Are peer review sites impacting the large enterprise buyer? TrustRadius says yes
- The impact of peer review sites on B2B buyers is no longer debatable. But does that influence extend to the large enterprise? And is it fair to compare the role of analysts to the Kardashians? Those were some of the items I debated with the TrustRadius team.
In a recent pitch, TrustRadius did just that, with an email entitled "Gartner, IDC, & Kim Kardashian?" The email went on to say:
"Analysts are the Kim Kardashians of the B2B world,” said Vinay Bhagat, founder & CEO of TrustRadius, a peer review platform for B2B tech. “Buyers are still interested in what analyst have to say, but ultimately they want to hear from people like themselves. Their peers and others users are more relatable and provide a trusted view into what it is like to actually use these complex technology products."
I took issue with the quote - maybe the Kardashian reference hit too close to home. But Bhagat's team was up for a debate. That was the perfect bait - TrustRadius' latest (free) report, the 2018 B2B Buying Disconnect, is good fodder for my diginomica series on the informed B2B buyer. I soon found myself on the phone with the TrustRadius crew, including Bhagat and Julie Neumann, Director of Content Marketing.
The Kardashians, analysts, and quadrants debate
My superficial problem with the quote is that none of the analysts I run into on the road - a category I sometimes find myself in - are living a posh life anything like the Kardashians. I don't think the occasional fruit basket in an anonymous hotel room qualifies. My bigger problem is that I don't think the analogy works. As I told Bhagat:
Celebrities tend to have an overwhelming power to influence buying trends on behalf of consumers. I just talked to a retailer about providing retail data. When Kim Kardashian throws up something on her Instagram, it can literally change supply and demand issues for a particular item overnight.
You don't think a Magic Quadrant has the same thing, though, Jon?
Okay - that was a heck of a rebuttal. No, I don't think it's the same thing; B2B buying is not as impulsive as consumer purchases. But it's a fair point on Bhagat's side, and now we have a common grievance.
I'm not a quadrant fan. There's nothing magic to see here. Treating one source as the stone tablets is deeply flawed. It's irritating to see vendors falling over themselves to fuss over placement on charts like these. I understand why they do it, but I don't like the game. Quadrants are a useful reference, but are way too subjective and one-size-fits-all to dictate a B2B purchase. Enterprise buyers need a range of trusted sources - and a world class BS detector - to make the right software decisions. And that's the area of greatest agreement between myself and TrustRadius.
The TrustRadius Buying Disconnect Report
Another thing I like about TrustRadius is their punchy style. I find it hard to resist a report that leads with:
Buyers want the brutal truth, but vendors aren’t keeping up.
The TrustRadius 2018 Buying Disconnect Report - a second annual installment - backs that point up with these bullet points:
- 85% of vendors believe they are open and honest about their product’s limitations. Only 37% of buyers agree.
- Just 23% of buyers said their vendor was highly influential in the purchasing decision. Those vendors were two times more likely to be candid about their product and provide unbiased customer insights.
- 84% of buyers said they were willing to share their perspective with prospects. There is potential for two times participation in advocacy programs, but vendors need to ask.
Those are potent findings. And: they point to meaningful action items for software vendors. It would be easy for TrustRadius to make the argument buyers need peer review sites to balance biased vendor marketing. But instead, TrustRadius is calling attention to action items that will give the vendor more relevance and impact to the buyer.
Make the buying process more transparent; be open about your products' pros and cons; leverage your customers to tell your story - those are crucial items vendors can act on, all the while respecting that the control of the purchasing process has shifted to buyers.
Hashing out the impact of peer reviews on the enterprise
But that leaves us with a burning question: what is the role of peer review sites in the B2B buying process? Let me start with my views going into the call with TrustRadius:
- Peer reviews are becoming an important part of the software buying process. In the SMB space where software purchases are less complex, or in enterprise settings where smaller purchases are made via credit cards, peer reviews are one of the biggest influences on purchasing decisions. However, going into the phone call, I didn't believe peer reviews are having as much impact on large-scale enterprises purchases - yet. For two reasons: lack of volume of nuanced reviews by industry, and the need for interpersonal discussions on purchases of multi-year impact.
