The document outlines strategies for selling in a challenging economic environment in 2009, highlighting the impacts of a downturn on IT spending and sales approaches. Key findings suggest companies must adapt by investing in sales training and demand generation, while also focusing on maximizing productivity with limited resources. IDC predictions emphasize that those who fail to adjust their strategies or cut back on sales investments may not survive into 2010.

1. Selling in 2009: 10 Ways to Find, Win and Keep the Money Lee Levitt Director, Sales Advisory Practice www.SalesAdvisoryPractice.com

2. Agenda Introductions & Methodology The Economic Context: 2009 – A Year of Change & Challenge Key Findings Executive Outlook Sales Program Investment People and Productivity Investments Selling in a Down Economy IDC 2009 Executive Guidance

3. Introduction and Methodology Tech Sales Barometer Introduction Sales Barometer is an annual deliverable of the Sales Advisory Service Formal written deliverable to follow in late January Individual client presentations available on request Methodology In-depth survey, conducted by phone and online with senior sales executives (both clients and non-clients) at technology companies, in November and December of 2008 30 participants, representing $201B in revenue (37% of US IT market) Respondent titles include, “Director of Strategy, VP Sales, VP of Global Sales Operations, VP Finance and Sales Operations, VP Global Field Enablement, Director Sales Operations, VP Sales Strategy and Operations” 97% US-based, most with regional to global responsibility Participants guaranteed confidentiality and a sharing of the results

4. Storm Warning: Impact on IT Spending IT spending downturn spreading to all sectors of the economy (industries and geographies) Short-term panic has already impacted sales of hardware, new software licenses and contracts Weak economy will drive down tech spending plans throughout 2009, with gradual recovery in 2010 dependent on broader economic rebound Mature IT markets could turn negative in 2009 Emerging markets will be impacted, posting growth in high single digits instead of double digit expansion Tech downturn will not be as bad as 2001-2002 (barring even worse economic scenarios), and recovery will be faster Biggest impact in commodity hardware upgrade markets (e.g. PCs); software applications next; project-based services will be hit Relative resiliency in ongoing infrastructure projects, some types of outsourcing, security

5. IT Buyer Confidence At Record Lows… Monthly poll of business managers and CIOs is lower than ever (poll started in 2002); index score below 1000 indicates predicted contraction in overall IT spending

6. IDC Prediction #1 Selling strategies that worked last year will not work in 2009

7. How Bad Could It Get? 2009 Worldwide IT Spending Downside Scenario Source: IDC Q3 2008 Worldwide Black Book, Downside Scenario Model

8. IDC Prediction #2 Companies that significantly reduce their sales and marketing investments in 2009 will be gone by mid 2010

9. IDC Forecasts Sales Expenses to Grow Slowly in 2009 Source: IDC’s Tech Sales Barometer 2009 , IDC's CMO Tech Marketing Barometer, 2008 , IDC’s CMO Tech Marketing Benchmarks Study 2008 and IDC Q3 ’08 Black Book Avg. % (1.7%) 3.5% 5.1% 2.6% Rate of Growth, Year over Year

10. IDC 2009 Tech Sales Barometer Executive Outlook Key Research Findings Revenue projections are on the positive side Confidence is solid, but under challenge The economy is having an expected impact on plans But, investment strategies have not tanked

11. Revenue Projections Mostly on the Upside PROJECTED REVENUE GROWTH (relative to IDC segment projections for 2009) Source: IDC’s Tech Sales Barometer 2009 Percent of Respondents

12. But Confidence is Being Challenged How do you feel about the prospects for sales success at your company during the next 6 months vs. 6 months ago? Percent of Respondents Source: IDC’s Tech Sales Barometer 2009

13. The 2009 Economy Drowns Out All Other Management Issues Percentage of respondents citing factor Source: IDC’s Tech Sales Barometer 2009 Please describe the top three factors influencing your outlook for the next six months

14. IDC Prediction #3 Companies that blame their lack of selling on the economy will fail by mid 2010

15. Investment Risk Taking is Not Bad… How would you characterize your organization's sales investment/activity for the 2009 calendar year? (i.e., with respect to potentially increasing hiring and overall sales expenditures) “ Continuing to hire, but locking down expenses.” “ Will invest in markets where upside is seen, but divesting in markets that are particularly bad.” Percent of Respondents Source: IDC’s Tech Sales Barometer 2009

16. …But Sales Plans are Seeing an Impact To what extent is your company’s sales plan for 2009 being affected by the current economic environment? Percent of Respondents Source: IDC’s Tech Sales Barometer 2009

17. IDC 2009 Tech Sales Barometer Sales Program Investments Key Research Findings Sales programs will be cut, but quotas will not As such, sales will be expected to deliver more with less Sales Productivity is a major investment focus Demand generation is also seeing gains

18. IDC Prediction #4 Sales organizations will be asked to do more with less Doh!

19. Sales Will be Expected to Do More with Less Percent Change in Budget/Quota Source: IDC’s Tech Sales Barometer 2009

20. IDC Prediction #5 Companies have cut T&E budgets deeply. Most will lose valuable face time with customers and prospects Those that shift headcount to inside sales will provide similar levels of customer touch at lower cost…and drive higher customer satisfaction

21. Sales Must Stay the Course, Despite Changes in Other Areas TRAVEL & ENTERTAINMENT BUDGET Percent of Respondents % of Respondents Source: IDC’s Tech Sales Barometer 2009 If you already have your FY 2009 plans in place for the following items, do you expect to adjust them in response to the rapidly changing global economic conditions?

