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How Customers Choose Solutions Providers 2009
 

How Customers Choose Solutions Providers 2009

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ITSMA, in partnership with Pierre Audoin Consultants (PAC), conducted the 2009 version of its acclaimed How Customers Choose research across three continents.

ITSMA, in partnership with Pierre Audoin Consultants (PAC), conducted the 2009 version of its acclaimed How Customers Choose research across three continents.

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    How Customers Choose Solutions Providers 2009 How Customers Choose Solutions Providers 2009 Presentation Transcript

    • How Customers Choose Solution Providers, 2009: The Importance of Personalization, Epiphanies, and Social Media ABBREVIATED SUMMARY Final Data Report | September 2009 Prepared by: Julie Schwartz Senior Vice President Thought Leadership and Research ITSMA Katie Espinola Senior Research Analyst ITSMA Olivier Nguyen Van Tan Managing Director PAC AND Final Data Report | Abbreviated Summary | F016AS
    • Summary: How is buyer behavior changing? Cost containment is giving way Recovery is around the corner in 2010. Prepare now. to innovation and expansion. Social media usage is up. Almost non-existent two years ago, social media is If you are not now becoming central to the technology-based already playing, solutions buying process. get in the game. Buyers want marketing to add Only thought leadership will capture buyers’ attention Invest, collaborate, value. and keep them engaged. and innovate. Expectations for A strong reputation and proven track record are table Do your personalization and stakes. Today, buyers expect you to know and homework. customization are higher. understand their unique business issues. There are many paths to reach There is no silver bullet marketing tactic. You need a Find your buyers. combination of on- and off-line channels to create customer’s demand and generate and nurture leads. preference. Everything seems to be Facing tighter budgets and a demand for greater Develop reusable important. personalization, marketers have a resource issue. campaign assets. How can you stand out in such a market? You need Partner with sales. to differentiate account by account with precision- targeted value propositions. Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 2
    • The recovery is in sight for 2010 PAC Forecast: Worldwide IT Spending (in million USD) CAGR $1,586,337 2009–2013 $1,489,473 $1,404,450 4.5% $1,332,099 $1,340,224 IT Services 789,849 (CAGR 4.6%) 742,601 701,893 660,414 670,253 Software Products 288,869 310,124 271,487 (CAGR 4.8%) 256,660 258,962 Hardware 415,026 411,009 415,026 458,003 486,364 (CAGR 4.0%) 2009 2010 2011 2012 2013 Source: PAC, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 3
    • We entered this recession with lean IT spending; little room to cut compared to the previous recession What is happening to your IT spending (including hardware, software and IT services) so far in 2009? Compared to 2008, has your 2009 budget… % of Respondents (N=355) 25 15 15 14 14 11 7 Strongly Decreased Slightly Stayed more Slightly Increased Strongly decreased (between -5% decreased or less the increased (between +5% increased (more than and -10%) (between -2% same (between +2% and +10%) (more than -11%) and -4%) (between -2% and +4%) +11%) and +2%) Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 4
    • Companies are either protecting themselves from a riskier environment and/or making the most of their current IT resources What are the top Back-up, archive, disaster recovery 50 three technologies IT security 34 IT optimization 33 that you consider as Virtualization 28 priorities for your Microsoft .NET 16 company in 2009? Cloud computing 13 % of Respondents Risk and compliance 13 (N=352) Web technologies (HTML, PHP, etc.) 12 Open source 10 Java 9 Systems maintenance 8 Networking 7 ERP 7 Business intelligence 7 Unified communications 7 Green IT 4 Collaboration tools and technologies 4 CRM 3 Systems upgrades 3 Mobility 2 SOA 1 Note: Up to three responses allowed. Other 7 Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 5
    • Now, more than ever, marketers need to base their activities on customers’ buying processes ITSMA’s Relationship Model/Buying Process Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Processes Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 6
    • Stage 1. Create demand. Help potential customers identify problems and opportunities Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Process Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Epiphany  Create idea- and trend-based thought leadership Marketing Process  Help clients discover and respond to the most important business issues they face  Take clients out of the day-to-day to collaborate and spark new ideas  Arm partners/sales/business developers with content Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 7
