2024 U.S. Tech Trends Report: 58% of Businesses Regret a Recent Software Purchase

To avoid making damaging purchase decisions, companies should rethink how they find & evaluate vendors.

Simply put, most U.S. businesses buy the wrong software.

That’s according to Capterra’s 2024 Tech Trends Survey*, in which 58% of U.S. buyers say they regret at least one software purchase made in the past 12 to 18 months.

The problems start with the initial list of vendors—something that nearly all buyers (98%) make when buying software. Ninety-one percent of these buyers go on to purchase from their initial list “almost always” or “most of the time,” then regret their purchase decision 60% of the time. More than anything, buyers need better methods for creating a stronger initial list in order to increase their odds of success.

But the issues don’t stop there. If you’re looking to buy new software, our data reveals a number of areas—from the makeup of your purchasing team to how long you take to make a decision—where improvements can be made to improve your likelihood of purchase satisfaction.

A single bad software purchase can devastate a business

Companies across sizes and industries need software today to operate and grow, and vendors have met the moment to give buyers more options than ever.

Sadly, more options haven't led to better purchase decisions. Not only have a majority of U.S. buyers (58%) made at least one software purchase in the past 12 to 18 months that they’re not happy with, but nearly a quarter (23%) have made multiple regretful purchases during that timespan.

Complicating matters further, there isn’t one primary cause for all this regret that we can hone in on and remedy. When it comes to the product itself, at least a third of U.S. buyers with purchase regret cite the software being more expensive than expected (35%), or having difficulty onboarding and training new users (34%). Vendor-related issues, like a problematic handoff between sales and implementation teams (48%) or poorly managed expectations (39%), also lead to regret.

Buyers are running into all sorts of obstacles leading them to feel like they picked the wrong software—and the consequences couldn’t be greater. Our respondents tell us that regretful software purchases have drained their IT budgets, hampered employee productivity, and even made their company less competitive in their industry.

How quickly a business can recover from these setbacks is essentially a coin-flip. While 44% of buyers say the financial impact of their poor purchase decision was minimal and easy to overcome, slightly more (56%) say the impact to their business was “significant” or “monumental”—impacting their long-term performance or risking real and immediate harm to their business.

The bottom line is that companies are running into numerous issues when buying software, highlighting the need to reevaluate the entire process for how they find, evaluate, and decide on a product. If buyers don’t adjust, and continue on the path to regretful purchases, some may never recover.

Avoiding purchase regret starts with having a better initial list of vendors

Companies often rely on shortcuts to make their initial software vendor list quickly so they can get back to other responsibilities. They prioritize vendors they’ve seen in advertisements, or that came up at the top of a Google search.

And it’s here where businesses unknowingly start their path towards a regretful purchase—by having tunnel vision for the familiar or popular, and ignoring better options they don’t know exist.

Case in point: Vendor social media posts (77%) and Google Search (67%) are the information sources used to make initial vendor lists that produce the highest amount of purchase regret. These sources can tell buyers which vendors promote their product most effectively, or can dedicate the most resources to search engine optimization (SEO), but not necessarily which one makes the best tool for their needs.

On the other hand, outside of having a previous relationship with a vendor (48%)—something that isn’t possible if you’re a new business or buying software in a new category—the information sources that produce the least amount of purchase regret are product comparison websites and consultations with industry experts (51% each).

A combination of product comparison websites and consultations with industry experts can help buyers create a better initial list of software options. But we also find that knowing when to stop with your initial list is just as important as knowing where to start.

According to our data, buyers that have three vendors on their initial shortlist have the lowest amount of regret (53%). Having fewer than three doesn’t give you enough options to compare and contrast, but having more than three slows down the evaluation process and leads to decision paralysis.

Buyers with three vendors on their initial list also reduce their likelihood of regret the most if they actively engage all of the options on their list (attend demos, do a free trial, etc.). “Depth over breadth” is the best strategy when evaluating software options.

4 additional tips for buying the right software

Using better information sources to create an initial list of vendors is critical to ending up with the right software, but it’s far from the only area where companies can improve their odds of success.

Here are some other ways companies can reduce software purchase regret, according to our data.

