How Customers Choose Solutions: An Interview with ITSMA’s Julie Schwartz

Julie Schwartz, senior vice president of thought leadership and research at ITSMA, recently presented the findings from our 2007 study of how customers choose solutions providers, sharing how the vendor selection criteria have changed and what providers can do to win more business.

ITSMA: Julie, five years ago, prior experience with a company was the most important factor in choosing a solutions provider. But your recent report shows that this has now become the least important factor. What has contributed to this change?

Schwartz: With the rise of globalization and offshoring, customers today have so many more choices than they did even five years ago. They also have access to much more information, and the cost of gathering this information—and acting on it—has decreased significantly. So, prior experience with a provider is no longer required to feel confident that the provider can get the job done. Altogether, the rise of available information and the increased number of players have empowered customers.

ITSMA: What can providers do to counteract this decrease in customer loyalty?

Schwartz: The top factors driving customer loyalty are reliability, competence, and responsiveness. Providers that embody these qualities mitigate the customers risk. Above all, providers need to deliver the highest-quality solutions possible. They also need to know the customer’s business inside and out and respond quickly and effectively to customer needs.

When customers begin to search for a provider, their top source of information is their professional colleagues and peers. Therefore, it’s vital for providers to focus on fostering community. If you’re delivering a high-quality customer experience, you want your customers to talk to each other and to prospects. A few ways to facilitate and participate in this dialogue include:

• User groups
• Advisory councils
• Online communities
• Executive events
• Employee blogging programs

Additionally, providers must ensure that there is valuable content available wherever potential customers look for information, whether it’s on the Web, in the press, at industry conferences, or elsewhere. Thought leadership, therefore, is key.

ITSMA: Although price falls low on the list of vendor selection criteria, the research also shows that buyers today are more willing to experiment with low-cost providers. This seems contradictory. What’s going on?

Schwartz: It used to be that low cost was equated with poor quality. But now, with globalization and the advent of offshoring, the connotation of “low cost” has changed. Customers today don’t base their decisions on price; they base their decisions on which provider will reduce their risk the most and be the best cultural fit. Only after these needs are met does price become a factor.

ITSMA: What should solutions providers do to increase the opportunity funnel and win more business?

Schwartz: We’ve identified five key steps that marketing should take to increase opportunities and better reach prospective customers:

• Orchestrate a customer experience that creates advocates. Keep your existing customers happy and loyal, and create evidence of a track record.
• Invest in customer relationship programs. High-touch, content-rich customer relationship programs such as executive-level business events, user groups, and private briefings have proven to be some of the most effective methods.
• Influence new and traditional influencers. Reputation is extremely important. In addition to the traditional influencers such as journalists and industry analysts, companies today must also pay attention to academics, bloggers, and independent consultants, among others.
• Balance push and pull marketing. Customers want to buy; they don’t want to be sold to. In spite of this, push marketing can still be effective, as long as it is targeted and relevant. To reach the maximum number of potential customers, marketers should invest in both push and pull activities.
• Employ segment and Account-Based Marketing (ABM). Customers need assurance that you will solve their unique business problems. The deep research that is required to effectively implement segment marketing and ABM will build buyer confidence by positioning your company as an expert that truly understands the buyer’s needs.

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ITSMA specializes in helping companies market and sell services and solutions more effectively. We work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA annual program clients include business leaders such as AT&T, Cisco, Deloitte, EMC, Fujitsu, Hewlett-Packard, IBM, Microsoft, SAP, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing℠, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.