Satisfaction With Software Drops With COVID-19 Uncertainty

Introduction

The impact of COVID-19, as it became a global pandemic in Q1 of 2020, has affected user sentiment toward software during a growing period of fear, uncertainty, and doubt.

To analyze the impact, SoftwareReviews compared satisfaction (willingness to recommend to a peer), ability to deliver business value (fair cost to value), and likeliness to renew prior to March 10 and post March 10.

Summary of Findings

SoftwareReviews data from over 3,000 surveys, completed January 1 to April 2, 2020, reveals an increasingly negative user emotional connectedness with much of the software they are using. While this was anticipated due to the increasing social and economic uncertainty impacting global markets, the rate of decline has been more dramatic than expected in the short weeks after the North American market becoming the epicenter of the COVID-19 pandemic.

As software is critical in the productivity and interactions of users, especially as organizations have implemented remote work policies, data from our ongoing reviewer communities have allowed SoftwareReviews to quantify the decline in confidence in renewing software contracts. Current expectations that a software solution might be renewed has fallen by 7% across all software categories. Further insights from these same reviewers show an overall decline of fair cost to value of 2% and a decrease in willingness to recommend to their peers of 2%.

As IT spending is projected to decline in 2020, most cuts will be with technologies seen as lacking in quantifiable value for their users or the organization. As renewal confidence is correlated to perceived “business value” and trust is “a willingness to recommend,” it is our opinion that vendors must adapt their outreach programs and pivot their teams to address these factors during the second quarter of 2020 to engage their customers with programs that build trust and prioritize support to mitigate account risk.

SoftwareReviews recommends vendor marketing and sales teams invest in measurable activities that build trust, foster stronger relationships, and deliver products that produce business value. The following data provides insights and specific actions our research indicates may deliver the best outcomes for users and vendors alike.

SoftwareReviews will continue to publish monthly and quarterly updates to these charts at www.softwarereviews.com.

Changes to How Likely People Are to Recommend Software

One of the most important measures of software is how likely the user is to recommend the software to a peer. This metric provides a clear data point that validates the trust and confidence a user has in both the product and its supplier in helping them succeed.

In three weeks, user sentiment declined by 5% when asked if they would recommend the current software they were using to a peer. This tells SoftwareReviews that customer loyalty is at stake in a growing number of accounts.

This decline in loyalty should be a warning to software vendors that customers are becoming increasingly wary of whether their product is the best one for the job or are questioning if the vendor values their needs given current challenges.

A strong “willingness to recommend” score correlates to strong user loyalty and indicates a strong relationship to the software vendor’s ability to renew, grow, and defend an account. The impact of a decline in customer loyalty is very hard to recover. Therefore, it is SoftwareReviews’ recommendation that marketing and sales teams prioritize customer support and engagement programs, provide timely extensions and training options, and ensure they regularly seek data on customer satisfaction with the product, partner, and vendor teams their customers are interacting with.

Recommendation & Actions for Vendors:

1. Bolster customer outreach to provide additional support and training access. Assist IT departments in efforts to educate and support remote users and optimize systems.
2. Double down on monitoring customer-experience metrics through your own CSAT programs and data from third parties. Use data to assess and action concerns with your viability and accessibility to your customers and users.
3. Focus marketing on core features and dependability. Address the needs for user trust and safety as they deal with social, family, and economic challenges.

Is Your Software Still Providing High Value?

In just three weeks, the SoftwareReviews community revealed a shift in the perceived value of software. On average, across over 600 reviews of 200 products, scores indicate a decline in satisfaction when users were asked if their software solutions are delivering fair cost to value.

This shift illustrates an increasing expectation of what users feel their software tools should be delivering for every dollar invested. With many business and users impacted economically, a drop in perceived value delivered, if not monitored, may result in many contracts not being renewed. Feedback from users and IT departments on a drop in value will translate to cuts in IT spending in the near term and potentially result in longer-term optimization strategies as organizations look to manage costs during and after the pandemic.

