How Customers Choose Solution Providers Insight into Key

How Customers Choose Solution Providers Insight into Key Buying Criteria for Services and Solutions—North America Julie Schwartz Senior Vice President Research and Thought Leadership ITSMA Marilou Barsam Senior Vice President Client Services and Corporate Marketing Tech. Target OLB 81208

Successful companies map their marketing strategy and tactics to the buying process Relationship Stages Buying Process OLB 081208 Awareness Interest Confidence Loyalty Search Alternative Evaluation Selection and Purchase Post-Purchase Evaluation § Clarify objectives and solution specifications § Identify alternatives (short list) § Solicit proposals § Evaluate alternatives § Select the provider § Negotiate the contract § Ultimate sign-off § Evaluate satisfaction § Measure value delivered ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 2

ITSMA has come to recognize that there is another buying process stage that is often overlooked Relationship Stages Epiphany Need Recognition Buying Process OLB 081208 § Explore the possibilities § Identify a need or opportunity Awareness Search § Clarify objectives and solution specifications § Identify alternatives (short list) Interest Confidence Alternative Evaluation Selection and Purchase § Solicit proposals § Evaluate alternatives § Select the provider § Negotiate the contract § Ultimate sign-off ITSMA Online Briefing Loyalty Post-Purchase Evaluation § Evaluate satisfaction § Measure value delivered © 2008 ITSMA. All Rights Reserved. 3

IT Pros are Always Researching

IT Buyers Use Multiple Content Types at Different Stages of Buying Cycle Awareness Consideration Decision Vendor demos Trial software IT vendors Live events Virtual trade shows Search engines Published research Case studies White papers Webcasts IT publishers IT videos Industry magazines IT newsletters IT blogs Widgets Podcasts IT wikis Q 4 2007 Tech. Target and CMO Council Technology Buying and Media Consumption Survey, Report 4

IT Buyers Use Multiple Content Types at Different Stages of Buying Cycle Awareness Consideration Decision Vendor demos Trial software IT vendors Live events …used at different stages of the buying cycle Virtual trade shows Search engines Published research …offer more choice and broaden reach Case studies White topapers strengthen online branding opportunity Webcasts IT publishers IT videos Multiple content types Industry magazines IT newsletters IT blogs Widgets Podcasts IT wikis Q 4 2007 Tech. Target and CMO Council Technology Buying and Media Consumption Survey, Report 4

Today’s Presentation n Results from the ITSMA-Tech. Target How Customers Choose Survey n Buying behavior at three stages of the Buying Process: Epiphany Need Recognition OLB 081208 Awareness Search ITSMA Online Briefing Interest Alternative Evaluation © 2008 ITSMA. All Rights Reserved. 7

Research Methodology Sample sources: § Tech. Target IT Research Panel § ITSMA in-house list OLB 81208

What companies were included in our sample? What is your company’s primary business? % of Respondents (N=216) Approximately, what is your company’s annual revenue, is it ___? % of Respondents (N=216) Note: Other includes: Healthcare (7), Retail (3), Wholesale Distribution (3), Education (3), Legal (2), Consulting (2), IT Services (2), Multi-industry, Energy, Non-profit Ministry, IT Outsourcing, Distribution, Transportation Services, Information Management, Oil & Gas, Utilities, Marketing, Wholesale, Construction, Non-profit, Defense Contractor, Biotechnology Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 9

Who did we speak to? Are you an business or IT professional? % of Respondents (N=216) What is your job title? % of Respondents (N=216) C-level, GM, President (15%) Business (35%) IT (65%) VP/Assistant VP (17%) Director (40%) Manager (28%) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 10

How are they approaching investments given the current economic climate? Which of the following is more important to you and your company in the current economic environment? % of Respondents (N=105) Which would you say is driving your technology investment focus right now? % of Respondents (N=214) Other (9%) Reducing costs (46%) Increasing revenue or sales (54%) Cost reduction (35%) Adding new functionality and capabilities (56%) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 11

