Thursday, January 11, 2001
B2B Technology Behaviour
Although researchers have studied the buying patterns and
purchasing motivations of consumers for a long time,
businesses remain poorly understood as buyers. To address
this situation, Forrester Research, Inc. has launched
Business Technographics North America, a business segmentation
system that predicts the eBusiness budgets, progress
and aspirations, technology-buying styles, and technology
adoption of the largest companies in the United States.
"The average Global 2,500 firm will spend $35 million
on eBusiness initiatives next year, yet little is known
about how these purchase decisions are made," said
David E. Weisman, group director at Forrester. "Similarly
sized firms within the same industry often make very different
decisions when selecting and implementing new technologies
-- it's not a good segmentation system, but it's all that
marketers have today. What Business Technographics provides
is a framework for explaining and predicting the what,
why, and how of business technology decisions."
"Understanding a company's eBusiness ambitions and
spending styles provides insight into where they will make
their technology investments," said Patrick Callinan,
senior analyst at Forrester. "While virtually every
company will continue to invest in infrastructure -- servers,
software, storage, and networking gear -- only the more
risk-tolerant firms are making early investments in things
like supply chain applications and wireless LANs. Surprisingly,
Linux has yet to achieve enterprise credibility in any
segment."
To determine the eBusiness progress and aspirations of
companies with revenues greater than $1 billion, Forrester
surveyed more than 1,000 senior business and IT executives
in the United States. The Business Technographics segmentation
is based on three dimensions of eBusiness culture: technology
risk tolerance, which predicts a willingness to buy new
technology; executive commitment, which predicts the level
of investment in new initiatives; and business/IT coordination,
which describes a company's buying style. Combining these
three dimensions produces a segmentation of buyers that
can be used to predict a company's technology choices,
eBusiness investments, and purchase processes.
Companies with a technology risk tolerance that is above
average are more willing generally to adopt new technologies
or to work with lesser-known technology providers. Dynamos
-- risk-tolerant companies with high levels of executive
commitment and high interdepartmental coordination -- are
the eBusiness technology leaders, spending the most on
new technologies and rolling out some of the earliest uses
of new applications. Companies with high risk tolerance
and executive commitment but poor departmental coordination
-- Mavericks -- also spend more on new technologies business
units, but they often circumvent IT to implement new technologies.
High-tech companies usually fall into this segment.
Risk-tolerant companies with low levels of executive commitment
fall into two segments. Mobilizers are firms in which senior
management doesn't understand eBusiness, but strong departmental
coordination enables them to be early technology adopters.
Daredevils, lacking both executive support and departmental
coordination, have low expectations and below-average budgets
for eCommerce. Despite these hurdles, there are managers
at these companies who push through innovative new applications,
keeping these firms technologically competitive.
Companies with a technology risk tolerance that is below
average generally take a cautious approach to eBusiness,
often waiting until new technologies have been proven to
be worth the investment. However, this group does not necessarily
spend less on technology. Followers --companies with high
executive commitment and departmental coordination -- simply
buy technology later, after it has matured. These companies
get eBusiness, but they trail the pack on eBusiness initiatives
and metrics. Meanwhile, Dreamers, companies with executives
who get eBusiness but lack strong departmental coordination,
often spend selectively on new technologies.
Risk-averse companies with a weak commitment to eBusiness
from senior management trail the other companies in their
implementation of technology. Plodders, which benefit from
good departmental coordination, suffer from small budgets
and a lack of ambition for eCommerce revenues. Stragglers
come out at the bottom of the heap, with a low tolerance
for technology risk, small budgets, little support from
senior management, and low coordination of eBusiness projects.
These firms are the most likely to seek the assistance
of consultants to help them compete in the eCommerce arena.
QVC Top Shop in Latest PowerRankings
QVC triumphs with rave reviews from customers and quick
phone support in the latest PowerRankings of online general
merchandise retailers by Forrester Research, Inc. Forrester's
PowerRankings combines survey data from online consumers
and unbiased shopping tests to provide objective rankings
of the leading US eCommerce sites. The companies that
rank below QVC are Amazon.com, Best Buy, and buy.com.
Top scores from consumers in all but one category help
QVC secure victory. The site notes shipping costs with
product descriptions, its phone representatives answer
calls in less than a minute, and customers can use online
chat to answer pressing customer service questions. However,
the site isn't perfect. Search results are often overwhelming
lists, and customers can't easily edit account information
like addresses or shopping preferences.
In a tight battle for second place, Amazon.com wins with
excellent search and a long feature list. The site sports
the fastest express buying of tested sites, helpful customer
reviews, extensive product descriptions, and an easy-to-use
gift finder. Drawbacks include no privacy policy links
on checkout pages, vague inventory status, and slow-to-respond
phone-based customer service.
Best Buy comes in third, with much quicker average email
response times than its rivals, low shipping costs, and
online express order tracking. But shoppers must call to
cancel orders, and the site lacks features like gift-wrapping
and customer reviews.
"While QVC's site doesn't offer as many features
as its rivals, happy customers are the key to its success," said
Tom Rhinelander, research director at Forrester Research. "It's
exactly the opposite situation for Best Buy, where low
marks from its customers hold it back. As for Amazon, slow
responses from customer service remain its most striking
weakness."
Consistent navigation, enhanced 3-D views for some products,
and a clearly posted privacy policy in the shopping basket
at last-place buy.com do not make up for other weaknesses,
including vague inventory information, irrelevant recommendations
on checkout pages, and the highest shipping charges of
tested sites.
For the latest PowerRankings, Forrester surveyed 20,000
consumers from the NPD Group's online panel. These consumers
identified the eCommerce sites that they purchased from
most recently and rated their experiences. A team of Forrester
shoppers then evaluated the shopping experience on sites
that have a statistically valid number of consumer respondents
by performing a series of rigorous tests. The consumer
data and Forrester shopper scores were then synthesized
and weighted, with consumer views accounting for two-thirds
of the overall PowerRankings. A complete set of PowerRankings
results -- both consumer and Forrester shopper data --
is made available to all ranked companies free of charge.
News Tidbits (appears every day on the front page)
-Dow Jones News says that many assets of defunct dot com
companies are ending up on the auction block. The items
- high priced furniture, futuristic phones, large plasma
screens, and new cars - may paint a picture as to why
these companies failed as is pointed out in the upcoming
book Web Profits Applied.
