COVID-19 has created unprecedented disruptions in business as usual and IT has been one of the most heavily impacted organizations. IT has been asked to cut budgets in response to sinking revenues while simultaneously enabling organizations to work from home and engage with customers in new ways.
As IT has turned to their vendors to help them through their COVID-19 response, Topline asked ourselves 3 questions:
- What are IT professionals looking for from their vendors to help them through COVID-19?
- What has been the impact of vendors’ responses to COVID-19 on their customer relationships
- Which vendors are doing the best job helping their customers and which are doing the worst?
To answer these questions, between May 11, 2020 and May 14, 2020, we conducted a survey of 224 senior IT leaders at companies of all sizes and across all industries.Here is what they had to say:
1. What are IT professionals looking for from their vendors to help them through COVID-19?
IT professionals are primarily looking for the following 4 things from their vendors, which their best vendors are providing but their worst are not:
- Rapid Response for High Priority Special Projects: COVID-19 has spurred a large number of special projects designed to help companies adapt. These include projects such as enabling employees to work from home, implementing eCommerce solutions, and scaling up rapidly to respond to their customer requests (such as airlines handling cancellations)
- Continuing Business as Usual: Often, all IT professionals are looking for from vendors is to continue to support their business as usual – Keeping their systems up and running, delivering standard orders as promised, and maintaining their support SLAs. They worry that service from their key vendors will fall off and leave them high and dry.
- Enhanced Service & Communications: IT professionals cited a wide range of ways that their vendors were making special efforts to provide information during the crisis such as providing more training sessions, sending notices about developments in the business and outreach from Account Managers to check in
- Financial Assistance: As IT budgets have been hit hard by COVID-19 (Topline’s previous COVID-19 study found that on average IT budgets were being reduced by 11% from the original 2020 plan), IT departments are looking for vendors to provide financial assistance beyond what is contractually required such as reducing commitments, deferring payments and providing free services and licenses.
What has the Vendor that has had the best response to COVID-19 done to merit that status?
2. What has been the impact of vendors’ responses to COVID-19 on their customer relationships?
Perhaps the best summary of the impact on customer relationships as a result of COVID-19 is the old saw “A friend in need is a friend indeed.” For many IT professionals, COVID-19 may present the most difficult challenge of their careers and how a vendor responds in the crisis can make, break or cement (for better or worse) their relationship with the customer.
To measure the impact, the survey asked for both the vendor that had the best response to COVID-19 and for the vendor that had the worst 1) The NPS score both prior to COVID and today and 2) How the vendor’s response would change how much business they did with the vendor in the future.
For the Best Response Vendor, the findings were eye-popping, with the NPS for those vendors increasing by 45 points, from 11 to 49 and 79% saying they expected to do more business with the vendor as a result.
NPS of Vendors with the Best Response Increased by 45 Points
For the Worst Response Vendor, the impact was almost as large as the upside for the Best Response Vendors, with NPS falling by 39 points and 66% saying they expected to do less business with the vendor as a result. However, the reason for this is that companies were already very unhappy with their Worst Response vendors before COVID 19 as their Before NPS was already a disastrous -57. For the most part, the Worst Vendors lived up to their pre-COVID reputation of being poor vendors by responding poorly to COVID.
NPS of the Vendors with the Worst Response Fell by 39 Points
3. Which vendors are doing the best job helping their customers and which are doing the worst?
As survey respondents were free to pick any of their vendors as having the best and worst response to COVID-19, there were a long list of companies across all categories and sizes that fell into both categories, but 2 vendors did stand out:
– Microsoft as having the best overall response: They were mentioned as having the Best Response by 56 companies but the Worst response by only 12
– Oracle as having the worst overall response: They were mentioned as having the Worst Response by 11 companies and none who mentioned them as having the best.
So what does this mean for your business? We recommend looking at the following 3 areas and making changes to your COVID-19 response if you are not already doing these things.
- Redirect resources to Customer Engagement: Customers are rewarding even modest increases in levels of responsiveness and service. Actions can be as simple as regular emails letting customers know what is happening or more extensive such as assigning staff whose regular activities have been disrupted to front line activities such as Training, Support and Customer Success
- Put special emphasis on Detractors: One of the key findings of the survey was that 74% of customers who had previously rated their vendor with the best response as a Detractor had moved up at least one NPS category – 47% to Passive and 27% to Promoter. COVID-19 offers a unique opportunity to reset a relationship.
- Consider options for Financial Assistance: While it may be counter-intuitive to provide customers with financial assistance while you’re facing your own monetary pressures, there are ways to build goodwill in the short term that could more than pay for themselves when things return to normal in terms of lower churn and more upsells. Pushing out payment terms and providing free licenses are inexpensive in the short term and can create enormous goodwill. Even larger concessions such as letting customers reduce contractual commitments can have a positive ROI relatively quickly. One of the survey respondents shared a case where they decided to walk away from a contract where the vendor refused financial assistance to go to a competitor. In this case, financial assistance would have had immediate return over losing the customer entirely.
Full survey results: To access the full survey results, you can download them here.