74% are either increasing or maintaining their IT budgets What is happening to your spending for technology-enabled business initiatives so far in 2008? % of Respondents (N=212) Increase (35%) Stay the same (39%) Decrease (25%) Will it increase by more or less than 10%? % of Respondents (N=75) Will it decrease by more or less than 10%? % of Respondents (N=53) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 12

Create Demand: Build and nurture relationships before your potential customer is ready to buy Relationship Stages Epiphany Need Recognition Buying Process OLB 081208 § Explore the possibilities § Identify a need or opportunity Awareness Search § Clarify objectives and solution specifications § Identify alternatives (short list) Interest Confidence Alternative Evaluation Selection and Purchase § Solicit proposals § Evaluate alternatives § Select the provider § Negotiate the contract § Ultimate sign-off ITSMA Online Briefing Loyalty Post-Purchase Evaluation § Evaluate satisfaction § Measure value delivered © 2008 ITSMA. All Rights Reserved. 13

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Buyers perceive solution providers to be moderately helpful when it comes to identifying business problems How helpful are solution providers in working with you and your organization to identify and clarify business problems or opportunities? % of Respondents (N=199) Mean Rating: 3. 1 Note: Mean rating based on a 5 -point scale where 1=not at all helpful and 5=very helpful. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 14

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Likewise, there is room for improvement when it comes to bringing new ideas to potential clients How helpful are they in bringing you new ideas and showing you the possibilities to solve your business issues? % of Respondents (N=199) Mean Rating: 3. 2 Note: Mean rating based on a 5 -point scale where 1=not at all helpful and 5=very helpful. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 15

Topical Info. Center Unified Communications Thought Leadership Example: • Tech. Target editorial content on the left side • 100% share of voice for sponsor surrounding the content • 10 content links along the right side of the editorial content • Banners

E-Guide— Storage Virtualization Thought Leadership Example: • Four articles on Storage Virtualization produced in rich-media format • Up to four pages for sponsor messaging integrated with editorial content, including: advertisements, resource links, and other information about sponsor’s company or products.

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Buyers are looking for thought leadership that is proven, practical, and relevant In your view, how much does each of the following contribute to compelling, high quality thought leadership? Mean Rating (N~185) Validity: Proving the solution is effective Practicality: Demonstrating a solution can be implemented Relevance: Meeting a critical and market need Clarity: Making a clear argument with words and concepts that are easy to understand Focus: Having a single fundamental message Rigor: Having tight consistent ideas and language Novelty: Coming up with a unique diagnosis or solution Note: Mean rating based on a 5 -point scale where 1=not at all a factor and 5=a major factor. Source: ITSMA, How Customers Choose Study, North America, 2008, adapted from the Bloom Group, 2007 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 18

Vendor Case Study • Title: NASA Federal Credit Union Discovers Online Data Backup • Topic: Backup/ Recovery • Promotion Site: Search. Storage. com • Sponsor: EVault, Inc. • Best Practice: Marketed well-known partner • Benefit-Oriented positioning paid off • Performed 29% better than case studies promoted on site during same period

Third-Party Case Study • Title: Forrester Consulting Case Study on Database Security & Compliance • Sponsor: Guardium • Topic: Risk Management • Promotion Site: Search. Security. com • Best Practice: Marketed third-party endorsement • Third-Party association delivers results • Performed 42% better than all white papers promoted on site during same period!

Relationship Stages Epiphany Awareness Interest Confidence Loyalty The most valuable relationship building activities are those that facilitate the exchange of ideas and foster community Which three solution provider relationship-building programs do you think provide the greatest value to you? % of Respondents (N=184) User groups Private briefings Executive-level business events (e. g. , seminars, meetings) Client reference programs Customer advisory councils Collaborative thought leadership development Dedicated “microsite” for your company with information about their project work and thought leadership Account-based or one-to-one marketing programs Loyalty incentives (e. g. , training credits, discounts) Customer satisfaction and loyalty surveys Online communities/social networking that the solution provider facilitates Social or recreational activities (e. g. , golf outings, dinners) Joint PR/Advertising/co-branding Blogging Note: Up to three responses allowed. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 21

