ITSMA How Customers Choose, 2008 Abbreviated Summary

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ITSMA’s 2008 How Customers Choose Solution Providers Study revealed a number of important insights. Through detailed research and analysis of customer buying behavior, we have concluded that marketers need to engage customers earlier than ever before—during what we call the epiphany phase of the buying cycle. Based on interviews with 216 U.S.-based business and IT buyers of business and technology solutions, the report helps marketers better understand the marketing activities that will deliver the desired results at three major stages of the buying cycle: epiphany, awareness, and interest. http://www.itsma.com/research/how-customers-choose-solution-providers-north-america-2008/

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ITSMA How Customers Choose, 2008 Abbreviated Summary

  1. 1. How Customers Choose Solution Providers North America, 2008 ABBREVIATED SUMMARY Prepared by: Julie Schwartz Senior Vice President Thought Leadership and Research ITSMA Abbreviated Summary | F014AS
  2. 2. Overview  Creating Demand and Recognizing the Need in the Epiphany Stage – Buyers are looking for thought leadership that is proven, practical, and relevant – The most valuable relationship-building activities are those that facilitate the exchange of ideas and foster community  Generating Awareness and Leads in the Awareness Stage – Buyers are proactively buying; they are not waiting to be sold to – Professional peers are the most important ―search tool,‖ followed by online sources – The marketing vehicles that are most effective highlight problem solving  Generating Interest and Providing Proof Points in the Interest Stage – In evaluating the solution, feature/function and ROI win – In evaluating solution providers, an impeccable reputation tops the list – Knowledge and experience with the technology and industry are important but not sufficient Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 2
  3. 3. Figure 1.1 ITSMA’s Relationship Model Relationship Epiphany Awareness Interest Confidence Loyalty Stages Need Search Alternative Selection Post- Recognition Evaluation and Purchase Purchase Evaluation  Explore the  Clarify  Solicit  Select the  Evaluate Buying possibilities objectives proposals provider satisfaction Process  Identify a and solution  Evaluate  Negotiate  Measure need or specifications alternatives the contract value opportunity  Identify  Ultimate delivered alternatives sign-off (shortlist) Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 3
  4. 4. Figure 1.2 Thought Leadership Evaluation Criteria In your view, how much does each of the following contribute to compelling, high-quality thought leadership? Mean Rating (N~185) Validity: Proving the solution is effective 4.3 Practicality: Demonstrating a solution 4.2 can be implemented Relevance: Meeting a critical and market need 4.2 Clarity: Making a clear argument with words and 3.8 concepts that are easy to understand Focus: Having a single fundamental message 3.4 Rigor: Having tight, consistent ideas and language 3.4 Novelty: Coming up with a unique diagnosis or solution 3.3 Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 4
  5. 5. Figure 1.3 Most Valuable Solution Provider Relationship-Building Programs Which three solution provider relationship-building programs do you think provide the greatest value to you? % of Respondents (N=184) User groups 53 Private briefings 40 Executive-level business events (e.g., seminars, meetings) 35 Client reference programs 31 Customer advisory councils 28 Collaborative thought leadership development 24 Dedicated “microsite” for your company with information about their project work and thought leadership 19 Account-based or one-to-one marketing programs 17 Loyalty incentives (e.g., training credits, discounts) 12 Customer satisfaction and loyalty surveys 11 Online communities/social networking that the solution provider facilitates 9 Social or recreational activities (e.g., golf outings, dinners) 9 Joint PR/Advertising/co-branding 4 Blogging 2 Note: Up to three responses allowed. Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 5
  6. 6. Figure 1.4 Finding Appropriate Vendors What percentage of the time would you say you do research and find appropriate solution providers versus they contact you first? % of Time (N=191) The solution provider contacts me first (31%) I do the research and find the appropriate solution providers (69%) Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 6
  7. 7. Figure 1.5 Main Steps to Identify Alternatives When you have a business problem, what are the first three steps you take to identify alternative solutions? % of Respondents (N=194) Speak to my professional peers 80 Look online, including IT publisher Websites, company Websites, blogs, etc. 55 Speak to your existing hardware and software vendors 40 Speak to or check publications of industry analysts (e.g., Gartner, IDC, AMR) 36 Get advice from consultants 26 Read business and trade publications 16 Speak to or check publications of financial analysts (e.g., Merrill Lynch or Goldman) 6 Respond to unsolicited emails and cold calls from consultants or solution providers 2 Pay closer attention to advertisements 2 Other 1 Note: Up to three responses allowed. Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 7
