Informed buyers and the crisis of tech differentiation

When was the last time you sat in on a webinar and said, ‘Man, that was really great!’? Yeah, me too. But I recently had that experience on a replay of Gartner’s The sad state of differentiation and what to do about it (free w/registration).

On the webinar, Gartner’s Hank Barnes, Research Director, Technology Go-To Market provided hard data about the educated enterprise buyer. Bottom line? Tech (and tech services) companies are struggling mightily to differentiate themselves with today’s enterprise buyer.  ‘We have the best people’ has long been a stamp of positioning mediocrity, but what happens when you are eliminated before you can even make the pitch?

To contrast with Gartner’s findings. I did a sweep of other recent insights on B2B buyer personas. What I found was a buying sensibility that favors some tech companies but punishes others. Issues are also raised about the value of content in research and evaluation.

Data: why the self-qualified buyer disrupts enterprise sales

Barnes launches the webinar with a Q4 2013 Gartner survey of 359 buyers of technology information and services. The question of how buyers prefer to evaluate and engage tech vendors showed that self-directed search trumped even peer reviews:

gartnerbuyers

Source: Gartner webinar, The sad state of differentiation and what to do about it

No big shockers here – though this level of buyer autonomy disrupts the old fashioned ‘saturate the market, corner the prospect and charm/cajole/close them’ sales approach (even car dealers are having trouble with that style now). Prospects are also eliminated throughout these cycles, meaning that in the ‘explore’ phase, you  may have been pro-actively eliminated (or completely invisible in search), with limited data clues to trace.

The conclusion? A failure to differentiate early in the buying process is a costlier problem than ever. So how are tech companies doing? Well, according to this particular survey, not so special: 52% of those Gartner surveyed said it was difficult to understand vendor differentiation.

In the cases where tech firms did stand out from their peers, there was an interesting mix of old school and new school characteristics. For this survey, service and support was the clear winner at 67 percent, followed by product features and functionality at 55 percent. Price (48 percent) and quality (44 percent) were also factors.

However, the next two differentiators are two that Barnes called attention to during the session: clear communication of business outcomes (29 percent), and ease of doing business (28 percent). Service and support poses a differentiating danger, however: 80 percent of the respondents who cited tech providers as being ineffective at differientation cited messaging as the biggest problem.

That puts a wrench in things: service and support turns out to be a wet noodle as a messaging theme (it’s kind of a tedious variation on ‘we have the best consultants’). Instead, you have to demonstrate the culture of service during the sales experience – it’s a  ‘show, don’t tell’ characteristic. Pushing product features as opposed to business outcomes was another bone of contention with respondents, with 74 percent citing an over-emphasis on product features as a differentiating failure.

Wrapping up the Gartner data, one list of stats threw me. When asked for the top three sources their used to evaluate how IT solutions differ, the respondents said:

References from same-size peers in industry: 60 percent
IT analyst firms: 56 percent
Professional communities: 36 percent
References from same-size peers in region: 25 percent
IT events and conferences: 21 percent
Systems Integrators and value-added resellers: 21 percent
IT vendor’s sales representative(s): 19 percent
Articles in press publications: 17 percent
IT vendor’s websites: 12 percent

Under 10 percent answers included: Provider-centric customer communities (9 percent), Content marketing (5 percent), Digital media (4 percent), Social media (3 percent),  and IT vendor advertising (2 percent).

There was a mix of the expected and the head scratchers in this data. Social media’s pathetically low score was no surprise, but then  I don’t rate social media nearly as highly for B2B marketing as some do. One thing that occurred to me: the top seven results all strongly imply a direct personal relationship of some kind. If true, that does not surprise. While you can cultivate the conditions for trust through content, you seal that deal in person. Of the non-personal criteria, it makes sense for (cough!) impartial third party press coverage to finish the highest.

So does content matter to the enterprise buyer, or not?

But what of the small result for content? Doesn’t that conflict with my past insistence on an aggressive content strategy?. Perhaps. Before we dismiss content, take another look at the relationship between content and the self-informed buyer. Case in point: a recent piece on Demand Gen Report by Glenn Taylor says:

Russell Kern, President and Founder of KERN, a consultancy, noted that the average buyer will download 10 to 14 pieces of content during the researching, consideration and purchase process, with short video snippets being among the most important content. Providing content that is relevant to a specific point in the sales funnel is an issue many organizations still have trouble with, as reactions depend largely on buyer intentions at the time they receive the content.

