Software Industry Trends Report: Buyers Uneasy With Unfamiliar Brands

April 20, 2021
Contributor: Samantha Bonanno

The disruptions of 2020 are still rippling into 2021. Businesses and buyers alike remain profoundly affected by insecurities and losses, and their behaviors and preferences have changed accordingly.

In December 2020, Gartner Digital Markets surveyed 1,000 business leaders across 15 countries* as part of the 2021 Software Global Outlook survey, to better understand how the sales and marketing landscape shifted, which technology trends that began as a reaction to COVID-19 took root as permanent business practices, and how businesses reimagined customer acquisition and retention. 

A detailed analysis of the entire survey can be found in “Global Software Trends for 2021: A New and Normal Future.” Covered trends include technology purchases, business strategy prioritization, and consumer preferences for interactions in their primary language. 

Among questions about technology adoption and business practices, survey respondents were asked how brand familiarity affected their likelihood of making a new software purchase. Their responses signal potential incentive for software providers to prioritize brand recognition. Here's what the survey revealed.

Buyers are reluctant to take chances on unfamiliar brands 

Businesses are reluctant to spend money with software providers they aren't familiar with. 

When asked which type of provider they preferred to do business with, 78% of businesses (on average) said they prefer either a well-established company/brand or one they had already worked with. Only 21% of global respondents expressed openness to any software or SaaS provider with a solution that could meet their needs.
A bar graph displaying how buyers show preference for familiar software companies by country.

Notable exceptions to the global trend are Mexico with 42% expressing openness to any provider with a fitting solution and the U.S. noting 32% openness. Conversely, 54% of respondents in France indicated a preference for providers they have already worked with; other high-fidelity countries include Australia and Belgium. 
Pie charts displaying industry preferences for familiar software companies.

We saw similar trends across respondents’ five most common industries, with 75% preferring a known, established software provider versus 25% expressing openness to any provider. 

This data demonstrates major incentive for software providers to prioritize brand recognition and robust nurture campaigns for existing customers. 

With a tumultuous year behind and an unknown year ahead, B2B software buyers appear less likely to take a risk on an unknown SaaS provider. 

Software and technology companies must meet buyers where they are

A Gartner survey of more than 400 chief marketing officers (CMOs) indicates that businesses are already shifting attention to a strong brand strategy. When asked about their top marketing focuses for the next 18 months, 33% cited brand strategy as the most vital (full research available to Gartner clients).

Given buyers' high interest in businesses they have already worked with, software providers should focus on expanding packages and services for their existing customers. Make sure these customers know about new updates and rollouts, as well as other features they aren’t yet using. 

At the same time—to ensure they remain competitive and continue to attract new customers—software and technology companies should also double down on branding investments to capture those buyers willing to try out a reputable, new-to-them company. 

Global Software Trends for 2021: A New and Normal Future

Recognize new trends and adapt to rapidly evolving shifts in global software buyer behaviors.
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Samantha Bonanno

Samantha is a Senior Specialist Analyst for Gartner Digital Markets, where she offers insight and thought leadership on marketing trends and best practices for small and midsize businesses. An Upstate New York native, Sam spends her free time backpacking with her dogs and holding snobby opinions on craft beer and single-origin coffee. Connect with Samantha on LinkedIn.

*Gartner Digital Markets 2021 Global Software Outlook survey

Results presented are based on a Gartner study to understand business challenges and approaches to technology and software investments. The primary research was conducted between October and November 2020 among a total of 1,349 respondents in the following countries: United States, Canada, Mexico, United Kingdom, Australia, Italy, Portugal, Brazil, Belgium, Netherlands, Sweden, India, Spain, Germany and France. 

Companies were screened for number of employees (2 to 249) and total annual revenue (less than 100 million USD in fiscal 2019) to arrive at small and midsize businesses. Respondents were also required to be involved in purchasing technologies for the organization and hold a position of manager or above in the company. 

Disclaimer: 

Results do not represent “global” findings or the market as a whole but reflect the sentiment of the respondents and companies surveyed.
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