Honesty Proves Best Policy for Closing B2B Deals: Study
Vendors have a better shot at closing deals for large-scale B2B software purchases when they are upfront and honest about the quality of their products, a new study from
There is a bit of a trust gap between what is promised in negotiations for these deals and what actually is provided, indicates the poll of more than 650 technology vendors and buyers — including many that spend more than US$50,000 on B2B software deals.
Eighty-five percent of participating vendors claimed to be upfront about the limitations of their products, while only 37 percent of customers said the vendors met their expectations for honesty.
“This is especially troubling when you think about the scale of these purchases,” said Julie Neumann, director of content at TrustRadius. “Twenty-three percent of buyers reported spending over $100,000 per year on their solution, and several said picking the wrong software could put their jobs at risk.”
Trust but Verify
A large percentage of buyers said they trusted their colleagues and peers when making a purchase decision, the study found. However, relying on that group alone often can be too limiting, and additional input from outside sources is required.
Peer reviews rose from the fifth most-popular information source in a year-ago TrustRadius survey to the second most-popular in the latest study, which was released last week.
Only 23 percent of respondents said that a vendor was highly influential in determining their buying decision, and those vendors were twice as likely to embrace authenticity than others. Among buyers who said they worked with a very influential vendor, 56 percent of them said the vendor was very upfront about the limitations of its product.
Demographics are an important consideration, the report also noted, with millennials being very influential. Many of the surveyed companies used buying committees, and a majority of the members of those committees were millennials. More than 45 percent of buyers were 25 to 34 years old, while 30 percent were 35-44 years old.
Believe Me Not
“Over the past year, as companies from Equifax to Facebook have squandered whatever legacy of trust they may have earned, concerns with concepts around trust have entered into new areas of business and industry,” said Charles King, principal analyst at Pund-IT.
“That means in processes and sectors where trust is a critical issue, including B2B software, concerns are even higher than normal — and for good reason,” he told the E-Commerce Times.
Trust is a critical component of big-ticket software purchases, according to Gerry Giacoman Colyer, head of growth at
“This is true not only because of the expense involved, but also because of the high variance in implementation outcomes,” he told the E-Commerce Times. “Getting it right can lead to substantial productivity improvements, while getting it wrong can have costs that go far beyond the cost of the software alone.”
Companies usually require more than just a good sales pitch and third-party review before pulling the trigger on a large-scale B2B purchase, noted Cindy Zhou, principal analyst at Constellation Research.
“When it comes to B2B enterprise purchase influencers, my research shows the initial strategic discussions originate from peer referrals and analyst recommendations,” she told the E-Commerce Times. “Once a shortlist is determined, then buyers look at online reviews and other third-party sources.
Vendors can help themselves by being transparent about the true value of their software and providing relevant customer references in a similar industry and similar sized company, Zhou pointed out.
However, buyers need to be aware of the monetization model of the review site they are using, she cautioned, to understand how objective the reviews really are.