When I first took up the 'profession' of sales in the 70s, the school of thought was that by leading a conversation and using certain techniques, it was possible to get someone to buy what you were selling. In my case it was photocopy machines. There were two key phrases that were popular at the time, and fortunately both (along with the whole manipulative sales approach) have pretty much fallen out of favor. I bring this up because in our last survey, we asked one of those key phrases; "What would it take for you to switch EDI provider." Actually, we asked it in a slightly different way, but the question was still the same. By the way, the second key 'closer' phrase was some version of, "If I could do (fill in your preference), would you buy this product right now?"
Our last survey asked about how connected you were to your current EDI provider, and we asked in two ways. The first was:
What conditions would make you switch away from your current EDI solution or provider?
And the second was the complimentary question:
What conditions would get you to leave your current provider and move to a competitor?
The most interesting trend I noticed was that about 40% of you would not leave your current provider even if they went out of business... now that's what I would call loyalty.Both questions asked about your sensitivity to price changes, and in both cases, more than 60% of you indicated you would consider changing if
a) if your current provider increased prices
b) a competing provider offered lower prices
That's pretty compelling evidence of the price sensitivity in this business. What the question didn't ask was how much difference there needed to be between current and proposed prices. Presumably a 2% change would not be significant enough to persuade a change, but would 10% be enough?
Not quite as many of you (57%) indicated that a decrease in the quality of customer service would prompt you to change providers. And 44% said they would be tempted to change if a provider offered capabilities and functions that were not available through their current provider.
These responses tell us that price competition is the leading factor in considering change, but customer service and advanced features are also significant determining factors in prompting change.
Many of you penned your own explanations, and this one in particular seems to sum up the overall sentiment. "Other than going out of business, I would only switch if there was a combination of the other factors. For instance, Increased Costs by itself would not be a consideration. It would only be a consideration if it was in addition to a 'vote of no confidence' in a merger OR a decrease in customer service." And these comments seems appopriate in the current scheme of mergers and corporate change "If my provider were to merge with a company I did not have confidence in, I might switch. I would monitor the situation and if my confidence was not increased, I would probably switch." And, "Currently concerned with GXS's purchase of Inovis. Years ago we had switched from GXS to Inovis due to poor service, poor customer service and bad web tools. We are unsure of how then new company will service their customers going forward."
With regard to selecting and changing to a different provider, these comments were indicative of many of your thoughts "If the provider had superior capabilities, better pricing, excellent customer service and new functionality that we were looking for, it would be cause to at least review the cost of switching. Switching providers is a difficult process that I have gone through before and would think long and hard about before doing again." And, "When we first looked at EDI providers, the first person I came in contact made the difference. To have someone listen to me and take to find out what I am looking for was key. The websites that I looked at also made a difference. A simple and user friendly approach always helps. It shows that the company is in touch with the potential customer. Simplicity of a system is what speaks to us."
The takeaway here seems to be that while many of you show tremendous loyalty to your EDI service providers, there is willingness to change if offered better pricing, more features and better customer support. In fact, those are likely to be the same general criteria we all apply to our business and personal buying decisions. Still, EDI providers need to be sensitive to these trends, and those that are aggressively seeking to increase their customer bases can apply these lessons to their sales approaches. In the end, the old sales question "If I could XXXX, would you buy this product today" still holds true, even if it shows up in a different context.