What's Holding Up Buyers?: Top Obstacles to Making Software Decisions with G2's VP - Asia Pacific

But really quickly, 30 seconds about me. I'm going to date myself here. I've been working with technology vendors for 27 years. Most of my experience has been with the analyst firms, but I have some experience in the software side. Last 7 years, I've been working with review platforms, most recently with G2, helping us to grow in Asia Pacific. I live here in Singapore. You see the picture of my wife, my 2 sons. My 2 sons seem to be kicking my ass every day. A lot of fun though. So first off, the good news, and I think we all need some good news. Yeah, despite the economic headwinds that we've seen, people are still buying a lot of SaaS. Yeah, from G2's data, we've seen that the average mid-size company last year had 111 SaaS applications, and we're estimating that by next quarter, that's going to rise to 119. So we are seeing some impact from the economic headwinds and that the average spend has been coming down slightly. We see companies starting off with smaller contracts. Companies are negotiating a lot more aggressively. And companies are rationalizing their SaaS spend as well. Many people are reducing licenses, seeing what licenses they can get around. So overall, though, SaaS is vibrant. We're seeing good growth. I think what we're experiencing right now, the best analogy is a hangover. Probably some of you are experiencing a hangover from the festivities last last night. You know, the last 5 to 10 years we've indulged ourselves. You know, there's a lot of funding, a lot's been happening, and we're kind of experiencing that hangover right now. I've been through 5 economic crises in my life, going all the way back to the 1998 Asian economic crisis. The great news is they all end, and in hindsight, they're often a lot shorter than we thought they were. So like a hangover, this is going to pass us by and things are going to get back to solid growth moving forward. But speaking of hangovers, That's 24-year-old me. I was probably hungover in that picture. I was living here in Singapore. This is back half of the '90s. I was a hot mess when I was 24. I was working at IDC as a junior salesperson. And it was 24-year-old me that started on his first software buying journey. So this was the late 1990s. I thought it would be interesting to look at that journey and look at how things have changed between then and now. If you look back in the '90s, first of all, who put a 24-year-old in charge of buying CRM? That was a sign of the times. Yep, software wasn't that important. CRM was new. Most companies didn't even have a CRM. I got most of my information from magazines, reading magazines in the office trying to figure out what vendors to work with. Stayed up late at night calling those vendors in the States, because their websites were very rudimentary. No information, hard to learn about their products. And when I called those vendors, what I was asking for was a demo CD. And I got to wait 2 weeks for that to arrive in the mail, prayed it worked so I could see, uh, the— what this vendor had to offer and how they could help. And then I had a total lack of choice. There literally were 5 vendors that potentially could help us. That's not a short list of 5, that's only 5. So we ultimately went with a company called Goldmine, uh, very innovative at the time. I think they're still around, but we went with them as a CRM. Guess what? We had to wait 2 weeks for the software to arrive. Those nice shiny CD-ROMs that come in the mail. So, in many ways, it was a much simpler time, but as you can see, it was a pretty frustrating buying process for us. So we are going to fast forward 26 years. A 50-year-old Christopher Ryan is going to try to buy CRM software. And we're going to dive into that today, and we're going to talk Number 1, how it's a lot easier to buy software now, but there are also still a lot of challenges that buyers are facing, and we're going to dive into that. So we're going to utilize data from G2's Global Buyer Behavior Study. So this is a global study that we do, but we also have information on Asia Pacific. Where the Asia Pacific data and insight deviates from the global figures, we're going to call that out so you can see what might be different here in the region. So with that, we are going to start our software buying journey. So first off, for starters, I need software that's easy to implement. I need to get a quick ROI, and I need it to be easy to use. And this has been pretty consistent in our buyer study. Year on year, these are the top 3 attributes that are driving buyers' decisions. The thing that's really changed, though, is that buyers want to see ROI, and that's increasing every year. As far as a determinant for their ultimate buying decision. We're also seeing ROIs getting condensed. Every year it's getting shorter and shorter. When the study came out late last year, it's now 6 months. So buyers want to see from signing a contract to 6 months, they want to see positive ROI. That's a challenge for vendors. It's tough in that tight time frame to show ROI on average. You know, some buyers have a longer time horizon there. But on average, it's 6 months. And that, again, has been a big challenge for vendors. As a buyer, I am overwhelmed by the sheer number of vendors that have solutions for what I'm looking for, and I don't know where to start. This is a big challenge for vendors. There's so much competition out there in SaaS. If we rewind 26 years, I literally had 5 options. It was simple. 