For a while now I am contemplating about
why companies choose one customer service solution over another. After all the
market is pretty crowded. Vendors have a hard time to differentiate themselves.
Just looking at G2Crowd one finds 88 Help Desk Solutions.
Larger organizations are likely to be
influenced by Gartner’s Magic Quadrant on Customer Engagement Centers or the
Forrester Wave on Customer Service Solutions. Smaller organizations are probably
looking more at the new breed of peer-to-peer review sites, like the
aforementioned G2Crowd or GetApp, TrustRadius, Capterra and others.
Many companies conduct research and
establish an RFP process to determine the best fit; some see a bottom-up
approach from team level to corporation. A kind of ‘shadow IT’ emerges to solve
a team’s particular problem. This solution over time could get corporate
blessing and may even become the main solution.
A clear and reliable roadmap is mandatory
for all vendors, so no difference here. Same for share of mind – this has
become table stakes.
But what is it that makes one vendor win
over another? Are there patterns? To get more insight I asked some smart people
who stay unnamed here – but you know who you are!
So What Are Contributing Factors?
The good news is that there seem to be only
a few factors. Based on the discussions I can roughly group them into six
categories.
Here they are, in no particular order:
·
A particular feature is needed
or desired
·
Suite- vs. Best-of-Breed
thinking
·
Size of the customer organization
·
Relationship building
·
Referrals
·
Departmental adoption
Of course they are not mutually exclusive.
Let me briefly dive into each of them.
Need of a Particular Feature
This is something that helps nimble
specialty vendors that either already offer a very particular feature, e.g.
support for mobile applications, a Google-like search through an FAQ, an FAQ
that is available offline, or the philosophy of treating service requests as a
conversation instead of coming from a ticket point of view. The former
emphasizes on the customer, the latter on the service provider. With the
probable exception of the philosophy approach this contributing factor does not
provide a vendor with a lasting advantage; successful features can – and will –
be copied in a short time.
Suite vs. Best-of-Breed
Helpdesk software should not be a silo of
its own but be integrated into the other business systems. As one of my
contacts said “there is some convergence”.
However, integration is a very complex
topic. Some vendors are therefore offering tightly integrated software, usually
on cost of some breadth or depth of functionality and are successfully selling
this as an advantage. Customers that go the suite way are usually more
interested in a holistic approach than a complete fit to all needs.
On the other hand Best-of-Breed vendors are
focusing on providing the best solution while maintaining a small footprint and
while increasingly offering integration via platforms. This is usually achieved
by having prebuilt integrations and partnerships with platform vendors and
therefore by joining (or creating) an ecosystem of vendors. Still, customers
opting for Best-of-Breed often look more into a strong functional fit to their
requirements.
Size of the Customer Organization
As one of the persons I talked to said, “You
cannot be wrong if you decide for IBM” was a slogan back in the 80s that pretty
well describes the behavior of large organizations. Risk averse, following the
mainstream – almost driven by fear.
Although this is no more that prevalent,
one can still observe that larger, more centralized organizations favor the
incumbents over new best-of-breed solutions. This results in a tendency towards
suite solutions. Organizations that give their units more independency tend to
be more nimble, like smaller organizations, and are more accessible for best-of-breed
and departmental solutions.
Relationship Building
Relationships are a powerful tool. Vendors
that are able to demonstrate that they are not only after a sale but also want
to become reliable partners to their customers can get a distinct advantage,
especially when showing an outside-in focus that focuses on continuous benefits
to the customer. Strong relationships serve as a barrier for competition, and
create the opportunity for internal as well as external referrals.
Referrals
Referrals are the strongest marketing that
a vendor can use. Regardless of best-of-breed or suite, referrals get earned by
building a relationship and delivering up to promise. This is doubly true in
times where trust implodes
and is in crisis mode with people mainly trusting “someone like me”. Be it the
groqing out of a department of a solution, or the win of an additional
customer, satisfied customers who turn advocates are key.
Departmental Adoption
Land and expand! This is a proven strategy
for small and aggressive vendors, enabled by cloud delivery models. Especially
in organizations with decentralized decision-making this is a good approach to
get functional pain points alleviated quickly, albeit often at the expense of a
corporate strategy.
What Does It Mean?
Different criteria have different impacts
and need to be looked at from different angles. However, one thing is clear:
Relationships and referrals are key components in the mix. Suite- as well as
Best-of-Breed vendors are well advised to build strong partnership
relationships with their customers. For both types of vendors this brings new
customers and for Best-of-Breed vendors it additionally opens the door from the
department into the main enterprise.
Suite Vendors
For big suite vendors it is hard to do a
departmental sale. Examples for this category of vendors are SAP, Oracle, and Microsoft,
or formerly Netsuite, probably also Zendesk. Their solutions are regularly
(with some exceptions) geared to the large enterprise where also the deals are
bigger. Relationship building encompasses building relations to a number of
stakeholders and correspondingly takes more time. These vendors need to be able
to make a strong point on easy process integration plus getting the right
feature-set into the solution. Their being confined to the enterprise market is
their biggest problem and they need to be able to act like Best-of-Breed
vendors. The emergence of <take your pick> clouds shows that they are
working on this.
Best-of-Breed Vendors
In contrast to suite vendors, Best-of-Breed
vendors can concentrate on particular, important and distinguishing features. With
that they also focus on a smaller set of industries and customer sizes. Due to
their focus they are often able to maintain an advantage. Good examples here
are Helpshift, or Freshworks and, surprisingly, Salesforce.
An odd assortment?
No.
Helpshift is a pureplay, albeit with a
focus on bigger customers. Freshworks and Salesforce offer a variety of
solutions, with Freshworks covering the SMB market and Salesforce the upper M
and enterprise markets. I do not name them suite vendors, as both sell disjoint
products that can be integrated via a common platform. Salesforce here became
big by using a ‘land and expand’ strategy, which it still uses.
For vendors in this group it is important
to show the right feature fit for their audience plus the ability to integrate
into other systems, to not get marginalized. Helpshift has the clearest focus
with a strong, matching feature set, and a tight integration into Salesforce.
Freshworks and Salesforce are offering a number of specialized applications
that can integrate through their own platforms – and offer marketplaces to
attract specializations that they do not offer themselves.
And there is Nimble, which is in a different area, but has
a very interesting strategy.
The company positions itself as the ‘entry
drug’ into a larger ecosystem, with a tight focus, augmented by a clear growth
path for their customers. And with relationship sales par excellence.
In conclusion: There is a simple framework
but the secret is in the mix.
And the mix differs for each company. Use
the right arguments for the right customer.
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