Tuesday, September 22, 2015

Three Challenges that will Impact Your 2016 IT Sales and Marketing Plans

If you are in IT sales and marketing, there are three significant challenges of which you should be well aware when setting up your budgets and plans for 2016.

IT Spending on the Decline?
First, Gartner announced mid-summer that IT spending is on the decline. A predicted anemic increase in IT spending at the beginning of 2015 has now been replaced with a 5.5% decline (compared to a paltry 1.6% growth in 2014).

Although Gartner blamed the decline on a rising dollar, we don’t buy it and have seen where prior forecast declines by Gartner were actually blamed on a declining dollar!

The real reason: We are in the era of Frugalnomics, so despite the rising importance of technology, do more with less is the mantra and Cloud / Service models are reshaping the spending landscape.

For you, an already price sensitive and competitive marketplace could get dramatically more so over the next 12 months and beyond, especially if you are in one of  five key technologies that will be most constrained:
  1. Communications Services – Taking the biggest hit, a move to subscription services, price erosion and competition in communication services are combining for an expected 7.2% annual decline.
  2. Devices – PC and tablet sales are struggling, with smartphone spending and a Windows 10 upgrade cycle unlikely to make up for the expected 5.7% annual spending decline.
  3. IT Services –Despite increases in business /technology complexities and the need shrinkage, a big reason why several service providers have announced significant headcount reductions.
  4. Data Center Infrastructure – storage and networking are expected to decline a significant 3.8% YoY, with decision makers postponing upgrades and extending lifecycles for on-premise infrastructure as they figure out their cloud / hybrid strategies. One bright spot is mainframes, benefiting from delayed refreshes during the recession and new product introductions.
  5. Enterprise Software – Although productivity / process improvements from software remain an important investment priority, big software purchases are being replaced with SaaS, and despite a healthy number of transactions, spending is declining 1.2% YoY, with significant pricing pressure.
Regardless of whether you are marketing / selling one of these five technologies or something different, there is a tangible impact to your from IT spending constraints:
  • Buyers are now more than ever sticking with status quo versus considering new proposals.
  • Personal risk is higher than ever, making emotions and trust more significant decision drivers
  • More projects will be unbudgeted, so a stronger business case will be needed to convince frugal buyers that the project is a priority and the solution is low risk / high reward.
Is your content ready to help convince buyers that the challenges you address are investment worthy in a constrained spending environment?

Are your sales reps / channel partner sable to  emotionally, logically and credibly convince more frugal buyers to allocate shrinking budgets for your solutions over other projects? Can they defend you selection and price against competitors and discounts?

More Stakeholders in Every Decision
Second, there are more stakeholders involved in every decision. IDC indicates that the number of stakeholders has dramatically increased 43% over the past three years, Now, more than 8 are involved a typical technology decision. If your proposals are more than $500k, you now average 10 stakeholders per decision.

More stakeholders several significant challenges for your content, sales conversations and proposals:
  • Each stakeholder has a unique point of value, making it difficult for one-size-fits all approach to resonate with what is important and will motivate / convince each decision maker.
  • It is difficult to reach each stakeholder directly, so your presentations and proposals often need to do the selling for you.
  • Sales reps and channel partners have to identify and turn the key stakeholders they are able to meet with into influencers and convincers within the organization.
Is your content personalized to articulate your unique value to each stakeholder?

Are your sales reps and channel partners arming influencers with the right conversations, storytelling and proposals to communicate and quantify your value in proxy?

IT Spend No Longer Controlled by IT
Finally, we are at a significant turning point where IT spend is no longer controlled by IT. Last year, IDC reported that 48% of IT spending was controlled or influenced by the business (IDC). In 2015, the trend for business unit control has accelerated, with business leaders and their reports for the first time in history in control of the majority of IT decision-making.

And this trend is only accelerating, with Gartner predicting that by 2020, business units could control or influence as much as 90% of technology purchase decisions!

The risks?

1.     What is valuable to business and financial buyers is not the same as what matters most to technical buyers.

2.     Most marketers and sellers aren’t reaching the business buyers who are now sparking demand and purchase cycles.

3.     And when the business buyer is engaged, most sales reps and channel partners are not having the right conversations, and the traditional technology buyer centric content they are using isn’t helping reshape the business engagement.

So how well does your content, sales reps and channel partners speak the language of business and articulate your unique business value to a completely different breed of decision makers and budget holders?

The Bottom-Line

If you are in IT sales and marketing, these can be challenging times, but with change comes disruption, and an opportunity for the savvy to capitalize.

The research is clearly indicating significant shifts:
  1. IT spending is on the decline
  2. More stakeholders are involved in each purchase decision
  3. Business units are now in control of the majority of technology spending.

And therein is a significant opportunity, for you to evolve your 2016 strategy to take advantage of these shifts The key is to reshape your content, conversations and proposals to be more effective in this constrained, complex and frugal environment:
  1. Target the status quo – developing the right value messaging, insights, storytelling to illuminate challenges with business-as-usual and the cost of “do nothing”.
  2. Communicate to the business buyer - targeting and engaging in the language of business stakeholders, aligning with the unique “point of value “ of not only technical, but the ever growing power of business and financial stakeholders.
  3. Fuel value conversations – communicating and quantifying the cost of “do nothing” and your unique value to ever more skeptical and frugal decision makers.   

For a complete roadmap on how to best handle these trends, check out the: Frugalnomics Survival Guide - - How to Use Your Unique Value to Market Better, Stand Out and Sell More


Frugalnomics In Effect: Gartner Predicts 5.5% Decline in IT Spending for 2015 - http://blog.alinean.com/2015/07/frugalnomics-in-effect-gartner-predicts.html

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