Partnering With the CIO: The Future of IT Sales Seen Through the Eyes of Key Decision Makers

Sacrifice in Vain?

Ron Rose, the CIO of Priceline.com, wonders how much revenue and margin could be increased by anticipating the end of the quarter more effectively and closing the most critical sales earlier. “IT vendors give up a hefty amount of revenue and margin at the tail end of each quarter,” observes Rose. “It would be interesting to know how much more they would earn if they could avoid even half of that.”

For veteran CIOs, many IT sales pitches create an eerie sense of déjà vu. If the CIO shows little interest in the product, the sales rep quickly changes the subject to pricing. When that gambit fails, the sales rep assumes the CIO is merely being coy. At this point, the sales rep might begin talking about potential discounts or other incentives.

What the sales rep probably doesn’t know—or refuses to believe—is that the CIO’s budget was set months ago. Unless the supplier is riding to the rescue with an urgently needed product or service that will help the company address a pressing business challenge, there won’t be any money in CIO’s budget to cover the purchase.

Offering steeper discounts won’t move the sale forward for two good reasons. The first is very simple: If zero dollars have been set aside for the purchase, a discount is meaningless. The second reason is that most CIOs have been around the block often enough to know instinctively that the first-year cost of any new IT purchase usually represents the tip of a much larger iceberg.

“If you’re looking at an ...