Ease of implementation, ROI dominate software buying decisions: report

Ease of implementation and return on investment (ROI), combined with ease of use, continue to dominate the business to business (B2B) software buying process, according to a report from software marketplace G2.

The report, which is based on a survey of 1,002 global decision-makers with responsibility for, or influence over, purchase decisions for departments, multiple departments, operating units, or entire businesses, showed that at least 93% of respondents indicate the quality of the implementation process is very important when deciding whether to renew a software product.

The respondents said they are looking for the least amount of friction while adding a new solution or software to their technology stack and that ease of implementation can add to the frictionless experience, according to the report.

In fact, 77% of respondents indicated they have either worked with a vendor’s implementation team or have worked with a third-party vendor for implementation, as opposed to 34% of respondents indicating that they handle implementation with their internal teams.

These implementation teams play a pivotal role as they shape an opinion about vendors and can help make contract renewals easier, the report noted.

Pricing no longer an effective sales tool

Pricing, according to the respondents, was the second-least favored factor in the buying process. The survey showed that sticker price is no longer a sales tool and has been replaced by proof of return in investment.

The decision makers ranked ease of implementation as the top important factor while ROI within six months and ease of use were the second and third most important factors among 12 other considerations, including price, as part of the buying process.

The survey data showed that these decision makers want to achieve ROI quickly and believe that an easy implementation process combined with an easy-to-use product may help them generate returns faster.

Lower switching costs affect renewal rates

At least 53% of respondents surveyed said they conduct research and consider alternatives when a product is up for renewal as opposed to 45% claiming they renew the software they already use without considering other options. This phenomenon can be attributed to increasing options and lower switching costs, the report showed.

However, the group of decision makers that renews a product without considering options is growing slowly. There has been a 3% increase year-on-year for the same category, according to the report.

Vendors must make information such as proof of ROI available in early stages of adoption in places where these decision makers frequent for researching new products, as a majority of decision makers are still looking for alternative products, the report said.

At least 76% of respondents said product and service review websites are trustworthy and transparency in the validation of the reviews is key. More than 33% of decision-makers surveyed said transparent validation of reviews is the most helpful feature when using online software or service review sites.

The report also shows that most enterprises have a six-month contract period, which leaves limited time for vendors to make an impression on the buyer. At least 57% of respondents said they have a six-month period compared to just 11% stating that they have two-year or multiyear contracts in place.

Buying directly from vendors is slowing down

Buyers are slowly shying away from buying directly from vendors, the report highlighted. Only 60% of respondents said they bought directly from vendors, a 9% decrease from the previous year.

Alternatively, buyers are increasingly purchasing software from third-party marketplaces and value-added resellers (VARs), according to the report.

At least 28% of respondents said they were buying software from third-party marketplaces, an increase of 6% from the previous year’s survey. Further, 11% of respondents said they were buying software from VARs, a 4% increase year-on-year.

Buying committee changes complicate purchase process

The B2B buying journey, according to the report, is becoming increasingly complex due to changes in buying committees. At least 80% of respondents said their enterprises or organizations have such committees in place.

More than 67% of respondents said buying-decision makers are changed frequently or nearly always during the software buying process, up by 15% from previous year’s survey.

Another challenge is that the buying committee is more likely to have changed at the time of renewal from when the product was originally purchased, the report showed.

IT Strategy, Software Licensing