Software vendors often lack the data to understand the nuances behind their customers’ decision to abandon their tools in favour of a rival’s. But buyers don’t switch products without good cause.
Research and technology firm Gartner sought to quantify and explore these behaviours through a study published earlier this month, which looked into the opinions of over 3,400 global software buyers.
Gartner’s Digital Markets’ 2024 Tech Trends Survey revealed not only how software buyers choose software vendors but also some elements of regret that lead to buyers abandoning one software product for another.
The study pointed out that despite 96% of those surveyed preparing a list of potential software vendors before making a purchase, a substantial 60% experienced some form of dissatisfaction within the last 18 months, leading them to regret their software acquisition.
These findings hold significant implications if we factor in that almost a quarter of the respondents who expressed regret over their software choices went as far as cancelling their contracts.
What’s more, a substantial third of buyers opted to pitch their tent entirely with different software vendors. The report also emphasised that over half of those who regretted their purchases (56%) believed that the financial setback would adversely affect their business’s long-term performance.
This situation has a greater impact on small businesses with under 250 employees, almost 60% reported experiencing a substantial impact, in contrast to 50% of their larger counterparts.
These figures underscore the importance of making informed software purchasing decisions for businesses of all sizes, as the consequences of regret can be quite significant. So, what does Gartner think can be done better? TechInformed spoke to several tech CEOs and Gartner Digital Market’s global VP of products to find out more.
Gartner reported that a third of respondents said that product trials were an important factor that they took into consideration before making a purchase decision.
According to Gideon Kalu, founder, and CEO of Femur, a software development company for business products, trials have advantages for both vendors and sellers. “By offering trial periods for software, vendors can cut down on refund requests, reduce bad will, and overall ensure that only satisfied customers use their products,” he said.
Kalu suggested that allowing a reasonable period of product trial time for customers to have a clear picture of how the product will solve their problems is also essential.
“As for how long trials should span, from my experience, it is relative to the product. But generally, a seven-day trial is generous enough and is a long enough time for anyone to determine if a software is the right fit for them.”
According to Gartner’s study 30% of respondents thought that software demos were a crucial consideration when building a vendor list. This indicates that a guided view of the software’s features and capabilities plays a significant role in decision-making.
However, a Navattic State of Demo report shows that vendors don’t place a premium on software demos, even when most use “Book a Demo” as their call to action. According to Navattic, software demo processes are riddled with inefficiencies, friction, and long response times between when potential customers book a demo and when they get a response.
All these factors can make a potential software buyer change their mind about including a software product on their vendor list.
A third of software buyers in Gartner’s report claimed to prioritise customer reviews above all other considerations when crafting vendor lists. It’s just common sense, according to Thibaut de Lataillade, global vice president of products at Gartner Digital Markets.
He adds: “Verified reviews encourage software buyers to consider a software solution. A verified review can influence a software product’s reputation and the perception of its vendor.”
Apart from having a great product that ‘does what it says on the tin’, Lataillade also noted that good reviews might also come from good customer service. Explaining this, he noted:
“Customer service is the new marketing. It’s the strongest message every software vendor can send, not only to their existing customers but also to their market. When a potential buyer is looking at the software they intend to buy, quality of customer service rating is one of the top factors they consider.”
As Gartner delved deeper into some of the reasons behind buyer regret and subsequent churn, the higher-than-expected-cost of ownership appears to be a key product-related factor for 33% of respondents.
“Many software buyers are quite unaware of the additional cost of owning the software they purchase, either because they didn’t get enough explanation from the vendor or lack of clarity in the software pricing model,” says Lataillade.
To address issues of higher-than-expected costs of ownership, Lataillade suggested that software vendors ought to be clear when discussing the costs of acquiring a software product. Customers should know in the asking stage, for instance, if there are additional costs regarding product configurations, integrations, and implementations.
Another reasons for regret/churn among 32% of buyer respondents was complex software implementation. On the vendor-related cause of regrets, issues concerning the transition from sales to implementation (43%) stand out as the most significant cause of buyer regret, along with mismanaged expectations (42%).
Addressing complex implementation in software products, Chris Bailey, Observability and AIOps engineer at IBM, explains that software solutions should “focus on the user experience, continually identifying and removing points of friction and toil.
He adds: “As software engineers, we’re very familiar with how we do software performance engineering – for example, we identify functions that have long ‘path lengths’ and reduce the number of sub-calls and instructions required.
“Optimising user experience is similar – streamlining tasks so they require the fewest number of steps and, where possible, automating common tasks.”
According to Robert Burkett, divisional CIO for data solutions vendor Harmony Healthcare, there are key questions suppliers must answer to ensure that software buyers do not regret buying their products or abandon them for another.
“Does the product do what we’re saying it does? Is the product fit for use [minimal bugs, limited downtime etc.] ? And does the product meet the value proposition the market demands?”
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