The Myth of Selling/Marketing to the CIO in SMB

This guest post is from Kenny Madden of Spiceworks, one of Austin’s hottest startups. Do you sell to technology buyers? You should pay special attention.

(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.

About Bryan Menell

Bryan is the Managing Editor for AustinStartup and the CEO of Mahana. He is a co-founder of Capital Factory, an investor and advisor, and runs the popular Austin Tech Happy Hour with his wife.

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