Outsourcing: Why CIOs Hate How You Sell IT Services

IT vendors spend $25 billion a year on lead generation, while CIOs have become skilled at the art of evasion. CIO.com talked to xPeerient CEO Mark Hall about why the IT marketplace is broken and what he thinks could fix it.

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CIO.com: What about after you sign a contract—does the hard selling continue?

Hall: If it's an IT services relationship, there's always the question of renewal. The salespeople love you for two months prior to the purchase decision. Then they may go away for ten months. Then two months before renewal, you get a new salesperson calling you. That's the way accounts are managed.

If you're already in relationship with an IT services company, the switching costs can be enormous. The vendor's goal is to get ingrained as much as possible so the switching costs are even higher.

CIO.com: What's the best way to handle the upsell or renewal calls from an outsourcer?

Hall: Just to keep the company honest, I'd have a competitive bid process to bring things back to a head. Create a policy to review every vendor relationship every two years. Look at the financials and force them to go through the bid process. The vendors don't like it, but it's effective.

CIO.com: How do CIOs deal with the barrage of vendor sales calls today?

Hall: They develop evasion techniques. A lot of them set up vendor relations portal. When the salesperson calls, the admin tells them to go there and enter their name in the queue. Others have developed solutions that are very tricky. If a call from an IT vendor comes in, they tell them they're transferring them to Dan Heller in the procurement office. The salesperson gets a voice mail greeting, 'Hi, this is Dan Heller, leave a message.' Only there is no Dan Heller.

CIO.com: If the IT sales process is so inefficient—and even drives customers into hiding—aren't the vendors working on new techniques themselves?

Hall: What could they do that they haven't already tried? What they need to do is build relationships. What we're trying to do is change the hunted into the hunter. Rather than the vendor pursuing the buyer, why not have the buyer who has a need pursue the vendor. Then you say to the vendor, 'Here's an active buyer that's doing a project that needs you because they said so.'

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