How to Sell Using Business Acumen: A Chevron Case Study with Brent Barclay

Understanding your customer’s business is one of the most important things you can do before an executive sales conversation.

In Business Acumen for Sales Success, we introduce a practical framework that helps sales professionals move beyond product-focused conversations and become trusted business advisors:

• Understand the Business
• Analyze the Five Drivers
• Understand the Buyer
• Align Your Value Proposition
• Focus on Business Outcomes
• Become a Trusted Advisor

In this episode, Stephen H. Covey and Brent Barclay put that framework into practice using Chevron’s latest earnings call as a real-world case study.

Rather than analyzing Chevron from an investor’s perspective, they demonstrate how a salesperson can use an earnings call to better understand a customer’s business, prepare for executive conversations, and connect their solution to the outcomes that matter most.

In this conversation, you’ll learn:

• How to research a customer before your first meeting
• What Chevron’s latest earnings call reveals about the company’s strategic priorities
• How to identify the business drivers that matter most
• Why different stakeholders care about different business outcomes
• How to align your value proposition with what executives are trying to accomplish
• How to connect your solution to meaningful business outcomes
• How to move from vendor to trusted business advisor
• Practical ways to apply this same framework to any customer or industry

Whether you’re selling into the energy industry or a completely different market, the framework is the same. The better you understand your customer’s business, the more relevant your conversations become.

This episode demonstrates how to apply the framework from Business Acumen for Sales Success to a real company. If you’re looking to improve executive conversations, create more value for your customers, and become a trusted business advisor, this episode provides a practical example you can begin using immediately. 

Resources Mentioned:
Join our monthly “How to Listen to an Earnings Call” webinars
Chevron’s most recent earnings call analysis

Books:
Seeing The Big Picture
Business Acumen for Sales Success

Transcript

SPEAKER_00 0:06

Welcome back, everyone, to the Business Acumen Podcast. One of the central ideas in our book, uh Business Acumen for Sale Success, which by the way, if you're watching, here's an image of it, is that top salespeople don't necessarily begin with their own product. They begin by understanding their customers' business. They try to understand how the company makes money, understand what executives are focused on, and then they can connect their solutions to those business priorities. In today's episode, we're gonna try to apply that process to a real company. So Brent Barclay joining us again recently led our earnings call debrief on Chevron. In fact, he when I say recently literally just ended. By the way, we'll yeah, by the way, we'll we'll link in the show notes that earnings call debrief if if you want to watch that as well. So rather than just simply discussing the earnings call, we're gonna try and answer a practical question. If you were a salesperson trying to sell into Chevron right now, what would you need to know? And we're gonna try and take kind of the formula in in our book, Business Acumen for Sales Success. So, Brett, thanks for joining us. And let me let me start with the first question. Before a seller ever talks about their solution, our book teaches that they need to understand the customer's business. So, based on Chevron's latest earnings call, what would a seller need to understand about Chevron's business right now?

SPEAKER_01 1:38

Yeah. So right now, obviously, uh uh volatility is the name of the game in the oil industry. Uh, and it's outside of your normal economic uh supply and demand from the standpoint. You have when you have geopolitical issues, what's what's happening in the Middle East, and that ability to get that oil out of that area. It's one of the large, large, I think it's 25% of oil production comes out of that kind of straight of Hermoose. So that that volatility of numbers and the the things to be aware of is that this is a unique situation, right? And so I gotta be able to understand well, what's really going on with the company because numbers are all over the place. Uh, they have big investments in their capital projects, and so what's happening to that based upon volatility? So it's kind of wading through a bit of the messiness of what's getting communicated around commodity price and see kind of what's really going on. If I was looking at them in general, one of the things I'm looking at is kind of their key priorities, right? Where is the cash going? And a big part of that is in capital projects, about $18 to $19 billion of capital spends. They didn't change that after Q1 when you had some of the most volatile times for them. They continue to see that as consistent. Only about 5% of their production is in that that that area, being affected by that uh the political unrest that's going on there. And so being aware of they're working from kind of a position of strength. Chevron uh it doesn't have a significant amount of assets in that geography. Uh, they also have a big opportunity with uh the acquisition of Hess. So they're they're looking to grow and expand. And uh in Venezuela, uh, what's going on in Venezuela? They're one of the key majors, uh, IOCs, international oil companies who stayed in Venezuela uh during some of their political unrest. And so they're ramping up or looking to ramp up. So there's opportunities there. So for me, kind of if I bullet down the three, is one, they're they're moving forward and they're looking for growth, a significant budget available for these projects, making sure that we're aware of uh, you know, one of the big things they talk about is enterprise optimization. So, how does our product or service drive efficiency, effectiveness, more volume at a lower cost? Those are going to be things that they're talking about. For example, they have a huge cost reduction initiative they're looking at. They're looking to reduce, kind of from an infrastructure perspective, about three to four billion in annual cost out of their operating budgets. So, how does your product or service drive that that cost management is a big uh importance for them? So those are the those are the things that kind of uh uh uh come to mind.