22. IDC Prediction #6 Sales organizations that bolster dedicated investments in lead quality and demand generation will be rewarded with significantly higher sales productivity This is no time to hide!

23. Demand Generation and Sales Enablement See Increases while Others Cut Source: IDC’s Tech Sales Barometer 2009 How will your overall sales investment in the following functional areas change in calendar year 2009 compared to calendar year 2008? Percentage Decreasing vs. Percentage Increasing

24. IDC Prediction #7 Organizations that cut sales training in 2009 will suffer Organizations that bolster sales training in 2009 will prosper

25. Empowering The Sales Force Seeing Top Increases in Investment Percentage of Respondents Citing Area Please identify the sales program investment areas that have received the most increase in funding for calendar year 2009? Source: IDC’s Tech Sales Barometer 2009

26. Sales Rep Productivity of Greatest Importance Working from a total pool of 100 points, please assign a point rating for how important each of the following is to your organization's sales activities during the 2009 calendar year. Sales Activity Importance Rating (out of a possible 100)

27. Investment Continues in Emerging Markets Percent of Respondents How will your overall sales investment in the following regions change in calendar year 2009 compared to calendar year 2008? Source: IDC’s Tech Sales Barometer 2009

28. IDC 2009 Tech Sales Barometer People & Productivity Investments Key Research Findings Sales specialization is on the rise Plenty of room for improvements in productivity Sales & marketing alignment is still a challenge

29. IDC Prediction #8 Savvy organizations will use the economic downturn as justification to replace direct sales “laggards” with well enabled inside sales Customer (and employee) satisfaction and sales productivity will rise accordingly

30. Sales Headcount Shifts to the Inside Percentage Decreasing vs. Percentage Increasing Source: IDC’s Tech Sales Barometer 2009 In what sales areas will you be changing headcount (in your organization) in calendar year 2009?

31. Productivity Improving, But Still Room for Improvement Percentage of Respondents Source: IDC’s Tech Sales Barometer 2009 How would you rate the overall sales productivity of your sales organization?

32. Marketing and Sales Still Need Greater Alignment On a scale of 1 to 100, where 1 is mis-aligned and 100 is perfectly aligned, please indicate the alignment rating between marketing and sales along the following dimensions: Average Alignment Rating Source: IDC’s Tech Sales Barometer 2009

33. IDC 2009 Tech Sales Barometer Selling in a Down Economy Key Research Findings Sales cycles are getting longer Sales force empowerment a clear focus

34. Sales Cycles are Getting Longer… Over the last six months, how has the length of your sales cycle changed? Percentage of respondents Source: IDC’s Tech Sales Barometer 2009

35. …and More Leads are Needed to Win Over the last six months, how has the number of leads necessary to close a deal changed? Percentage of respondents Source: IDC’s Tech Sales Barometer 2009

36. IDC 2009 Tech Sales Barometer Executive Guidance

37. "Opportunity's favorite disguise is trouble ” Frank Tyger

38. IDC 2009 Executive Guidance Short Term “FixIts” Stay the Course - it takes a couple of weeks to wipe out a sales organization, 18 months to rebuild it Do some House Cleaning – Get rid of low performers & reposition headcount as needed. Are tasks, people and resources properly aligned? Empower your Sales Professionals – train your sales people in the language of the “down” economy Boost lead quality – better sales mapping, demand generation, and lead qualification will improve sales ROI

39. IDC 2009 Executive Guidance Ongoing Improvements Increase focus on sales methodology – boost investments in training & usage Enforce good Account Planning Processes Continue to evaluate match of resource and responsibilities – are $250K resources doing $10/hour work? Ratchet up the use of sales metrics – use the economy as an “excuse” to focus on metrics (This can help in sales & marketing alignment) Improve your Sales Enablement capabilities – Good sales enablement is a cornerstone of sales productivity

40. IDC 2009 Executive Guidance #9 If you remain confident & customer focused, understand the impact of the economy on your customer and strategize to serve them accordingly, your organization will be well positioned to thrive in 2010 and beyond #10 Continued support of customers during the downturn will earn loyalty (build relationship capital) when the turnaround comes The sales organization can lead the way through this economic environment All of your money comes from sales

41. The Sales Advisory Practice Team Lee Levitt Program Director Sales Advisory Practice Phone: 508-988-7974 Michael Gerard Research Vice President Executive Advisory Group Phone: 508-988-6758