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Posted by Scott Santucci on January 31, 2011
Where Have We Been?
Shakespeare once wrote, “the past is prologue,” and that is a wonderful way to start a conversation about the tectonic forces at work that are fundamentally changing how vendors go to market.
As you try to remember to sign your checks 2011 instead of 2010, take pause and think a little bit about the changes that have taken place in our industry over the past decade.
Where Are Buyers Going?
On the buyer side, we are seeing a growing trend to push more suppliers through professional procurement functions while investing in strategic vendor programs with the select business partners that add more value to their companies. How well has the technology industry as a whole responded to these changes?
If you accept the idea that buyers pay more for perceived value (and that only they can determine what is valuable), then some financial trends make a good scoreboard. We recently analyzed 100 technology companies’ financials (hardware, software, services, telecommunications, etc.) over the past 10 years. When we normalized year-over-year growth (for example, what was the % growth of revenue from 2005 to 2006 and plotting out that % growth rate for each year from 2000-2009), we found some very interesting trends. First, in every single year, the year-over-year growth of SG&A was higher than the growth rate of revenues. Secondly, margins are clearly under pressure; in 2000 the industry average operating margin was 18.1% – by 2009 it had declined to 13.4%. In other words, the rate at which technology vendors are investing to fuel their selling engine is higher than the yield they are getting.
Where Should You Be Going?
This is exactly the focus of our sales enablement research agenda at Forrester and the theme of our upcoming conference, titled: "New Buyers, New Demands: Accelerating Sales Performance" (Feb. 14-15 in San Francisco). Our lens is very simple – CEOs want their businesses to drive more profitable growth and are growing frustrated with execution. Buyers are stratifying their suppliers into a caste system of commodity and strategic partners – and vendor go-to-market models are not keeping up with the change.
To tackle this problem, vendors must find ways to communicate value (in the terms of the customer, not themselves), and that requires coordination across product, marketing, and sales organizations. We have designed our conference to provide you a layered approach to:
Information About The Forum
Link to information:
Where is it?
The Palace Hotel in San Francisco, California
When is it?
February 14-15, 2011
We have group pricing available because we encourage people to come as cross-functional teams.
If you are a Forrester client, contact your account executive – your probably have some conference tickets available as part of your contract. If you are not a client, you can register for the forum using the link above.
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