    • Solution providers are only moderately helpful at sparking epiphanies How helpful are solution providers in bringing you new ideas and showing you the possibilities to solve your business challenges? % of Respondents (N=355) Not at all helpful = 1 10 2 17 3 34 Mean = 3.2 4 23 Very helpful = 5 16 Note: Mean rating based on a 5-point scale where 1=not at all helpful and 5=very helpful. Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 8
    • Stage 2. Generate Leads. Make it easy for potential buyers to find you Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Processes Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Awareness  Develop and implement integrated awareness campaigns—on- and off-line Marketing Process  Balance both push and pull marketing  Amplify reputation through word of mouth marketing  Work with sales to develop solution-specific value propositions Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 9
    • When companies identify a need, they proactively seek out alternative solutions When you have a business problem that requires a technology-based solution, what percentage of the time would you say you do research and find appropriate solution providers versus them contacting you first? Mean % of Time (N=355) The solution provider contacts me first (37%) I do the research and find the appropriate solution providers (63%) Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 10
    • Buyers rely on their colleagues to point them to alternative solutions; nothing else comes close Total What are the Speak to colleagues for referrals 33 17 19 68 first three Do an online search including, company websites, 11 14 14 39 steps you take whitepapers, podcasts, Webcasts, etc. to identify Speak to your existing solution providers and 9 13 11 32 alternative hardware and software vendors solutions? Get advice from consultants 9 8 12 28 % of Check the blogosphere, social networks, or online 8 Respondents chat boards 10 11 27 (N=355) Speak to or check publications of industry 8 11 5 23 analysts such as Gartner, PAC, IDC Speak to or check publications of financial 6 8 6 19 analysts such as Merrill Lynch or Goldman Sachs Read business and trade publications 5 6 9 19 Pay closer attention to advertisements 6 5 5 15 Respond to emails and cold calls from consultants 4 5 6 14 or solution providers Other 1 1 Note: Numbers may not add up due to rounding. Step One Step Two Step Three Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 11
    • Three-quarters of buyers are using social media in the purchase process—that’s huge! Which of these Web-based tools do you use to gather information and communicate with colleagues during the purchase process? % of Respondents (N=350) Which of these Web-based tools do you use to gather information and communicate with colleagues during the purchase process? % of Respondents (N=264) None LinkedIn 58 (25%) (75%) Blogs 50 Facebook 47 Twitter 41 Plaxo 39 Note: Multiple responses allowed. Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 12
    • US buyers trail their European and Brazilian peers when it comes to social media…by a lot! Which of these Web-based tools do you use to gather information and communicate with colleagues during the purchase process? (By country) % of Respondents US UK France Germany Brazil (N=170) (N=50) (N=50) (N=50) (N=30) 2 6 6 7 45 None Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 13
    • Stage 3. Personalize and customize. Know the buyer’s unique business issues Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Processes Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Interest  Develop and implement coordinated, multiphase, multichannel lead Marketing Process nurturing programs  Turn qualified leads over to sales  With sales, develop targeted value propositions based on knowledge of the customers’ business issues Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 14
    • Today, everything is important; no particular attributes stand out When evaluating alternatives and selecting the company to help you implement the solution, how important are the following to your decision? Mean Rating (N=355) A commitment to deliver measurable business results 3.5 Knowledge and understanding of your unique business issues 3.5 Available resources to meet deadlines and speed time to market 3.5 Quality of software support 3.4 Knowledge and understanding of your industry 3.4 Previous experience with your company 3.3 A proven track record backed by customer references 3.3 A highly-tailored, customized solution 3.3 IT skills and certifications 3.2 Proactively offered innovative and insightful ideas 3.2 Thought leadership on the solution areas you are most interested in 3.2 Local presence 3.0 Offshore and nearshore resources 2.9 International presence 2.9 Note: Mean rating based on a 5-point scale where 1=not at all important and 5=very important. Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 15
