pwc experience radar 2013 business to business software industry

7/27/2019 Pwc Experience Radar 2013 Business to Business Software Industry

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volume 3

Locating the sourcesof value behind truly exceptional customer

experience

April 2013

Experience Radar 2013

Lessons from the U.S. EnterpriseSoftware industry


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The business-to-business software industry is not only highly dynamic but also one of the most relationship dependent anywheretoday. Gone are the days of large-scale salesand implementations. Cloud, mobile, newsales models and quick service/support are just a few of its emergent dynamics. This isalso a business that has traditionally depend-ed on relationships, although these wereabout sales and not end user needs.

In todays empowered customer world,Enterprise Software vendors must rethink their value propositions and the experiencethey deliver. Juggling transformation andsatisfying diverse groups of stakeholdersthrough tailored experiences are key. In

many ways, Enterprise Software is leadingthe way for other industries to follow.

During the period of Y2K, technology vendors were able to dictate terms in a demand-drivenenvironment. As a result, the bulk of these vendors revenue owed from maintenancecontracts and license renewals. They were inthe business of selling their software features,not delivering on real customer needs.

The culture of old-school relationship-basedselling no longer appeals to customersandnor do simple transactional sales. Customers want someone who understands their busi-ness challenges, a partner to help them solveproblems. That shift points to a more consul-tative sales approach. At the same time, theconverging forces of cloud, social media,

2Experience Radar 2013 | U.S. Enterprise So tware industry

mobile and big data are reshaping how work is done. Creating experiences to help custom-ers navigate this changing landscape is acritical part of the partnership that they seek.

Vendors must remain relevant to stay in thegame. And to do that, they need to employ theattributes of experience (e.g., convenience,quality, support) to deepen relationships withcustomers and offer exactly what they value.Its never been about the bits and bytes.

Experience Radar helps you locate two ele-ments critical to pleasing your customers andgrowing your business: experience seg-ments and experience enhancers .

Experience segments are those naturalgroupings of consumers that appear oncesurvey respondents are categorized by thefeatures they value, their demographicsand behavioral pro les. Theyre who youcan build a business around.

Experience enhancers are those mar-ket insights thatwhen translated intopractical actionscan create value forB2B customer s. Theyre what you mightdo to grow your revenue.

Experience Radar points the way to valueand pro tsby identifying ways to serve all your customers, but particu larly those seek-ing an experience thats second to none.

Best,

Paul DAlessandro

PwC U.S. Customer Impact Leader

Experience matters.Its never been about the

bits and bytes.

Patrick Pugh

PwC U.S. Software and Interne t Leader


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04 Industry challenges and opportunities

05 Measuring the core attributes of customer experience

07 Understanding the Enterprise Software customertheexperience segments

12 Building experiences that customers valuetheexperience enhancers

42 About moments of truth

43 More about our methodology

44 AppendixSegment descriptions and comparisons


Table of contentsConsumer insights for the U.S. Enterprise

Software industry

volume 3 PwCs Experience Radar helps businesses f ind the often-hidden sources of value that drive exceptional, differentiatedcustomer experience.

By helping Enterprise Software vendors rank their product and service features, Experience Radar locates opportunitiesto create value and thereby bolster top-line growth andbottom-line results.

This years series of studies measures the experiences of about 6,000 U.S. consumers across multiple industries. 1 The Experience Radar assign s value to a broad set of customerexperience attributes broken down into industry-specificelements and then ranked by what target segments value most.

Our methodology employs a conjoint survey technique toreveal insights that can be honed to improve precision. Other,more traditional customer experience studies typically do not tie to hard economics like value measures, price elasticity and churn metrics. Experience Radar does.

While the results outlined in this report are at the industry level, PwC can use this same methodology to develop an Experience Radar that is customized to your business.

1 Retail Banking, Enterprise Software, Media & Communications, Grocery, Airlines, Pharma ceuticals and Home Ser vices.


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Enterprise Softwarechallenges andopportunities

The digital revolution has transformed theEnterprise Software sales process. Todaysconsumers (including decision makers and endusers) are better informed than ever before. As

a result, they expect the next-generation salesexperience to be uniquely tailoredboth totheir requirements and to the pace at whichthey do business.

Enterprise Software providers who are unableto meet these higher consumer expectationsare at a marked disadvantage. After all,

customer-oriented industries have raised thebar for everyone.

Enterprise and small-and-medium-sized (SMB) businesses face the same threats and havethe same rich opportunities for growth. Customization, adaptability and multichannelaccess are critical. The advent of new user interfaces (e.g., tablets, more advanced smart-phones) is driving the focus toward interaction with the end user. Gone are the days of green-screen terminals and form-based applications.

The momentum behind big data will drive Enterprise Software providers to change theirunderlying data models. Social, collaborative and multiple-device applications used to befar out on the horizon. Now customers view them as table stakes. And they expect to be

able to con gure their software on their own rather than relying on IT staff.

Threats

Nontraditional players (e.g., Amazonscloud and supply offerings) enteringthe space

Online business models reshaping theEnterprise Software sales process

Demand for free trials and usability studies (look/touch/feel experience) priorto purchase

Lower margins due to vertical integrationof the stack (e.g., companies playing in theback-end and front-end software space)

Delivery of the lowest TCO (total cost of ownership) in the cloud

Opportunities

Engage customers as social mediapromoters

Design software to function any time,anywhere, and on any device or interface

Tap into the increasing volume of unstructured data to meet ever-changingconsumer demands

Build R&D capabilities to shorten time tomarket

Rely on partners (e.g., system integrators,consultants) to provide a more holisticsolution


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5Experience Radar 2013 | U.S. Enterprise Software industry

Experience Radar measures theexperiences of thousands of consumers

We use an advanced primary research technique 1 to assign values to these attributes at

an industry level.

The5

core attributes of the EnterpriseSoftware customer experience

COMMUNITY 5Customerspersonal brand andconnections withothers

Friendliness andease of obtaininghelp

Anytime, anywhereaccess

CONVENIENCE3Performance and value received

PRESENTATION 4 Aesthetics,arrangement of offer

1 Ad aptive Choice-Based Conjoint.

QUALITY1 SUPPORT 2


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Title of the pageSubtitle here

Putting the EnterpriseSoftware customer rst

In the past, this business has been all abouttransactions. Now, experiences based onconnection and relationship drive customerchoices.

