Budgets
Credible COMMUNICATIONS
05 November, 2012 12:27
We’ve discussed how the two components of Credibility (Trust and Capability) map to the three communication skills necessary to build credibility-- Connection, Consultation and Conversation.
What we haven’t discussed is the relative significance of each of these credible communication skills-- especially in the context of the customer’s roles, values and objectives.
Certainly, at every level of your customer’s company all three skills are critical. And being able to “connect” with your customer is at the core of every business relationship. But as you move up the “food chain” from purchasing agents through middle management all the way up to top executives like the CFO or CEO, the ability to identify customer business value-- and converse about it in an intelligent and insightful way-- overshadows the sometimes superficial impact of traditional “relationship” selling.
What we haven’t discussed is the relative significance of each of these credible communication skills-- especially in the context of the customer’s roles, values and objectives.
Certainly, at every level of your customer’s company all three skills are critical. And being able to “connect” with your customer is at the core of every business relationship. But as you move up the “food chain” from purchasing agents through middle management all the way up to top executives like the CFO or CEO, the ability to identify customer business value-- and converse about it in an intelligent and insightful way-- overshadows the sometimes superficial impact of traditional “relationship” selling.
Compounding that effect is the fact that at higher levels in the company, the influence and scope of financial authority increases as well. Lower management SPENDS the budget and middle management MONITORS the budget-- but it is upper management that SETS the budget. And has the discretion to modify those budgets based on how the opportunities you present align with and enhance Key Performance Indicators (KPIs) including, profit, margin, growth, etc.
Thus, while recognizing the importance of connecting and consulting skills in the pursuit of credibility, the focus of this blog is discussing the skill of executive “conversation.”
And now that we understand how to use Credible Communication skills at appropriate levels of the client company, next time we will explore what exactly executives expect to be able to communicate about. In other words, “how do we ensure our CONTENT is as credible as our COMMUNICATION?”
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"You want me to budget for WHAT?!
27 August, 2011 09:58
It's amazing how out of touch some people still are in this economy.
I've recently had some pointed discussions with what I call the "black turtleneck crowd (you know, the "who loves you baby, let's do lunch" art school dropouts that try to convince you to hire their artsy fartsy ad agency to fund their fantasizing over winning a Cleo award)." Even in this business climate, some of them are trying to tell you to actually spend MORE on unproven, knee-jerk marketing to "jumpstart" sales-- sort of a "stimulus package," if you will.
Don't get me wrong. At heart, I am a sales/marketing guy myself. I just "grew up" enough to realize that when you become a C-Level executive, you have to take the big picture into account. And now you're asking me to create a whole new budget for your pet initiative? FUGETTABOUTIT.
And frankly, for a marketing exec to ASK for a separate high level budget item for a new initiative reinforces an unfortunate and unnecessary stereotype that marketing folks are all sizzle and no steak, and don't get "that we're trying to run a business here, not your own personal experiment with the trendy, flavor of the month, marketing pixie dust voodoo!"
Sure, you'll make the (very legitimate) argument that your initiative can indeed produce measurable and significant improvements in revenue and profitability. It's all about the metrics-- yeah, I get that. But just like I'm telling the Engineering VP that he can't hire a new team of FLEX programmers, and the Sales Director can't open that satellite office in Atlanta (even though "it'll pay for itself within 6 months!"), YOU, Marketing Department, can't have a whole new budget for "the next big thing."
What you CAN do-- and what I EXPECT you to do-- is figure out how to use what you've got more effectively. And if you new proposal is REALLY that great, find a way to pay for it out of existing budget. Stop going to low ROI tradeshows. Cut some of the ad budget. Get a second source print vendor to cut production costs. You know-- MANAGE YOUR BUDGET.
Absolutely feel free to reallocate your resources as you see fit within those parameters. But don't ask the CFO/Controller to cut you a new "budget" at a time like this. Believe me, if you don't already know, you soon will, that he/she is still looking for whole chunks to take OUT-- not put in. That's just the reality of any responsibly run organization.
That said, as a financial executive I would love for you to present me with an ROI analysis of various programs and approaches and as long as it's not a cashflow issue ("I don't care HOW good a deal you can get on that Ferrari, we DON'T HAVE THE MONEY!"), I'm willing to consider shifting funding your way if I am convinced of the payoff. Show me direct improvement in actual revenue and profits. Specific declines in costs due to customer service, recurring revenue and customer retention, etc.
Marketers need to stop "drinking their own bathwater" and notice that they're sharing the bathroom with more and more people who are not impressed with the "ring around the tub." Clean up after yourselves, and learn the "Executalk" of your finance executives to earn their trust rather than expecting them to learn the "Marketspeak" about your initiatives.
I've recently had some pointed discussions with what I call the "black turtleneck crowd (you know, the "who loves you baby, let's do lunch" art school dropouts that try to convince you to hire their artsy fartsy ad agency to fund their fantasizing over winning a Cleo award)." Even in this business climate, some of them are trying to tell you to actually spend MORE on unproven, knee-jerk marketing to "jumpstart" sales-- sort of a "stimulus package," if you will.