SPEAKER_00 4:15

Yeah, um kind of the the next step or process is is looking through through the lens of our five business drivers. So cash, profit, assets, growth, and people, as anyone who's listened to the podcast knows. When you look at Chevron today, which of those drivers stand out the most and and why?

SPEAKER_01 4:33

And Steven, today is is unique because the call that we did was the their call May 1st. So here we are, we're June 23rd, right? So you're you're talking uh, you know, a month, almost two months later, you're looking at this, uh, or at least a month and three weeks, and today's commodity price is at $75 a barrel. Uh, at the time of the call, it was over $100, like $115 a barrel. So those economic changed. But at the time of the call, cash was king. They were talking a lot about cash. If you listen to these calls, cash isn't always at the top. But when you're dealing with kind of the some of the issues that they dealt with. One issue is what they call their working capital. Now, if you look from accounting perspective, that's current assets minus current liabilities. Most of us don't even know that. Here's what you want to think of when you're thinking working capital. Number one is receivables. How quickly are they collecting on their receivables? Number two is inventory. What's happening to their inventory? How much inventory are they carrying? Uh, one of their inventories, of course, is going to be stuff like their feed stock, a barrel of oil, right? Well, if that barrel of oil goes up or down, that impacts how you're accounting for that barrel of oil. So, for example, if I get a barrel of oil in my inventory and all of a sudden I got to do my accounting of it, oil jumps to $118 a barrel. That's going to impact how much inventory. It's going to increase my inventory, which is going to reduce my cash. But it's all a non-cash thing. It's actually not that you pay extra money for that. You're just accounting for it. What's going to happen though is once they actually sell that barrel of oil, that's where those dollars are going to come in. So cash is a big question for them right now. They generate $7.1 billion, but with some of these uh working capital, cash being stuck in working capital, uh, andor some of these uh hedging issues they had to deal with, cash is vitally important for them right now. Now, uh eight weeks, seven weeks later, that may change a little bit as you start to see flow through. For example, they felt about a billion of that uh working capital. So they had $4.6 billion of cash stuck in working capital on Q1. They felt like they'd pull off on top of what they generate an additional billion of what was stuck there in Q2. So cash may not be as big of a priority, but for them, the $18 to $19 billion investment, that's significant. You're looking at $4 billion a quarter, basically, or more. So they got to have enough cash to fund that. Uh so cash will continue to be one of their key drivers. And then with that, it's the asset side. So where we deploy and where we expand, and how efficiently are one running. Two metrics we often talk about is availability of their assets and then utilization of those assets. And so making sure you're not having operational downtime. So, from a sales perspective, how am I helping to run efficiencies? How am I helping to maintain uptimes of their assets are going to be key differentiators for them? How can you get the assets to do more with less is another factor. That's where your automations, that's where your uh even AI technology can help assess. I'll give you one example. On a refinery, every year they're doing these turnarounds where they kind of pull shut it down for like three weeks, 12 months, they pull everything apart, check it all, and then put it back together and get it running, right? Well, now with AI and the technology that's been integrated in these refineries, it's really directing their uh maintenance capitalization or capital. Meaning uh rather than just shut everything down, they can do it in phases based upon they know what's coming up. That technology is a game changer because it's reducing their costs, giving more cash-to-fund, feature growth for them. So those are some of the things that stand out as I think about what they're focused on right now.

