Traditionally, Microsoft had viewed Software Assurance mostly as a vehicle for the purchase of software upgrades. But at a time when IT budgets were facing increased scrutiny, renewals were declining—putting a significant amount of potential revenue at risk.
As one tech reporter observed, “There appears to be some disconnect between how Microsoft wants to sell its software and how businesses want to buy.”
Microsoft was under pressure to build additional value into their Software Assurance offering—and they needed innovative ideas to give customers more reasons to buy.
We were a business facing a potential crisis. Using ODI, we were able to discover many new growth opportunities, pull together a valuable offering and reframe our marketing message around a PC lifecycle management offering. In a market under immense price pressure, Strategyn helped us grow a struggling business.”
ODI provided a step-by-step framework to uncover exactly what these customers were trying to accomplish, what they needed in a product, and how they would measure their success.
Microsoft focused their value creation efforts on two particular decision-makers—procurement managers and IT professionals—who were trying to complete the jobs of purchasing and managing a software license.
The team interviewed 28 procurement managers, uncovering 76 customer needs, called desired outcomes, related to purchasing a license. They also interviewed 30 IT professionals, uncovering 58 desired outcomes related to purchasing, 81 outcomes related to managing a software license, and 34 other jobs related to managing software licenses. For example, customers were having trouble keeping track of the number of PC software licenses they owned. IT professionals were also having difficulty anticipating potential software conflicts when they deployed a new operating system.
Using ODI-based quantitative research techniques, Microsoft had 100 procurement managers and 298 IT professionals complete surveys to prioritize these desired outcomes.
The survey results revealed broad dissatisfaction with current licensing practices—many of the desired outcomes were underserved by existing offerings in the market. Microsoft discovered multiple opportunities to add value beyond just purchasing, ranging from improvements in software acquisition and deployment, to maintenance and training, to disposal of old PCs.
With ODI results in hand, Microsoft knew exactly where and how to add value to his Software Assurance offering across all the various job steps. In fact, many pain points could be addressed by existing Microsoft offerings. For example, Microsoft already had solutions to keep track of licenses owned and to anticipate software conflicts.
The company already had many solutions that would help customers achieve their desired outcomes across their lifecycle—they just needed to package them together in a cohesive and compelling offering.
Microsoft’s results were dramatic and immediate.
In the year Microsoft announced the changes to the Software Assurance offering, they doubled year-to-year revenue.
Between 2004 and 2008, Microsoft substantially grew the Software Assurance business and dramatically increased annual renewal rates. Customer satisfaction also increased, and complaints about Software Assurance dropped.
Microsoft discovered it was sitting on a growth business once value was measured from the customer’s perspective.
…we realized that we were only really engaging with the customer in one tiny piece of their job—the purchase of the software. But this was just part of a much bigger challenge that they faced. We were not engaging with them in many of these other areas that were very important to them and where they were very dissatisfied.”
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