- I believe that today's informed buyer needs a wide variety of input sources to make effective purchasing decisions. For enterprise buyers, that means tapping into their trusted networks of advisors. That network includes, most importantly, their industry peers and user group communities, but also analysts, influencers of all stripes, and subject matter experts inside and outside of company walls. Opinionated commentary, social media banter, and external review sites factor in, but the personal network is the most important single filter.
- The top peer review sites, including TrustRadius, have done a good job vetting reviews. As a result, these review sites are credible sources of information. However, at many shows, particularly cloud software shows for the midmarket, I see the vendor with a sign up booth for instant reviews. Frequently, rewards are given to attendees for stopping in for five minutes to do a quick, happy review. I question whether these "welcome wagon" review tactics lead to quality, balanced reviews. Too many enthusiastic reviews that lack balance will lead buyers to distrust peer review sites which may appear to have been gamed by the vendor to lean positive.
On the second point, TrustRadius found similar things in their report, but with a twist. For "trustworthiness of information sources," buyers said that referrals from friends, colleagues and peers ranked third, directly behind their own past experience or hands-on trials. However, TrustRadius found that fewer buyers had access to personal referral sources of their own. Thus the need for online reviews.
On the third issue, the one about the "welcome wagon" review tactics at events, Bhagat agreed with my concerns. He told me when TrustRadius handles event-based sign ups, they just get one data point, such as "likelihood to recommend this tool." They follow up with the attendees after the show and send them a structured, online review. That gets a better quality review than an attendees would have time to give at a conference.
The TrustRadius team challenged my view that peer reviews aren't yet impacting large enterprise purchasing decisions. On the call, I used the example of Oracle HCM versus SuccessFactors versus Workday. Bhagat was ready:
We've had 4,482 unique people come to our site this year to evaluate Workday. The most common thing they did was read reviews. The second most thing they did was compare it to Oracle HCM... We don't work with Workday yet. We work with SAP and IBM and Oracle.
The first product that Oracle chose to work with us on to drive customer feedback was HCM. They found we can actually share with them in real time which brands are doing research on them. They were very surprised to see the skew toward the large enterprise companies that are doing real-time research about them.
After the call, TrustRadius sent me another enterprise example: Anaplan, a CPM platform that sells at the enterprise level. At the time, they had 98 in-depth reviews, and an additional 91 ratings on TrustRadius. I had raised the issue of industry variation. TrustRadius responded that the volume of reviews has helped a great deal with that:
This level of scale helps them achieve coverage across a diverse spectrum of verticals, ranging from a professional sports team to a dairy corporation.
Overall, I have a strong agreement with TrustRadius's goal to support the informed buyer with quality peer reviews that aid in decision making. Since our conversation, I've seen several more "welcome wagon" review setups at trade shows. I hope more vendors do what TrustRadius recommends, and avoid getting quick hit reviews on site.
The data TrustRadius shared with me shows there is more peer review impact at the large enterprise level I realized. It makes sense that areas like HCM and CPM would be popular areas for the peer review trend to take hold. When I searched TrustRadius for retail-related reviews for solutions from Oracle, SAP, and Infor, there wasn't much there yet. Critical mass across verticals will take time.
I think where I differ the most with TrustRadius is around the pervasiveness of trust networks. I find most buyers have some form of trust network they can tap into, at events or online. I believe those personal networks will always trump external information sources (and, in some cases, reinforce those external sources. You trust content more from those you've met and interacted with). However, the 428 buyers TrustRadius surveyed in 2018 did not align with my perceptions on the pervasiveness of those networks, so that's a debate to continue.
I agree with TrustRadius that the classic analyst report approach isn't enough for today's buyer. Things are moving way too fast to wait half a year for a white paper. But what I see at events is a more fluid and personal relationship between customers and influencers of all stripes. This is far more valuable than any quadrant or vendor hotlist could ever be.
For enterprise customers who are isolated from that interpersonal mix, I would say: break out of that isolation. Yes, check peer review sites. But also build your personal network out with a range of smart folks. Maybe not the Kardashians though.
End note: In a follow-on piece, I'll dig into TrustRadius' recommendations on vendor transparency and customer advocacy. It's also important to note that this interview took place in April. Publication got delayed, so a couple of the stats in the quotes above are from April timeframe. Also check Barb Mosher Zinck's prior diginomica piece, TrustRadius on how to make peer reviews matter for B2B buyers.