Decision Insights: How the C-Suite Makes Buying Decisions
What are Decision Insights and Why Do They Matter?
For a long time, KLAS been casually collecting responses from providers regarding their IT buying decisions. Our researchers always ask whether a product being rated is in the provider’s long-term plans. This question often yields basic data about buying decisions. We’ve also done clinical market share reports for acute care and ambulatory EMRs for about a decade. Those reports have simply validated vendor wins in the market.
About a year ago, KLAS started digging deeper. We created a science out of gathering important buying-decision data. Our new process has helped us find answers to questions like these:
Why are people buying what they’re buying?
What research are providers doing in the middle of buying decisions?
How do different vendors work to earn business?
Providers’ thoughts about these topics—along with the statuses of recent or in-process decisions—are compiled and analyzed in what KLAS calls Decision Insights. These insights have already proved valuable to KLAS, our provider friends, and (perhaps especially) our vendor associates.
But how is this market-moving information measured? What truths have been revealed in providers’ comments? And how are vendors leveraging KLAS’ findings?
The A-List Framework
As KLAS considered how to approach Decision Insights, we felt that some of the most important metrics to measure were how often a vendor is considered, how well they do at holding on to customers, and how satisfied their customers are.
This led to us creating the triumvirate framework of market energy, retention, and satisfaction. Only vendors who do well in all three of these areas can qualify for our A-list.
Market energy is measured by how many looks a vendor’s product is getting in comparison to other products in the market segment. In other words, is the vendor’s product getting more than its statistical “fair share” of considerations? An answer of “No” may indicate that the vendor or its technology is going stale.
Have you ever rushed to try a new restaurant but never gone back after your first meal there? KLAS knows that there are vendors similar to such a restaurant. A vendor who attracts a lot of new customers only to see them walk away has a problem bigger than subpar breadsticks.
While we don’t always correlate satisfaction scores with Decision Insights data, we felt that these scores were too important to leave out of the A-list framework. Why? Because we know that many providers have purchased tools but keep them only because they feel forced to. KLAS wanted only the vendors with satisfied customers to make the A-list.
And so, the A-list requirements stand: above-average buying energy in your market segment(s), a retention rate of at least 90%, and a KLAS satisfaction score of 85 or higher. Only eight vendors across all market segments achieved a spot on KLAS’ A-list in the Decision Insights 2018 report.
Decision Insights 2018 Report
Along with details about the A-list vendors, KLAS wanted to publish other Decision Insights data that we knew would move the market and pique interest. One surprise, for example, is that high KLAS satisfaction scores don’t necessarily correlate with high market energy.
However, they are a significant factor in which tools are actually chosen. In other words, earning a high KLAS satisfaction score isn’t likely to earn a vendor more considerations but is highly correlated to the vendor earning more wins.
KLAS gleaned quite a bit strictly from the numeric data gathered in preparation for the report, but perhaps the most helpful information was found in providers’ comments about their HIT buying decisions. KLAS has learned, for instance, how drivers of purchasing choices differ between market segments. In the most mature market segments (such as acute care EMR), most providers are consolidating for the sake of integration.
With newer but established technology (e.g. BI analytics tools), customers tend to focus on functionality. Reasons behind choices in emerging market segments (like secure communications) are the most varied.
Vendor Success Stories
Provider comments have also allowed KLAS to pass vendors feedback that they might never have heard otherwise. After all, how often does a provider organization call up a vendor to say, “We chose a different tool over yours. Want to know why?” As it turns out, vendors really want to know not only why current customers chose them, but also why potential customers didn’t. This understanding can help them make changes that will mutually benefit them and their customers.
For example, we spoke with one vendor ablaze about their new cloud functionality. The only problem? Several of their customers’ Decision Insights comments showed that customers were leaving the vendor in search of a cloud product. The vendor was floored. However, they also felt grateful for the realization that they could retain more customers by improving their marketing message and making their road map clearer to current customers.
Another enlightening conversation happened with a vendor seen as a successful thought leader in their market. Using Decision Insights commentary, we showed the vendor the perception of many potential customers that the vendor’s tool had more functionality than they needed and could afford. This information led the vendor to consider a new direction. They have begun devoting R&D resources toward creating an additional tool with more basic capabilities and a lower price. Their hope? To reach a new group of customers who have never seriously considered going with this vendor.
Learning Even More
Clearly, the Decision Insights is already making an impact in the market. As someone who has spent my whole career studying the roles of sales teams and operations teams, I learn things every day from the Decision Insights data that keep me excited to come to work. I eagerly await learning more about vendor best practices, provider perceptions, and purchasing trends in the HIT world.