Selling with Business Value is a Fundamental and Permanent Shift

Do you have the tools needed to meet this challenge?

The latest analysis from IDC and Forrester predict that in 2008, worldwide IT spending will grow at a significantly 20% to 40% slower pace than prior years. IT budgets that grow more slowly means less to spend on new projects, and a clear return of the frugal buyer.

Frugal buyers are demanding quantifiable proof that proposed technology investments will drive bottom-line benefits. How much proof? Over 90% of corporations now require that proposed projects have a formal business case to quantify a positive return on investment (ROI).

At issue for solution and service providers who seek to get buyers interested and get new proposals approved, IDC | Alinean surveys indicate that most buyers are not capable of doing the assessments and cost-benefit analyses themselves - at least not for all projects and not in a time-efficient manner. Indications are that two-thirds of corporations do not have the tools, research, resources and time to perform their own benchmarks, assessments or business cases in any formal fashion. With CIOs lacking internal resources and skills, many proposals will languish - bad news for IT vendor and solution providers' sales cycles which have and will continue to extend as a result. Research from Selling Power magazine corroborates that more sales calls are needed to close deals in 2008 compared to 2007 - and that the longer the sales cycle, the less chance for close.

Clearly-quantified justification cannot be left to buyers alone as these buyers:

1. Do not know how to benchmark opportunities and assess and easily quantify value of proposed solutions

2. Can take months to perform the analysis, slowing the sales cycle

3. Can take months to gain approval consensus, slowed by inadequate analysis, validation and financial justification

4. Will not see the differentiating value of your solutions vs. competition

IDC | Alinean survey results indicate that providers helping buyers to prove the value of proposed solutions is mandatory, with over 81% of buyers expecting vendors and solution providers to deliver benchmarks, assessments and business cases. The thinking is - If a vendor really wants to sell us something, let them do all the work and prove the priority and value proposition to us. Implementing business value sales tools and practices represents a great chance for vendors and solution providers to collaborate and form a consultative partnership with customers.

And sales is not alone in being impacted by tightening budgets. IDC research shows that in 2008 the growth in IT marketing spending is far outstripping the expansion in IT spending, meaning that each marketing dollar is chasing less and less market opportunity, and not going as far as a result. One of the best ways to help make marketing dollars go further, and to improve marketing effectiveness is to connect with buyers needs early and more directly. According to IDC improving marketing effectiveness in a tightening economy is most effectively accomplished by directly helping prospects benchmark and assess quantifiable opportunities and quickly assess the value of proposed solutions - raising the priority over alternatives and the competition.

As a result of more IT decision governance, IT budget tightening and more frugal buyers, the following trends arise:

1. Getting prospects interested in new projects will be more difficult as discretionary spending will see the biggest cutbacks - making it harder to get attention for any new proposals not already on the planning roadmap.

2. Getting prospects to prioritize proposed projects and gain economic buyer approval will rely more than ever on quantifying return on investment and proving quick payback.

3. Sales cycles will be longer for projects that lack a clear economic benefit defined by standard financial metrics.

To address the frugal buyer opportunity, research indicates that a focus on selling with business value is required.