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ERP Vendors Do Not Have Strong Brand Awareness
ERP vendors have a weak hold on their customers' hearts, minds, and wallets, despite significant investments in marketing and branding.
Posted Jan 15, 2004
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According to the Yankee Group, enterprise resource planning (ERP) vendors have a weak hold on their customers' hearts, minds, and wallets, despite significant investments in marketing and branding. The new report, done in tandem with Market2Customer, a member of Monitor Group LLP, tested the power of the ERP corporate image among business decision-makers. Jon Derome, program manager for the Yankee Group's Business Applications & Commerce advisory service, says that while no one vendor stands out as a brand of choice, a few names did surface more than others. "When unprompted, 32 percent of respondents entered SAP as the first ERP brand that comes to mind," he says. "Surprisingly, Oracle was the second most commonly cited ERP brand, at 16 percent. We also tested end-user willingness to recommend an ERP brand, which is a good test of brand strength. Again, there was a bit of surprise at Oracle's strength. Thirty-two percent of respondents were willing to recommend Oracle, which was the highest recommendation rating among vendors. Despite awareness, only 26 percent of respondents would recommend SAP." Although lack of brand awareness may initially be thought a bad thing, Derome disagrees. "The good news is there's a significant opportunity for any ERP provider to step up, distinguish itself, and sell more products to its current customers," he says. "This demonstrates how listening to what the customer wants is paramount." Though many ERP suite vendors also offer CRM solutions, Derome does not think that the opportunity is there for a one-two punch in terms of gaining ERP and CRM market share together. "Most buyers start with ERP and buy CRM second. If experience with the first purchase is bad, vendors can't leverage brand equity in the upsell," Derome says. The survey also illustrates a disconnect between buyer requirements and vendor performance, Derome says. "Vendors promote speeds, feeds, and technology prowess, but according to our respondents these traits are not meaningful or relevant to the basic challenges ERP customers face today," Derome says. "Decision-makers tell us that they want service, flexibility, and practicality. Unfortunately, none of the major brands differentiates itself along these lines, leaving the door wide open for any one of the category providers to address these unmet needs."
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