    • Stage 4. Provide proof points to mitigate risk Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Processes Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Confidence  Provide TCO/ROI data and tools Marketing Process  Mitigate risk via case studies, references, and demos  With sales, develop targeted, role-based value propositions  Provide sales with proposal development support Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 16
    • The attributes that are most differentiating during the selection process are relationship-based Think about a recent competitive bid situation. Which of these factors truly differentiated one solutions provider from another? % of Respondents (N=355) The company that knew our business needs better than the others 36 The company with which we had a past relationship, so we knew what to expect 29 The company with better client references 29 The company that brought all the right resources into the selling process 28 The ―safer‖ choice based on brand reputation 26 The company that was more collaborative throughout the selling process 25 The company that brought more new thinking and ideas to the selling process 23 The company that offered the better price 22 The company with the strongest recommendations from analysts or consultants 22 The company that had the best knowledge of the technology 20 The company that was more open and upfront than the others 19 The company with the best understanding of the industry 10 Other 1 Note: Up to three responses allowed. Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 17
    • Stage 5. Measure and communicate the value you provide Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY Buying Need Search Alternative Selection and Post-Purchase Processes Recognition Evaluation Purchase Evaluation  Explore the  Clarify objectives  Finalize the  Select the  Evaluate possibilities and solution short list provider satisfaction specifications  Identify a need  Solicit proposals  Negotiate the  Measure value or opportunity  Identify contract delivered  Evaluate alternatives alternatives  Ultimate sign-off (short list) Loyalty  Provide tools to measure ongoing value delivered and progress toward Marketing Process customers’ solution KPIs  Manage advocacy, reference, and community-building programs  Work with sales to monitor and nurture customer satisfaction Source: ITSMA, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 18
    • The most common relationship-building programs are business content focused, small and personal In which of Executive-level business events (e.g., seminars, meetings) 60 these solution Private briefings 57 provider relationship- One-on-one, executive-to-executive relationships 57 building Small, intimate, local peer networking events 52 programs do Client reference programs 51 you Online communities/social networking that the solution 50 participate? provider facilitates Dedicated ―microsite‖ or portal for your company with % of information about their project work and thought leadership 49 Respondents Account-based or one-to-one marketing programs 49 (N=355) Customer advisory councils or boards 45 Social or recreational activities (e.g., golf outings, dinners) 44 Joint PR/advertising/co-branding 41 Other 3 Note: Multiple responses allowed. Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 19
    • Research Methodology  355 telephone interviews  Conducted June and July 2009  Five countries: – US – UK – France – Germany – Brazil Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 20
    • Who did we speak to? Are you a business or IT professional? What is your job title? % of Respondents (N=355) % of Respondents (N=355) Manager (16%) C-level, GM, President (37%) Business Director IT (50%) (17%) (50%) VP/Assistant VP (30%) Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 21
    • Geographic Distribution Country % of Respondents (N=355) Brazil (9%) Germany (14%) US (49%) France (14%) UK (14%) Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 22
    • Which companies were included in our sample? Approximately, what is your company’s What is your company’s primary business? annual revenue, is it ___? % of Respondents (N=355) % of Respondents (N=355) 7 Other 23 22 7 Business services 10 15 Financial services (e.g., banking, insurance, 14 14 11 investments) 13 Public sector (federal and state or large local 11 only, NOT education) Retail/distribution 12 Energy/utilities 13 Healthcare $200– $500– $1– $5– $10– Over 499M 999M 4.9B 9.9B 20B $20B 14 Communications (telcos, media, entertainment) Manufacturing (consumer and industrial 15 products) Source: ITSMA and PAC, How Customers Choose Study, 2009 Final Data Report | Abbreviated Summary | F016AS How Customers Choose © 2009 ITSMA and PAC. All Rights Reserved. 23
    • Contact Julie Schwartz Olivier Nguyen Van Tan Senior Vice President Managing Director Thought Leadership PAC and Research o.nguyen@pac-online.com ITSMA Phone: +1-646-277-7255 jschwartz@itsma.com Cell: +1-917-744-7902 +1-781-862-8500, Ext. 112 Katie Espinola Senior Research Analyst ITSMA kespinola@itsma.com +1-781-862-8500, Ext. 114 Final Data Report | Abbreviated Summary | F016AS How Customers Choose AND © 2009 ITSMA and PAC. All Rights Reserved. 24