Huge, Active Online Communities

Generate Leads: Make it easy for potential buyers to find you Relationship Stages Epiphany Need Recognition Buying Process OLB 081208 § Explore the possibilities § Identify a need or opportunity Awareness Search § Clarify objectives and solution specifications § Identify alternatives (short list) Interest Confidence Alternative Evaluation Selection and Purchase § Solicit proposals § Evaluate alternatives § Select the provider § Negotiate the contract § Ultimate sign-off ITSMA Online Briefing Loyalty Post-Purchase Evaluation § Evaluate satisfaction § Measure value delivered © 2008 ITSMA. All Rights Reserved. 23

Relationship Stages Epiphany Awareness Interest Confidence Loyalty IT buyers are actively researching new solution providers What percentage of the time would you say you do research and find appropriate solution providers versus they contact you first? Mean % of the Time (N=191) The solution provider contacts me first (31%) I do the research and find the appropriate solution providers (69%) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 24

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Professional peers are the most important “search tool” followed by online sources When you have a business problem, what are the first three steps you take to identify alternative solutions? % of Respondents (N=194) Speak to my professional peers Look online including, IT publisher Websites, company websites, blogs, etc. Speak to your existing hardware and software vendors Speak to or check publications of industry analysts (e. g. , Gartner, IDC, AMR) Get advice from consultants Read business and trade publications Speak to or check publications of financial analysts (e. g. , Merrill Lynch or Goldman) Respond to unsolicited emails and cold calls from consultants or solution providers Pay closer attention to advertisements Other Note: Up to three responses allowed. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 25

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Buyers turn to both informal and formal peer networks % of Responses (N=197) Speak to peers who participate in exclusive councils or communities you belong to (25%) Speak to colleagues in your company for referrals (40%) Speak to colleagues at other companies for referrals (35%) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 26

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Search methods vary by role, so adapt your marketing to your target audience When you have a business problem, what are the first three steps you take to identify alternative solutions? % of Respondents Speak to my professional peers * Look online including, IT publisher Websites, company websites, blogs, etc. * Speak to your existing hardware and software vendors Speak to or check publications of industry analysts * Get advice from consultants * * Read business and trade publications Speak to or check publications of financial analysts * * * Respond to unsolicited emails and cold calls from consultant Pay closer attention to advertisements Notes: Mean rating based on a 5 -point scale where 1=not at all effective and 5=very effective. * Indicates a statistically significant difference. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 27

What should be important to IT marketers? Q: Which is the single most effective information source? Q 4 2007 Tech. Target and CMO Council Technology Buying and Media Consumption Survey, Report 4

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Web 2. 0 is slowly gaining momentum, yet resistance to adoption persists Are you using or have you used any new Web 2. 0 or social media tools such as blogs or social networks to seek out information on possible solutions? % of Respondents (N=202) Don’t know (4%) Yes (37%) (Primarily blogs) No (59%) (Why not? not reliable, not trustworthy, time consuming, content not valuable, no need, against organization policy, security issues) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 29

Relationship Stages Epiphany Awareness Interest Confidence Loyalty The marketing vehicles that are most effective are content rich and highlight problem solving Which types of marketing vehicles do you believe are most effective in getting your attention and encouraging you to learn more? Mean Rating (N~185) Case studies describing successful customer solution implementations Article in the business or industry trade press Speech or presentation at a conference or trade show Invitation to a seminar or workshop White paper offered on the Internet Search engine hits when doing research or surfing the Web Invitation to a Webinar Conference sponsorship Electronic newsletter from the service firm Direct mail brochure Online advertisement Email from a sales representative from the service firm TV or print advertisement Phone call from a sales representative from the service firm Hospitality programs such as dinner or golf outings Solution provider's blog Sporting or cultural event sponsorship Note: Mean rating based on a 5 -point scale where 1=not at all effective and 5=very effective. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 30

Provide Proof: Buyers are looking for a proven track record Relationship Stages Epiphany Need Recognition Buying Process OLB 081208 § Explore the possibilities § Identify a need or opportunity Awareness Search § Clarify objectives and solution specifications § Identify alternatives (short list) Interest Confidence Alternative Evaluation Selection and Purchase § Solicit proposals § Evaluate alternatives § Select the provider § Negotiate the contract § Ultimate sign-off ITSMA Online Briefing Loyalty Post-Purchase Evaluation § Evaluate satisfaction § Measure value delivered © 2008 ITSMA. All Rights Reserved. 31

