Are Kiwi CIOs in need of improved channel relations?

Are Kiwi CIOs in need of improved channel relations?

Tech leaders unhappy with vendors and providers

Credit: Dreamstime

At a recent IDC roundtable, we asked CIOs how they would rate their relationship with their key vendors in New Zealand.

While there was no expectation of perfection, the low ratings and scathing comments that followed should ring alarm bells for vendors and channel partners.

After some heated discussion, the attendees (a dozen in old-fashioned money) agreed that they liked and trusted somewhere between five and ten per cent of their technology vendors.

The 90 per cent balance they dealt with "because we have no real choice in the matter.”

This was not a lone unhappy client making these comments, but a group of experienced senior managers, representing a wide range of organisations. Nor was this group unique in their experiences and comments.

IDC analysts work with a wide range of vendors and IT buyer clients; anecdotal experience suggests that frustrated or dissatisfied customers are the silent majority, not a vocal minority.

In an age where pretty much everything is available as-a-service, and customer experience is supposedly at the heart of every business transaction, why are so many senior IT executives unhappy with their vendors?

The reasons given during the discussion, strongly supported by anecdotal experience, resolved down to two primary issues:

  • Vendor marketing espouses a customer-first approach to business and building relationships, but relatively few companies live up to these claims
  • Vendor sales staff are often inept at building relationships based on trust and a “customer-first” approach

Several CIOs commented that they only hear from sales people when they have something new to sell or if they have changed companies.

Frustration was expressed (vehemently) about situations where a sales person, having previously sold them a system, and then since changed employers, would return proclaiming the virtues of the new solution; along with a range of spurious reasons as to why the new offering was now superior.

It's not that IT buyers are automatically predisposed to distrust vendors either.

IDC's 2017 C-Suite Barometer research highlighted that more than 60 per cent of clients look to their primary vendors for digital investment guidance.

IT buyers want trusted, open relationships with their key suppliers; indeed they look to them for strategic technology advice, but the majority are too often frustrated by their day-to-day experiences.

The consensus, after “enthusiastic” discussion, was that vendor sales staff and account managers are primarily measured on sales, and so their behaviour is driven by their KPIs and related compensation.

The group suggested that vendors should review sales staff KPIs, with an increased emphasis on overall customer satisfaction, not just raw sales figures.

However, measuring customer satisfaction can be a challenging undertaking, especially where complex technology systems and solutions are involved.

While the Net Promoter Score (NPS) is appealing in its simplicity, it is not always appropriate for technology customers. Asking users about their “likelihood to recommend” is irrelevant if they had no choice in the selection of the system.

Vendors looking to improve customer satisfaction may well be better served by seeking to create apostles, rather than promoters.

For those not familiar with the Apostle Model, it first came to broad public attention in a November 1995 Harvard Business Review article Why Satisfied Customers Defect by Thomas Jones and Earl Sasser.

The Apostle model and its definitions highlight why it's important for technology vendors to measure customers across two indices (satisfaction and loyalty), not the single “likelihood to recommend” used by the Net Promoter approach.

Using just a single measure doesn't deliver the full picture when it comes to business technology purchases.

Doug Casement is a senior research manager at IDC New Zealand

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