Understanding Why People Buy Software

Note- When I say software, it’s understood I mean SaaS as well.

Awhile back someone sent me a link to a video clip of a Mad Men episode. It’s a scene in which Donny Draper is pitching the Kodak Carousel. If you notice in his pitch he rarely mentions what the product is or what it does, but rather tells a story about an experience he has. It’s easily one of the most powerful and possibly eery television scenes I’ve ever watched. Take a look for yourself:

http://www.youtube.com/watch?v=suRDUFpsHus (embedded disabled unfortunately)

“Well, technology is a glittering lure.”

I’ve worked in both the B2C and B2B market in software and this story resonates very well for me. Why? Because it’s interesting to understand why both Companies and Individuals chose to buy software and I think it comes down to one prime thing: individual user experience. Let’s break it down:

Consumer – It’s no secret that in today’s B2C software market that user experiences always win out. It’s the reason Facebook, Twitter, Apple, and Google are all winning. Their offerings mainly rank high in the following areas: How easy is the product to use? How easy is it to interact with friends? How much enjoyment do I receive from the product/service?

Businesses – There are generally two buyers of business software – CIOs and Line of Business heads. In the case of the CIO, enterprise software is largely completed by the shake of a hand. If you ask anyone experienced enough in enterprise software sales they will tell you that CIOs buy enterprise software because (1) they like the person selling it to them and (2) they don’t want to get fired. The offerings from business software vendors rank highly in the following areas: How easy is it to keep my job? How easy is it to find people to implement and support the software? How easy is it to pass blame to service provider? How much enjoyment did I get out of the sales process? You may have noticed I mentioned nothing about the user experience of the people who will actually use the software! This is important, because this is largely the reason many end users complain about enterprise software. This won’t change until the CIO reports to it’s end users and not to a CFO/CEO/Board. For Line of Business heads, it is slightly different, because they do have direct interaction with their end users. They software they tend to purchase is more user friendly, but still has a good personal experience for them. Their offerings mainly rank high in the following areas: How easy is it for my team to use the software? How easy it is for me implement the software? How easy was it to purchase the software? How easy is it to prove to my management that the software is working?

Zed Shaw says it better than me: (watch 17:53 on)

“You didn’t buy it, your boss did…How did they sell this crap? Steak and strippers baby!”

There’s lots of ways software vendors answer these questions. For example, their software has features such as scalability, premium support, longevity of vendor’s establishment, references, etc. I’ll get more into this in detail in an upcoming blog post about how start-ups work in the enterprise area.