olb81208 how customers choose solution providers insight into key buying criteria for services and...

OLB81208

How Customers Choose Solution ProvidersInsight into Key Buying Criteria for Services and Solutions—North AmericaJulie SchwartzSenior Vice PresidentResearch and Thought Leadership ITSMA

Marilou BarsamSenior Vice PresidentClient Services andCorporate MarketingTechTarget

http://www.techtarget.com/index.html

© 2008 ITSMA. All Rights Reserved. 2OLB081208 ITSMA Online Briefing

Successful companies map their marketing strategy and tactics to the buying process

AwarenessRelationship

Stages Interest Confidence Loyalty

Buying Process

Search Alternative Evaluation

Selection and Purchase

Post-Purchase Evaluation

Clarify objectives and solution specifications

Identify alternatives (short list)

Solicitproposals

Evaluate alternatives

Select the provider

Negotiate the contract

Ultimate sign-off

Evaluate satisfaction

Measure value delivered


ITSMA has come to recognize that there is another buying process stage that is often overlooked

RelationshipStages

Buying Process

Awareness Interest Confidence Loyalty






Solicitproposals


Select the provider


Ultimate sign-off



Epiphany

Need Recognition

Explore the possibilities

Identify a needor opportunity

IT Pros are Always Researching

IT wikis

Podcasts

Widgets

IT blogs

IT videos

Webcasts

White papers

Search engines

Virtual trade shows

Live events

Trial software

Vendor demos

IT vendors

Published research

Case studies

IT newsletters

Industry magazines

IT publishers

Awareness DecisionConsideration

Q4 2007 TechTarget and CMO CouncilTechnology Buying and Media Consumption Survey, Report 4

IT Buyers Use Multiple Content Types at Different Stages of Buying Cycle

IT wikis

Podcasts

Widgets

IT blogs

Trial software

Vendor demos

IT newsletters

IT videos

Webcasts

White papers

Search engines

Virtual trade shows

Live events

IT vendors

Published research

Case studies

Industry magazines

IT publishers

IT Buyers Use Multiple Content Types at Different Stages of Buying Cycle

Awareness DecisionConsideration


…offer more choice and broaden reach to strengthen online branding opportunity

…used at different stages of the buying cycle

Multiple content types


Today’s Presentation

Results from the ITSMA-TechTarget How Customers Choose Survey

Buying behavior at three stagesof the Buying Process:

Awareness Interest

SearchAlternative Evaluation

Epiphany

Need Recognition

OLB81208

Research Methodology

Sample sources:

TechTarget IT Research Panel

ITSMA in-house list


What companies were included in our sample?

Note: Other includes: Healthcare (7), Retail (3), Wholesale Distribution (3), Education (3), Legal (2), Consulting (2), IT Services (2), Multi-industry, Energy, Non-profit Ministry, IT Outsourcing, Distribution, Transportation Services, Information Management, Oil & Gas, Utilities, Marketing, Wholesale, Construction, Non-profit, Defense Contractor, Biotechnology

What is your company’s primary business?% of Respondents (N=216)

23

23

19

18

17 Other

Communications

Public Sector

Financial Services

Manufacturing

Source: ITSMA, How Customers Choose Study, North America, 2008

Approximately, what is your company’s annual revenue, is it ___? % of Respondents (N=216)

2017

20

1013

19

$200–499M

$500–999M

$1–4.9B

$5–9.9B

$10–20B

Over$20B


Who did we speak to?

IT (65%)

Business (35%)


Are you an business or IT professional? % of Respondents (N=216)

What is your job title?% of Respondents (N=216)

Director (40%)VP/Assistant

VP (17%)

Manager (28%)

C-level, GM, President (15%)


How are they approaching investments given the current economic climate?

