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How Customers Choose Solutions Providers 2009 

How Customers Choose Solutions Providers 2009

 

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

   
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