Report: Software buyers want to see business value |
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By Mark Brunelli, News Writer
03 May 2004 | SearchCIO.com |
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Louis-Robert Denis despises cold calls from software vendors.
The chief information officer (CIO) and vice president of Trimble Navigations, a Global Positioning System company based in Sunnyvale, Calif., regularly gets phone calls from sales reps who don't understand his business. They know plenty about the "hot" new software they're selling and nothing about how that software fits in and adds value to Denis' company.
"Selling in the software industry has plenty of room for innovation," said Denis, who once received a Hot Wheels car in the mail as an incentive to do business with a software vendor.
Denis isn't alone in his disappointment with the hard sell. A new survey found that IT executives everywhere feel the same way.
Stratagem, the Herndon, Va.-based research firm that conducted the survey, said software vendors that fail to respond to the business needs of potential customers will lose money. The decadent spending days of the late 1990s are long over, Stratagem said, and despite the gradual economic recovery, the focus of software buyers has shifted from "latest and greatest" to "practical and valuable."
Stratagem's "Enterprise Buying Survey" polled 138 senior IT employees from manager to CIO. The respondents represented a variety of industries and organizations with annual sales between $100 million and more than $1 billion.
"One of the things painfully evident is that any purchase they made had to be justified in terms of the business value," said Brian Koma, Stratagem CEO. "Buyers are moving from a technology approach to a business approach."
This shift in buying attitudes should serve as a wakeup call for software vendors that use overly aggressive sales tactics and don't get to know their markets, Koma said.
The Stratagem report found that a majority of IT decision makers feel that software sales reps have an "excellent" or a "very good" knowledge of the products they're selling. But fewer than 15% of respondents rated sellers as "excellent" when it comes to understanding their business needs.
Even with the rise of advanced communications technologies like real-time team rooms and video conferencing, the majority of survey respondents said that they prefer face-to-face meetings with sales teams.
Survey respondents also indicated that price is not the deciding factor when it comes to buying software. In fact, price finished fifth on the list of concerns, behind product features and functions, ease of use, user interface and architecture.
More than 40% of the respondents said that confidence in the vendor's ability to provide solid customer support is a critical sales factor. Other less critical criteria for making purchasing decisions included licensing policies and the financial condition of the vendor.
For Denis, a little more respect on the part of the software vendors would go a long way. Rather than making cold calls, software vendors should develop a solid plan, do their homework, and set up face-to-face demonstration of the technology, he said.
Most importantly, Denis said, software vendors should get well-established and independent Web sites and magazines to review their products. This is an easy way to increase a buyer's confidence and might help software vendors get through the door.
Stratagem's Koma agreed, and offered a simple message for software vendors: "If you can't relate your product to a business need, customers are not going to look at you."
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