IT industry analyst firm Forrester predicts that while business technology spending will rise by 9% this year, IT managers and CIOs will control only a portion of that spend. Today, line of business influencers are the new technology power brokers, researching, purchasing, deploying, and managing IT services. Surprisingly, they are often overlooked or ignored by ISVs, MSPs, and VARs, as well as their channel partner communities. And, even when these vendors and IT service providers understand this changing dynamic, they are often uncertain as to how to reach line of business executives.
In this piece, we’ll talk about B2B IT sales, who these buyers are, why and how they buy, their relationship with their IT departments, and how non-technical line of business executives can become a significant growth factor for your B2B sales.
——— The Ultimate Guide ———
The New B2B Sales Experience
While this is an important topic for today’s IT sales professionals, this shift is not a completely new phenomenon. The launch of Salesforce and other SaaS applications in the late 1990s helped usher in a sea change in how IT services are purchased and by whom. CIOs and IT Directors lost all control over company data, IT spend, and IT resources purchased by their non-technical colleagues.
Today, the executive mandate common across most organizations that IT resources be used to help fuel a company’s ongoing growth is enabling the CIO to regain control. They are establishing a new, more effective relationship with non-technical influencers like the CMO, VP of Sales, head of HR, Director of Finance, CFO, or a similar business executive.
How are they doing this? By not trying to fight the change, but by embracing it. By becoming a partner in business technology and IT spend across their organization.
How Have B2B IT Sales Changed from Yesterday to Today?
Let’s look at how IT products and services were purchased and managed in the past and what’s happening today.
Yesterday, the CIO or IT department was responsible for all IT resources, capabilities and budget.
-
The IT department bought, provisioned, deployed, and maintained all company technology including traditional boxed software, hardware, and related technology resources.
-
Technical knowledge was limited to the members of the IT staff,
-
IT controlled the technology budget for the entire company,
-
IT owned the relationship with ISVs, VARs, MSPs, and other tech product and service providers.
-
IT investment was viewed as a capital expense.
Today, non-IT business leaders, purchasers, and influences are in control.
-
Individual departments like sales, HR, marketing, customer care, finance, and others buy, self-provision, and maintain many SaaS applications.
-
Technology know-how now exists across all departments by employees who would normally be considered non-technical.
-
Most departmental budgets now include an IT component.
-
While line of business executives don’t reach out directly to traditional ISVs, VARs, MSPs, and other tech providers, they are very important stakeholders in the buying process.
-
Each department’s IT investment is now viewed as an operating expense.
The Worldwide Semi-Annual IT Spending Guide: Line of Business, published by International Data Corporation (IDC), forecasts that technology spending by line of business decision-makers will overtake technology spending by the IT department by the end of this year and accelerate over the coming years.
So, where does this leave the office of the CIO? Analyst firm Gartner explains that the focus of the CIO’s office has flipped from issues associated with owning and providing technology-based solutions to adding valuable supporting services to complement the usage of SaaS.
“The office of the CIO should focus on becoming a cloud brokerage, offering value-added capabilities, including help desk/support for cloud SaaS solutions, integration skills, and procurement and contract management skills for cloud usage.”
Your B2B Sales Challenge
So, with this shift in who is buying much of the IT services needed by companies of all sizes, you, as an ISV, MSP, or VAR, have a couple of major challenges.
First, the CIO, director of IT, and the rest of the IT department have historically been the gatekeepers for their company. They decided what technology products and services were purchased, when they were purchased, and from whom they were purchased. While IT departments are still purchasing network infrastructure resources, laptops, and business applications like Microsoft Office 365, which are used by all employees, department heads and line of business executives now have significant influence over products and services purchased for their individual departments and team members.
Second, these LOB executives or department heads are focused on the needs, challenges, and goals of their specific department. When a new VP of Sales or CMO joins the company, they are given a laptop and the basic business applications they need to do their job. Unless something breaks or they can’t send or receive an email, they are most likely not thinking about these technology resources, how they were purchased, or how they will be managed and maintained. In most cases, these business executives don’t know the ISV, MSP, distributor, or reseller their IT team is using. They don’t know you exist.
So, the question is, what is influencing these line of business executives to make their own IT decisions and how can you help play an important role in purchase decisions and ongoing management?
What’s Influencing the Line of Business Executive to Buy?
Before you can put an effective B2B sales strategy in place, you need to understand what’s driving the line of business executive or department influencer to take matters into their own hands and either make their own IT purchases or significantly influence the IT purchases of their CIO or IT Director.
