• Happy New Year! Maybe not for IT Sales & Marketing

    The New Year’s cheer didn’t last long for IT, as Gartner was quick to lower its global technology spending forecast, barely a week into 2012. With the financial crisis in Europe dragging on, natural disasters in the Pacific Rim disrupting component supply chains, and a Presidential election cycle  in the US dampening any hope for optimism, Gartner lowered earlier forecasts to 3.7%, down almost a full percentage point from initial 4.6% growth forecasts.

    Looking beyond 2012, Gartner also estimates continued headwinds, lowering future forecasts for 2015 downwards to 5% growth from earlier 5.4% predictions.

    To put this in perspective, last year  global technology spending grew at 6.9%, making 2011a standout year compared to earlier, and if you believe the forecasts, later years.

    For IT executives, budgets will remain constrained, an environment of do-more-with-less. Frugalnomics is in full effect, leaving fewer resources to evaluate new opportunities and the organization risk adverse to change. More control is in the hands of finance, requiring more economic justification on each proposal. Serious budget constraints make even high ROI projects hard to get approved. Addressing the growing backlog, satisfying business needs, and justifying new projects will remain challenging for IT execs.

    For IT solution providers, 2012 promises to be a challenging year, with buyers more overloaded, skeptical and frugal than ever before – making it tough to connect and engage to discuss new opportunities, and when engaged, making it more difficult to break the status-quo, justify purchase decisions, and close more competitive deals.

    In every challenge though is a great opportunity, whereby the solution providers that can help facilitate this ever more difficult process will have a distinct advantage in 2012 and beyond.

    So how can IT solution providers succeed in the face of Frugalnomics?

    The best way may be for IT solution providers to optimize their marketing content and sales engagement practices to help facilitate the buyer’s journey, working hand-in-hand with today’s more overloaded, skeptical and frugal buyer to break through the status-quo bias to identify and address important opportunities, justify investments and make valuable purchases.

    Facilitate the Economy-Focused Buyer’s Journey with Right Content and Tools

    The Buyer’s Journey represents a set of steps an organization needs to go through in order to make a purchase. These steps may vary based on the organization’s decision making processes and the type or size of purchase, but typical process steps include three different phases: Discovery, Consideration and Decision.

    You can think of the journey as a complex change management process, a set of steps that can be difficult, frustrating and time consuming for the buyer to navigate.

    The more facilitation provided by the solution provider to streamline and remove friction from the process, the better. And with the buyer having fewer resources than ever, consultative facilitation becomes crucial to winning deals.

    Discovery Phase

    In the first part of the buyer’s journey, decision makers need to be convinced that the current way of doing business is not ideal, and that the status-quo should change. Making this more difficult, the buyer must convince not just themselves, but many other stakeholders that the change is beneficial and worthy. And in today’s economy, finance is playing more of a key role in setting strategy and budgets – a risk adverse bunch that will need extra convincing.

    With a current do-more-with-less environment, most organizations are doing all they can to keep the lights on, much less consider new projects. In such a stressed environment, buyer’s might be feeling pain, but not have the resources to address, and in many instances are not self-aware of what ails them.  For those that are aware of issues, convincing the multitude of stakeholders in the organization and finance to make the necessary and precious investments can be a challenge.  After all, for most organizations it is easier and less risky to do nothing, than to change from the status quo.

    At this critical stage, defining the vision for the project, most buyers are researching options on their own, and not involving sales in the process. However, it is during this early phase that buyer’s indicate establishing strong provider preferences, with Forrester indicating that 65% of vendors who create the buying vision during these early phases of the journey getting the deal. For many solution providers, lack of engagement means a “failure to launch”.