Peel back the onion. Get to the core of what yourcustomer is and values.

Experience Radar can help you: Build experiences that matter to your customers using a variety

of levers such as presentation, community and human service

Figure out whom to target and how to market experience-basedofferings

Set yourself apart as a partner who can help companies movethroughand nd opportunities intechnological upheaval

Inspire engagement and brand ambassadorship

Offer what your customers value

While the insights in this report focus onthe Enterprise Software industry, many

of the lessons are applicable to customer

experience management across industries.


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What is it?This schema uncovers which customers

value experience and what they want.

Hows it different?Traditional market segmentation is usually based purely on demographics. In contrast, we segment Enterprise Soft ware customersby the features they value, rmographics andtheir behavioral pro les.


2013 experience segmentsExperience Radars

Enterprise Software customersegmentation

What is its value?This segmentation provides direction

on whom to target and how to marketexperience-based offerings. Use it tocomplement the work you are already doing with customer segmentation and voice of the customer.

The 6 experiencesegments

Enterprise

Up & Coming

Corporations

Emerging

Empires

Big Business

Behemoths1 2 3

SMB

Mid-Sized Movers Elemental Establishments VivaciousVentures1 2 3


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Snapshot of Enterprise segments

Up & Coming Corporations

Emerging Empires

Big Business Behemoths

Who is this segment?Least number of employeesand smallest revenue of theEnterprise segments

Mid-sized, with >5,000employees and revenue of $1bn$10bn+

Large, w ith >10,000 employeesand revenue >$10bn

What does this segment value?Engaged and interested inexperience, companies in thissegment interact with expertsto learn what is new on thehorizon. Vendors that tailorproducts to meet speci cbusiness needs are highly valued.

Currently in a stable growthstate, companies in this seg-ment tend to make smallersoftware purchases to bridgegaps in existing systems. They are frequently in the marketfor software.

These companies havecomplex needs characteristicof large organizations. Vendorrepresentatives play animportant role throughout thecustomer journey.

How socially vocal is this segment?

Most vocal Enterprisesegment

Most likely to repurchaseand tell colleagues andpeers about a goodexperience

Most likely to share badexperiences and discouragepurchases as a result

Tend to keep to themselves Will stop spreading good

word of mouth after just amonth

Least likely to discourageothers after a badexperience

Tend to focus on positiveinteractions

Most likely to recommendafter a great experience

Will continue to recommendfor years to come

1 2 3


Emerging Empires

Big Business Behemoths21 3


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Comparing the Enterprise segments

Which segment has thegreatest lifetime value?

How to serve them Leverage good wordof mouth to attractnew customers withsimilar pro les.

Evaluate value andfeasibility of tailoringto meet the needs of aspeci c company.

Encourageengagement andparticipation inonline communities.

Recognizeimportance of supportto this segment.

Provide an excellentinstallation experience.

Minimize downtimethroughout thebusiness relationshipissues with delivery are one reason fordissatisfaction.

Most

Least


Emerging Empires

Big Business Behemoths1 2 3


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Mid-Sized Movers

Elemental Establishments

VivaciousVentures

Who is this segment?Largest SMB segment, withthe most employees and mostincome

Second-largest SMB segment,


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Comparing theSMB segments

Which segment has thegreatest lifetime value?

How to serve them Keep abreast of theirspeci c needs in orderto provide the most valuethis segmentlooks for the best vendor t, regardlessof any existingrelationship.

Deliver best-in-classaccess across multipledevices.

Reduce cost to serveby providing self-service options.

Keep lines of communication open.

Suggest tools thatincrease theiremployee mobility.

Provide excellent end-user training.

Take advantage of thesegments preferencefor self-service throughmost of the customer journey.

Ensure onlinecustomer service iseasy and reliable.

Most

Least

Mid-Sized Movers


VivaciousVentures1 2 3


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5

Turn advocacy into action

2

Infuse

the human touch

1

Deliver what matters most Promote

agility

4

Own the issues

2013 experienceenhancers

Building (and growing) your business by designingand delivering exceptionalcustomer experience

3

The ve behaviors that Enterprise Software vendors can adoptto enhance customer experience and create value are:


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EXPERIENCEENHANCER 1

Stable, easy to use and hassle freethese are key.

Look across the product lifecycle, and ensure you

deliver a consistently strong experience. Drop the

extra frills that add complexity but little value.

13

Deliver what mattersmost

1 IT Adoption Insight, Rep. Neochange, 2012. Web. 11 Oct. 2012.

Delivering on the basics is easiersaid than done. An important step in c reating greatexperiences is to focus on the customersgoals and usability expectations. Whencompanies look beyond their own feature

lists, theyll nd that customers yearn forsimplicityand they will open or close their wallets based on the exper ience they receive.

PAGE ONE

Only half of software featuresare widely used, which meansmost enterprise software is much

more complex than the t ypicaluser needs. 1 Extra featurescan negatively affect a usersexperience.

Who wants to waste time ipping throughuser manuals? Along with cost andscalability, ease of use is a top purchasedriver.

Usability isnt only about the software.Customers want a straightforward experi-

ence from purchase to service.

intuitive ...Im looking for something

that is more plug-and-play.

It should be

Ease of use drives purchase

2.5x more than customization.

Vendor produced anddelivered an exceptional product ahead of timethat optimized company ef ciency.

50 %

SalesService

ImplementationUsage

Experience Radar 2013 | U.S. Enterprise So tware industry


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14

The purchase is just the beginning.Stable, easy to use and hassle freethese are key.





1 Harris, Chandl er. IT Downtime Costs $26.5 Billion in Lost Revenue, InformationWeek, May 24, 2011.

Companies pour time and resources intochoosing systems, but implementation is whatcustomers remember the most. Receiving the

Downtime costs customers big money. Smaller rms lose around $70,000 annually, andlarge rms lose more than $1 million. 1 Keeping systems stable is top of mind for both SMBsand Enterprises.

PAGE TWO

2x Enterprises, with their larger ITbudgets, are willing to pay twiceas much for best-in-class stability.

crashed...on my busiest day!