Traditionally, it was the sales department that was required to drive revenue growth for the company while other departments like marketing, which was considered a cost center, was asked to cut expenses. Today, CEOs require every department, including sales, marketing, customer support, finance, and others to actively contribute to the growth of the organization.
In the marketing department, for example, this means understanding exactly who the company’s target buyer is, the journey they take to becoming a customer, other influencers who may impact the buyer’s decision, their experience with your brand, and opportunities to upsell and cross-sell additional products and services once they’ve become a customer. Marketing is no longer considered just a cost center. They must prove they are driving growth along with every other department within the organization.
What’s the Line of Business Executive or Department Head Buying?
Sampling of popular SaaS applications across departments.
They are buying SaaS, SaaS, and more SaaS. Software as a Service applications are being purchased by all departments in small businesses and large enterprises across all industries. The number of SaaS applications in use by the average organization has grown from 8 in 2015 to 18 in 2019. Companies who consider themselves “SaaS Powered” are running 34 apps across their business. In fact, 73% of companies surveyed in Better Cloud’s State of the SaaS-Powered Workplace report, say that nearly all of their applications will be SaaS by 2020.
Understanding the Relationship Between the Line of Business Executive and Their In-House IT Department.
The interaction a line of business executive or department head has with their company’s CIO or IT director normally falls into 3 primary categories.
-
A Partnership: These LOB executives work very closely with the leadership of their IT department. They appreciate the value and expertise their CIO or IT Director brings to the table. The line of business executive presents their needs and works closely with their IT counterpart to determine the best solution, research application options, purchase and deploy a SaaS solution, and support the application, data, and network needs over time.
-
The Hybrid Approach: These LOB executives take a hybrid approach. They know exactly what they need. They know what SaaS resources are available to them and do their research on each solution until they narrow it down to a shortlist of three or four possibilities. They then ask the CIO for their opinion. However, they remind the CIO that while they welcome the CIO’s thoughts, the line of business executive will be making the ultimate decision as to which SaaS application is purchased. Once purchased, the plan is for the individual department to deploy and manage the solution on an ongoing basis – although this does not always end up being the case.
-
Going Rogue: These LOB executives are those most likely to go rogue. They are going to do their own thing from beginning to end. They know what they need and will do the research necessary to find the most appropriate solution. They have IT funds in their budget. They will hire people to join their team who understand the SaaS application they choose and can manage and maintain it from within the department. No IT department resources are needed or requested.
If LOB Executives Are Buying Their Own SaaS Applications but They Don’t Know You Exist, What Do You Need to Know to Ensure You Are Successful?
As an ISV, MSP, reseller, or VAR, how are you supposed to grow your IT sales if half of your potential customer base doesn’t know you exist?
-
Speak Their Language with a Business Focus: While you’re still selling technology services, the CFO, CMO, VP of Sales, or other LOB executive doesn’t speak the language of IT. They speak the language of business which focuses on their departmental needs, goals, and challenges as they relate to their company’s growth.
-
Understand Their Goals and Challenges: What are they looking to accomplish? Do they have a current pain point or a long-term business goal?
-
Know If There Is an In-House IT Department and If It’s Involved: If there is an in-house IT department, work with them as opposed to against them. They can bring you in as a technology partner to assist in providing services, expertise, and resources they may not have. A single project may lead to multiple projects across the organization.
-
Ask the Right Questions to Uncover Internal Issues or Politics: Talk to the CIO or other IT leader to better understand how each department is managing its IT resources. Is there a tug-of-war going on for control? Is one company executive extremely vocal in their beliefs, swaying all others to their way of thinking? Is there a preference for one technology vendor over another?
Things Line of Business Executives Often Forget to Consider
Whether they are in sales, marketing, HR, customer care, finance, or another department, a LOB executive has very specific goals that a targeted SaaS application can help them achieve. However, they often forget to consider more long-term issues which will reveal themselves further down the road. These include:
-
How is the app going to be managed long-term?
-
Do they have the expertise/knowledge within their department to manage it successfully?
-
Is the IT department going to be asked to support it? Do they have the time?
-
Will the services of an external IT consultant, VAR, or MSP be needed?
-
What is the process for managing and keeping an inventory of all applications within the department as well as across the company?
So, How Can You Take Advantage of These Overlooked Considerations?
You need to understand the mindset of the LOB executive during this stage. At this point, they have implemented their SaaS application and it’s most likely working well for them.
As time goes by, they begin to realize that while the application is working well, their team could be more effective if they received additional training on all of the app’s capabilities. Effective reporting would also increase exponentially if it could be fully integrated with other department’s SaaS applications like Salesforce or Connectwise.