1. Have a mix of IT and non-IT staff on your purchasing team (or use an IT service provider)

Rarely does a business software decision rely on one person. More often, a team of stakeholders is created to evaluate options, and we find that the makeup of your team matters significantly.

Having a mix of IT and non-IT staff on your purchasing team is ideal for lowering your likelihood of purchase regret. The IT members can handle technical details surrounding things like data migration and integration with other systems, while the non-IT members can evaluate features and try products to see if they’re easy to use.

If you lack internal expertise or don’t have the bandwidth though, that’s OK. We find that companies that use the services of an external contractor for business software purchases have the lowest regret rate of all (46%).

2. Define specific goals for your purchase

Part of the reason success or failure is hard to pin down with a software implementation is that “success” or “failure” aren’t fully defined. Companies know they need software to fill some type of need, but many don’t go as far as to actually measure if the software will fulfill that need or not.

Whether the goal is to increase customer satisfaction by 10% or reduce the risk of a cyberattack by 60%, having defined, measurable goals with your software purchase can help you determine if your decision was the right one. Communicating these goals, and using a feature comparison template, can better align your purchasing team around which products are most likely to check all the necessary boxes.

3. Understand the total cost of ownership (TCO)

It's not a coincidence that software being more expensive than expected and poorly managed expectations from vendors are top drivers of purchase regret. Unlike a lot of purchases, the price you usually see for software is not the price you pay.

While vendors may advertise a certain price on their website, that usually only covers the cost of the actual software license. On top of this price (and usually buried in the terms and conditions), there are add-on fees for things such as setup, data migration, user training, and customer support.

Asking about and knowing the TCO for a product will keep your expectations in line and ensure your purchase doesn’t blow your budget. For more help on this, check out our helpful guides on software pricing models and TCO.

4. Make a decision in three months or less

There’s value in taking your time, fully weighing your options, and signing on the dotted line only when you feel like you have enough information. What there isn’t value in is bloating your initial list with tacked-on products, having reruns of meetings, and stalling on a decision because you can’t make up your mind.

Unless you truly feel like you need to go back to the drawing board, once you’ve fully evaluated the three options on your initial shortlist, meet with your stakeholder group and make a purchase decision. Our data shows the companies that take decisive action on a software purchase are the least likely to experience regret.

With software spending on the rise, companies have a chance to right past wrongs

In 2023, small and midsize businesses (SMBs) invested heavily in software despite recession fears, and we find that 2024 will be a similar story. All told, 65% of the U.S. buyers in our survey, from SMB or enterprise, say they plan to spend more on software in 2024 than they did in 2023.

“The way we do things,” including when buying software, can be hard to change in any organization. That being said, the typical ways that companies find and evaluate software products have led to disappointment more often than not. If you plan on increasing your software spend in 2024 like most businesses in the U.S., it’s important you follow the advice in this report to avoid more regretful purchases.

But we’re not done. Below are some stats on which businesses experience purchase regret the most. If you’re more inclined to experience purchase regret based on our data, it’s even more important that you implement the best practices cited throughout this report.

Who experiences purchase regret most often?

• Buyers from large (1,000+ employees, 66%) and midsize (250 to 999 employees, 67%) businesses experience purchase regret more than small businesses (5 to 249 employees, 51%). We chalk this up to having more bureaucracy and IT complexity. 

• Buyers from newer businesses (1 to 5 years old, 74%) experience purchase regret more than older businesses (10+ years old, 45%). Software buying experience matters, so if you’re concerned about your lack of experience, consider working with an IT services agency that can lend their knowledge.

• Of the industries represented by at least 30 respondents in our survey, buyers from IT businesses experience regret the most (76%), while buyers from manufacturing businesses experience regret the least (43%). This may seem surprising, but IT businesses often purchase tech that addresses more complex needs, increasing their likelihood of regret.

Additional software buying resources

• The Ultimate Guide to Getting the Most Out of Product Demos

• Why Your Software Search Doesn't Stop After Purchase

• How To Communicate With Software Vendors During the Purchase Process

• 5 Things Buyers Wish They’d Known Before The Software Buying Process

• 6 Steps For A Successful Software Contract Negotiation