The global landscape of software purchasing is currently marked by an alarming rate of post-purchase regret and churn, according to this Gartner Digital Market’s 2024 tech trends report. Findings revealed that despite 96% of software buyers committing to building a vendor list before making their software purchase, 60% experienced dissatisfaction in the last 12–18 months, leading them to regret the software purchase.
Gartner researchers have detailed recommendations on how vendors can improve this software buying regret-and-churn situation. We also share an expert’s tips on how tech decision makers can help to reduce software buying dissatisfaction.
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Reasons for software buying regret and churn
The report highlighted product- and vendor-related factors that are responsible for software buyers feeling regret.
From a product perspective, higher-than-expected costs of ownership (33%) was reported as the most common cause of regret. Slow or complex implementations (32%) was the second most common factor causing post-purchase regrets in software buyers. Some buyers (46%) expressed the need for software vendors to reduce the complexity inherent in software implementation through enhanced implementation assistance and improving their response time.
Speaking to TechRepublic via phone, Thibaut de Lataillade, global vice president of products at Gartner Digital Markets, said, “The primary concern here is the unexpected cost or total cost of ownership, which customers often do not fully understand due to lack of transparency in costing of some of these software products. Customers often do not know about the additional costs that may come from product implementations, configurations, integrations and training needed to use the software.”
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Of the vendor-related factors, issues surrounding handoff between sales and implementation (43%) came in as the highest factor for regret, while mismanaged expectations (42%) was another factor.
According to Lataillade, “Both factors can quickly sour the post-purchase experience, leading to dissatisfaction. The implications of such dissatisfaction are not confined to a mere transaction but extend to the heart of strategic business decisions.”
Impact of customers’ dissatisfaction with their software purchases
Nearly a quarter (24%) of survey respondents who experienced regret chose to cancel their software contracts, and a third of them (33%) decided to switch software vendors altogether.
The report also pointed out that over half of buyers who regret their purchases (56%) believe the financial setback will negatively affect their business’s long-term performance. This is particularly challenging for small businesses with fewer than 250 employees, as 59% of them saw a significant impact, in contrast to 51% of larger businesses.
How vendors can reduce software purchasing regrets and prevent churn
Addressing regret among software buyers before it becomes churn is paramount for software vendors. While the Gartner survey identified immediate response to customer requests and enhanced implementation assistance as the two most important strategies to prevent regret, there are other crucial strategies that can help.
Engineer software products for simplicity
Software products developed for end users should be designed for simplicity to improve ease of implementation and use.
In a statement made available to TechRepublic about this report, Gideon Kalu, founder of Femur, Inc. a company that builds business software products, said, “For vendors to mitigate regret, software development should trace firmly from the user and back to the technology. Unfortunately, most software companies have it backward; they begin with the technology and try to force-fit user consideration as an afterthought. Put differently, software developers are notorious for over-engineering products that should be simple, hence, leading to overly bloated products. The aftermath is a software product that lacks ease of implementation and use.”
Engineering software products to ensure user satisfaction should include such measures as ” … thorough user research, controlled A/B tests to determine usefulness, optimizing for simplicity, and using clear, intuitive design languages that declutters software products,” Kalu added.
Build credibility with verified reviews
Verified reviews from software buyers are one of the fundamental pillars of consumer trust; they can significantly impact the perception of software products and vendors. Such customer reviews provide potential buyers with authentic and unbiased insights into the software’s performance and its suitability for their specific needs. Vendors that encourage and facilitate genuine user feedback can build credibility and trust, making it more likely for buyers to feel confident about their purchase decisions.
According to Gartner’s report, building a vendor list is a crucial step in the software buying process, and 33% of buyers rely on customer reviews (Figure A). Most of the buyers build their vendor lists from reliable software review sites and user communities.
Figure A
Empower sales teams and buyers
Empowering sales teams involves equipping them with the knowledge and tools, such as CRM systems, chat software, email communication platforms and presentation software, to assist software buyers effectively. Sales representatives should be well-versed in the features, benefits and potential challenges of their software solutions; this knowledge can help them guide potential buyers to ensure they make choices aligned with their specific business objectives.
Beyond empowering the sales team, the report also recommended creating quality content around software products such as product guides, demo videos and self-service tools to empower the buyers with enough information about how to implement the products. Gartner’s study highlighted that product trials (33%) and demos (30%) are important considerations when buyers build a vendor list.
Identify warning signs of potential regret during the sales process
Early recognition of customer concerns or issues can allow software vendors to address these problems promptly and potentially salvage the relationship. This proactive approach can prevent regret from escalating to the point of contract cancellation or vendor switching.
Dmitry Alasania, head of sales at cloud data platform Skyvia, said in a statement made available to TechRepublic that software vendors can identify warning signs of regret by monitoring customer health scores. Software vendors should endeavor to “Vigilantly monitor customer health scores and offer proactive technical assistance if issues arise. Employing predictive analytics and user behavior tracking can also aid in identifying and addressing potential problems before they escalate, thereby reducing customer churn.”
Prioritize post-sales communication
It’s important to follow up with software buyers to guide them on implementation, integration and configuration needs. “Post-sales communication is necessary for post-purchase expectation alignment,” wrote Alasania. “Software vendors must guarantee that after a customer subscribes to a product, their initial expectations, formed during the solution selection phase, are fully met. This involves ensuring consistency between the value proposed in marketing materials and the actual results that the customer receives,” Alasania explained.
“Software vendors can no longer afford to view the purchase of their products as a one-time transaction. Instead, they must consider it as the initiation of a long-term partnership. To retain and satisfy their customer base, vendors should prioritize these crucial post-purchase elements,” de Lataillade stated.
How tech decision makers can reduce software buying regrets
Tech decision makers also have a role to play in preventing regret among their software buyers, especially in the areas of software implementation.
In a statement made available to TechRepublic, Divisional CIO for Harmony Healthcare, an Addison Group company, Robert Burkett, noted that “Tech decision makers should ensure the people using the software are educated to the capacity of the tool before implementation begins, implement a triage/warranty period after the close of the project, do a comprehensive implementation assessment to determine potential points of failure and see that each product has extensive documentation to ensure understanding of capabilities.”
Survey methodology
Gartner noted: “The survey was conducted online in July 2023 among 3,484 respondents from the U.S., U.K., Canada, Australia, France, India, Germany, Brazil, and Japan, with businesses across multiple industries, employing between 5–10,000 or more workers, and reporting up to $1 billion in annual revenue. Respondents were screened to ensure their involvement in software purchasing decisions.”