Relationship Stages Epiphany Awareness Interest Confidence Loyalty When evaluating the solution, feature-function and ROI win Once you have created your short list and you are evaluating alternative business solutions, which one factor is most important to your decision? % of Respondents (N=193) Mean Rating ROI (The calculated Return on Investment for the solution) or cost/benefit analysis 4. 3 Features and functionality of the solution 4. 3 TCO (The total cost of ownership) 4. 1 The price 4. 0 Soft benefits such as customer satisfaction, brand equity, service quality The length of time required to implement and realize benefits 3. 8 4. 0 Reduced risk of implementation 3. 9 Other NA Note: Mean rating based on a 5 -point scale where 1=not at all important and 5=very important. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 32

Relationship Stages Epiphany Awareness Interest Confidence Loyalty When evaluating providers, an impeccable reputation tops the list When evaluating alternatives and selecting the company to help you implement the solution, which one factor is most important to your decision? % of Respondents (N=188) Mean Rating A proven track record 4. 3 People and an organization you can trust 4. 4 Knowledge transfer to your staff 4. 2 Knowledge and understanding of your unique business issues 4. 1 Available resources to meet deadlines and speed time to market 4. 3 Knowledge and understanding of your industry 4. 0 Previous experience with your company 3. 7 Highly-tailored, customized solutions 3. 3 Thought leadership on the application of technology to solve business problems 3. 8 A collaborative work style 4. 0 A low price 3. 5 Other NA Note: Mean rating based on a 5 -point scale where 1=not at all important and 5=very important. Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 33

Relationship Stages Epiphany Awareness Interest Confidence Loyalty Knowledge and experience with the technology and industry are important, but not sufficient Which of these would you say gives you more comfort that a solution provider can deliver? Knowledge and experience with… % of Respondents (N=189) Your industry (e. g. , banking or healthcare) (11%) The technology (35%) The business process (26%) Your company and your business (28%) Source: ITSMA, How Customers Choose Study, North America, 2008 OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 34

Marketer Challenge: What content types and specific media will be most effective to reach buyers at each stage of the buying cycle? n First step—What is your primary challenge? – Attracting prospects from competition? Capturing share in a subsegment? Finding best leads in a booming market? n Based on that—Which decision-making stage and content to focus investment OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 35

Online, prospects enter, exit, progress with different needs. Information need = opportunity

Match content type and content topic to decision making stage Content Topic Awareness/ Solving IT Problems (editorial content) Downloading Trialware and Demos Media Type Attending Webcasts and Podcasts Downloading and Reading White Papers Consideration/ Technical Information (vendor-specific) Decision/ Solution Information (proof points/case studies)

Case Study: Smurfit-Stone (#247 on the Fortune 500), LAN Specialist Researching IT Solutions Value of multiple content topics and assets extends to developing a prospect online Content Topic Awareness/ Solving IT Problems (editorial content) Downloading Trialware and Demos Media Type Attending Webcasts and Podcasts Downloading and Reading White Papers “Overview doc, ” March 2006 Editorial/expert Consideration/ Technical Information (vendor-specific) “Tech Description, ” April 2006 Vendor focus/overview Decision/ Solution Information (proof points/case studies) “Service Offering Description, ” May 2006 Case study

Recommendations: Map your marketing strategy and tactics to the buyer’s process Epiphany Need Recognition: Create Demand Awareness Search: Generate Leads Interest Evaluation: Provide Proof Points § Build relationships based on thought leadership and community § Show the possibilities § Align your content to the buying stage § Ease the burden; make the buyer’s search effortless § Emphasize word of mouth and online marketing § Rely on pull marketing, but don’t completely abandon push marketing § Show, don’t tell § Demonstrate validity and practicality through case studies § Personalize and customize: Know the buyer’s unique business issues And then turn the lead over to sales to close the deal! OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 39

Thank You! OLB 081208 ITSMA Online Briefing © 2008 ITSMA. All Rights Reserved. 40