Brian Sommer of Techventive also makes a convincing case for content as differentiator. Sommer recommends creating content assets that reinforce ‘thought leadership’ and provide fodder for substantive marketing campaigns. The competition gets exposed:

When a firm can offer up a team that includes a published subject matter expert, how can some undifferentiated, unoriginal competitor stand a chance? They can’t.  Businesses buy people first, teams second and the firm third when it comes to services.  You can shout all you want that your firm “hires the best people”, “delivers value”, etc. but that is all noise and comes off undifferentiated to most service buyers.

After bemoaning how few firms produce this kind of content, Sommer jams the point home with a reminder that content also drives search:

What’s brilliant about this is that this is the material that buyers are looking for – no SEO needed here as the high number of hits on this material alone will automatically move this information to the top pages of search engines.  Buyers will find your firm as they will be finding your assets more and more frequently.

In a recent piece on The Coming Era of the Self-Qualified B2B Buyer, Tony Zambito argues for a transparent buying process, even exposing prospects to honest reviews:

Where it is appropriate, enable buyers to experience what they normally may at the consumer level.  Offer analytics and modeling tools designed to give B2B buyers the power to make an assessment and to see how your organization qualifies.  Support with user reviews, the good and the bad.  Allowing for an open and transparent reflection of experience.

Verdict

While Gartner’s findings are revealing, the modest sample size should be taken into account. But there is near consensus that the typical ways of pushing technology and services are losing effectiveness. Even that old stand by, the monster email campaign, is challenged by the increasingly aggressive filters that allow users to limit messages that don’t provide a tangible benefit. Opt-in is no longer a one-time push of a button, it’s an ongoing challenge of relevance.

One caveat: incumbents with deep pockets are much tougher to displace than change agents would have us believe (Gartner found at least half of those surveyed take brand reputation heavily into account). Nor are the incumbent connections forged on golf courses ever going to disappear from the buying process. But those realities don’t invalidate the changes documented: the informed buyer is here to stay.

Action steps are many, but my top items are:

  • Build a go-to-market pitch based on business outcomes, reinforced by a disciplined customer case study and advocacy program.
  • Social media is not irrelevant, but should be the cherry on a rich content strategy grounded insearchable assets.
  • Hiring social media experts is far less important than hiring digital media experts. Multi-media content production is ideal for creating a storyline that sticks.
  • Trust is cultivated online but is cemented by personal relationships between trusted experts. ‘Always be closing’ gives way to ‘always be advising.’
  • Re-jigger the entire sales and marketing process to ensure that the ‘prospect experience’ lives up to the post-sales ‘customer experience.’

During the webinar, Barnes went for the jugular by challenging attendees with some deceptively simple questions: ‘Do you provide a better buying experience than the competition?’ Do you have the simplest contract to use in the industry? Do you make [your products] really easy to order and configure?’ Translating that into a prospect experience is easier said than done. But we can start by asking the right questions.

Image credit: On the crossroads © Mopic – Fotolia.com

Jon Reed

Jon Reed

Jon Reed has been involved in enterprise communities since 1995, including time spent building ERP recruiting and training firms. These days, Reed is a (cough) blogger/analyst and also counsels vendors and startups on go-to-market strategy. He is an SAP Mentor, Enterprise Irregular, and video content producer.
Jon Reed

@jonerp

Enterprise Irregular, diginomica co-founder + SAP Mentor who blogs/videocasts on the enterprise, w/ dash of bootstrappin' + media hacks. OK, I rant sometimes.
Jon Reed

Leave a Reply

  • jonerp says:

    Barnes_Hank Hank thanks for those valuable clarifications on the data. I know that some felt that the data was self-serving (which of course doesn’t mean it was incorrect), but the fact that two surveys (with decent if not huge sample sizes) generated similar results is useful. 
    For my part I was less interested in exactly which third parties were noted by respondents, and more interested in the overall trend which is that third party content scores a high trust factor for the so-called “informed buyer.”
    I’m concerned that a lot of marketers don’t realize that if all their content is branded, they are not reaching decision makers early enough. Essentially the sales cycle now begins before a sale is even on the horizon, prior even to initial research. Branded content just doesn’t do as well for those purposes. 
    I agree on the sales cycle mapping issue – after I wrote this piece I also wrote a couple others that addressed this topic. The PR over content marketing debate piece I wrote recently may interest you. Thx.