SPEAKER_00 8:08

By the way, if you like what we've been talking about, you'll love our book, Business Acumen for Sell Success. It's the ultimate guide to more strategic deals and starting to think like a business partner. It's gonna change the way you sell. Going back to that, when when you look at the five business drivers, Brent, I guess what's what's your process for when you read the earnings call? Do you have a sheet where you mark, hey, here's cash. They mentioned this time. You know, what's what's your process? You know, if you're a salesperson that hasn't done this before, I guess what would your advice be?

SPEAKER_01 8:42

I get the transcript. And once I get the transcript, I just mark that thing up. They said cashier, profit asset growth of people. I'm pretty, I'm pretty generous uh in my amount of slash marks or information I gather. I'll read a sentence who'll say uh profitability is up by 15% year over year. Well, I'm gonna get growth in there, and I'm also gonna get profit up there, right? Or I paying dividends. Well, it takes cash to fund the dividends, but it also benefits a shareholder. So that's people for me. So I got cash and people on that. And with AI nowadays, once you've kind of done your initial read-through, AI is a great kind of it's like having an expert in the room to go back and forth. And I know we've got a tool that we're looking to uh make available at some point that allows that assessment. Um, my only caveat with that is keep that whole human in the loop, right? The ability to rather just go through and have it spit out and you don't know what it's saying, you've got to make sure that it's accurate. And and how does it fit within kind of your experience and what you're hearing internal to the organization? I think that's vitally important. But once you're comfortable with your key metrics and your strategy, that AI can really help give you some great ideas of what you can do within your role to drive your organization's success. So for me, it's just uh Mark and itself.

SPEAKER_00 10:02

The next section we talk about in the book is the importance of understanding the actual buyer. So obviously, different leaders care about different things. Uh, a CFO sees the business differently than an operations leader or a plant manager or procurement executive. So if you're selling into Chevron, I guess who who are the key stakeholders and and what are they likely to care about? Now I know that that's a broad question because it it could rate it could range in a lot of uh you know, you can go a lot of different directions with that. In your experience in oil and gas, having been in that industry quite a bit over your career, um, I guess how how do you understand the buyer in that in that context?

SPEAKER_01 10:45

Yeah. So if I'm selling in uh you know uh oil and gas services or product, my typical group is gonna be their operations or asset managers, or uh to your point, like a plant manager or the groups that you're looking at. Uh, within that, you're also gonna have kind of your procurement supply chains. Those are the big groups that you would look at. From an operations asset manager, it's gonna be like a reliability and uptime. You know, what are you doing to help me run my asset as efficient and effectively as I can? Cost management, that's a big lever for them, especially like at a refinery. Refinery is pretty low margins versus if you look at the upstream, which is gonna be the exploration of getting the oil out of the ground, that's gonna be very high margins. Uh, you got different perspectives, but if it's upstream, you're more about production volumes, efficiency of production volume, the quality of the reserves you're getting out of the ground, right? Uh, whereas the refinery, it's about how how efficiently are we running these assets, uh, making sure that they're available to run, meaning you're not having operational downtime, but you're getting that right amount, but what they call optimal utilization. Now, you think about it on a plant, they're in the 95, you know, 90 plus, probably 95 plus percent uh availability. Now, what that means is you're not having a big operational downtime where something drops and all of a sudden you're shut down for a week. That that would be uh you know a very negative for a plant manager, right? Well, the utilization then is your utilization depends on what you're looking at, but I've seen them somewhere around a low utilization, might be in the 60s, but you're probably in that 75, 80, maybe 85% when oil's at $100 a barrel, or you got uh on a refinery, what they call the crack spread, the difference between what it costs to bring a barrel of oil in and then what you can sell it in gasoline or distiller or whatever. If you got high numbers there, you want to produce as much as you can, take advantage of that as quickly as you can. And so that whatever you can do to drive that uh is gonna be important for that operations or asset manager. Well, procurement, procurement's all about, you know, I don't want a bunch of infirmes sitting around. I want the greatest value for my dollar. And so being able to speak to how your technology, your innovations are gonna uh what's that return on benefit I'm getting for that? Uh returns are gonna be important, how quickly are they paying you? You know, a chevron's probably pushing their suppliers 90 days. Of course, that requires you to carry more cash to withstand that ups and downs. But thinking of ways that you can uh help uh create the greatest value uh for the price that they're getting on on the products or services you're providing. So again, uh efficiency is important for them as well. Standardization uh uh of how your products can kind of be standardized and integrated into their tools and resources is going to be important for them as well. Those are probably the two most common. The third one you might get is engineering, and that's gonna be a lot more technical, where you're gonna look at stuff like uh uh technology you're bringing in, AI you might be using, uh how it's driving efficiency. Uh the engineers tend to be a little bit more on the innovation and technology side than maybe some of the cost and uh standardization you might look for.