Increasing revenue or sales (54%)

Reducing costs (46%)


Which of the following is more important to you and your company in the current economic environment?% of Respondents (N=105)

Adding new functionality and capabilities (56%)

Cost reduction

(35%)

Which would you say is driving your technology investment focus right now?% of Respondents (N=214)

Other (9%)


Will it decrease by moreor less than 10%?% of Respondents (N=53)

57 43

Less More

74% are either increasing or maintaining their IT budgets


What is happening to your spending for technology-enabled business initiatives so far in 2008? % of Respondents (N=212)

Increase (35%)

Stay the

same (39%)

Will it increase by moreor less than 10%?% of Respondents (N=75)

68 32

Less More

Decrease (25%)


Create Demand: Build and nurture relationships before your potential customer is ready to buy

RelationshipStages

Buying Process







Solicitproposals


Select the provider


Ultimate sign-off



Epiphany

Need Recognition




Buyers perceive solution providers to be moderately helpful when it comes to identifying business problems

Note: Mean rating based on a 5-point scale where 1=not at all helpful and 5=very helpful.Source: ITSMA, How Customers Choose Study, North America, 2008

How helpful are solution providers in working with you and your organization to identify and clarify business problems or opportunities? % of Respondents (N=199)

5

32

38

24

2

Very helpful = 5

4

3

2

Not at all helpful = 1

Mean Rating: 3.1

RelationshipStages Awareness Interest Confidence LoyaltyEpiphany


Likewise, there is room for improvement when it comes to bringing new ideas to potential clients

Note: Mean rating based on a 5-point scale where 1=not at all helpful and 5=very helpful.Source: ITSMA, How Customers Choose Study, North America, 2008

How helpful are they in bringing you new ideas and showing you the possibilities to solve your business issues? % of Respondents (N=199)

6

36

38

18

3

Very helpful = 5

4

3

2

Not at all helpful = 1

Mean Rating: 3.2


Topical InfoCenterUnified Communications

Thought Leadership Example:

• TechTarget editorial content on the left side

• 100% share of voice for sponsor surrounding the content

• 10 content links along the right side of the editorial content

• Banners

E-Guide—Storage Virtualization

Thought Leadership Example:• Four articles on Storage

Virtualization produced in rich-media format

• Up to four pages for sponsor messaging integrated with editorial content, including: advertisements, resource links, and other information about sponsor’s company or products.


Buyers are looking for thought leadership that is proven, practical, and relevant

Note: Mean rating based on a 5-point scale where 1=not at all a factor and 5=a major factor.Source: ITSMA, How Customers Choose Study, North America, 2008, adapted from the Bloom Group, 2007

In your view, how much does each of the following contribute to compelling, high quality thought leadership? Mean Rating (N~185)

3.3

3.4

3.4

3.8

4.2

4.2

4.3Validity: Proving the solution is effective

Practicality: Demonstrating a solution can be implemented

Relevance: Meeting a critical and market need

Clarity: Making a clear argument with words and concepts that are easy to understand

Focus: Having a single fundamental message

Rigor: Having tight consistent ideas and language

Novelty: Coming up with a unique diagnosis or solution


Vendor Case Study

• Title: NASA Federal Credit Union Discovers Online Data Backup

• Topic: Backup/ Recovery

• Promotion Site: SearchStorage.com

• Sponsor: EVault, Inc.

• Best Practice: Marketed well-known partner

• Benefit-Oriented positioning paid off

• Performed 29% better than case studies promoted on site during same period

Third-Party Case Study

• Title: Forrester Consulting Case Study on Database Security & Compliance

• Sponsor: Guardium• Topic: Risk Management• Promotion Site:

SearchSecurity.com• Best Practice:

Marketed third-party endorsement

• Third-Party association delivers results• Performed 42% better

than all white paperspromoted on site during same period!