5 options. Who am I going to pick? Who's the best? If you look at G2 CRM category right now, 823 different CRM products qualify for the category. Again, CRM is a big category. It's a bit of an outlier, but most categories have anywhere from 50 to 150 products. So there is a lot of competition out there, and that's a challenge for buyers. Buyers don't know where to start. Who do I shortlist? Who do I research? Who can best serve me? As a buyer, I am struggling to find content to help me choose the right vendors. This is probably the biggest impediment for buyers right now. From our study, the top 5 things holding back buyers, 4 was content. So buyers are struggling to find credible content. They're struggling to find content that's going to help them understand the vendor's offerings. Those are the top 2. Consistently have been the top two. What we've seen moving up is industry content. So these are buyers not looking really for industry solutions. What they want is information on how you serve people in their industry. This could be case studies, this could be reviews, any type of content that helps them understand what people who look like them, what success they have seen with your solution. And that's the one we've really seen skyrocketing up lately. I think as SaaS becomes more ubiquitous, people are looking more at specific industry content to help them make that decision. As a software buyer, I am struggling to trust the vendors that I'm researching. So we saw 2 slides ago, there's a tremendous amount of competition in SaaS. Everybody is saying that they're the best. Fancy websites, interactive demos, they're pushing case studies. It is a big, big challenge for buyers to understand what is real and what's just marketing. So a big challenge here is that you can see only 1 in 3 buyers actually looks at a vendor's website and says that this is the information source that I trust the most. And that's a big challenge for vendors because typically your website is your channel to the market. It's how you communicate what you do, how you add value. But yet only 1 in 3 buyers actually trust that. In many cases, they're getting information from other sources. As a buyer, I've got more stakeholders than ever that I have to manage. So as you can see here, 71% of buyers said that stakeholders are added to the buying process either always or frequently. And that's an 11 percentage point increase since 2021. And again, big challenge for buyers, they have to manage more stakeholders. With more stakeholders comes more opinions. So it's important not only to buy the right SaaS, to buy the right solution, but to really get into this environment of where you're managing multiple stakeholders through that process, not just in buying, but implementing and utilizing, uh, the software that you've put in place. As a software buyer, my boss is probably going to change. We've seen a 60% rate of where people are saying decision makers are changing either always or frequently. And again, this is a big challenge for buyers because buyers have to reeducate these new decision makers. And that's really where content comes into it. We said content was a big, big impediment for buyers. Buyers are constantly having to use content to reeducate these decision makers. Why do we have this project? Why did we pick these vendors? Who are we ultimately gonna pick? This also has an impact on the length that it's taking projects to get done because of this change in decision makers. But inversely, for software sellers, those sellers are seeing a length in their sales cycles. It's just taking longer to get deals done. And again, that's a big challenge on the vendor side as well. As a software buyer, my CFO and my management team is really pressing me to do a short-term contract. You know, my CFO has seen a lot of software projects not be successful. They've seen software turn into shelfware, and they're really pressing for a short-term contract to mitigate their risk. We've seen through the data, 57% of software contracts now are 6 months or less. And again, as we look regionally, Singapore, Australia, New Zealand aligned roughly around this 57% mark, give or take a percent or two. India is the global outlier. 