    Solution providers can help facilitate the decision making process during Discovery in a number of ways, including:

    • Diagnosing issues – Through self-assessment tools and sales-led workshops, helping illuminate important issues of which the busy buyer might not have been aware, and helping the buyer to confirm that the known pains they are feeling are real and should be a priority to resolve. Helping buyer’s recognize important issues is often done via research and case studies, communicating that others are experiencing similar pains, that these issues should be a priority to resolve, and that solutions exist to meet the challenges. Diagnostic Assessments are even more provocative, surveying the buyer on spending, goals and priorities issues, capability and maturity to understand where they are currently, benchmarking them to best practice leaders and peers to identify and prioritize issues, and prescribing specific solutions to remedy the highest priority opportunities.
    • Quantifying the cost-of-doing-nothing – many organizations won’t change unless they understand that maintaining the status-quo has a cost that greatly exceeds the investment / risks of change, and the cost-of-doing-nothing is high enough to make the project a priority.  Research papers and case studies can be used to help convince buyers that not changing has significant cost, TCO Calculators can be used to quantify the current costs in comparison to costs post change, and Benefit Estimators can be used to quantify the savings and incremental value available, but not being realized.

    Consideration Phase

    Once a buyer has committed to change and prioritized the project, the decision makers need to research possible solution approaches and create a short-list of specific providers.

    Empowered by the Internet and social media, but overloaded, it is difficult for buyers to wade through the copious amounts of research and marketing materials to understand the various advantages and benefits that each solution approach might provide.

    Solution providers can help facilitate the Consideration phase, providing content and engagement tools to help:

    • Provide Solution Demos and Trials – spoiled by consumer “try-before-you-buy” options, prove the capabilities of your solution versus others with demos and trials.
    • Deliver Solution Guides and Comparisons – helping customers properly consider various solution considerations, options and competitive differentiators.
    • Quantify the incremental benefits and TCO of various solution options – to help buyers understand the differences amongst various solution approaches, vendors should provide research, case studies and analysis tools to help buyers understand the various competitive options and advantages of different approaches, quantify the total cost of ownership (TCO) differences, and illuminate the incremental benefits of the solution compared to other solution alternatives.

    Decision Phase

    In the final stage of the buyer’s journey, the procurement team must reach consensus on a particular proposal, and gain selection approval from the many stakeholders involved in the decision making process. Finance in particular has become more involved in economic justification and the final vendor selection process, providing more price pressure and financial diligence.

    The final Decision is a best-value bake-off, where Forrester indicates that 35% of vendor selection decisions are made. Even though the earlier phases drive 65% of decisions, many deals get stalled at this phase, with vendors failing to overcome objections and driving consensus, making it vital to effectively address.

    To make it easier for stakeholders to grant approval, risk must be mitigated and justified, with the solution provider providing content and engagements to:

    • Provide financial justification – providing the research, case studies and ROI tools to help quantify the required investment, benefits, ROI, payback and other key metrics that financial executives need to make the case for change.
    • Quantify price / value trade off – delivering comparisons that prove competitive advantages of the selected product / service, especially quantifying the total cost of ownership (TCO) advantages, incremental benefits, and lower risks.

    The Bottom-Line

    Gartner indicates that IT buyers will continue to be challenged by the economy in 2012, making it more difficult to make investments and drive change.  Buyers are looking for solution providers who can help facilitate the buyer’s journey, helping uncover and prioritize important opportunities for improvement, recommend the right solution options, justify decisions and deliver superior price / value.

    Although the spending growth slowdown will be a challenge, solution providers have a unique opportunity to help facilitate this ever more difficult buyer’s journey with content and engagement practices to help facilitate and shorten cycles. Throughout the journey, marketing and sales engagements can provide content to help facilitate change and the decision making process, especially research insights, case studies, diagnostic assessments, benefit estimators, demos and trials, ROI business case and TCO comparison tools.

    Source: Gartner Says Worldwide IT Spending to Grow 3.7 Percent in 2012, Eurozone Crisis and Hard-Disk Drive Shortage Impacting Spending


    Tom Pisello founded Alinean, Inc., in 2001 where he coined the term, “Frugalnomics.”  You can read his daily blog at Tom Pisello: The ROI Guy.

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