It is the conventional wisdom in sales and marketing that word-of-mouth advertising is far more effective than traditional formal advertising. With regard to IT purchasing decisions, International Data Corp. has explored how effective such interpersonal communication is in comparison with other sources of purchase influence, such as sales reps, system integrators, Web sites, trade magazines and value-added resellers.*
Under the Influence
In analyzing these clusters of purchase influence, we can separate buyers into two fairly distinct groups of purchasers based on their key influences when choosing IT resources for their research labs:
• Traditional buyers. One group emphasizes software and hardware sales reps as well as value-added resellers and system integrators. We refer to this group as traditional sales channel buyers, because they respond primarily to sales efforts directly mounted by IT vendors.
• Third-party reference seekers. A second group seeks out third-party sources of influence, such as colleagues in other companies, trade magazines and Web sites. This group is somewhat less trusting of vendor-created information and seeks unbiased opinions before making a purchase decision.
Both categories have strengths and weaknesses. Given that data and informatics are relentlessly moving from the periphery to the core of bioscience organizations, it is imperative that IT buyers critically examine the sources of influence and their own buying behavior to make sure they make the best possible decisions.
Seek an Opinion
One of the benefits of third-party sources of information is a lack of self-interest in the advice. A colleague does not receive a commission for convincing you that brand A is really better than brand B. The opinions of coworkers are a convenient way of vicariously extending our base of experiential knowledge. And, in a one-degree-of-separation community like bioscience, opinions quickly coalesce. Although third-party advice from trade magazines or Web sites lacks the same personal touch and level of trust as talking to a colleague, they both have the potential to broaden substantially the range of third-party influences on a decision.
However, third-party sources of information and opinion about products and brands are not infallible. Individual experiences may be unique and not representative of the general experience. Thus, it is best to talk to several people in order to discern common patterns of experience with a particular product.
A second danger is the halo effect — the tendency to extend the good vibes from one product to a much wider set of products or services from the same company without any direct experience with those other products. Of course, negative halo effects are also common. A third problem is that some people share opinions based on hopelessly outdated information and experiences. Some IT purchasers in bioscience base their views of current IT vendors on experiences from 15 to 20 years ago. How relevant are experiences that old to present-day buying decisions?
The main strengths of sales channel information are the current nature of the information and the ability to ask detailed questions. If the first tier of sales reps fails to answer questions satisfactorily, you can push the inquiry further up the chain until you are talking to a suitably qualified individual. A further advantage is the clarity of goals: The buyer is trying to achieve the best solution for the best price, and the salesperson is trying to pitch his or her own company's solution to the problem. Finally, people who set out to work directly with the sales channel often do a more thorough job of examining all the options available in the marketplace.
The obvious weakness, however, of relying on the sales channel is a predisposition to exaggeration and hype. Sales reps are genetically predisposed to exaggerate strengths and downplay the weaknesses of the products they sell. Objective, comparative data are scarce. And unless a company is truly superior on most criteria, it will try to avoid comprehensive comparisons with competing products and only make comparisons that they know will be favorable.
The best buying strategy for large IT purchases is a combination of the two popular approaches. Define your requirements. Survey the market through traditional sales channels to identify a limited set of products that meet those requirements. Then, turn to your one-degree-of-separation network to uncover the characteristics of a product or vendor that may be curiously absent from the spec sheets. What is the customer service like? How easy is it to access technical support? Do they meet deadlines? These and a variety of other intangible characteristics are where the third-party sources will help you make the final purchase decision.
Michael R. Swenson is a senior research analyst at IDC and can be reached at email@example.com.