Over the last 12 to 18 months, I’ve had the opportunity to gather information and learn from over 650 corporate IT buyers in the US and Europe, including nearly 200 one-on-one interviews. These interactions happened in the context of my consulting engagements for software providers which included everything from value proposition development, brand portfolio analysis and restructuring, brand equity and awareness studies, customer journey development and optimization of the client’s onboarding process.
Below, is a summary of what I have learned throughout these interactions and interviews about the most important criteria these corporate IT decision makers apply when selecting an IT vendor or Technology Service Providers (TSPs):
- References as the typical starting point: First of all, most corporate IT buyers will already have done their research about a specific vendor before even reaching out to that vendor. Unlike the traditional sales funnels, which are typically controlled by the vendors, buyers are now in control of the information and information flow they use to make decisions. In fact, according to Gartner technology buyers today spend 65% of the time in their buying efforts reviewing information or interacting with people and organizations other than the TSP. They will have looked at analyst reports (Gartner’s magic quadrant for example), talked to their peers and often will have talked to existing and former customers of that specific vendor. As a result, they will also have a specific set of questions (and potentially concerns) they’d like the vendor to address once they reach out to them.
- Differentiating benefits & brand story: Second impressions (for the first impressions see point 1) are typically influenced by the vendor’s positioning (value proposition) and its benefit messaging. This is a huge area of opportunity for most IT vendors, whose competitive environment is often hard to clearly define and often includes many frenemies. Throughout my projects with software B-to-B software providers I’ve learned that the key in positioning and messaging a brand is often to link the value proposition and benefits of their offering to overall business issues that are relevant to the C-suite of their potential customers. This approach creates relevance and often differentiation, especially among the most business minded stakeholders on the buyer side.
- A problem-solving mindset rather than features-selling: This one surprised me a little but the myth of the supplier’s sales person still tending to focus on selling the features of their products rather than on helping solve their customers specific problems (while showing how their product can help) is well and alive. Instead, most IT buyers want their suppliers to really try to understand the specific business problems the organization is trying to solve before providing a tailored solution. The way to demonstrate that is by avoiding generic sales presentations focused on the supplier’s capabilities during the first meeting (happens all too often still). Instead, the focus should be on “really listening” to try to understand the needs and requirements of the various stakeholders involved in the process. A potential customer will always lean towards the vendor understanding and addressing their specific business problem.
- A foot in the future and one in the present: Many IT buyers I’ve talked to mentioned the desire to find a supplier that is a thought leader in its category, i.e. that understands how a specific market is going to evolve in the next 3 to 5 years but that is also well grounded in today’s realities. As such, they are typically looking for vendors with leading-edge rather than bleeding-edge capabilities, the latter scaring off many potential buyers and making it more difficult for them to justify internally.
- Fremium: Fremiums allow potential buyers to experience the solution first hand without too much of a commitment. That’s a no-brainer. The bigger point here however is that an increasing number of potential buyers want to know what it will be like to work with a specific vendor before signing the contract. They obviously want to know what the product or solution can actually provide (ROI calculations and time-to-value) but they often also want to know what it will be like to work with the vendor: what does the implementation roadmap look like? What will it be like to interact with the CSM team? How will the vendor address problems that will inevitably come up during the implementation phase? How and how quickly will tickets be handled? What will the onboarding process look like? Etc. A company able to provide a glimpse of what it would be like to work with will automatically have a competitive advantage over a vendor not doing this.
- Cultural fit: A less tangible but increasingly important criteria which emerged over and over in my interviews with corporate decision makers and buyers is the “cultural fit” between the vendor and the buyer as an increasingly important buying criteria. While this criteria is a little less tangible, buyers want to know if the vendor shares their values and culture and if the people on the vendor side are the type of people those on the corporate side will want to work with.
So what are the implications for TSPs? Here is a short list of questions worth trying to answer:
- Do you put the same amount of energy and effort in managing your reputation and in managing the actual experience of your current customer than you put in your new business and sales activities?
- Is your brand story, value proposition and messaging approach unique and tied to the overall business issues that are relevant to your potential customers or are they generic and vague in nature?
- Do you follow a strict and rigid protocol when interacting with a potential customer or do you first try to understand their issue (or help them define their issue) and then tailor your sales approach to helping them solve that issue?
- Are you perceived as a thought-leader in your industry and vertical?
- Do you provide an insight into what it would be like to work with you? This could be as simple as a free trial or a series of testimonials from existing customers.
- Do you research the culture and values of your prospective customers and try to connect those with your own?
If you answered yes to most of these questions, congratulations, you are far ahead of the competitive curve. And if you answered no to some or most of those questions, at least you know where to focus your energy on from now on.
In any case we’d love to talk to you and discuss how we could help you build your brand, drive business growth and reduce churn.
First The Trousers Then The Shoes Inc. is a brand research, strategy and innovation consulting firm. If this article resonated with you, please feel free to reach out to me at Ulli@first-the-trousers.com, for an informal conversation on how we could help your business succeed.