69% of software contracts are 6 months or less. We also see that while pretty much shorter-term contracts have been in the SMB space before, we're seeing this now impacting the mid-market in the enterprise as well. As a software buyer, I don't need to buy direct anymore. I've got options, but where do I buy? This is probably the biggest trend that we've seen in SaaS, looking at alternative channels. On one side, you've got the global cloud marketplaces, the AWS Marketplace, the Azure Marketplace. They're really starting to provide, you know, the early stages of almost a B2C type experience for buyers. That all-in-one shop. But we've also seen value-added resellers. And these aren't the VARs of old, the VARs from 10 or 15 years ago that would just go and implement software. These typically are service providers that are bringing SaaS into their portfolio of products and services to serve their customers better. So again, from a regional perspective, you can see ANZ in Singapore roughly aligned with the global averages that we see. India is a bit of the outlier here. 70% are still going direct with vendors. As a software buyer, if I buy from a third-party cloud marketplace, is that a better option for me? It depends. Really depends on what you're buying. It depends on your organization. But as you can see from the data, buyers are increasingly experimenting with cloud marketplaces. So AWS Marketplace, the Azure Marketplace. There are various reasons for this. Some cases it's just easier, one-stop shop. You got someone who can manage multiple software subscriptions. You don't have to go to various vendor websites to manage that. It's all with one party. You see a lot with security as well. You know, AWS, Azure, other marketplaces really focus on security. They have the security standards, they have the compliance in place, makes people feel a little bit better about security as opposed to dealing with lots of multiple vendors. So this is a trend that we've seen. You can see from the data, big increase from 2020 to 2021. Expect to see that continued increase into 2022 and 2023 where we are now. So definitely something for vendors to, to take note of these alternative channels. As a software buyer with all these challenges that I'm facing, I can actually still transact pretty quickly and I can do it with a credit card. So we see 55% of software buyers buying software over $20,000. They can transact in 3 months or less. And actually in the region, pretty similar. It's even a tick higher. It's getting closer to 60%. So we've seen that SaaS is accelerating the buying cycles. Obviously challenges that we've outlined. But people can still transact relatively quickly, and a lot of that has to do with credit cards. 53% of buyers most often now are buying SaaS with a credit card, and the enterprise is coming up pretty quickly as well. 48% of people in the enterprise say they most often buy with a credit card. The global outlier? Here in Singapore, 35%. We're trying to dig into the data to understand why why it's 35%. My theory, here in Singapore, we like to follow the rules. We go through procurement. Whereas if you look at other markets, I lived in Australia for many years, a lot of shadow IT. People are using that credit card to buy software without going through procurement. So we talked a little bit about the buying journey. What are the challenges that buyers are facing as they go through that journey? Now we want to talk a little bit more about software vendors. What does this mean for you as a vendor? First up is content. Content is number one. As I mentioned, 4 out of the top 5 challenges buyers outline deal with content. Buyers are struggling to find content. The content's not answering their questions, and the content's not going deep enough. I think the main struggle that buyers are having, or better said, the mistake that vendors are making, is that they're writing content and creating content for what they think buyers need to know instead of really understanding that buyer journey and the content that buyers are consuming. Yeah, if you think buyers are just going to your website, you're way, way wrong. Buyers are consuming content in many other areas. They're looking at expert content. They're talking to the analyst firms. They're talking to thought leaders. They're looking at customer content. Social media, looking at what the review sites say. This is something we call the Trinity of Content. Vendor content plus expert content plus customer content. Holistically, buyers just view it as content. They are looking at content to help them solve a problem, and they're getting it from wherever they can. But all of this content is very influential in the buying process. So as vendors are looking at this content, you need to really think about content that's going to meet the buyer's need not really what you want to tell them. And that's a great way to build trust with buyers. And if you build trust with buyers, you're now going to be able to differentiate yourself. Going back to the slides about just the competition in SaaS, that trust is a great way to differentiate. So people are looking at you and you can start having that conversation. Number 2, deliver ease of use, deliver ease of implementation, and focus on ROI. I don't think this is a surprise to anyone. I'm probably not telling you anything new here. I think the big change has been on the ROI side. As I mentioned, that's increasing in importance, and buyers are now not looking at ROI at the end of the sales process where they've traditionally looked at it. Many are now looking at the beginning of the sales process. They want to understand the ROI that they're going to get from a vendor. I think vendors have been very weak when it comes