Software purchasing process changes
Godard Abel, CEO of software review site G2Crowd notes that as the new year approaches, companies are setting new goals with new budgets, and software purchase decisions tend to be made on a company’s to-do list, but Abel notes that technological innovations and trends are “sweeping through the enterprise software market,” changing how softare purchasing decisions are being made.
In his own words, Abel predicts below the six ways that software purchasing will change in 2014.
1.) Buyers will have the upper hand.
Just as we’ve seen in our consumer lives, peer reviews and online information will drive smarter business software purchase decisions. In the past, buyers had to rely on vendors to share demos, pricing, and customer references. Now software buyers can access other customers directly on review sites and get aggregated data on actual discount levels and terms. According to Sirius Decisions research, B2B buyers complete 67 percent of their journey online prior to engaging the vendor and a sales rep. In 2014, software buyers will start to shop much more like car buyers and know exactly what they want and the price they want to pay before talking to a vendor.
2.) Buyers will not be in the IT department.
Buying power in IT purchases is shifting from CIOs to CMOs, VPs of sales, and other line executives. Traditionally the CIO would start by reaching out to traditional analysts such as Gartner and others. Now marketing executives will discover and evaluate marketing systems by doing their own online research, peer outreach, and free trials. The marketing team will buy applications without even involving IT in the process. Many industry experts are predicting that within a few years, CMOs will be spending more on IT than CIOs.
3.) Software buyers won’t wait for analyst reports.
The growth in enterprise software means that categories are constantly growing and changing, much more so than in the past. New products are entering the market all the time, and entire new categories of software are sprouting up every year. Gartner and traditional analyst firms typically publish reports only every year or two based on research that took up to a year to complete, and the reports typically cover only large vendors that sell to large enterprises. Not only do innovative, smaller vendors miss out on the attention given to their larger competitors, but enterprise buyers that rely on analyst research might miss out on an emerging technology that could best solve their problem because it’s too small to be reviewed by an analyst. Peer review sites are democratizing this process by allowing all vendors to participate via user reviews.
4.) Buyers will leverage social signals.
With the emergence of Twitter and LinkedIn, buyers have direct access to unfiltered comments and sentiments from peers in real-time. Buyers will increasingly rely on recommendations and insights sourced from people they follow and connect with.
5.) Big data will provide buyers new insights on vendor performance.
Rather than relying on just marketing data from vendors and dated analyst research, buyers can access synthesized, aggregated data sourced from online sources such Twitter, Klout, LinkedIn, Alexa, Google Trends, and Crunchbase that can provide real-time insight on a vendors scale and momentum.
6.) Buyers will look to online reviews when making purchase decisions.
For 72 percent of consumers, online reviews are the biggest driver when making a purchase decision, according to Social Media Today. In 2014 we expect business buyers to behave the same way and use peer reviews rather than analyst reports to build their short lists. It’s extremely difficult, if not impossible, for one person or even a handful of people to have enough knowledge and experience with an entire category of products to provide sufficient analysis and comparisons of all the products on a buyer’s shortlist. But polling a large group of users and looking at thousands of data points can afford that information. By combining all those perspectives, buyers can get a more comprehensive look at a product and ultimately select a better fit for the entire company or department.
Things certainly are changing
Abel notes that, “Overall, in 2014 we expect enterprise software buying to mirror the trends that have changed the way we make purchases in our consumer lives. Buyers from all departments will be turning to social signals and user reviews to help guide their purchasing decisions. Power is shifting to the buyer, and 2014 could be a major turning point in how companies select their software.”
Software vendors and the business world at large should take note that the decision making process has shifted, and times are certainly changing.