The Doyle Report: Value is Driving Sales Today, Not Upgrades
Upgraded your phone lately? If you’re like most Americans, the answer is probably, “no.”
Today, consumers are holding onto their mobile smart devices longer than ever between upgrades. Compared to 2011, consumers now keep their phones seven months longer before refreshing them. This is having a significant impact on the industry as a whole.
When final numbers are tallied for 2016, for example, mobile device shipment growth is expected to be flat year-over-year. Similarly, consumers and business customers are holding onto their PCs, servers and other pieces of equipment longer than before. Last year, Intel CEO Brian Krzanich said the refresh cycle for PCs had grown to nearly six years.
There are several explanations for this development: product quality is better than before, and storage and processing power are readily available in the cloud. What is more, there are fewer blockbuster product upgrades than before that force buyers hands. While Windows 10 no doubt drove some purchases, it wasn’t the catalyst for new business the way that previous Windows upgrades were. Nor were the most recent upgrades to Cisco switches, Intel chips and other upgrades.
A quick assessment of new ideas—from the Internet of Things to Artificial Intelligence (AI) to Virtual Reality (VR)—doesn’t reveal a major driver of upgrades anytime soon. Sure, some innovations will drive network and security upgrades. But something more is needed to drive new business.
Which is where you come in.
In past years, solution providers could count on Microsoft, Intel, Cisco, Dell and others to regularly provide them with opportunities to upgrade customers and refresh their systems. No more. Today the drivers of new business aren’t vendor upgrades but customer imperatives instead. That’s why security sales remain strong and why sales of applications that increase customer competitiveness remain strong.
If you can provide new business value, you won’t notice that refresh cycles are getting longer. But if you’re counting on someone else to drive your sales, you’re going to fall behind.