Gartner: Service, Support Beat Price in the SMB Market

Seventy-three percent of SMBs rated the service and support they received from their technology providers as the most important factor in a buying decision, according to Gartner's "User Survey Analysis: IT Evaluation Criteria and Channel Preferences in the SMB Market, United States, 2006."

With that in mind, Gartner analysts recommended that VARs put a premium on those factors and place them high in the sales pitch.

"For [an SMB], receiving poor service and support is actually more of a catalyst to unseat its incumbent provider than receiving a better purchase price… in some cases it even outranks functional satisfaction of the product itself," said Tiffani Bova, Gartner's research director for worldwide IT channel sales, programs and alliances.

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Ease of integration with existing systems was the No. 2 concern for SMBs making technology purchase decisions, Gartner analysts said, recommending that VARs perform a site audit before recommending upgrades. Technologies that require major upgrades to infrastructure are likely to get deferred because of the costs.

While SMBs agreed on those top two factors in making a buying decision, after that opinions diverged. Smaller SMBs—from 20 to 99 employees—placed a high value on the "ease of doing business with my provider." Gartner said this factor was driven by small businesses' lack of internal resources to put into managing the vendor relationship.

Lower-midsize businesses, from 100 to 499 employees, and upper-midsize businesses, from 500 to 1000 employees, ranked total cost of ownership as third on the list of important factors that played into their buying decisions.

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"As a company passes the small business threshold and becomes more complex, it is more likely that it will have processes in place to manage IT investments," Bova said. "Also, they have a proclivity to begin purchasing more multiyear solutions as at a greater expense than when they were small businesses."

Bova noted that that small businesses tend to outgrow solutions quickly and typically purchase products with two- to three-year maximum life cycles.

The Gartner survey also noted that an IT provider's knowledge of specific industry verticals is more important to small and lower-midsize businesses than it is to upper-midsize businesses.

"This is likely a result of the more resource-constrained environments small and lower-midsize companies have to deal with," Bova said. She added, "An IT solution that is packaged with some level of industry capabilities, such as an IP telephony solution targeted to retail shops or hospitals, is appealing to SMBs because they feel they are getting a solution aligned with their business processes without having to pay for the customization, which also makes it easier to justify in a business context."