Tag: University of Massachusetts at Amherst

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Helping a Small Business Customer Choose Your Solution

In a previous article entitled The Psychology of Small Business IT Adoption, I discussed Icek Ajzen’s Theory of Planned Behavior and how a number of researchers applied it to the process of small business IT adoption.  The concept, which ended up proving to be true, was that IT adoption by small businesses is a function of a number of fairly well-defined elements, and is not so much defined by specific types of businesses or the business leaders.  The elements which lead to the act of business IT adoption (as well as adoption of other services, I’ll bet) can be identified and addressed by the potential provider of the product or solution ahead of time, making the possibility of actual adoption much greater.

Knowing how your prospective customer will approach the decision-making process is important, and getting a little insight ahead of time never hurts.  Particularly when a lot of customers don’t actually reveal their thinking, it can be tough to know where to begin.  You’ve been there before – you’re making your pitch and asking questions, but are getting nothing in return.  Sometimes it’s “deer in headlights”, and they are simply overwhelmed.  Other times they’re thinking about things you’re not telling them… but they’re not letting you know you’re not telling them.  Dead air, and then a lost opportunity.

Boiling it all down to a fairly simple explanation, businesses adopt IT because there is a conscious plan to do so, and that plan is supported by a belief that the solution will do good things for the business, the solution is a recognized (if not expected) approach, and the business believes it has adequate resources and capability to effectively handle it.  It’s all about:

  • Intent,
  • the attitude towards adoption,
  • belief of expected outcomes and their value,
  • expectations and the motivation to comply with them, and
  • evaluating barriers and the adequacy of resources to overcome them.

Intent

The first and most important element is intent, a conscious plan to get or do whatever it is.  If the customer has no plan to get the item and sees no need for it, then the barrier is pretty high.  However, if the need can be created, and the customer can be driven to believe they need to get the item, then there is intent.  Now they’re looking for you and not vice versa.  Consider that the Snuggie wasn’t “something” until folks were told that blankets simply weren’t good enough any more for lounging around (they don’t have sleeves!).  Once people believed there was a problem, they pursued finding the solution.

The attitude towards adoption

Next, what’s their attitude towards getting the item?  Sometimes people go looking for things they don’t think they can actually get, and often they know they need something but don’t think the solution is even out there, so they have a jaded viewpoint from the start.  A prospect with a positive attitude and who wants to actually find a solution is far better to work with than one who has already determined that you can’t help them.  Sometimes all it takes is a good listener to help create a positive attitude and make someone willing to tell you how you can help them.

Belief of expected outcomes and their value

Now, what does the customer think they will get from the deal?  Will the solution actually solve problems or create new ones, and are the perceived problems to be solved big enough to really worry about in the first place?  Small businesses tend to be very cash conscious, wanting as much value as possible for any expenditure.   Further, most small businesses don’t let go of their cash easily and certainly not for frivolous purposes, so a successful sale is often supported by the customer’s belief that they will get a real solution and benefit – something of value which will be realized, and that is important enough to deal with sooner rather than later.

Expectations and the motivation to comply with them

It is interesting how many small businesses go shopping for products or solutions that they don’t actually intend to purchase or adopt.  Sometimes they just want to be able to say “we’re looking in to it”, even if they aren’t and don’t plan to, and sometimes they have a business requirement that they don’t want to have to meet due to cost or complexity or whatever.  Let’s say a business has customers complaining about unresponsive or bad support, and how they should have a ticketing system to help track issues better.  Maybe the customers have the right idea: maybe the business should have a ticketing system (the business provides support and ticketing systems are considered a support service industry norm).  This is the expectation.  Let’s also say the business uses a CRM solution to handle support, and they believe it handles things just as well as a separate “ticketing” solution.  Just because there is an expectation (customers want ticketing system), it doesn’t mean the business is motivated to comply (CRM does just fine).  Expectations come in many forms and from many sources – customers, vendors, employees, contractors, the government and regulatory… on and on.  Expectation and motivation to comply are both high when it comes to legal and regulatory issues, as these things can be tied directly to money and cash and risk.  In other areas, it may not be as easy to identify or address.  The best way to look at this issue is to try to understand what the business is doing now, whether the approach works or may be materially improved in servicing their business and model, and whether or not the business recognizes an immediate need to make the change.

