In 2024, the world will collectively buy $5.06 trillion worth of IT, an 8% YoY increase.
When we buy, 87% of us spend six months analyzing different products, and 99% of us are either “very confident or somewhat confident” in our eventual purchases. So maybe we are all great buyers?
Not so fast.
We buy too much: Reducing tech bloat was one of the themes in our slice of the world in 2023, with 94% of sales organizations planning to reduce their tech stacks. This is not just because of cost-cutting but also because 66% of reps reported feeling overwhelmed by the number of tools they were required to use.
We buy things that don’t work: Even though 99% of us are ‘very confident or somewhat confident’ in our purchases, according to the 2024 Gong State of Revenue Leadership Report, 73% of tech companies missed their customer renewal targets. We’ve mostly renewed purchases that are working well, which implies that much of what we buy doesn't provide the value we thought it would at the onset.
We buy in ways that lead to regret: It’s often quoted that 75% of buyers prefer a rep-free experience, but in the same Gartner report, they also state that “those who purchase through digital channels alone are more likely to regret their purchase.” We might want a rep-free experience, but that’s often not what we need.
Great GTM leaders will generate millions - sometimes billions - in revenue over the course of their careers. It’s what they are hired to do. But they also spend many millions - rarely billions - on products and services. So, they also need to be great capital allocators, which also includes being a great buyer.
6 buying tips shared with me from elite GTM leaders:
1. Know what your specific “win” looks like
There are clear advantages of being a great buyer: you get a sharp price, great advice, fast implementation, better terms, and maybe even value-added services included for little or no charge. Sometimes price is the ultimate goal: case and point, a Series B CEO I know negotiated the leading revenue intelligence platform “down from $340 a person to $180” – a 52.9% discount. Other times, price is less of the focus, and how the tech is implemented and supported becomes the most important buying motivator. In both cases, the smart buyer has determined the biggest reason that tech solution could fail in their organization (i.e., a slim ROI requires a push for lower pricing, while lack of adoption requires more focus on the implementation)
2. Get intimate with the problem
Every leader I spoke to knew the problem they were solving inside out. This enabled them to be efficient and organized in solving it. They avoid confirmation bias and instead consider all options—automation, outsourcing, or maintaining the status quo. If automation is the answer, they create a scorecard and assemble a buying committee, aligning all stakeholders before evaluating solutions. With this groundwork, they avoid legal delays that slow down 61% of deals. They spend the next six months evaluating 3-5 products, continuously doing their own ROI analysis, while 47% of buyers rely on sellers for it. This approach gives them confidence when approving the final purchase and the conviction required to drive adoption.
3. Categorize tech to understand your leverage better
One GTM leader I know buckets their tech stack accordingly:
Little to no Leverage: This typically applies to tech from a company with an existential offering (i.e., you are a clearly worse company without it) and a big moat. A good example of this is LinkedIn’s Recruiter suite, which would be essential for any talent acquisition team. Your pricing leverage is almost non-existent, so you need to find other areas (free training, more consultancy, multi-year contracts that avoid annual pricing increases).
Some Leverage: Technology in this category is still extremely important for your stack, but a few good options can create more competition for your business. Think of Apollo as an example: very good tech, but many of Apollo’s competitors would argue that their contact results are equivalent or better. That increased competition creates leverage in pricing and other areas important to your optimization.
Lots of Leverage: This tech is an advantage to your stack, but there is little to no moat for the supplier, so the ability to negotiate is extremely high. Think video conferencing, where there isn’t all that much difference between Zoom, Google Meet, and Microsoft Teams. You should have lots of room to maneuver in these negotiations.
4. Use your expert knowledge of quotas to your advantage
Every GTM leader has had a rep ask for discount approval on the last few days of a quarter, and every one of us - when fighting for those last percentage points - has at some point said yes. Knowing that we can all be our most flexible when targets are pressurized creates the most leverage potential. One GTM leader recommended being very open early about this timeline, specifically suggesting that you do not wait until the very last day to implement this strategy and instead ask, “What would the best price/user be if I could get this approved before the end of Q3?”
5. Determine if you have more value than just money
Word of mouth is powerful, so the promise of a reference letter, case study, or even negotiating a referral credit to off-set future costs can be a great way to lower your spend while keeping the quality of their implementation and customer service high (the case study specifically ensures that both parties benefit from a strong ROI).
6. Be fair and kind
66% of the time, getting the best price is important to buyers. To achieve this, you need the salesperson to secure the discount. Great buyers work with salespeople who care about their craft and treat them fairly and kindly. This means being transparent, not ghosting, and avoiding rudeness. Building this relationship ensures that when it's time to negotiate, the salesperson is on your side, helping you get the best deal.
Since we are no longer in a “growth at all cost” world, we must master how we spend money, not just how we make it. That’s not only about getting the best price because sometimes you can push too hard on price and suffer as a result. It’s about buying the things we truly need in a way that is thoughtful, efficient, and likely to lead to the ROI we need.