Both servers

value expected from a software investmentcreates a deep sense of satisfaction.

Implementationcreates many morememories thanadditional features.

Greatexperiences

Badexperiences

4x3x

Feature enhancement

C u s

t o m e r v a

l u e

Basic

Standard Best-in-class

Enterprise

SMB

So tware stability



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#1Frequent, unplanned

outages and technicaldif culties are the topdriver of churn.

Yet 7 out of 10 customer interactions are due to technical issues or dif culties withsystem access.

PAGE THREE

Building sustainable relationships requires regular, positiveinteractions.

7 out of 10 cite technical issues and dif culties with access as the top reason for vendor interaction.

Unwavering attention to the basics across the customer journey is a cornerstone of experience. Delivering consistent performance fends off attrition.

Customers want a software partnerand they want to interact with that partner in other ways besides complaining about performance. Ensuring that products work properly makes

room for these kinds of relationship-building interactions.

Having a rep in the area who visits to see how things are ishelpful, especially somebody whom we know personally andcan reach out to.


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Deliver what mattersmost PAGE FOUR

Highlight on segments 1

Ease of use Software stability Implementationperformance



Mid-Sized Movers

VivaciousVentures

Most likely of allsegments to basepurchase decision onease of use

Most valued feature,ranked #1 more oftenthan by other SMBsegments

Most valued feature,ranked #1 more oftenthan by other Enterprise

segments

Cause of more good andbad experiences for thissegment than for any other

1 Links to 2013 Enterprise Software Experience Radar SMB segments of Mid-Sized Movers (highest revenue and size), Elemental Establishments (neighborhood

stores with low revenue), Vivacious Ventures (vocal a nd mid- revenue earners) and Enterprise segments Up & Coming Cor porations (most vocal exper ience seekers), Emerg ing Empires (mid-sized and l east price sensitive) and Big Business

Behemoths (largest employee base with highest software spend).


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Deliver what mattersmost PAGE FIVE

Recommendations

You need to:

Focus on dependable performancePrioritize performance over bells and whistlesto deliver the most value to your customer.Make sure key functions work smoothly

before focusing on the latest trends. Level set with customers early on so they do not haveunrealistic expectations.

Discuss customer-speci c needs and yourproducts functionality. Work with thecustomer to separate the key functions fromthe add-ons. Customers may not realize they

are putting too much emphasis on a frill.Educate them, and focus your resourceson improving the main functions of yourproduct.

Help your customers that prioritizeeasy-to-use, hassle-free products andimplementation. Partner with systemintegrators to achieve a smooth installation.That way, you gain immediate access to

capacity while minimizing the nancial risksto the company. Ramp system integratorresources up or down as the projectdemands.

Keep the end goal in mind

Partner with system integrators


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Some hidden truths surfaced in this years Experience Radar

The big question:What might this meanfor the future of yourbusiness?

Access via multiple devices is vital.Businesses will pay almost 2x more formultidevice access.

Social is the vehicle for customerreferences. 80% of customers are likely to recommendtheir vendor through social media.

Reliability seems basic, but is toooften missing.Over 1 in 3 bad experiences are due tounreliable vendors.


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Understanding how customers want to interact is key to deliveringexperiences that will keep them coming back.


The channel landscape is changing fastwhich

is one reason to ensure human interactions are a

consistently large part of the customer experience.

Substantial returns can be gained by listening and

responding to customer needs every step of the way.

Infuse the human touch

upfront instead of just verbalassurances, the vendor actually created examples.

The vendor answered our questions

PAGE TWO

Most SMBs are comfortable with self-service. However, as the business relationshipdevelops, they become more reliant on human support. Post-purchase, for example, thetendency to self-service declines.

Mid-Sized Movers 1 do not t this SMB pat -tern. Even early in the customer journey,they value interactions with vendor repre-

Reliance onvendor rep

Implementpurchased software

Researchsoftware

Preparebusiness case

Importance o vendor representative

1 Links to 2013 Enterprise Software Experience Radar SMB segments of Mid-Sized Movers (highest revenue and size),Elemental Establishments (neighborhood stores with low revenue), Vivacious Ventures (vocal and mid- revenue earners) and Enterprise segments Up & Coming Corporations (most vocal experience seekers), Emerging Empires (mid-sized and least

price sensitive) and Big Business Behemoths (larg est employee base with highest softwa re spend).

sentatives. This is in line with Enterprises, which also rely on such access f rom the very beginning.

47 % 42 % 55 %

Nearly 3 out of 5 pre-purchase interactions with Enterprises involve vendor representatives

S a le s


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EXPERIENCEENHANCER






Infuse the human touch 2

Its the classroom setting, not in-depthcontent, that customers want. They can learnfrom each other as well as from the instructor.

Hands-on help is often the choice after purchase.

Customers are demanding instruction,not online assistance. Investing in robusttraining creates positive experiences. Itcan also improve operational ef ciency by reducing call volume.

PAGE THREE

hands on,

one-on-one.

I enjoyed the training we were given

65% want both classroom and online options when learning how to use the software

The vast majority 88% of SMBs and83% of Enterprises say a generalistis adequate as a trainer. The added cost of bringing in a specialist is not highly valued.

50%cite calling vendors for simplehow to information as a topreason for interaction.

Vendor representatives play an important role throughout thecustomer lifecycle.


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EXPERIENCEENHANCER






Infuse the human touch 2PAGE FOUR

everything I asked for

quickly and easily, along withanswering my long list of questions.

The rep provided

At critical moments, customers prefer vendor assistance to self-service.

Top expectations o live support

Likelihood o customers selecting vendorsover sel -service or issue resolution

SMB

In-depth productknowledge

First callresolution

Live person Knowsbusiness

Avaliable24/7

Knowsconfguration

Others

Enterprise

2.7x

6.8x

Focus on the types of customer experience that really matter. A straightforward frontline response can go a long way.

Enterprises often have single pointsof contact, which makes this easy-to-use channel a clear preference.

Enterprises engage vendors 2.5x more than SMBs for issue resolution.

