The Myth of selling/marketing to the CIO in SMB
(My definition of SMB = any company with less than 1,000 employees.)
There are approximately 17,000 companies globally with more than 1,000 employees. We only start to see the traditional role of CIO’s appear in the enterprise space (1,000 + employee orgs). There are few exceptions of course but not many.
IT vendors who have any interest in marketing/selling tech products to the SMB (regardless of direct/channel models) will have a very hard time time selling software/hardware/cloud products and services to “the” CIO. (He/she simply isn’t there in the majority of companies in this space) There will of course be a few exceptions but not enough to base your selling and marketing strategy.
For clarity here is a breakdown by market segment and general IT:
The Consumer Market: 1 – 10 employees
They tend to purchase products from the mass retail outlets or online retail stores and then look for family or friends to help them set-up and maintain their computers/networks. MSPs and IT service providers occasionally show up.
The S of SMB Market: 10 – 250 Employees
They have small IT budgets. They lack the buying power that larger companies have. This group typically relies on MSPs and VARs to compliment/run IT for them. Typically, these SMBs don’t have a large IT department (mostly between 1 – 5 IT pros if that). They purchase a large amount of all products through VARs/channel partners. They trust their partners and have very strong relationships with them. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers.
The M of SMB Market: 250 – 500 Employees
They have slightly larger IT budgets. Typically, these SMBs have an IT department of 1-10 folks. We start to see VP of IT but still require expertise in depth. They purchase a large amount of all products through VARs/DMRs. They trust their VARs and have very strong relations with them. When they ask their VAR what products/brands they should purchase they usually go with the VARs’ recommendations. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers..
Mid-Market: 501 – 1,000 Employees
They have slightly larger IT budgets than the previous group. Typically, these SMBs have an IT department of 1-10 folks. We start to see VP of IT, CIO, Server, Network but still require expertise in depth. They purchase the majority of products through VARs/DMRs with specific solution orientated practices. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers..
Enterprise Market: Over 1,000 Employees
The “Enterprise” market. The big boys, easy to know, easy to find. Most IT vendors focus on this space. See CIO, CISO, CTO and large IT departments. Enterprise CIOs tend to work directly with Vendors and negotiate price, service levels, etc.
What do to:
Even as IT organizations grow (in staff and responsibilities) the decision makers are “downstream” and are where you want your brand to be. Yes, the CEO, COO and sometimes the CIO is the one that writes the check but always remember this: The IT department may not have the power to say yes, but they most certainly have the power to say no. Focus on the myth of the CIO decision maker and your sales will suffer.
Do not neglect the IT department when marketing and selling technology products, services and/or solutions. Be sure to embrace and engage these critical influencers, while also marketing to the C-Level suite and then engage the IT department to support your sales and marketing efforts.
Don’t fall into this trap:
IT Marketer: “We are not interested in selling to the IT department, we market/sell to the CIO and it flows down from there.”
My opinion is irrelevant so I decided to ask 2 million IT buyers what they thought. I asked, ”As an IT salesperson or marketer, should I include the IT professional in my selling or focus on the CIO?” Here is a sample of responses:
What is a CIO? I am the IT guy for our 250 person law firm in Florida. Me and 2 other guys decide what to buy.
Most of us ARE decision makers…or at least TELL the decision makers what to decide. That’s how it works here.
Only marketing to the C-Suite is the move of someone who knows their product isn’t any good.
I think what so many vendors fail to realize is that while I, as an IT professional, am not the decision maker, I have two very important roles: decision influencer and gatekeeper. If a vendor doesn’t convince me, they don’t make it to the decision maker…and can make or break most IT decisions.
If it is budgeted, I am the decision maker. I make the IT budget, decide what gets in and does not. It gets approved. Then I order.
I wrote a post a while back called social media engagement and going to the gym ( An analogy)
I received a few hundred responses from IT marketers ( spiceworks clients and prospects I am trying to get invovled inside Spiceworks) saying they see the benefit of engagement but it’s so hard to attribute ROI to any kind of social effort.
Obviously Spiceworks is not just a social media platform but social engagement is a big part of our approach.
So in the Spiceworks spirit of listening to our clients/partners.
Here is my sequel post with a process that a couple of Spiceworks clients have used to show management the value of how social engagement drive’s $100,000′s of dollars to the pipeline and closed business. ( especially in a pure 100% IT platform like spiceworks)
The ROI of Social Media within the IT buyer community :
So often we hear people struggling with how to manage the return of their social media efforts. I do sometimes struggle with this when a IT vendor says I can’t spend time or $$ on social media until I can get exact ROI. ( Hmmmm what is the ROI on the beautiful fountain outside the HQ that costs $160,000 a year to run?:) ( True story from a previous software company I worked at by the way)
I sometimes think IT marketers are so focused on the ROI of a one-time ad, web page or action, and therefore they miss ( ironically) $100,000’s worth of opportunities because they don’t see that social media is ongoing conversational engagement. They forget that you need to go to the buyers first, provide them value, and spend time with them before they may take action.
There are 7 Million IT buyers ( 1 – 1,000 employees) who control over $900 Billion dollars of spend globally
4 straight forward tips:
• put some roots down
• understand who your buyers are and where they live, work and play.
• Do so and not only will people engage and respond to your efforts, they will purchase your products – and that is the best ROI a brand can get right.
So let’s take you through a proven process for IT vendors, Direct market resellers and VAR’s can use to monitor and track ROI conversations on Spiceworks:
Step 1: Set up a Spiceworks vendor page, run banners, send an e mail out to your specific target audience and start searching conversations topics in your area of expertise. ( Virtualization, Web filtering, security, backup etc)
Step 2: Browse the community and engage in the conversation, get known, be a resource.
Step 3: If someone expresses interest in you and your company , ask them permission to send some info, pricing, documentation etc. Continue the conversation. Shoot the person a note your info about your online store, discount, promotion, webinar, whitepaper, vendor page. RFQ button.
Step 4: If the person is interested, input them into your CRM ( lead source, create a opportunity associated to that conversation)
Step 5: Measure whether they end up buying! You can now track the origin and attribution of that lead, how many days it took to close, what other actions they took place prior to buying (vendor page follower, requested a quote,additional conversation in the community etc).
Step 6: Measure the percentage of time it takes on average to engage in these types of conversations and divide by average hourly rate of paying someone to do this type of activity or compare this to the $1,000,000’s being spent on cold calling teams, adwords, airport sponsorship, golf tournaments, full page print ad’s etc.
Let’s say it cost you $10,000 to get a person ( re the conversation) into the sales pipeline and they bought $50,000 worth of Hardware/software.
Step 7: (Revenue-Cost)/Cost = ROI so given this example: ($50,000 – $10,000) / $10,000 = 400% ROI. That ain’t bad going.
Here is a very funny Video discussing C –suite ROI:
I would love to hear from the IT buyers on this as well as our partners.
I would love to hear your feedback.