In a recent blog post, I highlighted a comment made by Mark Wilson, Sybase, regarding 4th quarter optimism for the B2B software industry. There’s reason to believe this optimism extends to all vendors of information technology (IT) products. The International Data Corporation (IDC) Executive Advisory Group issued its most recent forecast last week and is expecting improvement in IT vendor marketing and sales budgets for the rest of the year.
According to the report, the industry will see an average 3.7% increase in IT vendor marketing budgets and 5.6% in IT vendor sales budgets in 2010. Richard Vancil, vice president of IDC's Executive Advisory Group, is concerned that some IT executives may miss opportunities this year if they keep their marketing and sales budgets too closely aligned with revenue increases. Vancil encourages vendors to rethink their initial spending plans and increase budgets as necessary. Vancil also emphasizes that the marketing mix has undergone rapid change in this industry. “Traditional media spending has declined by 43% this year, and the category of digital marketing has grown by 53%.”
The typical IT vendor spends about 14% of revenue to acquire a new customer. And Michael Gerard, vice president of IDC's Sales Advisory Service, says businesses can reduce costs associated with new client acquisition by making the sales operations more strategic, by improving sales rep knowledge as they prepare to interact with clients ,and by deploying automation tools to boost process improvement.
Based on the results of this study, it appears that more IT vendors are also shifting their marketing resources to online channels as well.[Source: IDC Survey Shows Sales and Marketing Budgets Will Rise in 2010. IDC.com. 21 Sept. 2010. Web. 24 Sept. 2010]