognize, and key assumptions relating to commercial terms and conditions.

    The proposal must be perfect—high-quality document. All the numbers must be accurate, justifiable and easy to decipher.

  8. Over-prepare for any meeting with a board

    Bring the right resources, whether it's your CEO, CFO, or one of your company's directors. Know every word in your proposal. Rehearse again and again any potential objections, especially as it relates to risk and return. Know their industry, their competitors, their customers, their organization, their performance, their key goals and strategies and everything there is to know about the project or initiative for which you are proposing your offering.

Tough times call for tough actions

You'll need to prepare yourself for selling to boards going forward. It can be intimidating, but if you understand what they need from you and can meet their expectations convincingly, you'll be surprised at how comfortable you will begin to feel.

About The Author

Before founding The Stein Advantage, Inc., Dave Stein was employed by several leading-edge high-tech companies in a diversity of roles: programmer, systems engineer, sales representative, sales manager, director of worldwide sales development, VP of sales, VP of marketing, VP of international operations, VP of client services, and VP of strategic alliances.

During the early 1990s, Dave lived and sold in Europe, commencing international operations for the technology company he helped to build, Datalogix International, which was later acquired by Oracle. In the decade since, Dave has focused on coaching CEOs, VPs of sales and sales teams in 48 states and 23 countries. His unique skills in competitive sales strategies and political positioning have helped thousands of sales professionals win hundreds of millions of dollars of business against insurmountable odds.

Specializing in large, complex opportunities, Dave is much in demand as a speaker, consultant, coach, and trainer. He has worked with companies small and large, from less than $5 million in sales to the Fortune 500, including IBM, Oracle, Hewlett-Packard, Invensys plc, Honeywell, NEC, ALLTEL, Pitney Bowes, Siemens, McGraw Hill, Standard & Poor's, Richardson Electronics, AMS and Bayer.

Dave sits on the board of directors of Global Entertainment Holdings/Equities, Inc. (OTC BB: GAMM), a leading publicly traded holding company that provides business development support and administrative assistance for technology-driven subsidiaries that license, develop and host Internet software applications and operate web publishing sites in the online gaming sector.

Dave is a fitness enthusiast, instrument-rated pilot, airplane owner, bicyclist, pet lover, skydiver, scuba diver, firewalker, early adopter of technology, and internationally recognized expert on technology sales, marketing, and service. He is a member of the National Speakers Association, the Strategic Account Management Association, Sales and Marketing Executives International (SMEI) and AOPA, the Aircraft Owners and Pilots Association.

http://www.thesteinadvantage.com

http://www.HowWinnersSell.com

 
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