Dear Marketing – If You’re Going to Buy IT, Here Are Some Purchasing Tips

By Gregg Spivack

Director of Client Services, NPI

November 11, 2015

Interested in learning more about NPI’s services?

Contact Us

Artwork Courtesy of @iStock.com/vitanovski

Marketing continues to garner an increased share of companies' IT spend. So much that terms like “multiplatform” and “SMAC” have become CFO jargon. As the line between marketing and IT blurs (thank you, digital marketing), the vendor landscape is getting broader and more complex. New providers are emerging, older providers are evolving, and there is a good bit of M&A activity between the two. One thing is clear - vendors are seeking more ways to monetize the intersection of IT and marketing.

Similar (and related) to the ongoing cloud and big data pushes, this land grab is spawning inconsistent pricing and aggressive sales tactics among vendors. Here are several of NPI’s observations stemming from recent deal reviews for email marketing and customer experience solutions:

  • Tons of functionality being included in bundled products that may or may not be of value to companies
  • Relatively new products being rolled out with descriptions more impressive than actual capabilities
  • Variability in usage-based costs that can spiral beyond budget expectations
  • Suppliers struggling to hire in advance of demand, resulting in consultants learning on your dime
  • New pricing models and unfamiliar discount expectations
  • To avoid missteps that could lead to overspending, unanticipated costs or solution dissatisfaction, consider these tips:

    Get references. This will help you suss out unproven technology and maybe even build negotiation leverage.

    Beware of the bundle. Even if firms won't unbundle, knowing what you don't need can support conversations around pricing.

    Know your overage blind spots. Memorialize pricing tiers and the metrics that can drive overage in your contracts.

    Tighten up scope, meet the resources. Consider a design or scoping session where resources from the vendor are introduced, and you dig one layer deeper into how the solution will work in your environment. If certain resources they bring to the pre-sales effort are the ones you want on your project, write it into the agreement. Include standard language in your SOW about evaluating and removing project resources when circumstances necessitate it.

    Think value over bells and whistles. Consider how your firm will gain value from the product. Perform your own value analysis looking at metrics that are meaningful to your business - they may differ from how it’s being sold.