SPEAKER_00 13:54

So once someone's understood the business, analyzed the five drivers, trying and then tried to understand the actual buyer, how do you align the value proposition and ultimately focus on business outcomes? Now, I know it may be hard to take like a hypothetical product and say this is how we're gonna do it. I mean, you could you could even take business acumen training as as the value proposition, but just curious about how how how do you go? And if you're in that sales role and context, how do you go about aligning your value prop and trying to tie it to business outcomes?

SPEAKER_01 14:27

Yeah. Well, Steven, I think you're hitting it right on. And the more specificity comes is you know exactly what you're gonna sell into. But I think there's some broad overarching kind of value props or ways to think about what Chevron said and how I can articulate it. And then you got to give them the technical side, right? You got to be more specific. But the overarching, you know, that that kind of theme of uh kind of steady as she goes kind of approach, like we're not getting real volatile up and down. So going in with, oh, price is $120, you got to go sell, sell, sell, bye, bye, bye. Versus no, oh, he is you're you're steady, you're consistent. Here's how we can help drive that kind of opportunity. Uh, you're gonna need these maintenance uh products or whatever, or hey, from an innovation perspective, I know that's one of your key focus areas is innovation. Let me tell you how our technology can help drive some of that. Another one is showing how your product can do more or and cost less. They have that three to four billion dollar cost management initiative. So being able to articulate how your product can do that, produce more, generate more at a lower cost, or even maintain the cost, but it's generating more. Uh, those factors, I think that's a value proposition. You know, no, they got $18 to $19 billion of CapEx that this kind of steady. We're not looking at real swings, you know. Oh, let's build out a bunch of new assets. They're pretty steady, consistent. So, how do I speak to their consistency? How does our products drive their consistent goals and objectives? That being said, cost management's a big initiative. So, how can I get more value to cost less within the organization? One of the things that we'll should be aware of, it's a commodity-based industry. And so anything you can do that can make money at a lower price point, if you can get more pricing, most of that's going to flow through. So anything you can show that maintains that kind of doing more, costing less, or more efficiency, that's a huge sales item because as they have to deal with the ups and downs of pricing, it puts them in a much stronger position to withstand those ups and downs. So that kind of uh being aware of what it means to sell into a commodity-based industry, I think is important. Those are some thoughts that come to mind as you think about their industry for sure.

SPEAKER_00 16:40

Yeah. Um so I mean, the ultimate goal, again, for for someone in a sales role and whether it's showing in selling into Chevron or a different company, is trying to move beyond view, being viewed as just a vendor and becoming a trusted business advisor. And I think anyone in sales has heard that term before about becoming a trusted advisor. If you were sitting across the table from a Chevron executive, what would a trusted advisor sound like in your in your mind?