The most valuable relationship building activities are those that facilitate the exchange of ideas and foster community

Note: Up to three responses allowed.Source: ITSMA, How Customers Choose Study, North America, 2008

Which three solution provider relationship-building programs do you think provide the greatest value to you? % of Respondents (N=184)

2

4

9

9

11

12

17

19

24

28

31

35

40

53User groups

Private briefings

Executive-level business events (e.g., seminars, meetings)

Client reference programs

Customer advisory councils

Collaborative thought leadership development Dedicated “microsite” for your company with information about their project work and

thought leadership

Account-based or one-to-one marketing programs

Loyalty incentives (e.g., training credits, discounts)

Customer satisfaction and loyalty surveys

Online communities/social networking that the solution provider facilitates

Social or recreational activities (e.g., golf outings, dinners)

Joint PR/Advertising/co-branding

Blogging


Huge, Active Online Communities


Generate Leads: Make it easy for potential buyers to find you

RelationshipStages

Buying Process







Solicitproposals


Select the provider


Ultimate sign-off



Epiphany

Need Recognition




IT buyers are actively researching new solution providers

I do the research and find the appropriate solution providers (69%)

The solution provider contacts me first (31%)


What percentage of the time would you say you do research and find appropriate solution providers versus they contact you first?Mean % of the Time (N=191)



Professional peers are the most important “search tool” followed by online sources

Note: Up to three responses allowed.Source: ITSMA, How Customers Choose Study, North America, 2008

When you have a business problem, what are the first three steps you take to identify alternative solutions? % of Respondents (N=194)

1

2

2

6

16

26

36

40

55

80Speak to my professional peers

Look online including, IT publisher Websites, company websites, blogs, etc.

Speak to your existing hardware and software vendors

Speak to or check publications of industry analysts (e.g., Gartner, IDC, AMR)

Get advice from consultants

Read business and trade publications

Speak to or check publications of financial analysts (e.g., Merrill Lynch or Goldman)

Respond to unsolicited emails and cold calls from consultants or solution providers

Pay closer attention to advertisements

Other



Buyers turn to both informal and formal peer networks

Speak to colleagues in your company for referrals (40%)

Speak to colleagues at other companies for referrals

(35%)

% of Responses (N=197)


Speak to peers who participate in exclusive councils or

communities you belong to (25%)



Search methods vary by role, so adapt your marketing to your target audience


Notes: Mean rating based on a 5-point scale where 1=not at all effective and 5=very effective.* Indicates a statistically significant difference. Source: ITSMA, How Customers Choose Study, North America, 2008

When you have a business problem, what are the first three steps you take to identify alternative solutions? % of Respondents

1

1

11

8

38

30

43

38

80

2

3

3

22

19

40

38

66

80

IT (N=120)

Business (N=74)

Speak to my professional peers

Look online including, IT publisher Websites, company websites, blogs, etc.

Speak to your existing hardware and software vendors

Speak to or check publications of industry analysts

Get advice from consultants

Read business and trade publications

Speak to or check publications of financial analysts

Respond to unsolicited emails and cold calls from consultant

Pay closer attention to advertisements

**

**

**

**

What should be important to IT marketers?

5.3%

6.8%

9.5%

7.3%

17.8%

31.0%

5.9%

8.2%

10.1%

6.8%

15.0%

30.6%

5.7%

6.7%

8.2%

33.2%

16.9%

8.3%

IT Publishers-Magazines

Published Research

IT Vendor Websites

Conferences/Seminars/Tradeshows

IT Publishers-Websites

Search Engines

Q4

Q3

Q2

Q: Which is the single most effective information source?



Web 2.0 is slowly gaining momentum, yet resistance to adoption persists

No (59%) (Why not? not reliable,

not trustworthy, time consuming, content not

valuable, no need, against organization

policy, security issues)

Yes (37%) (Primarily blogs)


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%)



The marketing vehicles that are most effective are content rich and highlight problem solving

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

Which types of marketing vehicles do you believe are most effective in getting your attention and encouraging you to learn more? Mean Rating (N~185)