3 out of 5 customers are satis ed by knowledgeablerepresentatives who quickly resolve issues

24 % 21 % 17 % 9 % 8 % 8 %11 %


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EXPERIENCEENHANCER






Infuse the human touch 2PAGE FIVE

Highlight on customer segments 1

Interaction Good experience Sharing



Mid-Sized Movers


Most likely of allsegments to interact with company representatives acrosstheir customer lifecycle

Least likely SMB segmentto have had a goodexperience

Least likely Enterprisesegment to have had agood experience

Most likely to telleveryone after a goodexperience


stores with low revenue), Vivacious Ventures (vocal and mid - revenue earners) and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emergi ng Empires (mid-sized and lea st price sensitive) and Big Business



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Infuse the human touchPAGE SIX

Recommendations

You need to:

Build a lasting relationshipBegin each customer relationship withthe goal of a long-term partnership. Knowhow your product is being used and whatthe customer expects. Plan on providingpersonalized support when issues arise.

Create consistently strong experiences to win over segments such as Up & ComingCorporations 1 and Mid-Sized Movers. 1 Thesesegments tend to be in uencers and can serveas brand advocates.

Training is a win-win. With a strong trainingprogram in place, customers become moreself-suf cient and better informed. Theirfrustration drops, they call customer serviceless, and their satisfaction level rises. Usetraining and live demonstrations as an

opportunity to strengthen relationships withsegments such as Elemental Establishments 1 and Vivacious Ventures 1small businessesneed to keep up on the latest features to stay ahead of the curve.

Customers depend on your employees forsupport. Give your employees the trainingand resources they need to deliver a rst-ratecustomer experience. A representative within-depth knowledge of the product and the

ability to resolve an issue on the rst call willexceed customer expectations over 60% of the time. Ensure employee incentives arealigned to deliver an experience that meetscustomer needs.

Focus on training

Invest in employees

1 Links to 2013 Enterprise Software Experience Radar SMB segments of Mid-Sized Movers (highest revenue and size),Elemental Establishments (neighborhood stores with low revenue), Vivacious Ventures (vocal and mid- revenue earners)

and Enterprise segments Up & Coming Corp orations (most vocal experi ence seekers), Emerg ing Empires (mid-sized and least price sensitive) and Big Business Behemoths (large st employee base with highest software spe nd).


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3EXPERIENCEENHANCER

Companies are creating agile, streamlined

environmentsand they want software to support

these new ways of working. In this bring your

own device (BYOD) world, a whole new level of

exibility is required.

Promote agility

3 out of 5 want access throughmultiple devices.

2x Enterprises and SMBs are willingto pay twice as much for access onmultiple devices.

1 CTEMS Research: 78% of Enterprises Allo w Bring Your Own Device (BYOD). Marketwire, July 24, 2012.

Today, rich experiences are exibleand multichannel.Customers are working everywhere,often outside the con nes of of ce walls.They want easy access to applications,regardless of their location. And they want software features that keep pace with their evolving business models.

PAGE ONE

Mobility is table stakes now. 78% of companies have a BYOD policy, andcustomers are holding meetings, sharingdata and collaborating using a range of devices. At 3 out of 5 companies, onedevice simply isnt enough anymore.

Feature enhancement

C u s

t o m e r v a

l u e

Computer only

Computer +1 device

Computer +2 devices

E n t e r p r i s

e

S M B


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3EXPERIENCEENHANCER






Promote agility

customizethe software to meet our speci cneeds!

Both SMBs and Enterprises value software that can evolve with their business.Ease of use is particularly valuable to SMBs.

Customization is also crucial to meeting new challenges. It is less important forcompanies in stable states than in growth stages.

Top purchase drivers

PAGE TWO

Besides cost, scalability is a leading purchase driver.

We were able to

#1 Scalability

EnterpriseSMB

#2 Ease o use

#3 Recommendations

21%19%

21%

10%

13%

10%

G r o w

t h m o

d e E s t a b l i

s h e d

L e a d e r

Companies in growth stages need the exibility of full customization to meet unforeseen changes to their expanding business.

Companies in stable states have a clear roadmap of theirfutures. For them, partial customization will meet thei r needs.


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3EXPERIENCEENHANCER






Promote agility

25%of smaller businesses seethe cloud as critical to theirstrategic vision.

The days of the traditional IT data center are numbered.

1 Cloud Drivers For Adoption. CloudTweaks.com, Web. September 13, 2012

2 Kevin Casey, SMB Cloud Computing To Double By 2015, InformationWeek, May 13, 2011.

PAGE THREE

Nearly

Companies are moving away from traditional IT infrastructures to more exiblehybrid models that support features of cloud computing.

5x SMBs envision a cloud model more than Enterprisecompanies. In the U.S., SMBs will allocate more than $49 billion tocloud in 2015 2nearly double the size of the market today.

3out of

5

support a hybrid IT model. As datademands grow and speeds increase, 1 pure cloud computing will grow inrelevance, particularly for SMBcompanies.

Cloud

Company


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3EXPERIENCEENHANCER






Promote agility PAGE FOUR


Look closer at how the demand for customization dips as companies move fromgrowth stages ( like Vivacious Ventures) to stable states. The largest companies needfull customization for a different reasonconnecting legacy systems.


Emerging Empires


VivaciousVentures


Mid-sized Movers

CompleteFlexibility to meetun oreseen changes toexpanding business

CompleteRequired to ensure vastlegacy systems can connect

PartialSu fcient with a clearroadmap

L e a

d e r

E s t a

b l i s h e

d

G r o w

t h m o

d e


stores with low revenue), Vivacious Ventures (vocal and mid - revenue earners) and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emergi ng Empires (mid-sized and le ast price sensitive) and Big Business



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3EXPERIENCEENHANCER






Promote agility PAGE FIVE

1 Links to 2013 Enterprise Software Experience Rada r SMB segments of Mid-Sized Movers (highest revenue and size), El-emental Establishments (neighborhood stores with low revenue), Vivacious Ventures (vocal and mid- revenue earners) and Enterprise segments Up & Coming Corporations (most vocal experience seekers), Emerging Empires (mid-sized and least

price sensitive) and Big Business Behemoths (larg est employee base with highest software sp end).

Recommendations

You need to:

Selectively expand to new devices Your products probably function better oncertain platforms or devices than others.Do the research required to understand thetradeoffs across products and platforms.

Make sure you do not compromiseperformance in the name of multideviceaccess.

