Why do these countries exhibit different buyer behavior?
The first noticeable distinction is that there is often a huge difference between a company saying it’s interested in your software versus actually budgeting for it. In the U.S., some of those companies that said they currently use or plan to use software from a particular category actually had a much smaller budget set aside for the purchase. France and Germany, meanwhile, seem to show growing interest in budgeting even more for technology than they currently do.
In the United States, the length of the buyer journey is almost two years. The U.S. is more likely to have teams of software buyers who all need to weigh in and make a group decision on any major business investment. German companies tend to follow a similar timeline on their buyer journey, yet spend more time in the identification stage. B2B software brands that put greater effort into brand awareness can see greater payoff in this market. The upside for emerging brands marketing to German businesses is that the latter tend to currently adopt emergent technology at a higher rate than in the U.S.
In France, the lead time is also slightly longer at 2.5 years. While French businesses are statistically slower to adopt new technology and to make changes to technology currently in place, you can see in the above graph that this is shifting. There’s an expressed interest among French companies in emergent tech like virtual and augmented reality, as well as investment in more established software categories like cloud computing. B2B software business leaders should keep this mentality in mind when marketing to French businesses.
On that subject, cloud computing — including software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) — has become a de facto means of operation, especially at companies that require large amounts of storage and coordination across several offices in multiple locations.
Pivoting to data and information security software, France and Germany are members of the European Union, which adopted stringent GDPR compliance requirements. Any company that conducts business with a citizen of the European Union must meet those requirements or face hefty fines.
That also means that any U.S. or Canadian companies that interact with European citizens and businesses must also meet GDPR security requirements. Between trade with the European Union, increasing worries about cybersecurity and other security regulations, companies in all three countries would likely invest heavily in data and information security software.
Interpreting the difference in investment: Two lessons
Smaller businesses are key to selling in the U.S. and Germany.
If you’re interested in selling your software to U.S. and German companies, you should target smaller businesses. The U.S. has 28 million small businesses, which account for about 99.7% of all business in the country. Germany hosts similar stats, with 3.45 million small and midsize businesses that make up about 99.6% of the entire German business population. Compare these two to France, which has about 6.3 million businesses yet less than half (2.9 million) classify as small businesses.
French companies tend to be more established and require more time to make business decisions on technology use and investment. By contrast, the more common mentality of smaller businesses in the U.S. and Germany (which are also more likely to include startups in their mix) is to make software purchases based on needs and wants. Keep these business culture distinctions in mind when building out a buyer journey roadmap for small businesses.
Sell emerging tech to larger SMBs
No, this is not a contradiction of what was said above about targeting smaller SMBs. If you’re in emergent technologies such as blockchain, virtual/augmented reality and artificial intelligence, however, you have a unique window of opportunity. Despite distinctions in software adoption practice across the U.S., Germany and France, a Gartner 2019 survey showed a trend among larger SMBs toward greater enthusiasm for investing in emergent tech.
In the U.S., for example, only 18% of SMBs valued at $5 to $10 million planned on investing in wearables in the next two years, while that investment doubled (nearly 36%) among SMBs valued at $50 to $100 million. Virtual reality and augmented reality are being adopted by 34% of German and French SMBs in the same tier, compared to 27% and 24%, respectively, of SMBs worth $5 to $10 million.
To tap into these markets, you have to begin your marketing campaigns early in the expansion process to increase your brand awareness. Because it’s emergent technology, appearing trustworthy and marketing your company as a knowledgeable source of information is crucial for success.
What’s next for your software marketing plan?
Knowing the financial landscape and interest in your targeted country will not only give you a stronger sense of how to market but also of how much you can expect to make and how long creating a stable international business could take.
Have more questions on how to scale your business? Take a look at these answers to the top three global expansion challenges.
Gartner Top Technology Trends Survey
Results presented are based on a Gartner study to understand small business challenges and approach to technology investments. The primary research was conducted online among 715 respondents in 2018 and 539 respondents in 2019.
Companies were screened for company size in terms of:
Number of employees: 2-249 employees
Enterprisewide annual revenue: Less than 100 million USD
Respondents were required to be involved in purchasing technologies for the organization and hold a position of manager or above in the company.
The study was developed collaboratively by Gartner analysts and the primary research team who follow digital markets.