2.0

2.1

2.3

2.3

2.3

2.4

2.4

2.4

2.6

2.8

3.1

3.2

3.3

3.3

3.5

3.5

3.6Case studies describing successful customer solution implementations

Article in the business or industry trade press

Speech or presentation at a conference or trade show

Invitation to a seminar or workshop

White paper offered on the Internet

Search engine hits when doing research or surfing the Web

Invitation to a Webinar

Conference sponsorship

Electronic newsletter from the service firm

Direct mail brochure

Online advertisement

Email from a sales representative from the service firm

TV or print advertisement

Phone call from a sales representative from the service firm

Hospitality programs such as dinner or golf outings

Solution provider's blog

Sporting or cultural event sponsorship



Provide Proof: Buyers are looking for a proven track record

RelationshipStages

Buying Process







Solicitproposals


Select the provider


Ultimate sign-off



Epiphany

Need Recognition




ROI (The calculated Return on Investment for the solution) or cost/benefit analysis

4.3

Features and functionality of the solution 4.3

TCO (The total cost of ownership) 4.1

The price 4.0

Soft benefits such as customer satisfaction, brand equity, service quality

3.8

The length of time required to implement and realize benefits

4.0

Reduced risk of implementation 3.9

Other NA

When evaluating the solution, feature-function and ROI winOnce you have created your short list and you are evaluating alternative business solutions, which one factor is most important to your decision?% of Respondents (N=193)

3

4

5

8

8

11

26

34

Note: Mean rating based on a 5-point scale where 1=not at all important and 5=very important. Source: ITSMA, How Customers Choose Study, North America, 2008

Mean Rating



A proven track record 4.3

People and an organization you can trust 4.4

Knowledge transfer to your staff 4.2

Knowledge and understanding of your unique business issues 4.1

Available resources to meet deadlines and speed time to market 4.3

Knowledge and understanding of your industry 4.0

Previous experience with your company 3.7

Highly-tailored, customized solutions 3.3

Thought leadership on the application of technology to solve business problems 3.8

A collaborative work style 4.0

A low price 3.5

Other NA

When evaluating providers, an impeccable reputation tops the list

Note: Mean rating based on a 5-point scale where 1=not at all important and 5=very important. Source: ITSMA, How Customers Choose Study, North America, 2008

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)

1

3

4

5

5

5

7

10

11

14

16

19

Mean Rating



Knowledge and experience with the technology and industry are important, but not sufficient

The technology (35%)

The business process (26%)


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 company and your business (28%)

Your industry (e.g., banking or healthcare) (11%)



Marketer Challenge: What content types and specific media will be most effective to reach buyers at each stage of the buying cycle?

First step—What is your primary challenge?– Attracting prospects from

competition? Capturing share in a subsegment? Finding best leads in a booming market?

Based on that—Which decision-making stage and content to focus investment

Online, prospects enter, exit, progress with different needs. Information need = opportunity

Match content type and content topic to decision making stage

Content TopicAwareness/Solving IT Problems (editorial content)

Consideration/Technical Information (vendor-specific)

Decision/Solution Information (proof points/case studies)

Media Type

Downloading Trialware and Demos

Attending Webcasts and Podcasts

Downloading and Reading White Papers

Case Study: Smurfit-Stone (#247 on the Fortune 500), LAN Specialist Researching IT SolutionsValue of multiple content topics and assets extends to developing a prospect online

Content Topic

Awareness/Solving IT Problems (editorial content)

Consideration/Technical Information (vendor-specific)

Decision/Solution Information (proof points/case studies)

Media Type

Downloading Trialware and Demos

Attending Webcasts and Podcasts

Downloading and Reading White Papers

“Tech Description,”

April 2006

Vendor focus/overview

“Overview doc,” March 2006

Editorial/expert

“Service Offering Description,”

May 2006

Case study


Recommendations: Map your marketing strategy and tactics to the buyer’s process

Need Recognition: Create Demand Build relationships

based on thought leadership and community

Show the possibilities

Align your content to the buying stage

Search: Generate Leads Ease the burden;

make the buyer’s search effortless

Emphasize word of mouth and online marketing

Rely on pull marketing, but don’t completely abandon push marketing

Evaluation: Provide Proof Points Show, don’t tell Demonstrate validity

and practicality through case studies

Personalize and customize: Know the buyer’s unique business issues

And then turn the lead over to sales to close the deal!

Awareness InterestEpiphany


Thank You!

http://www.techtarget.com/index.html

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