The Four Types of Technology Buying Organizations

I recently learned about a customer segmentation criterion based on profiling the customer’s purchasing decision process. This is based on Gartner’s research, which identified four types of technology-buying organizations, translating into four marketing clusters in the enterprise world.

It is not the “classic” criteria we use in Customer Success, but it is interesting to explore.

The framework is handy as marketing and sales teams can adjust their approach to target and address the organization's needs as part of the buying decision process. While I did not find an explicit reference to CS in Gartner’s model, it significantly impacts Customer Success and the post-sales motion.

Let’s see how we can leverage Gartner’s insights and assist the CS teams in tuning their efforts as part of their customer’s journey.

When it comes to the buying decision process, Gartner identified these four enterprise clusters:

📌 “Cooperative”

📌 Strict Planner”

📌 “Catalysts”

📌 “Business Led”

The Cooperatives 

They are the largest group of enterprises, representing 43% of buyers. The cooperative approach implies that they are usually less clear on what matters most to them—everything seems to matter equally. This observation may also indicate that the sales team will have a challenge predicting their success in finalizing the deal with this type of customer.

According to Gartner, Cooperatives consider all types of information, including thought leadership, product or service features, and product reviews, when exploring a new product or service.

What does this mean for CS teams when “Cooperative” customers start their journey?

✔️ Handover from sales should include a reference to the criteria eventually considered as part of the customer’s decision process.

✔️ Multiple stakeholders might be involved, with varying needs and expectations, requiring the CS team's attention. Understanding their motivation and collaborative approach will be beneficial.

✔️ Champion or Champions?  one person? Or a team? If the champion was not part of the decision process, the CS team has to align and ensure they all follow the expectations set by the “cooperative team.”

✔️ EBRs—Multiple collaborative stakeholders form an excellent opportunity to present a business update to a team of curious stakeholders.

✔️ While stakeholders' interests may vary, CS can share best practices and demonstrate successful use cases to promote usage and value across the team.

The Strict Planners 

The “planners” prefer a proven technology that supports their strategic vision. Fifty-five percent of Strict Planners said they rely primarily on information about the product’s or service’s features when exploring a new purchase. Consequently, vendors prioritize supplying information that contains quantified results and rely heavily on expert interactions.

What does this mean for CS teams when “strict planners” start their journey?

✔️ The Handover from Sales should include the quantified references and benchmarks shared as part of the sales process.  

Examples:

📝 “The average onboarding duration is X days/weeks.”

 📝 “Using the platform, you can expect an increase of X% in new marketing leads.”

📝 “Other customers realized Y% reduction in cost/time-to-market.”

A knowledgeable CS team must be aware of such metrics/benchmarks to manage customers’ expectations accordingly and reduce the chances of “Buying Remorse” (also known as the sense of regret after making a purchase).

✔️ The CS team should carefully plan and navigate the onboarding phase to achieve the expected (quantified) results aligned with the expectations set during the pre-sales stage.

✔️ The CS team will pay more attention during QBRs/EBRs to those benchmarks the customer had in mind when making the purchase decision.  Results should be highlighted and explained, focusing on gaps and concrete steps to improve them.

✔️ With successful onboarding and adoption, CS can identify supporters and advocates who will provide a warm reference and possibly a case study about the measurable outcomes.

✔️ The CS team can elegantly close the cycle with the sales team by continuously updating them about the success of the “strict planners.” This will help sales promote additional benchmarks and proven results to attract new customers.

Catalysts

This type of customer might be more adventurous and accept the risks and costs of new technology. They will deploy as early as possible while seeking assurances and validation that technology will meet their needs. Catalysts look to understand a provider’s products and services for new technology primarily through search within a trusted independent site.

When buying replacement technology, they are more likely than other enterprises to seek information through direct vendor interaction. Gartner suggested that tech providers share information on product capabilities and implementation details. In addition, they are encouraged to provide free trials or proofs of concepts and interactive tools to support the catalyst’s buying process.

What does this mean for CS teams when “Catalysts” start their journey?

✔️ The CS team can engage in trials/POC, assisting customers with deployment and best practices.

✔️ The CS team can be instrumental in converting free trials/POCs to paying customers.

✔️ While the “Catalysts” will be more lenient regarding product malfunctions, the CS team should provide short-term workarounds with adequate support and visibility to a permanent fixing schedule.

✔️ Maintaining a solid relationship with the “Catalysts,” CSMs can obtain meaningful feedback and suggestions for improvements from early adopters.

✔️ CSMs should engage the product manager to present the product roadmap and path to maturity and subsequently instill confidence in the fellow “Catalysts.”

Business-Led 

These buyers represent 21% of those Gartner surveyed, and they involve the business throughout the buying process as they verify that technology drives business value. 

Business-Leds seek specific product and service information through customer references and proof points. In addition to product review sites, they rely heavily on direct engagement with vendors to learn more about products and services.

When buying new technology, 80% of business-led enterprises said they look to understand a provider’s products and services primarily through self-driven search rather than interactions with the vendor. Yet, the opposite is true when buying replacement technology, as only 43% look to self-driven search, relying on interactions instead.

What does this mean for CS teams when “Business-Leds” start their journey?

✔️ The handover from sales should include the expected business outcomes the customer had in mind during their decision process.

✔️ During onboarding, the success criteria agreed upon with customers should relate to Business outcomes.  While this, in principle, applies to any customer, “Business-Leds” may look for earlier reassurance and visibility of the results.

✔️ “Business-Leds” will expect the CSMs to align their terminology towards business impact and not necessarily focus on features and technology aspects.

✔️ QBRs and EBRs require a similar approach to prove the business impact compared to industry benchmarks and average results obtained by similar customers.

✔️ To promote more sales with “Business Leds,” the CSM should identify promoters and encourage them to log positive references on product review sites.

While promoting CSMs to be more confident in their commercial skill sets, I encourage them to expand their horizons and learn more about sales practices and frameworks. The Gartner framework is a great example of how CS teams can enrich their understanding of the Tech buying process while leveraging this type of customer segmentation to improve their performance.  Knowing the background of the customers' decision process and selection criteria will sharpen the CSMs as they can effectively manage the customers and their unique expectations.