SPEAKER_01 17:13

Well, I think being able to obviously depends on who you're talking to, but that ability to recognize that you know the market may be overacting, and maybe even internally are overreacting on some of these working capital changes, you know, all the stuff they've talked about on the call around $4.6 billion cash strain and and you know, uh $3 billion of timing around their hedging. So being able to acknowledge that uh in the end, hey, these numbers may be a little messy, but I know you're still driving in and kind of business as usual, steady as we go, kind of messaging the idea of you know, kind of driving towards different initiatives, different geographies or initiatives they're focused on, whether it be new innovative technologies like a Microsoft uh partnership that driven around uh uh uh engineering electricity to uh what's happening in Venezuela. Uh being able to speak to how your product and service can drive those big initiatives for them, be very clear on their core initiatives. Whatever we do, we want to be able to drive as much cash flow that you would then have available to get back to shareholders. Uh, you know, being able to tie what they're communicating to what you're trying to do. And in the end, your goal really is if you help them succeed, you help them succeed, guess what's going to happen to your pocketbook? Guess what's going to happen to your organization, right? Once you shift that mindset, I'm trying to help drive your cash flow that you're talking about, your asset utilization, your integration with Hess, uh, you know, your opportunities in Venezuela, more you understand about that, and let me tell you how we can help with that. You shift from that kind of features, advantages, and benefit salesperson to that trusted advisor. Once you understand what they're trying to accomplish and you can speak to how your products and servers can drive that, it's not a sell, you're part of the team. And I think that's where that's what doing this does. And be careful, Mike. Kyle are cautious in this this is you can get a lot of data and you can start throwing out numbers, trying to show people how smart you are. When I call into a Chevron, I'm not starting with, oh, your margins are up by this, you're down 4.6 billion, your cash drop. Hey, but I know it's messiness. I'm listening to what they're saying, and I in the back of my mind, I understand this. So when I talk, it's like, I know one of your big initiatives is you want to drive more cash flow for your shareholders. Plus, you got about an 18 to 19 billion dollar cap spend. Let me tell you how we drive cash, how our products help with those types of things. So it's just pulling a few of their initiatives. So rather than have it feel like you're trying to show how smart you are, it's really I understand what you're trying to do. But based upon what I'm hearing, I think this is how we can help. Or here's what I mean. Again, it's talking about how impacting your segment of the business, something like that. You may be talking to like uh uh an asset manager who isn't really looking at a refinery in Houston, for example, who isn't really seeing the big picture, but I might say something. I know one of the big initiatives you have is three three to four billion dollar cost reduction is a global. How's that impacting you guys at the refinery? Oh, here's what we're dealing with. Well, let me tell you how our product can help with that, help you to get more value for less cost. So it's basically having that knowledge and then asking the right questions to understand what their pain points are in the context of what the company's trying to do, and then share how your product can do it. Then that's the game changer, in my opinion. When you can do that, you're no longer a salesperson, you're part of my team.

SPEAKER_00 20:44

Brent, I think this has been great. And again, this has been um relatively surface level on this particular episode, as far as like we we're just trying to highlight some of the things in the book around again, understanding the business, analyzing the five drivers, trying to understand the buyer, and then aligning your value proposition, focusing on the business outcomes of the business, which ultimately leads to becoming a trusted advisor. But uh, I I I'd say I'll just leave it with if if this is something you're interested in, obviously check out the book, or if you have a sales team or want to bring this in to help your salespeople become better and become that trusted advisor. We feel like we have a really great framework to help do that. So hopefully this has been helpful for those listening. Brent, anything else you'd like to add before we leave, whether it's specific to Chevron or specific to you know sales in general.

SPEAKER_01 21:36

I think, I think overarching, a couple of things come to mind from a sales perspective. It's they have a need, you have a solution. And what you truly, it's you're really helping others to help themselves. So making that connection that builds confidence. I tell you, you do these reviews of what's going on in the organization, you walk in with a lot more confidence, and you really come across as somebody who's trying to help them succeed versus trying to sell a product. So to me, go forward with confidence. And one of the things that uh reviewing earnings call does is it builds that confidence, that capability to say, I can see what you're trying to do. Here's what I think we might be able to do to help you. And that's that's a game changer for them. So uh have that confidence by reviewing these earnings calls. I think it's a big differentiator for you for sure.

SPEAKER_00 22:19

Awesome. Thanks, Brent, for joining us, and thanks everyone for listening. We'll link in the show notes uh to all these resources for you. And uh, we'll talk to you soon.