Buyer 3.0: Changes to Technology Buyer Behavior

This morning in my infinite spare time (insert eye roll here) I attended a webcast presented by Christine Crandell of New Business Strategies on “Buyer 3.0: The Buyer’s Journey.” This was by far the most interesting 30 minutes of my week. Since I spend all my time on the supply side, thinking about the changes to the demand side–in light of changing demographics and social media–really gave me a new perspective on some challenges technology services is facing–especially as services focuses more on revenue generation.

A few key points from Christine:

• Customer experience. Today’s buyers are putting as much emphasis on the buying experience as they are the product features. This is something I hear all the time. I even have a section in my upcoming book about how often a rude or abrasive sales rep eliminates a “best fit” vendor from a technology project. If the customer doesn’t feel the love in every contact, you won’t be considered for the deal, no matter how good your technology is.
• Informed buyers. According to Christine, 70% of the buy cycle is complete before the buyers contacts you, giving the traditional sales rep less influence, and making other touch points (web sites, demos, blogs, analyst reports, etc.) very important. Again, this is something I hear from TSIA members shopping for technology. We have conversations about project goals and best fit options, I line them up with other members using the tool for reference calls or visits, and they spend time researching Forrester Waves, Gartner MQs, and doing lots of reading of online communities and expert blogs–all before they speak with a sales rep. By the time they contact the vendor, they are usually down to 2 or 3 vendors and ready for a test drive.
• Understanding influencers. What websites do prospects visit to learn about you? How big of an influence are social media channels and online communities? Are there particular people (press, analysts, bloggers) with a big sphere of influence? With so much research going on before engaging with a vendor, technology firms need to get much better at understanding how prospects form opinions about the brand and products, and look for ways to influence these influencers in your favor. I find only the very largest companies are doing this sort of analytic research involving millions of page views and clicks, and even then, the focus is more on customers than prospects.

I think there are some good lessons here for services marketing, who are trying to sell more services, and competing for that business with their customer’s own IT departments, as well as 3rd party service providers. Buying services from a product company may not seem obvious to buyers, so we need to get much more sophisticated about branding the service options and making them highly visible, particularly during the original product sales cycle. If they push the services decision to a later stage, the door opens for a lot of competition.

Thanks for reading!

Advertisement

How Service Can Get Marketing’s Attention: A Conversation with Kathy Macchi

The term ‘value added services’ was first coined in the telco industry, as companies started marketing additional services to consumers and businesses to increase wallet share (think call waiting, inside wiring coverage, additional lines, etc.). Today, the high tech B2B industry has fully embraced valued added services with offerings such as Platinum level support, dedicated technical account managers (TAMs), extended support hours, etc., which not only generate additional services revenue, but can help customers speed the adoption and consumption of technology, ideally delivering additional business value and accelerating the repurchase cycle.

But a challenge for many TSIA members is services marketing: how to get the word out to both the sales team and customers that these options are available, along with sales tools to explain the advantage and ROI of each offering. While our professional services cohorts, who are typically closely aligned with sales, have no trouble pitching the value of the services they provide, this isn’t a set of skills a lot of technical support teams possess. Until now. Kathy Macchi, managing partner of Allegro Associates, is along time partner of TPSA and now TSIA who specializes in developing demand generation and lead development programs for large enterprises. Kathy will be leading a professional development course entitled, “How To Jumpstart Your Services Demand Generation Engine,” at our upcoming Technology Services World Conference on May 2 in Santa Clara, CA. I had a chance to chat with Kathy last week about the importance of services marketing and her upcoming workshop. Here are some highlights:

John Ragsdale: I sometimes think “services marketing” is an oxymoron. I’ve talked about the “reluctant hero syndrome” before—people attracted to customer service roles are more likely to receive gratification from helping people than being a “rock star.” This makes marketing what you do difficult when you can’t easily brag about your role. Do most companies have a services marketing team, or is this an emerging practice?

Kathy Macchi: Most companies do have service marketing roles now. They seem to start with the Professional Services organization and over time their scope broadens to include education, customer support programs and other non-product areas. Marketers I have met, rarely suffer from the ‘reluctant hero syndrome’ so they have no problem talking about their areas of responsibility. Where Service Marketing is difficult is not working with the service or support groups but getting the service message out internally and externally where the majority of company effort goes to the product. Articulating value and having it understood and heard is the challenge.

