Selling to the CEO

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Selling to the CEO

• Dial in 877-302-8255
• Passcode 6693619
• Tim Fong
• November 9 , 2001

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Executive Advisors

• Northeast
• Jim Napier james.napier_at_oracle.com
• Southeast
• TBD
• Midwest
• Jerry Zabel jerry.zabel_at_oracle.com
• West
• Tim Fong timothy.fong_at_oracle.com

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Todays Agenda

• Why talk like the CEO?
• How to talk like the CEO
• How to sell to the CEO
• Case Study
• Questions/Comments

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Why talk like the CEO?
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To sell to the CEO, you need to think and talk
like the CEO

• Talk about things that are important to him/her
• Talk about them in ways that are relevant
• Understand what the CEO is saying

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Use Your Knowledge To . . .

• Communicate more effectively
• Better understand company politics/dynamics
• Create more compelling value propositions
• Net, Net
• Shorten sales cycle
• Improve probability of winning

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Bottom line is be credible

• People dont buy from people they like they buy
  from people that are credible
• Types of credibility
• Personal only gets you so far
• Knowledge closes the deal

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How do you be credible? Through your knowledge

• Learn about the industry
• Dynamics
• Trends
• Competitors
• Understand issues the company is facing
• Strategic
• Financial
• Operational

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Where do you get the Knowledge?
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There are many great sources for information

• Company Web Site
• Shareholder SEC Documents
• Subscription Services
• Public Sources (WWW)
• Periodicals

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Company Web Site

• Understand lines of business and accompanying
  revenue streams
• Understand background of executives and any
  biases they may have
• Determine funding sources and potential outside
  influencers/decision makers
• Job Postings are good intelligence key areas in
  company, bias towards other platforms/ software

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Shareholder SEC Documents

• Annual Report to Shareholders
• 10K Annual Report
• 10Q Quarter Report
• Proxy Statement

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10K Management Discussion

• Discusses trends in key areas
• Revenues
• Expenses
• Lines of Business
• Financial specific trends
• Earnings
• Cash Flow
• View of future
• Competition
• New businesses
• Risks

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10K Management Discussion

• Look for . . .
• Things going well
• Areas of pain
• Key financial trends
• Concerns for future

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Subscription Services

• One Source and Hoovers
• Strengths
• Easy to use
• Great query capabilities
• Comprehensive
• Good for quick side by side comparisons
• Weaknesses
• Company specific data only as good as provided
• Data on private companies very inconsistent

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Web Sources

• Red Herring www.redherring.com
• Find Articles www.findarticles.com
• AmCity www.amcity.com
• Other sources
• Business Journals
• Associations

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News Web Sites

• Mostly oriented towards stock market (public
  companies)
• Information typically available
• Business Overview
• Press releases and related articles
• Competitors
• Insider trading
• High level financials
• Research (mostly for a fee)
• SEC filings

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Magazines and Newspapers

• Good when looking for VERY current news
• Typically, searching archives does not go back
  more than 90 days
• If longer, requires a fee
• Additional subscriptions may be required for
  online searches

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Net, Net Bare Minimum

• Public Companies
• Hoovers or One Source
• Company Capsule
• Executive Profile
• Competitors
• Company Web Site
• Overview of Business (products, services, etc.)
• Job Postings
• 10K Management Discussion Analysis
• Press Release and Articles (last 3-6 months)
• Conference Calls (Analyst and Company)

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Net, Net Bare Minimum

• Private Companies
• Hoovers or One Source
• Company Capsule
• Competitors
• Company Web Site
• Overview of Business (products, services, etc.)
• Executive Profile
• Board of Directors
• Job Postings
• Press Releases, Articles (last 3 months)
• Funding (sources, amounts)

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What do you do with your Knowledge?
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The goal is to be fluent on the industry and the
prospect

• Understand the industry
• Dynamics
• Trends
• Competitors
• Understand issues the company is facing
• Strategic
• Financial
• Operational

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Analysis Framework
External Factors
Competitors
Past
Future
Suppliers
Customers
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Understanding Industry Dynamics

• Industry maturity causes different behaviors
• Factors effecting profitability vary widely
• Consolidations and other changes in the value
  chain
• Regulations (current and pending) influence the
  ability to change

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Understanding Industry Trends

• Key Trends
• Growth rates
• Customer attitudes
• Go to market model
• Product uses

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Understanding Industry Competitors

• Who are they?
• What are their strengths/weaknesses?
• What exploitable opportunities exist?
• What are the major threats to viability?