to ROI. A lot of vendors have very big picture ROI. This is what we can do. But they don't have the hard ROI metrics, the benchmarks, those ROI success stories. And I think that's a great way, again, to build trust, but really to differentiate yourself in the market is having those in-depth ROI figures and talking to customers about it very early, because again, it is a differentiator for you. Number 3, how can you make purchasing easier? And The key thing here is how do you collaborate with finance? We always say collaborate with finance to make them revenue heroes. Find a way to transact easier, simpler contracts, different payment options. How can you take friction out of that purchasing process? Great example of that is something that we've done at G2. Our finance team last year took our 12-page contract, made it 3 pages. I can't tell you what an impact that had on our business. Less legal reviews, less red lines, deals get done quicker. We don't have deals dying at that legal stage, which sometimes happens. A much smoother process. Customers are happier, our sales team's happier. It's just a lot easier to work. So definitely advice is partner with your finance team. Make them, as I said, revenue heroes. I can tell you, if your finance team feels that they helped you win a deal, they will be the happiest people you've ever seen. I mean, they're dealing with numbers every day. When they win a deal, They are ecstatic, smiles ear to ear. So think about how you can really partner with them. Number 4, look at those alternative channels. This is a way you can really juice your SaaS growth. For me, I think it's one of the biggest trends I'm seeing in SaaS. If you rewind again 26 years, 24-year-old me, channels were all the rage in Asia Pacific. That's how software vendors went to market. Very few people sold direct. SaaS has changed that. Yeah, we're traditionally selling direct when it comes to SaaS, but we're now seeing the channel emerge. Those channels could be, again, the global cloud marketplaces. They could be VARs. I think the biggest tip there is really understand who's influencing your buyers, who's working with them. Is it the AWSs and the Microsofts of the world? You know, is it individual vendor marketplaces, the AppExchange, the SAP Store, Or are there VARs you can partner with that are gonna get you into new industries and new countries? Another G2 example here, we've started working with agencies. So again, agencies have a seat at the table with CMOs. They're doing a lot of demand generation efforts. We've partnered with them because number one, they're getting us into new customers, but probably more importantly, they're getting us higher up the value chain. We're at the CMO's table thanks to that VAR. And they're pulling G2 into those conversations. We're seeing new contracts, but most importantly, we're seeing bigger contracts. So definitely evaluate these global marketplaces and understand how that can add and really juice the growth that you're seeing for your SaaS business. And to wrap it up, key takeaways. 20 minutes of a presentation, the 4 things that you should remember from what I've gone over today. Number 1, SaaS is still growing quickly. It's growing fast. Yes, we have economic headwinds, but it is still growing. But it's an increasingly competitive marketplace, and it's gonna continue to be competitive. Buyers can't find good content. That's what comes out in the surveys that we do. They are struggling on content 'cause there are just so many competitors out there. They are getting bombarded with content. I'm sure all of you get tons of emails from BDRs asking you to evaluate their solution. Imagine if you're a buyer, a CMO, a CRO, a CFO. These guys are getting hundreds of messages a day from people. I know people that have had to reconfigure their email to exclude BDR sending the messages because they're just overwhelmed. So look at the content and find that as a way to differentiate yourself. How can you stand out? How can you build that trust? And then focus on measuring ROI. This is something that software vendors, I, really feel don't do very well. You know, you've got the top line details on ROI, the big picture. Go deeper, get those ROI figures, the hard ROI data you can share with customers and prospects, and sharing that at the beginning of the sales cycle, not waiting for the very end when someone says, hey, when's this going to pay itself back? Last, look for ways to take friction out of the buying process. Work with finance. Like I said, and feel— please feel free to use the term I used, revenue heroes. Make them part of that process. Make them understand that the impact they can have by making that process easier, more simplified, taking the friction out, and you'll see the magic happen. So with that, I'd like to thank everybody for your time. I really enjoyed putting this together. It was interesting for me to go through all the stats. I hope you've enjoyed it as well. And we've got about a couple minutes here for Q&A if anybody has any questions on that. OK, great. We're going to start here. And if I can ask you to come to the mic so it gets hit on the recording for everybody.

