Technical Recession

Woe be to technology marketers in the next year … or two … or three.

Despite overly optimistic projections by some analyst firms, the tech industry will sink into recessionary doldrums like everyone else. With dropping stock prices, slowing revenues, and more picayune buyers, marketing strategy will again take the lead in leading tech companies through tough time (I know — Silicon Strategies Marketing had their best years to date in the dot-bomb era). The situation is so sire that I will be giving a talk on how to market technology during tough times at Software Business 2008 at the end of October.

Inforation technology index and S&P 500 shows crash in the tech marketThe damage has already started. Everyone in Silicon Valley with a pocket full of stock options is crying nightly in their collective beers as they watch the information technology index, the NASDAQ and the S&P fall faster than the price of disc drives. The indexes have slid 40% in 2008 and 20% in the last month or so. Sales are now freezing if not contracting and even techies in the booming Asian market are turning their decade-long buying spree into a more miserly mode.

How should technology marketing strategy change during a recession, especially a global one? You’ll have to come to Software Business 2008 to hear me discuss this in detail. For now understand that all buyers reevaluate the value/cost ratio of each purchase. You can reduce their cost, but doing so cuts your revenues and makes your survivability more difficult. Thus you have to focus on increasing value.

But your product road map is set nearly in stone and during a recession you cannot hire-and-build your way to solvency. The key is to get a better grasp on the concept of value and how your target market perceives that value. Where most technology companies go wrong is not articulating value. Value is an abstract that derives both from the logical (ROI, time-to-market, etc.) and emotional (success, fame, glory, etc.) sides of the brain. Those wanting a better picture into the concept of value should read Silicon Strategies Marketing white paper True Value.

During recession, the very concept of value in the minds of buyers (B2B included) changes. Knowing how organizations change their perception of value is important. The good news is these changes are very predictable and your responses are easily mapped.

The bad news is that you’ll have to be in San Francisco on October 30th to find out the details.


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