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Many technology market segments are showing signs of age. Companies in those segments work harder to maintain—much less to achieve new—revenue growth. Their products and services have become commodities. Product and service lifecycles are shorter; not one company seems to be able to keep the "Technology Leader" crown for very long.

Customers of IT companies seem to have realized that cost, complexity, and risk increase exponentially with the number of vendors they deal with, and so are settling on fewer and fewer suppliers. Final purchase decisions have migrated up in customer organizations—often to the CFO or CIO. Executives at these higher levels often earn their keep based on whether a project with their name on it achieves ROI. And with their paycheck and reputation on the line, you can bet that these senior executives are fully involved in the decision-making process.

To tackle these issues of aging segments, vendors are in ferocious competition to engage customer C-level executives who can assure prospective peers that "this" purchase decision is the right one. One such way of engaging executives is the Executive Sponsor Program (ESP), a standard "sales tool" since companies like IBM and Xerox pioneered relationship-based sales models many moons ago

The aging of technology segments has led many marketers to bring these rusty, old programs back to the forefront—a smart move, overall. Designed and implemented correctly, ESPs are valuable enablers to relationship-based selling, increased revenue, and maximized profitability from existing top customers.

How does it work?

In theory, vendors use the ESP to develop and maintain critical relationships at higher levels so they can "make the cut" and continue to grow revenue from existing customer bases. ESPs help relationships move beyond social events and reactive issue resolution to growth initiatives and proactive issue avoidance. Through them, vendors aggressively create dialogue with senior customer executives to understand their business pains and issues and to demonstrate a commitment to their success. Also through the ESP, which usually has a tactical charter, one vendor executive is matched with a peer from one or more (usually more) of the vendor's key accounts. ESPs can build deeper relationships between companies. They can increase loyalty and incremental revenue.

Yes, they can—but do they? The rusty, old model for ESPs is riddled with challenges, many of which you may be facing in your current program today or in the program you're planning to build.

Through this article we articulate the challenges with the old way of doing and thinking about executive sponsor programs; share with you a shiny, new model that works; and pose five potential actions you can take within 90 days to get your program running right.

Five Challenges of the 'Old' Executive Sponsor Model

  1. Busy executives have more on their mind than your program. If you run an executive sponsor program, you would probably agree that the largest and most resilient obstacle is gaining buy-in and participation from executives at your company. Yet without that internal support, your program is doomed. A typical day in the life of your CTO might involve dealing with product quality crises, unexpected project delays, and outsourcer delivery issues, not to mention the resignation of a key employee. It's not as easy as it seems to carve out time to proactively engage with customers or to strategize with account teams.

    In fact, one attitude resonates during our discussions with executive sponsors: If the customer is not in crisis or if a deal is not imminent, let's put the call off until next month. Of course, next month's call never comes, because it's as busy as this month. And, unfortunately, the best time to build the customer-executive relationship is when there is not a crisis or an imminent deal.

    For an executive sponsor program to work, your company needs either fervent customer-evangelist leaders or real financial drivers and outcomes that demonstrate the impact of strategic executive relationships. Without one or the other, executives will not invest time to establish valuable relationships of trust.

  2. Busy account managers have more on their mind than your program. Like executives, account managers are working harder than ever. Their territories have grown. They're saddled with the need to capture, document, and track every step of their sales efforts. They've got dashboards to populate, accounts to watch over.

    "The account manager's time is consumed by reactive tasks related to coordinating resources, parenting the solution implementation, tracking and resolving issues, responding to tactical customer requests, and identifying people within the organization who can enable the customer's success," explains former sales executive and Phelon Group consultant Tim Misuradze. "There's not a whole lot of time left for proactive activity like strategizing and nurturing relationships between corporate and customer executives."

    When both the executive and the account manager have much on their plates, an unhealthy inertia likely sets in. In post-mortems with executives, we often hear, "The account manager never called me to set up a meeting." Likewise, we hear from the account manager, "The executive sponsor never called me."

  3. Busy customer executives don't see the value of getting involved in your program. Customer executives are busy, too. A recent Phelon Group survey of 112 IT buyers and influencers revealed that the majority of customers do not see what value, in their terms, justifies active involvement in any of the plethora of vendor programs. If your customer executives aren't excited about the benefits of your company's executive sponsor program, or if they can't articulate the benefits to their management, they'll either resist it or use it to prod you to get what they want. Furthermore, if multiple vendors with multiple programs are targeting the same customer executive, how is she to choose?

    Many companies assume that customers appreciate increased attention, especially attention from senior executives. In reality, your customer is likely to carefully consider whether to invest time with an executive sponsor, particularly if your company is approaching that same executive with multiple programs, like the advisory board, a social event, or a reference request.

    In cases like that, the cumulative time requirement often forces the executive to question her involvement at all, especially if you're not enabling her to reach goals she couldn't otherwise achieve without involvement in your company's programs. It's also important to remember that in these times of lean resources and outsourcing, most IT professionals are cautious about how they spend their time; all efforts must be justified and tied to a net- benefit to the project, the team, the product line, or the company.