Hi, Chris. Thanks for the great session. Two questions for you, please. Question number one, all of these— parameters that you spoke about and, you know, the obstacles and so on and so forth, is that for a typical deal size of $20,000 or is it— in what range are we talking?

Yeah. So these definitely would be the averages. I think, you know, typically when we do the survey, you know, roughly anywhere from kind of $10,000 to $25,000 is where we see most of the results coming in. Some will be a little less. There are obviously some that hit a little bit higher, but I would actually say $5,000 to $25,000 is probably the sweet spot where most of the responses are coming And in all of these surveys, you know, you spoke about content, Trinity of Content and all of these things.

But did any, any of your buyers ever point out that the AE that they're talking to also plays a key role in their, in their decision-making?

Yeah, that definitely comes through. The quality of the AE and the information that they're getting from the vendor. I think it gets back to content. So I would look at that twofold. There's the AE and there's their knowledge, their experience. Which is going to vary. I mean, if you're a startup, probably not as much because you're just starting up. You're still learning. A more established company, you're going to have some AEs with tenure that have a tremendous amount of information, a tremendous amount of thought leadership. It's really going to vary. The frustration we see with customers is a lot of the content that they're being pushed, whether it's website or coming from the AE, is not answering their questions. It's not coming deep enough. So it's a really good question, though, because there's that dynamic. There's the content that the company and typically the marketing department is producing, and then there's the content that's in everybody's heads, that knowledge of, okay, how do you get an ROI on our platform, our software? What are the best practices? What are other people doing? Yeah, so it's very interesting to see that dynamic. But yeah, people are struggling with content. That's the number one thing that came through in the survey.

Thanks, Chris.

Great.

Thanks for the question. I think there was a question over here somewhere. Oh, there you are.

This is sort of a practical question.

Sure.

Because you mentioned the part about procurement, right? And a difficulty my company is facing right now is trying to convince our customers, in particular in this region, that we should be an OpEx cost, not CapEx, because the approval processes for these two expenditures are very different.

Yeah.

How do we do this? Especially because at the moment, many of the clients we're dealing with their only experience with software implementation, they were like big consulting firms or big tech shops in that way. How do we convince them that, hey, no, we're SaaS, we're friendly, we're cheap, we're affordable, easy to implement, and we should be all OPEX?

Yeah, that's a very good question. I know a lot of companies grapple with this. I used to be at Forrester for many years, and this was a commonly asked question, especially as SaaS was emerging. It was like, hey, we don't want to go in that CAPEX budget because because it's just, it's tough. It's tough. It's not as frequent. It's budgeted. I mean, gun to my head, I'd say, again, going back to content, content can be really helpful because you can go deeper in the content, you know, whether it's thought leadership content on why it should be OpEx instead of CapEx. I think providing examples as well, you know, in many ways, people don't want to be the first to do that. And, you know, if you're making the decision within an organization, you might not know who else has made that similar decision. So I think ways to be able to kind of aggregate, whether it's other customers that you have that have done that and being able to document that, that could be like case study. It could be some type of content where others have gone through this journey and made that decision, the decision obviously you want, and what were the impacts for them. So I think it— I wouldn't say it's the only solution. I'd be lying if I said, ah, that's going to solve it for you. I think that's a part of it is developing that content. And helping people to understand like, hey, you're not the first person to do this. A lot of other people have done it and this is the success that they've seen.