  • Barnes_Hank says:

    Jon, 
    I really appreciate your kind words on the survey.  A couple of points of clarification.

    They webinar actually used 2 different surveys for some of the data.  The info on differentiation (and the sources) was sourced from a group of 350 people.  This group is part of a Gartner research circle (Gartner clients), so the analyst ranking may be higher than for a broader segment—but your point on relationships and interactions is spot on.
    In terms of size, 38% of these were in orgs with 10K+ employees, 31% were 1000-9999, and 29% were less than 1000 (the remaining did not specific.

    The other survey had 503 respondents and was sourced independently (no guarantee of being a Gartner client) from firms in the U.S., Europe, and China).  41% of these were over 10K employeees, 19% were 5000-9999, 22% were 2500-4999, and 18% were 1000-2499.

    From both surveys and other research, you have picked up on a trend that I am seeing as well—that is that buyers trust influencers (peers, analysts, independent experts) much more than they trust providers.   Content can help, but most content is not oriented, as your described, to the buying cycle and is not outcome focused.   Vendors still love to tell customers about all their wonderful capabilities and expect them to figure out where the value comes from.

    Hank

  • simon_g1 says:

    I think Gartner’s survey may be skewed by its sample characteristics, ie, typical Gartner customers being large companies. We recently did an investigation to find out how our customers did their evaluation, which confirmed three of the top four:
    References from same-size peers in industry: 60 percent
    Professional communities: 36 percent
    References from same-size peers in region: 25 percent

    But the influence of analysts for international SMB customers was far lower than what Gartner found

  • jonerp says:

    hughcjohnson Hugh – good point. I had in mind a bit more content dissecting the survey but held off as it was long enough. That was one thing that occurred to me also – in addition to a modest sample size it’s certainly reasonable to posit that the respondents might have had a predisposition towards IT analyst firms. So yes, I think there is something potentially self-serving in that, and frankly we see that in many “surveys” that are issued which require us to not only use the data but keep a grain of salt handy. 

    One reason I wrote about this survey is because it contradicted, at least at some points, some of my biases/views – one of which is the declining influence of big analyst firms and the rise of peer groups, boutique specialists, independents, and upstart web sites. :) 

    My other caveats I think are covered in the comment to Dennis above. Thx for the post.

  • hughcjohnson says:

    jonerp – thank you for this article.  It is well written, well researched and thoughtful.  I haven’t watched the webinar yet, but I will on foot of this.  One observation though, is that the very high reliance on IT Analyst Firms might reflect the audience that was asked and responded?

    It would suggest to me that the audience was skewed towards larger enterprises that already have at least an email-list relationship with Gartner.

  • jonerp says:

    dahowlett Glad you raised that point, as I did think that the Gartner findings were a bit surprising in some of the conventional means of product assessment that came in ahead of content – particularly when you consider comments of Sommer, etc and the obvious role of content in search. 
    Reading between the lines I reached a similar conclusion, I think to yours – which is that the reason content is scoring so badly in a survey like this is because so much of it is crud. Or, poorly timed for where the prospect is in the sales cycle. I believe that’s the toughest part for most tech vendors. Aside from putting results in business outcomes it’s creating content that appeals at the top of the sales funnel where folks don’t want product pimping but informed industry conversations. Perhaps the low content scores on this survey are part of that struggle for relevance :)

  • dahowlett says:

    @jon – I’ve always said ‘people buy from people’ and so why I put such an emphasis on case material in our work . That doesn’t change . Perhaps what Gartner is trying to do is sort through the cruff of ‘stuff’ we see in revised models of engagement where there is little beyond refined push messaging, dressed up as content people will want to consume. Here i think Sommer is bang on the money. But then he comes from a services background as do I.