The most comprehensive solution is notalways the answer. Sometimes customers just want simplicity. Customization options will att ract different segments. Vivacious

Ventures 1 are experiencing rapid changeand as a result, they need a full range of options to meet uid sets of requirements.

An increasing number of customers wantaccess to all of their information anytime,anywhere. Provide access to key applicationsand data through cloud storage andSoftware-as-a-Service (SaaS) programs.With the right IT investments, customers can

get the convenience they seek while savingmoney on storage costs and IT supportstaff. The additional mobility will draw in Vivacious Ventures while the cost savings will attract Elemental Establishments. 1

Offer options

Build the right cloud capabilities


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4EXPERIENCEENHANCER

Issues will inevitably arise. How you handle

them is the difference between being a vendor

and a partner. Find ways to turn problems into

good experiences that build the relationship.

Own the issues

Lack of updatesand proper performancecaused us to part ways before

our contract was up.

Customers are asking for more digital options.

PAGE ONE

When problems occur with software, the impact can be felt across the rm. Take swiftaction to manage the resolution process and make things right.

So tware problemsa ect productivity

Its no surprise that B2B customersare vocal when problems occur.

60%Compared to B2C customers, B2Bcustomers are 60% more likely totell vendors about their problems.

3 out of 5 will switch vendors after abad experience


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4EXPERIENCEENHANCER

Issues will inevitably arise. How you handle them

is the difference between being a vendor and a

partner. Find ways to turn problems into good

experiences that build the relationship.

Own the issues

Figure out where you are failing to meet customer expectations.

PAGE TWO

part ways beforeour contract was up.

Lack of updates and not keepingthe software performing properly caused us to

That way, you can prevent similar problems in the future.

35% of bad experiences are causedby vendor unreliability relatedto products or services

2x Dissatisfaction withproduct performance or service drivescustomers to leave a vendor overtwice as often as price increases do

Bad experiences with products orservices have far-reaching impacts.Customers defect signi cantly moreoften due to these experiences than dueto price increases.

A simple x is not enough. Vendors need to remedy the source of the issue quickly and effectively to prevent the issue from occurring again.

Cause


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4EXPERIENCEENHANCER

Issues will inevitably arise. How you handle

them is the difference between being a vendor

and a partner. Find ways to turn problems into

good experiences that build the relationship.

Own the issues

24 hoursWindow in which mostcustomers want issue resolution

Time is money.

Customers want issues handled with urgency. The vast majority prefer immediateresolution in less than a day.

85%prefer to wait less than a day forissues to be solved

30%Large businesses value proactivesupport more than other segments

PAGE THREE

Indeed, nearly a quarter want thepotential causes of issues identi edand resolved even before a problemoccurs. Proactive support is particularly

important to Big Business Behemoths. 1 With their large operations, they wanta guarantee that their systems will run

awlessly around the clock.

Large business Other company segments

1 Links to 2013 Enterprise Software Experience Radar SMB segments of Mid-Sized Movers (highest revenue and size), El-emental Establishments (neighborhood stores with low revenue), Vivacious Ventures (vocal and mid- revenue earners) and Enterprise segments Up & Coming Corporations (most vocal experience seekers), Emerging Empires (mid-sized and least

price sensitive) and Big Business Behemoths (larg est employee base with highest softwa re spend).


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4EXPERIENCEENHANCER





Own the issues

2X more customers will remainloyal when vendors take actionto remedy issues.

PAGE FOUR

Fixing the problem is just the rst step.

Immediately acknowledge the issue, and take action to make customers feel whole again.

Likelihood that customers will be satisfed i a vendortakes action, versus no action

Repurchase a ter a bad experience

Compensation Re und Apologized

5.5x 5x

2x

3.8x

Satisfaction directly impacts customerretention. Tip the scales in your favor

by taking action. This is a powerfulopportunity to create value and cement your customers loyaltyand customersare 2x as likely to repurchase when youtake action than when you dont.

A c t i o n

N o A c t i o n


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Own the issuesPAGE FIVE


Sharing Bad experience Proactive support



Mid-Sized Movers


Most likely SMB segmentto tell their vendor abouta bad experience

Most likely SMB segmentto be burnt by a badexperience and neverrepurchase after they have had one

Value proactive supportfor issues far more thanall the other segmentsto ensure limited issuesarise

Most likely Enterprisesegment to be burnt by abad experience and neverrepurchase after they have had one


stores with low revenue), Vivacious Ventures (vocal and mid - revenue earners) and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emergi ng Empires (mid-sized and lea st price sensitive) and Big Business



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4EXPERIENCEENHANCER





Own the issuesPAGE SIX

Recommendations

You need to:

Get the basics right to avoid mistakesFocus on the most important things rst.Conduct root-cause analysis on service issuesand invest in processes and technology to minimize errors. For segments like Big

Business Behemoths, 1 which want vendorsto identify problems proactively, leveragepredictive analytics to enhance theirexperience.

Errors are inevitable. Do not stop attroubleshooting the technical issues. Createan escalation process that ensures allcustomers are satis ed after problems occur.

Track all issues until they are resolved. Offerfrontline staff a mix of resolution methods toquickly and effectively make customers feel whole again.

Customers are looking for reliable partners whom they can trust with their business.Take ownership of problems and work with the customer to resolve issues quickly.Instead of generic resolutions, offer

personalized solutions that satisfy speci cneeds. Build credibility through reliableproducts and support to create a long-termpartnership with customers.

Develop an issue resolution procedure

Create a long-term relationship


and Enterprise segments Up & Coming Corp orations (most vocal exper ience seekers), Emerg ing Empires (mid-sized and least price sensitive) and Big Business Behemoths (larg est employee base with highest software sp end).


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Community21

Convenience/ Accessibility

14

Presentation19

Quality13

Support9

Community18


16

Presentation19

Quality14

Support10

Community27


13

Presentation18

Quality15

Support9

Community22


13

Presentation14

Quality14

Support11

Community20


13

Presentation18

Quality14

Support10

Community11


10

Presentation9

Quality10

Support10

Mapping attributesto segments

What does this mean forhow you build customerexperiences?


Mid-Sized Movers

Emerging Empires



Vivacious Ventures

Community is the most important attr ibute across all Enterprise Software segments.Software stability and personal software support are vital in making sure a customers

experience is exceptional.