  4. All eyes are on program busyness rather than program efficiency. ESPs often face programmatic and operational rather than strategic challenges. Many companies see the program's summary task as one of matching executives to accounts and tracking executive sponsor meetings against a goal, such as "4 meetings per year per customer." This limited view means that several program and operational needs often remain unaddressed. For instance:

    (a) The need for oversight to minimize added demands on both executives and account managers: Tools, coaching and advocacy from the ESP office enable customer relationships to bear fruit. 

    (b) The need for processes by which to discover and continually measure customers' views of the program and of its value: Not only will customer requirements change over time, but tapping into their perceptions after increased experience with the program will generate new ideas. 

    (c) The need for infrastructure and methods to ensure that critical action items and intelligence are moved throughout the company: Program-gathered intelligence is a key lever for many organizations.

  5. It's easy to measure what's easy to measure rather than what really matters. The goals of executive sponsor programs are typically to build relationships at higher levels within accounts, to improve customer satisfaction and loyalty, and to drive incremental revenue. So why are we busy tracking the number of customer visits per executive?

    Measuring activity is a start, but activity does not equate to results. Your program can't measure everything, but it should focus on metrics that tie to sales pains, such as establishing relationships across a group of federated divisions, overcoming obstacles with an influencer or a committee, or getting face-time with a senior executive.

    Yes, it is difficult to measure revenue attributable to the program and the increased depth of senior executive relationships. But difficult does not mean impossible. These are the statistics you need to demonstrate the ROI of your program. They can be tracked. Results can be proved.


The New Executive Sponsor Program Model: Differentiation, Adoption, Results

If your company's executive sponsor program is going to do what it promises, it's going to need a new modus operandi. The old ESP model starts in a lofty place. It ignores the complexity of the internal machinations of a truly successful program. The old model operates by the assumption that if an executive calls customers once a quarter, loyalty and revenue will follow. But we know it's not that simple. The success of each call with a customer is highly dependent on the commitment, skill, preparation, and follow-up of both the executive and the account manager.

The new model looks much different. In it, program managers build a platform that strategically addresses the full charter of the program: deeper relationships at higher levels within accounts, stronger loyalty and customer satisfaction, and incremental revenue. In the new model, ESP program managers take ownership of identifying, developing and managing the resources, systems, processes, tools, and services that enable executive sponsors and account managers to consistently accomplish that charter.

In the new model, program managers lead ongoing efforts to objectively understand what customers want and need, and they use that information to maintain a program in which customers want to actively engage. Also in the new model, quantitative measurements of relationships, customer satisfaction, loyalty, and revenue are in place. Those measures demonstrate value. They increase excitement and internal support for the program.

Building an Effective Executive Sponsor Program: 5 Steps for the First 90 days

Like any effective enterprise program, getting a new model up and running requires a realistic long-term strategy and vision, and a detailed action plan that will help you move from here to there. Here are five steps you can take in your first 90 days; add them to your action plan for increased programmatic success:

  1. Start small. Find within your company disciplined executives who are subject-matter experts. Pair them with executives at customer companies that have identified and want to win emerging markets, or with those with a demonstrated willingness to view your company as a partner.

  2. Make the value unquestionable. Before focusing on building new relationships or deepening existing ones, focus on value reinforcement. Give ammunition to executives at your company; give them something to talk about. Give good reasons to prioritize and take the call to executives at customer companies. Make it palatable; make the value irresistible!

  3. Do your homework. Pair executives based on psychographics, mutual interests, or expertise rather than on "regional" location or title. Look for pairings that give mutual value.

  4. Bring more heads to the planning table. Involve customer executives and account teams in your semi-annual or annual planning process. Capitalize on compelling events important to the customer. What's their industry conference? Send the executive and the account lead to it.

  5. Leverage what works. Bring in consultants with customer program expertise (hint, hint) to maximize resources and your company's program investment. If you want to get your executive sponsor program up and running right the first time, or if you want to revamp the one you're managing now, then leverage the skill and expertise of a team that's been there, done that. You'll not only save resources but also save yourself from the frustration that inevitably comes when you have to learn by trial and error. We've learned from others' mistakes so you don't have to!

* * *

Long a standard tool in technology sales, an executive sponsor program has more potential than ever to increase your company's revenue and profitability. Companies that will "make the cut" despite their "age" will be those that have taken the time and effort to develop deeper relationships at the senior executive level. They'll also make more money.

We invite you to leverage our proven approach and success with customer programs for a perspective that will help you distinguish your program from those of competitors. And when given a choice, executives will push other programs down the pile, not yours.

Consultant Amy Fritz contributed to this article.

The articles in this three-part series:

Part 1: Meeting the CEO's Mandates: Setting Up a (Really Good) Customer Advisory Board

Part 2: Meeting the CEO's Mandates: The 'New' Executive Sponsor Program

Part 3: Meeting the CEO's Mandates: Tuning Up Your Customer Reference Program

Continue reading "Meeting the CEO's Mandates: The 'New' Executive Sponsor Program (Part 2 of 3)" ... Read the full article

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Promise Phelon is president and CEO of UpMo and founder of the Phelon Group.

Twitter: @PromisePhelon

LinkedIn: Promise Phelon


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