I spent a couple of days in New York this week with a CIO Customer Advisory Board. The main purpose of the meeting was to get their un-filtered feedback on my company’s strategy and direction. That part of the meeting was confidential of course but I still wanted to share some observations from the meeting about the general mood and attitude of the group.
Who were they?
The group was just under a dozen CIO’s from the Financial Services, manufacturing, medial/entertainment, hospitality, technology and communications industries.
What I Heard
They Expect 2009 Spending to be Flat – This surprised me. For now, at least budgets are not getting cut.
2009 Spending will be Focused on Revenue Generation – The allocation of budgets however, is shifting toward revenue generation.
Cost-Cutting Projects Must Show Fast, measurable ROI – This also surprised me a bit. In general cost-cutting projects are not happening in 2009 unless they can show very fast ROI.
Speed Matters – CIO’s are moving quickly right now and they expect vendors to keep up with them. If they ask for something they need it now and vendors who can respond quickly have an advantage.
So What Should Marketing Do?
Messages and Value Propositions Must Focus On Revenue Generation – Your customers need to understand how your product/service can help their businesses make more money. You, your sales force and your customers all need to understand that in very simple terms.
Give Your Customers Tools to Measure ROI – Don’t make your customer do the work to determine ROI. Give them tools to help them do it. Provide them case studies that show how other companies have done it.
Help Your Sales Teams (and your customers) Sell to Higher Levels in the Organization – When spending is getting scrutinized, you need to make sure that your sales team is selling across the entire decision making unit. Make sure that when your CIO brings the project forward for approval, the CEO doesn’t say “Who are these guys?” Now is a good time to do executive briefings. Bring your customers to you and get your best people in front of them. Educate them so that they are armed to sell inside the account.
Over-Arm Your Sales Force – Make sure you are ready when your customers ask for materials so that they can turn-around request as quickly as possible.
**Update** Survey results released today from CIO Magazine shows that 40% of CIO’s plan to cut their budget from last year. Perhaps my group was on the optimistic end of the spectrum but that isn’t what I heard this week. One thing that did jive with what I heard in my group – More than one-third of CIOs (35 percent) believe current economic
conditions will cause IT purchase decisions to be pushed higher within
their IT organization.
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Hey, thanks for sharing the thematic elements that came out of the meeting. This kind of anecdotal data helps to contrast with the aggregated stats like CIO Mag shares. It surprised me a little too. That’s why data, not my opinion, matters. I have one client that (at the CIO/SVP level) is very focused on cost reduction, not top-line growth. I have a potential client who provides $1M solutions with a 12 month payback to their customers – their pipeline and backlog are strong and growing.
From what I’m seeing, having just finished ‘scouting’ a corner of my market as a consultant, for every two or three companies “holding off” or “knuckling down”, there is another company pushing forward and taking risks. And the sense I get from the ones pushing forward is that they are leaning towards quality (find me the best people) more than savings (find me the most cost-effective people). I guess that they are throwing the dice, and want to improve the odds, instead of padding the (pre-risk-adjusted) return by a couple basis points.