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6 Paradoxes Facing Vendors Selling Enterprise Technology

By Hank Barnes | August 01, 2022 | 2 Comments

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The opportunities surround technology continue to expand, even as economic and societal concerns are heightened.    But, at the same time, it is getting harder to buy (for customers) and harder to market and sell (for vendors).   This was much of the focus of my keynote at the recent Gartner Tech Growth and Innovation Conference (attendees can watch the recording–and speed it up if they want to save time–from the event portal), “Confronting the Customer Power Paradox.”

We looked at the high frequency of significant regret for major technology purchases and offered an action plan to manage through it for the vendor community.  A number of my colleagues (thanks Mark Stanyer, Neil McMurchy, Chris Marshall, and Emil Berthelsen) and I have  since turned the story into a research series available to clients:

I humbly suggest this is must read research.

One of the most interesting things we discovered as we analyzed the data was the high number of paradoxical findings that emerged.   These are things that may cause you to fundamentally rethink much of what we do with customers.   Let’s take a quick look at six of them.

Source: Gartner, Inc.
  1. The Customer Power Paradox – The idea here is that there is almost universal agreement that customers have more power today and are in control.  But our results showed that despite this power, customers are struggling to make confident decisions.  The biggest driver of this paradox is the move to highly collaborative decision making as tech pushes farther and farther into the business.  That combined with our second paradox makes for real challenges for buying teams.
  2. The Paradox of Choice – This one is well understood, but it has been proven time after time that when buyers are presented with many choices they are more likely to do nothing, paralyzed by indecision.   For tech purchases, buyers have more great options (let’s face it, most products work and most services and services firms can deliver value more often than not)–both within a category and with multiple approaches to solve problems.
  3. The Personalization Paradox –   This is one we have talked about before.   The tech industry has become very fixated on buyer personas, with the majority of efforts unfortunately focused on finding things that uniquely appeal to a persona.   And, it feels like it works.   Personalization can drive increased engagement.  That’s great, right?  Actually no.  We’ve found that when buyers feel things are personalized and highly relevant to them as an individual, their buying team is more likely to experience delays.   This relates to the Power Paradox.   Individual focus invites disagreement on objectives and delays ensue.  Instead, focus on common ground and a unifying objective that brings people together as job 1.   If you want to connect that overriding goal to the specific impact and opportunity for buying team members, go for it (but it may not add as much value as you think).
  4. Regret and Churn–or not –  This is a different one, but we have seen that customers that frequently regret most purchases are less likely to churn when they are not satisfied.  So does dissatisfaction cause churn?  Sure, but not so much if you are dealing with a customer that is rarely satisfied.  The reason for this is that those same customers are the most change resistant in the market.  They’d rather stick with something they don’t like that much (maybe because they don’t like much of anything) than go through the whole process again.    This is one to think about for customer retention teams–evaluating the nature of dissatisfaction and the overall demeanor of the organization (guess what Gartner ETAs can help here) may help you put your retention resources in the most effective places.
  5. No Regret Buyer Behavior –  A deeper look at this one could make you question this paradox, but on the surface it plays (so humor me).  When we analyzed the behavior of buyers that expressed no regret for purchases we found a number of interesting things.   In particular, they were much more thorough in their evaluation and interactions with their chosen vendor.  They consumed more content.  They engaged in more activities.  And they bough7 seven to 10 months faster on average.  Would you think that to be the case?   On the surface probably not.   But digging deeper, these buyers are also more focused and more disciplined.   They don’t consume waves of information on the same topic; they consume a variety of information to understand both the value opportunity (why they should buy) and the effort to achieve that value (how).   They also frame things around a unifying goal.  And what was quite interesting was that these buyers were 5x more likely to not engage deeply at all (beyond consuming content) with other providers being considered (by deep engagement, we mean using trial software, having implementation planning and scoping meetings, and other similar activities).   The focus helps them overcome the paradox of choice.
  6. Ambitious Leader Challenges –  The final paradox relates to one of our Enterprise Technology Adoption profiles–the Ambitious Leaders.  This group is quite open to change and for many markets they are likely to be early adopters.  Business drives decision making.   This all sounds great, right?  Choosing tech for clear business reasons.  Moving fast and taking some risks.   All good, right?    Well, not always.   This group tends to end up regretting many of their purchases.   We think this is because they may skip some of the “technical sensibilities” that an “IT voice” can bring to discussions.   These frustrations may be more apparent for vendors implementing land and expand strategies, including product-led growth.  The Ambitious Leaders may buy really really quickly (and easily for your sales or conversion teams!).  They seem like a logical candidate for easy expansion.  But then the experience changes entirely.  They get stuck; they get frustrated; and growth gets delayed.   For this group, you have to help them understand what they don’t know that will impact success.  Guide them through the sticky challenges they may face before they face them.   Learn from them as you fight through the Trough of Disillusionment.   As a note, this land and expand challenge extends to several other ETAs, something David Yockelson and I covered in another piece of research for clients, “Using Product-Led Growth Strategies to Cross the ‘New Chasm’

There you have it—six paradoxes that need to be understood and identified to make buying and selling easier.  Critical thinking and customer understanding are the key skills and focus areas to fight through them.   The impact will be significant for those that do.

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2 Comments

  • You said, “Critical thinking and customer understanding are the key skills and focus areas to fight through them.”

    Since we already know (from research) that a comprehensive and thoughtful Discovery process will enable IT reps to form a better understanding of buyer needs and wants, this investment in time and effort is rewarded with dividends that can accelerate the procurement process of complex products and services.

    And yet, many IT vendors typically under-invest in Discovery.

    Hank, why is this still the norm? Your thoughts…

    • Hank Barnes says:

      I think it is because you can’t script and standardize it. The quest for scale squeezes out creativity and exploration. And then the volume game is played–allowing for more mistakes vs. the occasional win.