Small businesses feel the impact on their budget, while large enterprises see dips in employee productivity.
Regretful B2B software purchases are both common and costly, as we highlighted in our 2024 Tech Trends Report. We also find that the biggest setbacks that businesses experience from these regretful purchases vary based on one critical factor: their size.
According to Capterra’s 2024 Tech Trends Survey:*
Small businesses (5 to 249 employees) are most concerned that regretful purchases cost too much money.
Midsize businesses (250 to 999 employees) are the most likely to say a regretful software purchase made them less competitive.
At the enterprise level, small enterprises (1,000 to 2,499 employees) complain the most about poor user experience, while large enterprises (2,500+ employees) are most concerned with lost productivity.
Not only do these results tell us what businesses care about most when making software purchases, but they also give insight into the strategies you can implement while buying software to avoid these devastating setbacks at your own business.
Small businesses (5 to 249 employees): Cost is everything
Operating on razor thin margins, small businesses can’t afford to make expensive mistakes. If too much budget is poured into an investment that doesn’t pan out as expected, it could be the end of the company.
This means that when small businesses regret the software they buy, it’s usually because of cost. According to our survey, a higher than expected total cost of ownership is the leading cause of purchase regret among small businesses. In addition, when assessing the impact of a regretful purchase, small businesses cite high costs more than anything else.
When small businesses prioritize budget over everything else, it influences how they buy software in a few ways. For example, we find that buyers from small businesses are the least likely to say they almost always buy from their initial vendor list (28%). Once costs are calculated, small businesses seem easily swayed to abandon promising initial options for more affordable ones. Small businesses are also the least likely to attend demos in order to gather information about different products (28%), perhaps indicating that costs are eliminating a lot of options from purchase decisions before demos are even scheduled.
In an attempt to recoup costs from a regretful purchase, buyers could try to cancel their contract or request a refund. Curiously, however, we find that small businesses are the least likely to take these remedial actions.
/ Our advice to small-business software buyers
Small businesses tend to be young businesses, and as a result, they often lack expertise with buying software compared to their older, larger competitors. This can lead to sticker shock if buyers aren’t familiar with the extra costs beyond the advertised license fee associated with business software.
If you’re not familiar with these costs, you need to be. Check out our article explaining the true cost of business software to learn more.
Midsize businesses (250 to 999 employees): Poor software purchases hurt competitiveness
As opposed to small businesses, midsize businesses are not afraid to spend money to meet ambitious growth targets. Case in point: Software buyers from midsize businesses are the most likely to say their company is in a state of accelerated growth over the next 18 months.
Having the right software is key to fueling this growth. But midsize businesses regret their software purchases more than anyone else at 68%, and the biggest impact these regretful purchases have on midsize businesses, according to buyers, is a loss of competitive advantage.
This desire to grow quickly and compete is reflected in the three most common software purchases that midsize businesses have made in the past 12 months:
Learning management systems, which help businesses grow and develop employee skill sets.
Talent management software, which helps businesses attract, hire, and retain a growing workforce.
Facility management software, which helps businesses manage a growing portfolio of stores, warehouses, and other properties.
This need for speed might also explain why midsize businesses are the most likely to skip out on product trials—but doing this can increase the likelihood of a regretful purchase.
/ Our advice to midsize business software buyers
Unlike small businesses, midsize businesses are the most likely to always buy from their initial vendor list at 41%. However, they’re also the most likely to say they’d update or change their initial list of vendors to avoid regret in the future. Combined with their high regret rate, this indicates that midsize businesses may be moving too fast to stay ahead of the competition, and not using the best information sources to find promising software solutions.
We find that buyers who use product comparison sites, product demos, or free trials to gather information and create their initial vendor list have the lowest amount of purchase regret. If you haven’t leveraged these information sources before, use them for your next purchase.
Small enterprises (1,000 to 2,499 employees): Let down by user experience
Once businesses reach the enterprise level, the ability to scale profitably becomes more important than just growth. This includes filling key roles by attracting top-tier talent, and retaining as much institutional knowledge as possible to build on prior success.
Small enterprises need to offer a world-class employee experience to achieve these objectives. So when these businesses regret a software purchase, their biggest complaint is its impact on the employee experience as a result of employees hating to use the product.
There are a few reasons why small enterprises run into issues with software usability. For one thing, small enterprises are most likely to regret their purchase because they had difficulty onboarding and training new users. We also find that vendors aren’t offering as much help as small enterprises would like, as buyers from small enterprises are most likely to say their vendor offered poor technical support.
It may seem frivolous to focus on employees liking the software they use at work, but the implications of them abandoning a system out of frustration can be catastrophic. Our data indicates that small enterprises are the most likely to say the financial impact of their regretful software purchase is significant or monumental (66%).
/ Our advice to small enterprise software buyers
Instead of problems with finding information about software vendors or securing budget, small enterprise software buyers more often run into issues with deciding what they need from their software in the first place. More than any other size of business, buyers from small enterprises say they would clarify goals and outcomes and ensure alignment among their team on selection criteria to avoid software purchase regret in the future.
Doing these two things can hone in on what you actually need from your software purchase, and help you avoid making a substantial investment in a system that doesn’t have great training materials or vendor support—which ultimately impacts the user experience.
Large enterprises (2,500+ employees): Concerned about productivity
When it comes to large enterprise businesses, the key word is optimization. The products and services these companies offer, and the processes they use to bring them to customers, are fully realized. Any improvements to these processes that can eke out a percentage or two increase in efficiency or output is paramount, as they could result in millions more dollars of revenue for these businesses based on scale alone.
Accordingly, our data says the most disastrous outcome for regretful software purchases at this size is a loss in productivity.
Large enterprises may be the most likely to say the financial impact of a regretful software purchase was minimal, but they’re not afraid to abandon a product if it doesn’t meet expectations. Thirty-two percent of large enterprises blame not being able to show a positive return on investment (ROI) for their purchase regret—the most of any business size.
The vendor-client relationship is critical to purchase success at this scale. Not only do large enterprises rely the most on previous experience with vendors when building their initial list, but they’re also the ones most likely to expect their vendor to remedy their regret through enhanced training and onboarding, implementation assistance, and a dedicated customer service representative.
/ Our advice to large enterprise software buyers
Speaking of the vendor-client relationship, large enterprises are the most likely to say the vendor handoff between sales and implementation with their regretful purchase was problematic. Combined with taking the most time to evaluate and purchase a product (5.4 months, on average), these hiccups and delays can ultimately influence how long it takes users to reach full productivity with your new system.
Again, optimization is the key word here. Use retrospectives on past purchases and resources offered by vendors to make the purchase and implementation process more seamless in the future.
Additional resources on purchase regret
Business size is just one factor that influences software purchase regret. If you want to know how regret and other timely tech trends are impacting businesses in different countries or different industries, check out these additional resources:
Capterra’s 2024 U.S. Tech Trends Report: 58% of Businesses Regret a Recent Software Purchase
Capterra's 2024 Tech Trends Report: Software Selection Best Practices for Financial Firms
Capterra’s 2024 Tech Trends Report: How Retailers Can Avoid Regrettable Software Purchases
Capterra’s 2024 Tech Trends Report: Insights From Marketers To Watch