Recommendation & Actions for Vendors:

1. Make sure to align value to shifting priorities. Monitor data showing change in sentiment biweekly and develop initial responses. Adapt your value propositions to features or capabilities attuned to current user needs.
2. Implement messaging focused on building trust and re-engaging customers on proven features that drive trust and satisfaction. Use social media and customer experience programs to offer quick tips, training, and how-to videos to reaffirm that your users can get what they need from your software.
3. Make outreach more prevalent on your website and support pages. Show empathy to customers and ensure your sales teams are proactive in helping customers address pain points. Use data to align efforts to what users’ value. Companies that invest in customers win in the long run. Share the pain and build trust.

Impact on Renewal Probabilities

In three weeks the “likeliness to renew” dropped by 7%. SoftwareReviews data quantifies that many technology leaders and users are concerned with their organization’s and own economic future. While a majority did shift to “probably will” (pre-March 10: 43% vs. March 10 to April 2nd: 48%), we caution vendors it is very risky to assume spending with this much of a drop will stay at pre-pandemic levels.

As a likeliness to renew is tied to satisfaction, loyalty, and business value (as previously highlighted) a 7% drop in “probability to renew” is based on the same review sample that showed only marginal declines. This is a significant red flag that may predict that while loyalty and fair costs may show slight unique declines, the multiplying factor these may have on renewal probability is a clear alarm for software vendors.

Additionally, this decline, especially in a short period, validates the projected contraction of technology spending. With IT budgets projected to drop in 2020 and potentially in 2021, SoftwareReviews expects IT leaders will use inputs from users and peers to reduce or cut many software products and projects that score poorly. We expect many of these cuts to begin within the next 90 days and selectively through the rest of 2020.

Recommendation & Actions for Vendors:

1. Engage your accounts and document where support and engagement builds trust. In hard times buyers will stay with those they trust, not those with the best or newest whizzbang features.
2. Ensure Marketing and Sales are focused on current offering messaging and promoting customer-first programs. Tools to support IT priorities for helping your customers (technology and business) serve and support customers without interruption will be key.
3. Focus on ease of use and dependability. Use data, case studies, and customer experience campaigns that address and promote “getting things done” for your users. As social and economic uncertainty continues to rise, stress and frustration with using a product will quickly sour any relationship you’ve built.

Closing

Times of global uncertainty drive users to focus on the basic human needs for Safety and Belongingness (Maslow’s Hierarchy of Needs). Users will seek peers and trusted sources for insights and advice as they search for certainty and validation.

These are not part of a typical sales process, but they are important components of how customers see their suppliers and partners in today’s market. Companies that provide assurance and focus on trusted relationships will be the ones best positioned for growth and staying power during and after the current challenges.

We recommend emphasizing the following in your messaging and engagement strategies:

1. Focus on supportive messaging. Make sure your customers know you are there for them while they are managing personal, social, and economic distress. Highlight your ability to support, promote ease of use, and work with them on a case-by-case basis to address specific needs and demonstrate that shared success is your priority.
2. Ensure Customer Experience, Sales, and Marketing have the data they need. Can you quantify, with your own and third-party data, where users are happy or frustrated when dealing with you and your products? Do you have messaging and tools to address and promote these? Are you able to quantify your efforts in your customer business reviews and in the selection programs you are in now and will be participating in during the months to come? Use data from your own customers and trusted peer review data to drive the right conversations and actions across these teams.
3. Push service excellence, not products. Emotional footprint data shows that likeliness to recommend and clarity on the business value of software are tied to specific capabilities and features in each product category. Be prepared to promote and address how your leadership is focusing the organization on addressing how current solutions meet users’ wants and needs. Sell upgrades and new solutions later; today, show that you are listening and acting on the priorities shared by your users.

Methodology & Data

SoftwareReviews collects data on enterprise software satisfaction via an online survey.

The data here is from all software reviews collected since January 1, 2020, and is separated into two primary time segments:

• T1: January 1 to March 9, 2020 (n=2,455)
• T2: March 10 to April 2, 2020 (n=620)

Analysis focused on the initial questions in our SoftwareReviews panel data collection:

1. How likely would you be to recommend [the software product you are reviewing]?
2. Is the [software you are reviewing] providing fair cost to value?
3. What is the likelihood you will renew [the software product]?

Additional analysis will be conducted; however, these initial questions have been highlighted to reflect initial responses to overall sentiment for a given software in terms of user connectedness, value, and potential spend. Users of software are encouraged to share their insights at https://www.softwarereviews.com/start

Net promoter scoring (NPS) methodology was used to analyze all survey question data.