Community 5 Customers personal brand andconnections with others

Support 2 Friendliness and ease of obtaining help

Convenience 3 Anytime, anywhere access

Quality 1Performance and value received

Presentation 4 Aesthetics, arrangement of offer

SMB

Enterprise

1 Links to 2013 Enterprise Software Experience Radar SMB segments of Mid-Sized Movers (highest revenue and size),Elemental Establishments (neighborhood stores with low revenue), Vivacious Ventures (vocal and mid- revenue earners) and Enterprise segments Up & Coming Corporations (most vocal experience seekers), Emerging Empires (mid-sized and least

price sensitive) and Big Business Behemoths (larg est employee base with highest softwar e spend).


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Let customers do the work for you. Identify key

in uencers among them to serve as your brand

advocates. Build community among your customers

so they can help each other.

37

Turn advocacy intoaction

Blow satisfaction standards out of the water.

Encourage customers to share theirexperiences. Turn brand advocates intosales people and socially savvy self-service pros.

Strong reputations lead to bottom lineresults. With customers 3.5x morelikely to purchase from highly regardedcompanies, 1 a proven track record makesbusiness sense.

1 Reputation Institute, Navigating the Reputation Economy, September 10, 2012 (http://www.reputati oninstitute.com/ thought-leadership).

PAGE ONE

94%prefer a vendor that is well established84% will recommend a vendor aftera great experience

The vendor was prepared with a good understandingof our businessthey offeredus interesting use cases

beyond what werequested.

Proventrackrecord



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Accommodating uniquebusiness needs

Fast, ef cientresolution







2 X more than other segments, BigBusiness Behomoths share goodexperiences for years to come

Long-term sharing o great so tware experiences

To leverage great experiences, you have to know who is talking.

Big companies are good long-term bets, but all segments share similarly aftera month.

PAGE TWO

Feedback loops are a powerful tool.Make it possible for customers to share

and take action through engagement at various points after experiences.

Listening to your customer will helpidentify the types of experiences that

make them want to share. Act on what you learn to build brand ambassadors.

0%

1 year 2 years 5 years 10 years+

25%

50%

75%

100%

E Up & Coming CorporationsE Emerging Empires

E Big Business BehemothsSMB Mid-Sized MoversSMB Elemental EstablishmentsSMB Vivacious Ventures

SeamlessImplementation

Working together to de nerequirements

Follow up support andtraining was excellent

Great support and servicepersonnel


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Enabling conversations is easier with social media.

Interest in online communities pre erence

Likehood to recommend online

1 Matthew S. McKenzie, B2B Buyer Survey Reveals Impact Of Social Media On Vendor Selection Process. Demand Gen Report. 11 Sept. 2012.

Online communities are an opportunity for customer-driven self-service. Userscan learn, collaborate and share.

1 in 3 B2B rms participate in social activities every day. 1

PAGE THREE

Look at community forumsyoucan literally post your question,and people with similar things,

theyll respond

to you.

0-49 50-999 1,000+

39% 58%

73%Larger companies are

1.8x more receptive to onlinecommunities

4 out of 5 Companies are likely torecommend their vendor in anonline social community


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5






EXPERIENCEENHANCER

PAGE FIVE


Turn customers into key in uencers. Build great experiences using the drivers they care about. Each segments de nition of great is different. You have plenty of opportunities to make a great impression.


Emerging Empiress


Vivacious

Ventures

Mid-sized Movers

Seek personalizedattention. 20% of great experiences comefrom pairing with clearexplanations

Require smoothinstallationa good rstimpression drives 35%of memories

Value training in suchhigh regard it in uences20% of positiveinteractions

Value customization,a tailored experiencecreates 23% of memorable moments

Seek prompt support, which drives almost a quarter of greatexperiences

Form

F u n c

t i o n

Top drivers o great experience

Smoothinstallation

Feature

customization

Prompt support

User training

Personalizedattention

What de nes a great experiencedrastically varies across segments.

1 Links to 2013 Enterprise Software Experience Rada r SMB segments of Mid-Sized Movers (highest revenue and size), Elemental Establishments (neighborhood

stores with low revenue), Vivacious Ventures (vocal a nd mid- revenue earners) and Enterprise segments Up & Coming Cor porations (most vocal expe rience seekers), Emerg ing Empires (mid-sized and l east price sensitive) and Big Business



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Turn advocacy intoaction PAGE FOUR

RecommendationsYou need to:

Let the customer do the talking Find key in uencers and deliver theexperience they want to broadcast totheir networks. Give customers ampleopportunities to share and help them become

brand advocates. This is a particularly important tactic for segments that are vocal with good and bad experiences.

Do not de ne greate experience toonarrowly. Understand that segments havedifferent de nitions of great experiences. You need to tailor experiences to t each

segments unique circumstances. Apply what you learn about great experiences to meetand exceed customer expectations.

Monitor your brand online to see whatpeople are saying. Discover issues early andresolve before they escalate. Understand

customer opinions and proactively incorporate these ideas during upgrades andnew product development.

Offer an array of great experience

Take part in the conversation


and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emerg ing Empires (mid-sized and least price sensitive) and Big Business Behemoths (larg est employee base with highest softwa re spend).


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Create a positive moment of truth and you will have loyal customers.

On the ip slide, create a negative moment of truth and you have a brand detractor.

The words used most often by thosedescribing a positive moment of truth

The words used most often by thosedescribing a negative moment of truth

Percentage of respondents whoattribute negativeMOTs to unreliability 135 %1 Word clouds derived from Enterprise Software Experience Radar survey data.

Moments of truthPowerful events in the

lives of consumers thatoften de ne their opinionof a software provider

Percentage of respondents whoattribute positiveMOTs to quality

software withseamless installation

45 %


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This years Experience Radar study measuresthe experiences of about 6,000 US consumersacross multiple industries. 1 PwC conductedon-line eld work from May through July 2012. The study was designed to uncoverexperience recipes, pricing options andlinkages to customer loyalty.

We probe into the consumer responsesthrough the lens of experience attributes.These attributes include:

QualityPerformance and valuereceived

SupportFriendliness and ease of obtaining help

ConvenienceAnytime, any where access

PresentationAesthetics, arrangementof offer

CommunityCustomers personal brandand connection with others.