Evaluating barriers and the adequacy of resources to overcome them

The final and perhaps most important factor in SMB adoption of IT is the simple belief that it can be done.  Done at all, I mean, not just done “affordably”.  My dad taught me that it’s not a bargain if you can’t afford it.  Now, this doesn’t mean that there aren’t times when a business needs to bite the bullet and extend itself to become better.  But any small business in this position is a tough sell, simply due to real resources and capability.  No matter how much a business may know it needs something, if it really can’t do it, or believes it can’t – it won’t.

Make sense?

J

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The Psychology of Small Business IT Adoption

Convincing small business owners to adopt and apply technology in their businesses is often a difficult thing to do.  While most business owners readily accept the need to have computer software to help them produce information and an email account to communicate with others, even such fundamental business solutions as a business website or computerized accounting system can be a hard sale.

Solution providers in every category are looking for ways to communicate the value of their products and services to businesses, and many do not consider that communicating value to a small business owner is not the same as communicating value to a larger and more established enterprise.  There is research available which discusses why small businesses adopt IT, and how the importance (weight) of various factors change as the business grows.  With small businesses fueling the economy and numbering far larger than their enterprise counterparts, it makes sense to understand just why small businesses buy.  It’s also interesting to note that this research revealed that the different characteristics of firms and individual executives “did not have a unique effect on adoption decisions”.   If the decision wasn’t impacted by characteristics of either the firm or individual executives, what does impact the decision?

An academic study by Icek Ajzen (Organizational behavior and human decision processes… University of Massachusetts at Amherst) discusses a theory called the Theory of Planned Behavior, and this theory was posed as a basis for predicting who would pursue a particular course of action or activity.  The idea is that “intentions to perform behaviours of different kinds can be predicted with high accuracy”, and that the prediction is based on attitudes, subjective norms, and perceived control.  Okay, but what does that really mean?

Intentions represent the strength of a person’s conscious plan to do something.  So, when someone intends to do something, like adopt an IT product or service, it means that there is a strong positive plan in that person’s mind to accomplish the activity.  However, having a plan in mind – no matter how strong or positive – is impacted by several elements: attitudes, subjective norms, and perceived control.

Attitude represents the belief that the activity will lead to a consequence that means something.  If you have a plan to adopt an IT solution, but then develop a negative attitude towards the likely outcome (consequence) of using the solution, adoption isn’t likely to occur.  On the other hand, if the belief is that the results or consequences of adopting and applying the solution will be useful, and deliver benefits in the areas intended, then the chances of deciding to make the purchase increase dramatically.

Another factor which weighs on the intent to do something is the pressure related to “subjective norms”, or what might be considered to be social factors.  These factors exist in the firm, in the customer base, with partners, and within the market.  As an example, it is an expectation that a business will have email addresses, computers, and other technology to support the business.  This is simply a normal expectation of businesses today.  It is also a requirement that businesses protect customer information, a requirement and normal practice from both a privacy and regulatory perspective.  It is this expectation and the pressure to be “normal” (a motivation to comply) that also weighs on the decision to act and adopt.

The final factor is perceived control, which comes down to the person’s perception of how easy or difficult it will be to do what they’ve got in mind.  Looking at various potential obstacles, and judging whether or not the business has the resources and capability to overcome them effectively, results in either a positive or negative impact on the intent.

All of these things are placed in linear order, and a straight line can easily be drawn as you move through the process.  It’s all about:

  • Intent,
    • the attitude towards adoption,
      • belief of expected outcomes and their value,
        • expectations and the motivation to comply with them, and
          • evaluating barriers and the adequacy of resources to overcome them.

Boiling it all down to a fairly simple explanation, businesses adopt IT because there is a conscious plan to do so, and that plan is supported by a belief that the solution will do good things for the business, the solution is a recognized (if not expected) approach, and the business believes it has adequate resources and capability to effectively handle it.

Make sense?

J