Understanding Consumer Behavior: Interest vs. Action in France and Germany

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Counting chickens before they hatch—like putting on Superman’s cape, spitting in the wind, or whatever the opposite of Nike is—you just don’t do it.

This is never more true than in business. Rather than base your business decisions on what might happen, base them on what’s happening now.

As you grow your company, it’s not enough to know what software various industries are interested in.

It’s more important to know what software they’re actually budgeting for.

A man stands in front of a presentation board showing customers, gears, and the German and french flags.

Trust but verify your leads’ interest

Gartner Digital Markets surveyed French and German small to midsize businesses (SMBs) about their planned tech budgets for 2019. What we found can help you and your business understand both where the money is right now and where the money will be in a few years.

Let’s take a look at what types of software these surveyed French and German SMBs are currently using, which ones they plan on using, and what they’ve actually budgeted for. This data shows what you can expect in terms of market saturation and how much stock you can put in your leads’ proclaimed interests.

Selling established software to new and old clients in France

Interesting software types don’t open wallets in France

This graph compares what software French SMBs claim they are planning to use with what they have an established budget for.

French interest vs. action by interest

(Figure 1)

One important thing to note is that this doesn’t include every software type surveyed—simply the top ten based on intended use in the next two years.

That’s why there’s a large number of emergent technologies on this list, including virtual and augmented reality and the internet of things.

There’s a lot of interest among French SMBs in the potential these emergent technologies have. The big unknown of how they can help different types of businesses and industries generates a lot of excitement. But when you look at the budget numbers in this graph, you find that the most frequently budgeted for technology is cloud computing.

This is a much more established software type and, in fact, is the only type on this graph that shows a higher rate of budgeting than planned use in the next two years.

But wait, you say. How can that be?

Factor in current users who might want to expand

The group of respondents who claimed to be interested in using various software types in the next one to two years excludes those who are currently using the software.

Some of the 37% of French SMBs budgeting for cloud computing software already use it and are simply budgeting for new purchases or switching vendors in the next one to two years.

What this means for you is that your current users might be interested in expanding their operations. It also means there might be competitors’ clients out there who are looking to become your leads.

The flip side of this? If your product can’t scale with your clients, you’re more likely to lose them to someone else.

So what can you do to expand your leads while preventing the loss of any clients of your own?

  1. Nurture your current clients with aplomb
  2. Ensure your software can meet demands for expansion
  3. Revisit leads that fell through the funnel

The deceptiveness of this graph

I have to come clean about something though: That graph is lying to you. Okay, maybe not lying but at least not telling the whole story.

Figure 1 shows the top ten software types that have the most expressed interest for the next two years.

But what happens when we shift the graph to focus on the top ten software types that are actually budgeted for?

French interest vs. action by action

(Figure 2)

Now we see a wide array of new software types that are more established, such as HR software and digital marketing.

Though there are a few more emergent technologies here, the software types with the highest rate of future budgeting are the ones with a strong track record of success.

In Figure 1, there is only one case in which the budgeting outstrips the planned use. Figure 2, on the other hand, shows that in France, SMBs are more likely to budget for more pervasive software types than they are for hip new tech.

3 things to do with your French connection

Before we move on to talk about Germany, let’s take a second to review three main takeaways for your French marketing campaigns:

  1. Don’t trust the buzz around emergent tech: Plan for a longer marketing campaign before you start seeing profits.
  2. Make sure your older software—e.g., finance/accounting, project management—has high degrees of scalability or you might lose customers.
  3. Target your marketing toward current clients and lost leads who are looking to expand.

Understanding the lack of correlation in interest and action in Germany

German interest vs. action by interest

(Figure 3)

German SMBs show equal interest in new tech (such as blockchain and VR / AR) and older software types (think app integration and customer relationship management).

There is a noted difference in German budgets for older versus new software, but it isn’t necessarily consistent, which makes it difficult to determine a pattern.

What that does tell us, though, is that interest in emergent technology is more likely to have a solid financial foundation, given the lack of correlation.

German SMBs are more willing to actually invest in the technology that interests them, so if you’re exploring expanding your cutting edge software internationally, Germany is a stronger bet than France.

Let’s look at the inverse graph, though, to see if there’s any new information to be learned.

German interest vs. action by action

(Figure 4)

One thing that becomes instantly apparent is the gap between those planning on implementing certain technologies (most notably data and information security) and those actually budgeting for it.

This is partially because so many German SMBs already use data and information security (74%); there aren’t many companies left that haven’t invested in it yet.

However, that highlights questions around the difference between the rate of budgeting and the rate of use. Why are only 35% of companies budgeting for data and information security software if 88% expect to be using it by 2020?

The answer lies in the fact that many German SMBs hadn’t set their budgets for 2019 or 2020 at the time of our survey. So, while they could be intending to use the software, they might not have it all planned out yet.

In fact, 50% of surveyed German SMBs responded that they settle on their budget during the selection process, which can take about one year to reach from the top of the sales funnel.

German companies are slower to settle on their budgets, which means that you should put more stock in those that are currently using certain software and those that express an interest, as opposed to those who have set aside specific budgets.


Comparing the lessons from France and Germany

When you’re preparing to pursue leads in France and Germany, you might be tempted to assume that simply because SMBs have said they’re interested in your product, they’ll be easily converted.

Don’t fall into that trap. Our survey data shows that interest doesn’t always correlate with action.

 IN FRANCE:  Target your marketing toward businesses with more explicit budgets, whether they’re planning on or currently using your software type.

 IN GERMANY:  Focus more on those that have expressed interest rather than budgets, as many haven’t yet established their budgets. Germany is also a stronger marketplace for emerging technologies.

Additional resources on international expansion

As you prepare your business to expand into more territories, it’s important to learn as much as possible.

We’ve rounded up some additional resources to get you started:

Methodology

Information on Capterra’s Top Technology Trends for SMB survey

Capterra conducted this survey in June and July 2018 among 540 France and German-based SMBs with more than one employee and annual revenue of less than $100 million. The survey excluded nonprofit organizations. The qualified respondents are decision-makers or have significant influence on the decisions related to purchasing technologies for their organization.

Information on Capterra’s Buyer Behavior for SMBs survey

Results presented are based on a Gartner study to understand small business challenges and approaches to technology investments. The primary research was conducted online between July and September among 715 respondents in U.S. companies that have between 2 and 249 employees, and revenue of less than $100 million USD. Respondents were required to be involved in purchasing technologies for the organization and hold a position of manager or above in the company. The study was developed collaboratively by Gartner analysts and the primary research team that follows Gartner Digital Markets.

Looking for Marketing Automation software? Check out Capterra's list of the best Marketing Automation software solutions.

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About the Author

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Adam Rosenthal

Adam Rosenthal is a Senior Specialist Analyst covering Vendor Marketing. He received his Masters from the University of Chicago and worked on several TV shows you might have heard of.

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