Ragsdale: Let’s talk about the organization of services marketing. Is this a partnership with marketing? Are there dedicated marketing folks hired to work in support? Or marketing savvy support people doing double duty? What structures are the most common?

Macchi: I believe the TSIA survey data shows about half Services Marketing personnel reporting to the Marketing organization and half to the Services organization. I have found that the reporting structure did not matter as much as the overall company’s charter and viewpoint on role services and support plays. That role can determine the level of collaboration that services marketing plays with the larger marketing organization.

Ragsdale: I know that field marketing was cut heavily by many companies in 2008-2009, and field marketing is usually the group doing customer case studies and providing field sales with success examples. Is this putting even more pressure on the services team do provide their own marketing? No one else is doing it for them anymore.

Macchi: Services Marketing typically has two audiences: internal and external. Their internal audience can be their toughest audience. With the majority of resources focused on the product, service and support can take a back seat at times. The key to success is to partner with corporate and field marketing. Both organizations have experienced cuts and are always looking for materials that are relevant to prospects and customers to create demand for the company’s products.

Who better than the services and support teams to provide content? Your teams consist of experts chock full of knowledge about the products and customers. By partnering with the corporate and field marketing organizations you get information about your capabilities, team and expertise out to the internal and external audiences. Working with the marketing organization can produce far better results than working alone.

Ragsdale: You mention in your abstract that IT buying habits have changed, and this is impacting service sales. Could you talk about what is changing?

Macchi: IT Buyers are pushing salespeople out of the early stages of the buying process with search, industry influencers, their peers, and social media. Buyers find and consume information anywhere, anytime, from many different sources and channel. This puts pressure on vendors to “be everywhere” – pursue a multifaceted strategy for engaging with customers. And their means for finding information has shifted/expanded … trusted sources matter … as it helps to filter out the noise and find relevant information. So with all the changes – services / support can play a larger role in the buyer’s journey in what I call “trusted educators”. This role, I think, will be the role marketing plays in the future.

Ragsdale: One of the changes I’ve seen is that support is more visible in the initial purchase than in years past. As an example, Gartner has started evaluating customer service as part of a company’s standing in a Magic Quadrant. I’m glad to see the increased visibility, but I’m not always sure what they base those ratings on. Should customer support have more involvement in how company’s work with the big analyst firms? Having come from Forrester, we only talked to marketing VPs, never anyone from service.

Macchi: Yes, VP of Services / Support should be working with the VP of Marketing to tell the story because it is a changing story. The days of charging a flat 18% a year for support are over. Customers are savvier and want to know what they are paying for and what they are getting. Same with Professional Services. Gartner evaluates Professional Service organizations on completeness of vision (understanding customer needs, value proposition, etc.) and ability to execute (scalability, SLAs, best practices, etc). The VP of Services / Support should be the person that can speak to the criteria Gartner uses to evaluate services / support organizations. Partnering with the VP of Marketing to get that information and point-of-view into the report is critical.

Ragsdale: Could you give an overview of how your professional development course is structured? How will attendees spend their day?

Macchi: The morning presents research on how the IT buying process has changed. We discuss how these changes affect how buyers choose solutions and the effect this has marketing solutions. Marketing organizational structures and functions are reviewed to see where services marketing can have an impactful role.
The afternoon will be more hands-on with frameworks presented to help participant create value propositions and marketing plans. I want people to leave the room with a couple of good ideas they can go back to their organizations, implement and see results.

Ragsdale: Thanks so much for your time!

Macchi: My pleasure, John. I look forward to seeing you in Santa Clara!

—————————————————————————–

If services marketing is important to you, there are several deep dives on the topic at TSW, including “Making the Intangible Real for Customers: Best Practices for Marketing and Selling Professional Services” with Teradata and “Services Revenue Generation Panel: Best Practices for Driving Top Line Growth,” moderated by Kathy Macchi, along with panelists from SAP, Teradata and Kronos. Hope to see you there!