  8. 8. Figure 1.6 Use of Web 2.0 Information Sources Are you using or have you used any new Web 2.0 or social media tools such as blogs or social networks to seek out information on possible solutions? % of Respondents (N=202) Don’t know (4%) Yes (37%) No (59%) (Primarily blogs (Why not? not reliable, and Linkedin) not trustworthy, time consuming, content not valuable, no need, against organization policy, security issues) Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 8
  9. 9. Figure 1.7 Effectiveness of Marketing Vehicles Which types of marketing vehicles you believe are most effective in getting your attention and encouraging you to learn more? Mean Rating (N~185) Case studies describing successful customer solution implementations 3.6 Article in the business or industry trade press 3.5 Speech or presentation at a conference or trade show 3.5 Invitation to a seminar or workshop 3.3 White paper offered on the Internet 3.3 Search engine hits when doing research or surfing the Web 3.2 Invitation to a Webinar 3.1 Conference sponsorship 2.8 Electronic newsletter from the service firm 2.6 Direct mail brochure 2.4 Online advertisement 2.4 Email from a sales representative from the service firm 2.4 TV or print advertisement 2.3 Phone call from a sales representative from the service firm 2.3 Hospitality programs such as dinner or golf outings 2.3 Solution provider's blog 2.1 Sporting or cultural event sponsorship 2.0 Note: Mean rating based on a 5-point scale where 1=not at all effective and 5=very effective. Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 9
  10. 10. Figure 1.8 Most Important Factors in Evaluating Solutions Once you have created your shortlist and you are evaluating alternative business solutions, which one factor is most important to your decision? % of Respondents (N=193) Mean Rating ROI (the calculated Return on Investment 34 4.3 for the solution) or cost/benefit analysis Features and functionality of the solution 26 4.3 TCO (the total cost of ownership) 11 4.1 The price 8 4.0 Soft benefits such as customer satisfaction, 8 3.8 brand equity, service quality The length of time required to implement 5 4.0 and realize benefits Reduced risk of implementation 4 3.9 Other 3 NA Note: Mean rating is based on a 5-point scale in which 1 = not at all important and 5 = very important. Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 10
  11. 11. Figure 1.9 Most Important Factors When Evaluating Solution Providers When evaluating alternatives and selecting the company to help you implement the solution, which one factor is most important to your decision? % of Respondents (N=188) Mean Rating A proven track record 19 4.3 People and an organization you can trust 16 4.4 Knowledge transfer to your staff 14 4.2 Knowledge and understanding of your unique business issues 11 4.1 Available resources to meet deadlines and speed time to market 10 4.3 Knowledge and understanding of your industry 7 4.0 Previous experience with your company 5 3.7 Highly tailored, customized solutions 5 3.3 Thought leadership on the application of technology to solve business problems 5 3.8 A collaborative work style 4 4.0 A low price 3 3.5 Other 1 NA Note: Mean rating is based on a 5-point scale in which 1 = not at all important and 5 = very important. Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 11
  12. 12. Figure 1.10 Preferred Solution Providers’ Knowledge and Experience Which of these would you say gives you more comfort that a solution provider can deliver? Knowledge and experience with… % of Respondents (N=189) Your industry (e.g., banking or healthcare) (11%) The technology (35%) The business process (26%) Your company and your business (28%) Source: ITSMA, How Customers Choose Study, North America, 2008 Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 12
  13. 13. ITSMA’s Conclusions and Recommendations Epiphany Awareness Interest During the epiphany stage, During the awareness stage, During the interest stage, marketers need to provide it is all about generating leads marketers need to provide proof content that shows buyers the and educating buyers on the points and further specify the possibilities—and create those differentiated value you bring value a buyer will receive from ―a-ha moments‖ in which to the table. choosing you and your solutions. buyers recognize a need for According to this year’s research, the first time. ITSMA’s research shows that in evaluating providers, buyers buyers are speaking to their are looking for a proven track To create this thought- peers and relying on various record and an organization they provoking content, marketers online sources. Additionally, can trust. The content used here should collaborate with the the most effective marketing needs to demonstrate that you innovators in their own vehicles are case studies, understand the business company as well as those in articles, and speaking challenges within specific the industry—such as academia, engagements. industries and segments and that consultants, and governmental you have innovative and figures or organizations. compelling ideas on ways to address these challenges. Marketers should create a more targeted value proposition. Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 13
  14. 14. Contact Julie Schwartz Senior Vice President Thought Leadership and Research ITSMA jschwartz@itsma.com +1-781-862-8500, Ext. 112 For information about how to obtain the latest data please go to http://www.itsma.com/category/research/. Abbreviated Summary | F014AS How Customers Choose © 2008 ITSMA. All Rights Reserved. 14

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