How Sales and Marketing Teams Can Avoid Being Bitten by the Paradigm Shift in IT Spend Decisions | Gaining Altitude in the Cloud
Organizations are facing a paradigm shift in the way they envision, initiate and fund technology that drives business value. As discussed in my prior blog post, The Curveball Impact on IT Spend Decisions, a shift in influence has created two distinct buying markets within an organization. These two markets behave very differently and thus have different implications for IT vendors and service providers trying to sell into the organization.
The CIO market’s mandate is most often execution, cost reduction, quality, and compliance. The mandate for the business stakeholders market is business impact, time to market, and time to impact.
Further, CIOs typically think in terms of grand strategy — requirements definitions, detailed specifications, and structured PMOs. The new market of business stakeholders think in terms of trying before buying; they want to use a technology first to see how it works, then adjust it. This is a completely different methodology from a requirements methodology. It’s a different kind of buying.they
- It’s not CAPEX; it’s OPEX.
- It’s incremental steps, not the big-bang approach of a CIO.
- It’s making decisions based on what’s best for a business unit instead of the CIO’s approach, which must solve tech needs for the entire organization while also driving out costs.
The two markets’ approaches and mindsets are completely opposite each other. Unfortunately, they’re both happening at the same time in organizations today, and it creates a lot of confusion
Besides the two divergent markets, sales teams must recognize that, although the mandate for today’s CIOs is increasingly tactical, no CIO worth his sale will give up the fight to influence the business constituency and drive innovation and value.
How can sales teams accommodate these two markets and sell tech to the decision makers in both camps?
Selling to the CIO market
When selling to CIOs, remember that they will want to understand the technology, require proof that it’s going to work, and want develop a rigorous implementation plan. They will also want to make sure the solution is compliant and in line with the emerging standards in the industry.
Because their mandate is to reduce costs, CIOs likely will issue an RFP and get competitive bids, so you need to expect that competitive tension.
Selling to the business stakeholders market
Selling to business stakeholders is more of a vision-leading exercise. It’s crucial to understand the stakeholder’s vision so you can share how your technology or services could either implement that visions or shape it into being a more impactful outcome.
You then need to move from vision to experimentation. Business stakeholders won’t wait for your company to build the tech solution they envision. You need to sell a technology that is already developed to the point that users can start experimenting with it, and you’ll be competing against new SaaS and cloud offers that pop up quickly and allow try-it-before-you-buy it models.
The budgeting impact
CIOs are quite happy to go through a budgeting process, and your sales approach and timing needs to fit into the budgeting rhythm.
In contrast, the business stakeholder market often won’t focus on a large budget. They want to take initial baby steps to understand the technology. You won’t need to offer them a complete entrée; you just need to focus on the next couple of steps.
When the two markets converge
Once the business stakeholders believe in the value of the technology, they will need to bring the CIO into the discussions in order to help them roll it out broadly or expand the scope. At this point, you’ll be required to recognize and meet the CIO’s agenda. You won’t meet with the CIO face to face, but as part of the sales framework, you have to be prepared to answer her questions related to cost, scale, compliance, etc.
Selling into the two markets with opposite mindsets and behaviors, and eventually having to deal with both of them at the same time, is a much more complicated sale than in the past. It requires more patience and highly customized communications. But the prize for your successful strategy and efforts can be very large.