After the first few months of use, the reality of what the LOB executive accomplished so far has set in. They are now beginning to think beyond the application itself to what more they could accomplish if the solution was customized to meet their specific needs.
What does this mean for you and your team?
Remember that technology sales don’t simply have to be about boxed hardware, SaaS applications, cloud solutions, or managed IT services. Do you have team members who are very familiar with QuickBooks, Slack, HubSpot, or another popular SaaS app? Have you considered selling consulting, training, or customization services for those applications? Not only will this drive additional revenue, but it will differentiate your suite of services from your competitors.
What about providing a security audit to evaluate the impact that each new SaaS application will have on their network? Security is a key component of IT management for small businesses and large enterprises alike.
As we already discussed, SaaS-powered companies are using approximately 34 applications across their business. Who is monitoring which applications have been purchased and which employees are using each application? Does anyone maintain a master list of login credentials? What happens if an employee leaves the company? Is someone assigned to eliminate their login credentials so the former employee no longer has access to the business account? Even for companies with an in-house IT department, they may not have the time to implement a comprehensive application management solution and would welcome the opportunity for you to take this off their shoulders.
Your Opportunity to Reach These Hidden IT Buyers
Now that you know some of the issues a line of business executive encounters and opportunities you have to provide additional services to current customers or new services to new customers, you need to understand how to uncover these opportunities.
First, does the customer have an in-house IT department or not? The answer to that question will determine your strategy.
While there are many different ways in which you can reach individual line of business executives, we have included a small sampling below.
Reaching the Line of Business Executive When There Is an In-House IT Department
It is important to not try and circumvent your IT contact within your client’s organization. Trying to go around them so you can get to the line of business executive directly and more quickly will only alienate you from the CIO and the entire IT team.
-
Your strategy should be to become even closer with your IT contacts, supporting them with additional services or capabilities. Act as their technology partner. It’s your job to make them look good within their organization.
-
Ask your IT contact higher level company-wide questions to uncover the business needs of the organization instead of just focusing on the IT team’s technology needs.
-
Offer to support IT personnel by providing services that the in-house IT department is less experienced in or does not have the resources to deliver.
Reaching the Line of Business Executive When There is No In-House IT Department
It can be more challenging to reach line of business executives directly when you are so used to partnering with and working through an in-house IT department. In this case, it is critical to align your messages with the needs of your target LOB decision-maker and market to them where they are.
-
Target your marketing messages to speak the LOB executive’s language. For you to be successful, they must believe you understand their needs, challenges, and goals. This includes how you position your services and your company in your sales collateral, on your website, in case studies, in email campaigns, and other marketing materials.
-
Exhibit, sponsor or speak at industry conference related to line of business topics and their technology needs. Line of Business executives attend these events to educate themselves and learn about new resources they can implement to make their team more productive and help them achieve their goals more quickly. Examples of line of business-focused conferences include INBOUND for CMOs, The Sales Development Conference for Sales VPs, and the SHRM Conference & Exposition for HR executives.
-
Become a certified partner of specific SaaS vendors within your area of expertise and ask to be included in their partner directories. SaaS companies like HubSpot, Salesforce, BambooHR, and others, publish a partner marketplace directory. This includes vendors who have complementary products and services which may be of interest to their large customer community. If, for example, you specialize in creating custom workflows for Salesforce customers or have built an HR tool which would be the perfect complement to BambooHR, reach out to the most appropriate SaaS vendors for your solution and ask to be included in their partner directory. While these well-known SaaS solutions are great on their own, customers can more quickly meet their individual needs by adding your custom solution to their tech stack.
Key Takeaways
As you can see, B2B IT sales have become extremely challenging. The line of business executive has the ability and financial resources to make IT purchases on their own but are they the right purchasing decisions? The IT department is still a critical cog in the wheel but has also taken on a new role. It’s important that you understand the internal dynamics going on and your place in the changing SaaS purchasing landscape. This is an extremely valuable and lucrative sales opportunity if you handle it correctly.
Here are four final takeaways you should remember:
First, because every department is now being asked by their CEO to help drive growth across the company, business growth drivers are coming from a wide variety of areas. You need to have more strategic business conversations to uncover hidden IT opportunities as well as the business influencers behind them.
Second, cloud-based SaaS applications have enabled the line of business executive to be involved in all aspects of the purchase from research to deployment, management, training, customization, and integration.
Third, the purchasing criteria are shifting from software vendor brand awareness and price sensitivity to the ability of each department to achieve specific LOB outcomes and company goals.
Fourth, since this IT sales process is more focused around a business theme, you need to understand how that informs the messaging you use to convert a prospect to a closed sale.
