Friday, October 9, 2009

The Chief Sales Officer

Peter Drucker said that "the purpose of marketing is to create a customer."

But just as the title of Chief Marketing Officer grew from the ascendency of the marketing role in the 1990s, sales is now in its own ascendancy. As marketing becomes more complicated with customers informing themselves via the Internet and social media, selling as a function (finally) has risen to a high level of importance in most B2B organizations.

Today, the strategic purpose of selling is to create clarity for a customer, helping them to answer the question "what should we do?"

As a result, the selling function has risen to the other "C-level" functions. The title is only now catching up.

It's still an unusual title, almost non-existent a few years ago. Do a search on Google or any of the career sites and "VP Sales" dramatically outnumbers "CSO." I've run across this title only a few times:
  • AMD and Intel have CSOs
  • Don Grantham, recent addition to HP, uses the title
  • Mary Delaney was CSO at CareerBuilder before she became president of Personify, a CareerBuilder subsidiary
  • Paula Shannon has been CSO at Lionbridge for some time
  • Scott Rudy, former VP of Sales at salesforce.com, is now CSO at Savo Group

I expect the title to become more common (and embarrassingly, I should have posted this particular blog entry before I assumed the title!). Sales is now a critical function of any B2B organization and the sales organization needs a seat at the executive table, with operations and finance and marketing and people (what had been called HR).

With sales at the executive table, customers have a direct pipeline into strategic decision making. Sure, marketing organizations are chartered with collecting and delivering the "voice of the customer" but there's nothing like the voice of someone who has voted with his or her budget and has substantive input.

As a newly minted Chief Sales Officer, I'm learning the responsibilities inherent in delivering this input from the field. As a simple cost center, sales was less accountable for the results of their demands. With this greater visibility comes the responsibility of making the best decisions for the company and the customers.

I expect that my fellow CSOs are finding similar responsibilities. At the table with the rest of the executive team we represent the view from the outside. At the same time we have visibility into other company activities in a way sales never had before.

Personally, I welcome that responsibility. Together we are stronger!

Thursday, October 1, 2009

This Fourth Quarter

This fourth quarter is the most important of the decade.

Two weeks ago Ben Bernanke stated that the recession is probably over. Housing starts are up. The leaves are turning (at least in New England) and business people are starting to believe that the light at the end of the tunnel may be something other than an oncoming train.

We are all breathing a collective sigh of relief. It has been a difficult year...and for many, with the official unemployment rate scraping 10%, challenges remain.

Yet a sense of optimism is evident. And just as I predicted early in the year, budgets are now starting to open up. Mostly marketing and sales budgets, by the way. There hasn't been a general unleashing of capital investments or discretionary spending. That will come later, in mid-2010 and beyond. For now, the increased spending is coming from organizations that want to position themselves for success in 2010.

And that's why this quarter is the most important of the decade. The results of this quarter will drive discretionary investment decisions in 2010. If you want to have a good 2010, you must deliver the goods this quarter. Success in this quarter will help to ensure access to funding for the next quarter and the quarters beyond that. Mediocre or poor results this quarter will cause a significant rethink of sales and marketing strategy.

Many C-level executives and corporate boards are thinking: "Okay, you've had a year to figure out the current environment and to make the necessary mid-course corrections to ensure a reasonable result by the end of the year." Prove them wrong and your successor will be working on a very different action plan, one that involves wholesale shedding of divisions or organizations, cuts that go far deeper than the 5-20% layoffs we've seen already.

There hasn't been a single more important three month stretch this decade than perhaps the fourth quarter of 2001 for the travel industry. At the time I managed a business that built and sold technology services to road warriers. Road warriers were grounded on September 11th and my business went poof. The entire travel business was reshaped in that quarter and the airline industry is very different today as a result.

Your opportunity is to prove, in the next three months, that your business is both viable and thriving. With a focus on "co-creating" value with customers, you may have a chance. Customers today don't want to be sold to...they demand consultative sales people who work with them to boost profitability, reduce costs, increase shareholder value, make a difference in their world.

The critical success factors are simple and straightforward:
  • Focus exclusively on the prospects and customers who value and need your specific value proposition, your differentiator.
  • Narrow this focus to those who are committed to short term improvements in their business.
  • Ensure that your sales people fully understand the business processes and challenges of the individual prospect, not the group in general.
  • Commit to value-adding rather than transactional behaviors. You may think that hard selling will work in this market. It hasn't for years and it certainly won't now. You might "win" a few deals but you're destroying the relationships that bring long term profitability.
Focus on making a difference in your customer's world.

Lee