Normally this would have been posted to my Marketing Idea Guy website. This is the headline from Tech Journal South: "IT spending slowdown increases need for improved IT selling effectiveness using ROI/TCO Analysis"
"IDC and leading ROI/TCO tools developer Alinean predict that the tightened IT spending environment will require IT vendors to cost-justify their solutions amid increased competition, making business value selling a best practice requirement."
What this means is that even to sell on price, which telecom is infamous for, will still require that your company present an explanation of the ROI or TCO. The ROI (Return on Investment) would be a direct dollar savings by using your technology or managed services.
The TCO (total Cost of Ownership) would be a picture of the true, total costs of the small business owner maintaining and operating the technology, software or service by themselves versus contracting you to provide said product.
When things get tight, it is even harder to get people to change.
"DC and Alinean see the following trends emerging from 2008 IT budget tightening:"
- 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.
- 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.
- Sales cycles will be longer for projects that lack a clear economic benefit defined by standard financial metrics.
"IDC and Alinean are recommending the following initiatives for IT solution providers to address the emergence of a more frugal buyer:"
- Value oriented messaging and white papers, research and collateral to generate interest and position properly in a more competitive and frugal landscape.
- Benchmarking tools to identify and quantify competitive gaps and drive prospects with quantifiable compelling reasons to change.
- Capability and maturity assessment tools to identify specific prospect gaps and value opportunities/priorities, setting the agenda.
- Value-oriented sales tools to quantify the benefits of proposed solutions and projects, lowering IT infrastructure and operations costs and generating business value, investment required and ROI
- Business value training to help transition the sales force quickly.
- Implementing ROI SLAs with customers to track actual performance versus goals, then using this quantifiable proof for future up-sell an cross-sell campaigns.
- The need for independent third-party validation of TCO and ROI behind a business value assessment, to add credibility and overcome business owner skepticism.
Value Selling has been called many things including Consultative Selling and SPIN Selling. It means becoming a Trusted Advisor who asks open ended questions to elicit the pain (or what-keeps-him-up-at-night). Then you can present a possible solution. There is a chapter in my book, SELLECOM, about this. Buy now and save $5 before hit hits the printer!