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Understanding The Prospect

• Strategic Issues
• What is the company trying to accomplish?
• How will they accomplish it (internal growth,
  acquisition, etc.)?
• What obstacles do they face?
• What are the critical success factors?

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Understanding The Prospect

• Operational Issues
• Productivity metrics
• Information bottlenecks or silos
• Headcount
• Benchmarks relative to industry

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Understanding The Prospect

• Financial Issues
• How profitable is the company and why?
• How good is cash flow?
• What does the balance sheet look like?
• Receivables
• Inventory
• Debt

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Financial Metrics

• All companies
• DSO Avg A/R for period / Sales for period
  days in period
• Operating margin (operating income / sales)
• Net margin (net income / sales)
• SGA Percent (SGA / sales)
• Revenue per employee (Revenue for period / avg
  employees for period)
• Operating Cash flow (before financing activities)
• Days of Cash (cash / (total expenses
  depreciation) 365)

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Financial Metrics

• Manufacturing companies
• Inventory turns (cost of goods sold / avg
  inventory for period)
• Gross margin ((sales cost of goods sold) /
  sales)
• Return on Assets (net income / avg assets)
• Ratios
• Debit to Equity (long term debt / shareholder
  equity)
• Current Ratio (current assets / current
  liabilities)
• Asset Turnover

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Financial Metrics

• Service companies
• Development Percent (development expense / sales)
• Bad debt expense (bad debt expense / sales)
• Productivity metrics
• Application rate (professional services hours
  billed / total prof services hours)

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Case Studies
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Prospect/Qualifying
What is the business?
Car Salvage (SFO)
EVP Tools Used
Mini360 SEC Filing, Press Release
Deliverable/Objective
Cold Call/Letter to CEO
Alternative
No Call Into Account
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What is in the CEOs Brain?
Intense Competition for Supply of Cars
9iAS
Growth by Acquisition
ERP/Cisco
GA Costs Up!
How grow volume via net?
ERP/SS/Internet Arch
Displace IBM/AS400
I own 20 of Company
Speak EPS
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Seek Executive Sponsorship
What is the Business?
Electric Contractor (SFO)
EVP Tools Used
Mini360/VITO 10K, Exec Bio, Press Releases
Objective/Deliverable
Letter to CEO
Alternative
Continue IT Relationship
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What is in the CEOs Brain?
Cisco director on Board
Cisco is Oracle Customer
Expand Intl/Acquire
ERP/Acquire/Multi-Org
I want my IPO!
World-Class System Valuation Higher
Key customers
Oracle Customers
Promoted Purchasing SVP
iSupplier/Purchasing Purchase Strategic?
Labor intensive Cost structure
SS/TE/Projects Margins!!
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Validate/Ask for Exclusive
What is the Business?
Semicon Auto (SFO)
EVP Tools Used
Mini360/Exec Framework 10-K
Objective/Deliverable
Exclusive/Framework
Alternative
Exec Sponsored Survey
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What is in the CEOs Brain?
Growth by Acquisition
Misconfigured Product Delays Shipment
Configurator
ERP
Product Development Strategic
Customer Service
OPDX as Carrot
Spares/TeleService/ Mobile Field
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Value Proposition
What is the Business?
Printing Co. (SFO/Tech)
EVP Tools Used
Industry Research/NetPV
Objective/Deliverable
Business Buy-In
Alternative
Stuck
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What is in the CEOs Brain?
Growth by Acquisition
Recession
Winners vs. Losers
Applications Oppty
VISA
Internet
Cost of losing Customer?
Cost of customization? Competition
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Questions?
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Notes from Sessions
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Other Web Sites to Use

• CFOMag.com
• BusinessJournals.com
• VentureWire.com
• Contentville.com
• PWCMoneyTree.com
• FT.com (Financial Times)

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Other Resources

• Manufacturing Industrial Guide (Industry Metrics)
• MRI (Industry Metrics)
• J.K. Lassers How to Read a Financial Statement
  (Book)
• Almanac of Business and Industrial Financial
  Ratios (Leo Troy (Author), Prentice Hall)

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Different Twist on Donovans Model
Revolutionary
Technology
Standard
Traditional
Forward Thinking
Business