User Fidelity Wavers

Customer loyalty is pretty low in the IT industry, according to the latest survey

September 24, 2004

2 Min Read
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Vendors beware: Fewer than half of your U.S. customers are truly loyal, and nearly a quarter are thinking about ditching you. These are some of the key findings from Walker Information's latest loyalty report.

The study, which surveyed nearly 5,000 U.S. IT professionals, focused on five main technology areas: software, services, networking kit, servers/workstations, and storage systems. Firms purse strings may be loosening at the moment, but IT managers, having come through the last few years of economic slowdown, are clearly making their suppliers work for every dime.

This ties in with the feedback NDCF has been getting from users over the last few months. The market is slowly picking up, but it is unlikely we will see a repeat of the tech-purchasing frenzy of the dotcom era. Whereas vendors and their customers were once joined at the hip, users are now keen to explore all the options available to them (see Software Slump Is Deal Time and Are We out of the Woods Yet?).

But it’s not all doom and gloom for the vendors. Overall, some 84 percent of IT customers described themselves as being "satisfied" with their supplier in the Walker survey. Still, this is hardly a ringing endorsement, especially when viewed in the broader context of customer loyalty. Only 44 percent of the IT staff taking part in the study were "truly loyal" to their suppliers.

So, what about the remaining 56 percent? Some 30 percent felt "trapped" in their supplier relationship but were likely to continue, and 23 percent had little intention of staying with their existing supplier. The remaining 3 percent were pleased with the relationship, but were thinking about changing vendors anyway -- it seems it really is impossible to please all the people all the time.Microsoft Corp. (Nasdaq: MSFT) and the Linux vendors can breath a sigh of relief, however -- the software sector has the highest proportion of loyal customers (48 percent) and the lowest proportion of users planning their exit strategy (18 percent). But it’s a different story in networking, where a mere 37 percent describe themselves as really loyal, and 28 percent are looking for a way out of the relationship with their supplier.

Nevertheless, it was a networking company, Cisco Systems Inc. (Nasdaq: CSCO), that topped the charts for customer loyalty -- followed by Dell Computer Corp. (Nasdaq: DELL), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM). Other companies that performed well in the loyalty stakes were Microsoft, Network Appliance Inc. (Nasdaq: NTAP), Oracle Corp. (Nasdaq: ORCL), and SAP AG (NYSE/Frankfurt: SAP).

— James Rogers, Site Editor, Next-gen Data Center Forum

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