Don't get me wrong. At heart, I am a sales/marketing guy myself. I just "grew up" enough to realize that when you become a C-Level executive, you have to take the big picture into account. And now you're asking me to create a whole new budget for your pet initiative? FUGETTABOUTIT.
And frankly, for a marketing exec to ASK for a separate high level budget item for a new initiative reinforces an unfortunate and unnecessary stereotype that marketing folks are all sizzle and no steak, and don't get "that we're trying to run a business here, not your own personal experiment with the trendy, flavor of the month, marketing pixie dust voodoo!"
Sure, you'll make the (very legitimate) argument that your initiative can indeed produce measurable and significant improvements in revenue and profitability. It's all about the metrics-- yeah, I get that. But just like I'm telling the Engineering VP that he can't hire a new team of FLEX programmers, and the Sales Director can't open that satellite office in Atlanta (even though "it'll pay for itself within 6 months!"), YOU, Marketing Department, can't have a whole new budget for "the next big thing."
What you CAN do-- and what I EXPECT you to do-- is figure out how to use what you've got more effectively. And if you new proposal is REALLY that great, find a way to pay for it out of existing budget. Stop going to low ROI tradeshows. Cut some of the ad budget. Get a second source print vendor to cut production costs. You know-- MANAGE YOUR BUDGET.
Absolutely feel free to reallocate your resources as you see fit within those parameters. But don't ask the CFO/Controller to cut you a new "budget" at a time like this. Believe me, if you don't already know, you soon will, that he/she is still looking for whole chunks to take OUT-- not put in. That's just the reality of any responsibly run organization.
That said, as a financial executive I would love for you to present me with an ROI analysis of various programs and approaches and as long as it's not a cashflow issue ("I don't care HOW good a deal you can get on that Ferrari, we DON'T HAVE THE MONEY!"
Marketers need to stop "drinking their own bathwater" and notice that they're sharing the bathroom with more and more people who are not impressed with the "ring around the tub." Clean up after yourselves, and learn the "Executalk" of your finance executives to earn their trust rather than expecting them to learn the "Marketspeak" about your initiatives.
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A CEO's New Year's Resolutions
05 January, 2012 09:46
So it’s the start of a new year. You’ve got (or will soon get) new quarterly and very possibly new annual quotas. January seems like a good time to set some new goals and refocus on your objectives for the next twelve months. After all, everyone’s doing it, right?
Not necessarily.
To many a CEO or CFO, January 1st is just the beginning of another quarter—no more, no less. As we discussed in the last post, understanding your prospect’s calendar is a baseline component in understanding that prospect’s business. Many companies have fiscal years that don’t coincide with the calendar year. In fact, in many international markets, the fiscal year more typically ends March 1st, making this week the beginning of 4th quarter, not 1st quarter. You certainly can’t afford to be out of synch with your customer by 3 quarters!
For argument’s sake, let’s assume that the client’s fiscal year starts in January. So now it’s safe to assume the CEO is focused on new annual goals and objectives, right. Not really. Any CXO worth his or her salt has been working on this year’s objectives for at least six months. By now, not only are those goals and objectives pretty much set in stone, there are likely execution plans and management reporting systems already up and running.
And do you think any of your client’s goals for this year have anything to do with helping you make your quota? Not on your life. So if your goal is to really bring value and to help your clients be successful (and it should be), you are going to have to find out what they consider “success.” What are their goals? How will they measure progress? And most importantly, what can you do to help?
You can likely guess at some of the answers, but I can guarantee that if you want to make an impression at the C-level that leads to mutual success, you’re going to have to dig deeper—and you may be surprised at what you find.
Not necessarily.
To many a CEO or CFO, January 1st is just the beginning of another quarter—no more, no less. As we discussed in the last post, understanding your prospect’s calendar is a baseline component in understanding that prospect’s business. Many companies have fiscal years that don’t coincide with the calendar year. In fact, in many international markets, the fiscal year more typically ends March 1st, making this week the beginning of 4th quarter, not 1st quarter. You certainly can’t afford to be out of synch with your customer by 3 quarters!
For argument’s sake, let’s assume that the client’s fiscal year starts in January. So now it’s safe to assume the CEO is focused on new annual goals and objectives, right. Not really. Any CXO worth his or her salt has been working on this year’s objectives for at least six months. By now, not only are those goals and objectives pretty much set in stone, there are likely execution plans and management reporting systems already up and running.
And do you think any of your client’s goals for this year have anything to do with helping you make your quota? Not on your life. So if your goal is to really bring value and to help your clients be successful (and it should be), you are going to have to find out what they consider “success.” What are their goals? How will they measure progress? And most importantly, what can you do to help?
You can likely guess at some of the answers, but I can guarantee that if you want to make an impression at the C-level that leads to mutual success, you’re going to have to dig deeper—and you may be surprised at what you find.
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