IDC study finds sales budget growth outpaces marketing

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Tech marketers are increasing their sales budgets at a higher growth rate than their marketing budgets, according to research from IDC. IDC's Tech Sales Barometer, released last week, shows that sales budgets at technology companies will increase an average 7.9% this year over last. That is down slightly from last year's growth, when the average sales budget was up 9.0% over 2006. Sales budget growth continues to outpace marketing budget growth, which will increase an average 4.0% this year, according to IDC. The survey, conducted in January, was based on in-person, telephone and e-mail surveys with 26 senior sales executives at technology companies. The companies surveyed represent more than $170 billion in revenue. “We don't know how this challenging economic environment will shake out,” said Lee Levitt, director of IDC's Sales Advisory practice. “Many folks we talk to say their businesses have been severely affected by the downturn in spending.” He pointed to some key challenges facing sales executives. “The drive for overall sales efficiency and effectiveness is clearly being driven by tough economic times, competitive pressures and changing buyer requirements,” he said. IDC offered some guidance for sales executives to address these challenges. The first strategy is to align the sales organization with buyer requirements. For example, companies might consider partner programs to move down market into the small and midsize business segment, and leverage their inside sales teams. Next, companies need to focus on the quality of their sales operations, not simply compliance, such as getting salespeople to fill out the right forms. Finally, focus on results, not activity, IDC recommends. “Some sales managers still focus on the number of calls and the duration of calls,” Levitt said. “In today's more sophisticated selling environment, it's the results that matter.” The study also found that 68.0% of tech companies plan to increase staff in direct sales this year, while 45.0% will increase indirect sales staff, and 41.0% will increase field sales support. Also, technology marketers are increasing their sales investments outside North America. The regions that will see the greatest growth in sales investment by technology companies this year include Asia-Pacific (where 75.0% of marketers will increase sales spending); Europe, the Middle East and Africa (73.0%); and Latin America (71.0%). By comparison, 54.0% of marketers plan to increase sales spending in North America. M
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