By using adaptive choice-based conjointanalysis, Experience Radar revealscustomer trade-offs between different setsof experiential features and the value and


More about our methodology

willingness to pay consumers place on eachfeature. It also probes into other areas suchas purchase behavior, moments of truth(MOT), and word-of-mouth marketing withineach industry. The study combines andassesses these data elements to create a set of experience-based insights and a segmentationschema for each industry.

Our methodology employs an advancedconjoint survey technique to pinpointinsights. Other, more traditional customerexperience studies typically do not tie tohard economics like value measures, priceelasticity and churn metrics. ExperienceRadar does.

While the results outlined in this report areat the industry level, PwC can use the samemethodology to develop an Experience Radarstudy that is customized to your business

and identi es business accelerators.

1 Retail Banking, Enterprise Software, Communications & Media, Groceries, Airlines, Pharmaceutical s and Home Services.


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AppendixThe different segments

More detailed comparisonsof the segments


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Characteristics 39% of SMB population

1,000 4,900 employees

Annual earnings of $100mn $10bn

Typical software purchases $500 $999k

IT decisions makers within ITdepartments

Preferences Software stability : 65% seek top tier

option (45 minutes of downtime permonth)

Feature customization : Top-tier option with open API standards

Envisions a cloud model almost 2x morethan other enterprises

How to interact with Up & Coming Corporations

Up & Coming Corporations provide a great opportunity

for software vendors, since they are engaged and value

experience. They like to interact with the experts to learn

what is new on the horizon and highly value vendors that

can tailor products to meet their business needs.

Since Up & Coming Corporations are vocal in sharing

experiences with colleagues and peers, software vendors

can leverage this good word of mouth to attract new

customers with similar businesses pro les.



ENTERPRISESEGMENT 1

Behaviors Most vocal enterprise segment

Most likely to repurchase and tellcolleagues and peers after a goodexperience

Most likely to discourage others andshare with peers for years to come after abad experience


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5,000 employees, a portion over10,000 and

Annual earnings of $1bn $10bn+

Majority of software purchases >$500k

IT decisions makers throughout theorganization

Preferences Feature customization : 90% satis ed with

partial customization

Software stability : Majority prefermiddle-tier option (3-5 hrs monthly downtime)

Multi-device availability : Split betweenmiddle and top-tier options (1 additional vs. multiple devices)

How to interact with Emerging Empires

Emerging Empires are currently in a more stable growth

state and tend to make smaller software purchases that can

help them bridge gaps in their existing systems. Although

they make less expensive purchases than other Enterprise

segments, these companies are frequently in the market for

software.

Since Emerging Empires prefer to keep their opinions

to themselves, encourage these rms to become more

engaged in other ways. Prompt support is their top driver of

experience, so help them participate in groups like online

communities. These rms will appreciate getting answers

from other users, and they will provide assistance to others

as well.

Emerging Empires ENTERPRISESEGMENT 2

Behaviors Tend to keep to themselves

Will stop spreading good word of mouthafter just a month

Least likely to discourage others after abad experience


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Over 10,000 employees

Annual earnings over $10bn

Majority of software purchases between$1$10mn


Preferences Software stability : 88% seeking top tier

option (45 minutes of downtime permonth )


How to interact with Big Business Behemoths

Big Business Behemoths have complex needs characteristic

of large organizations. Vendor reps play an important role

for this segment throughout the customer journey. Help

them minimize the downtime in the business relationship

issues with delivery are the reason for dissatisfaction.

Since Big Business Behemoths are vocal when it comes togood experiences, provide them with plenty to talk about

by being on top of your game during installation. They wi ll

reward you with good word of mouth for years to come.

Big Business Behemoths ENTERPRISESEGMENT 3

Behaviors Tend to focus on positive interactions

Most likely to recommend after a greatexperience

Will continue to recommend for yearsto come


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50 249 employees , with a portionover 500

Annual earnings from $10mn $100mn upto $1bn for larger rms

Software purchases range from $50 $500k


Preferences Software stability : Majority seeking

top-tier option (45 minutes of downtimeper month)

Multi-device availability : Best-in-classaccess across multiple devices preferred

How to interact with Mid-Sized Movers

Experience matters to Mid-Sized Movers. Because these

rms are the least price sensitive, ease of use not cost

is their leading purchase dr iver. This segment looks for best

vendor t, regardless of any existing relationship, so keep

abreast of their speci c needs in order to provide the

most value.

Offer Mid-Sized Movers products that require little to

no downtime and can be accessed by multiple devices.

Deliver great experiences, and they will thank you with

recommendations for years to come.

Mid-Sized Movers SMBSEGMENT 1

Behaviors Tend to focus on positive interactions

Most likely to recommend after a greatexperience

Will continue to share for years to come with peers at other companies


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Fewer than 50 employees

Annual earnings >$1mn

Average software purchases >$50k

IT decisions makers are seniormanagement

Preferences Software stability : O ver 55% satis ed

with middle-tier option (3 5 hrs monthly downtime)

Multi-device availability : Top-tier option(works across multiple devices)

Cloud usage almost 2x more than that of other SMBs

How to interact with ElementalEstablishments

Elemental Establishments have simpler needs due to their

size and budget. Keep an eye on them, however, as their

needs will evolve with growth. Theyre not the most vocal

segment, so be proactive with recommendations when the

time is right.

For now, offer products like cloud-based solutions that can

help them manage costs. Also, suggest tools that increase

their employee mobility, as exible work environments can

reduce overhead.

Reduce your cost to serve these rms with self-service

optionsthis segment is comfortable with do-it-yourself.


SMBSEGMENT 2

Behaviors Keep to themselves and least likely

among SMBs to share experiences with peers

Least likely to recommend

Most likely to not tell their vendor aboutbad experience. This translates into lostsales as they are also the least likely torepurchase afterward


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Fewer than 50 employees

Annual earnings $1mn $10mn

Typical software purchases >$50k

IT decisions makers are in operations

Preferences

Multi-device available : 75% seekingtop-tier option (across multiple devices)


Envisions the cloud as a part of theirnear-term strategy 2x more thanother SMBs

Vivacious Ventures SMBSEGMENT 3

Behaviors A vocal segment, most likely to share

their memorable experiences, both goodand bad

Continue to share bad experiences for years to come

How to interact with Vivacious Ventures

Vivacious Ventu res are smal l and nimble companies that

want soft ware to meet their spec i ca nd ever-ch anging

needs. They see big things in their future and envision an

IT infrastructure that can g row with them.