I think culturally it's quite interesting because usually you get to the decision maker, CFO, CEO, whatever.

Yeah.

But how do you explain this to them in a way that doesn't, that still maintains that respect and that cultural sensitivity you have in this region?

Yeah, it's a tough one. It's always interesting for me being out here so long, seeing US companies come in because it is different. You have to show that respect and that deferential approach as you come in. I think it's number one, it's just developing that relationship. Yeah, very similar to the question we just had about, you know, AEs becoming thought leaders. As you become that thought leader, as you're providing value to companies, you know, you have that ability to start changing their mindset, you know, that ability to come in and challenge what they're thinking. The key thing is it takes time. And that's probably one of the big, you know, in many ways differences, especially as you see US companies come into Asia Pacific. I've had something I've told every manager I've had in the last 27 years since I've started managing sales teams, that when you start in Asia Pacific, you grow slow to grow fast. And what I mean by grow slow is you develop the relationships. Sales are going to take longer. Even with the teams, we're on the backside of the world from US companies. You really have to have your teams grow up and be thought leaders because they're not going to get the support that their colleagues in the States might be getting. And a big part of that is establishing those relationships with customers. They see you as a thought leader. They start opening up a little bit more. They're more open to your opinions, your ideas, where they're not going to be that way in the first meeting. That timeline to get that trust can vary. It could be a month for some people. They're very open. It could be years. Years for others. But I think it's developing that thought leadership and that trust to try to change that mindset. But like I said, it takes a lot longer than what you're going to see in the States, definitely.

Well, thank you very much.

All right, no worries. 2 minutes left. Any other questions? Yep, we got one more here.

So I guess one of the things you talked about was kind of the importance of providing good content and kind of the whole buyer education process. I guess as an industry, you know, Gartner and Forrester and G2, and there's been an evolution from, from, you know, where it was, you know, catalogs to now, you know, you've, you go on G2 and you can see everything. What's kind of next for you guys in terms of, you know, the next cutting edge of we as kind of software companies should be thinking about, you know, how do we, you know, position ourselves to be even, you know, better positioned on the next kind of G2 offering or the next kind of Gartner, Forrester kind of buyer education front?

Yeah, it's a great question. I mean, I can speak from the G2 perspective. For us, it's really customizing the recommendations for buyers. And I always, basically the analogy I use is a library. And I'm going to throw some shade on G2 here. And I work for G2, I guess I can. I mean, I feel we still don't give buyers everything we could because G2 in many ways is like a library. It's like old school. Like when I was growing up, you go to the library, you pull out the card catalog, catalog, you've got all the bookcases, you're looking for information. We provide you the library and it's really, really good, but we still make the buyer go and look for vendors and look for how good they are and read the reviews. Ultimately for us, we want to make it a more Google-like experience. And shame on me saying what everyone's been talking about for the last couple of months, ChatGPT-type experience where you're really looking at what is best for me. Like, what do people— I'm a mid-market retailer in the UK looking for marketing automation. What do people like me use? What do people like me— what have they seen success with? So it's really drilling into the specificity of the reviews because overall HubSpot's number one in marketing automation. They might not be the best choice for that mid-market retailer. There might be industry-specific tools that are a better fit, but it's harder for that industry-specific tool maybe to show up on the grid because they're competing with all the other marketing automation tools. So how do we make it more specific? Specific for buyers. So buyers are getting better recommendations. It's also good for vendors because vendors then can focus very much on, hey, I don't need to be number one in my category. I need to be number one for what I'm focused on. And that's driving their, you know, specific to G2 and specific to reviews, that's driving their, their motivation and their work on the platform. So for me, short answer, it's recommendations, giving better recommendations to buyers.