Offer these rms products that c an enable their workforce,

front and back of ce, to ourish. Build your relationship with these companies by teaching employees how to best

use new softwareuser training is t heir top driver of

experience.

Take advantage of this segments desire to self-serve

throughout most of the customer journey. However, be sure

the online experience is designed for usage.


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Overall, what do Enterprise customers value in EnterpriseSoftware?

High-quality customer experience is a de ningfeature for Enterprise software customers.Given their size, Enterprise customers areoverwhelmingly willing to pay for customizedpackages that are tailored to their unique needs.Extremely quick issue resolution and limitedsoftware downtime are top featuresandbusinesses are willing to pay for the convenience.

Customers seek out solutions that are easy tolearn and that require only a few days of trainingin person or online. Stable software is essentialcustomers expect it and they arent willing to pay extra for it.

Customer value or top eatures 1

Lower Willingness to pay

D e m a n d

L o w e r

Higher

H i g h e r Software stability

45 min monthly downtime

Device avaliability Computer &

multiple devices

Upgrades Performance

& interface withsome downtime

User trainingGeneral online &

in-depth classroom

VendorreputationExtensiveindustry

experience

Feature customizationPartial

Integration

levelFull

Ease of use 2-3 daystraining

Issue resolutionIn 24 hrs

1 Axis Lab els Demand-Relative feature importance assigned by customers; Willingness to Pay-Incremental featurewillingness to pay Other Figure Comments : Does not display Pre-Sale Support feature due to insignificant customer value relativeto feature set


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Overall, what do SMBcustomers value in Enterprise Software?

High-quality customer experience is a de ningfeature for SMB software customers. Many are willing to pay for customized packages that ttheir unique needs, quick resolutions to keeptheir software up and running, and consistentupgrades. Given the number of employees on-the-go and working remotely, access from multipledevices is valued.

SMB customers seek solutions that are easy tolearn and that require only a few days of trainingin person or online. Stable software is essentialcustomers expect it and they arent willing to pay extra for it.

Customer value or top eatures 1

Lower Willingness to pay

D e m a n d

L o w e r

Higher

H i g h e r

Software stability 45 min monthly

downtime Device avaliability Computer &

multiple devices

UpgradesPerformance

& interface withsome downtime

User trainingGeneral online & depth classroom

VendorreputationExtensiveindustry

experience


Integration levelFull Ease of use

2-3 days training

Issue resolutionIn 24 hrs

1 Axis La bels Demand-Relative feature importance assigned by customers; Willingness to Pay-Incremental featurewillingness to pay Other Figure Comments : Does not display Pre-Sale Support feature due to insignificant customer value relativeto feature set


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Comparatively, how do Enterprise segments value features?

Across Enterprise segments, Up & ComingBusinesses 1 will pay the most for 24-hour issueresolution. Emerging Businesses 1 and Big BusinessBehemoths 1 value multidevice access to softwareand solutions that are easy to operate and usethey will pay almost twice more for these featuresthan Up & Coming Businesses will.

In addition, Big Business Behemoths standalone in their willingness to pay for featurecustomization as well as performance upgrades toensure their software is constantly top of the line.

Feature willingness to pay premium or top eatures

Emerging Empires

Overall populationLess willing More willing

Ease of user interface2-3 days of training

Integration levelStandalone

Vendor issue resolutionResolution within 3 days

Software stability 7 hours downtime per month

Multi-device availability Works across multiple devices

Big Business Behemoths Circle size proportionate to feature demandUp & Coming Corporations

2%

33%

67%

69%

25%14%

20%13%

34%

57%

15%

26%

This chart compares segments demand for individual features 1 as well as their will ingness to pay for the feature . The percentages indicate the size of the premiumthat the segment is willing to pay for an enhanced experience with that feature. The size of the bubble indicates the demand for the feature.


stores with low revenue), Vivacious Ventures (vocal and mid - revenue earners) and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emergi ng Empires (mid-sized and lea st price sensitive) and Big BusinessBehemoths (largest employee base with highest software spend).


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Comparatively, how doSMB segments value features?

Mid-Sized Movers 1 value certain featuresbutthey are only willing to pay slight premiumsacross the board. Elemental Establishments, 1 onthe other hand, have the budget and the desire topay higher premiums for features that increasepersonalization and convenience.

Feature willingness to pay premium or top eatures


Overall populationLess willing More willing

UpgradesPerformance & Interface withsome downtime

Ease of use2-3 days training

Device availability Computer & one device

Issue resolutionIn 24 hours


Vivacious Ventures Circle size proportionate to feature demandMid-sized Movers

5%

5%

5%

12% 13%

10%

11%5%

5% 17%10%

36%6%

This chart compares segments demand for individual features 1 as well as their will ingness to pay for the feature . The percentages indicate the size of the premiumthat the segment is willing to pay for an enhanced experience with that feature. The size of the bubble indicates the demand for the feature.


stores with low revenue), Vivacious Ventures (vocal and mid - revenue earners) and Enterprise segments Up & Coming Corpo rations (most vocal experi ence seekers), Emergi ng Empires (mid-sized and lea st price sensitive) and Big BusinessBehemoths (largest employee base with highest software spend).


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While the results outlined in this reportare at the industry level, PwC can use thesame methodology weve used here todevelop a customized Experience Radarstudy and uncover opportunities toaccelerate your business.

If youd like to discuss these ndings orhow PwC can help you apply them to yourbusiness, contact:

Paul DAlessandro312 298 [email protected]

Patrick Pugh206 398 [email protected]


We hope these insights prove useful to your business


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2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member rm, and may sometimes refer to the PwC network. Each member rm is a separatelegal entity. Please see www.pwc.com/structure for further details.

This content is for general information purposes only and should not be used as a substitute for consultation with professional advisors PwC US helps organizations and individuals create the value theyre looking for

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