We usually associate the term “buyer’s remorse” with purchases we make as consumers. Some of the most expensive, yet common examples of buyer’s remorse that have led to a reasonable amount of distress are overspending on a wedding, buying a timeshare, buying a boat, or installing a pool.Buyer’s remorse is not limited to individual consumers, however. Businesses can experience buyer’s remorse, particularly when they are purchasing costly software to upgrade their technology. For community financial institutions (CFIs), this kind of regret is something to be avoided, considering that many smaller CFIs do not have a large budget to work with for tech upgrades. Spending funds on software that ultimately does not serve your business is budget money you may not be able to recover.The pressure to upgrade is also quite strong. To remain competitive in the financial industry, it is essential to ensure that your CFI is equipped with the right software platforms and technological advancements. Yet, according to Capterra’s 2024 Tech Trends survey, 60% of software purchasers regret a purchase they’ve made in the last 12 to 18 months. Buyer’s remorse isn’t mandatory, though. CFIs can make it much less likely by investigating potential software and vendors very thoroughly and thinking strategically about what they want their software to do for them now and in the future.Why Organizations Regret Tech PurchasesThere are common pitfalls to major technology purchases to avoid when your team is considering a software upgrade. Here are some things to consider ahead of time so you don’t fall prey to one of these mistakes:
- The purchase doesn’t align with business needs. If you go in without a clear understanding of the challenges you want these upgrades to solve — such as reducing manual work or improving forecasting — you risk investing in tools and features that don’t truly meet your institution’s needs, ultimately misusing funds.
- Impulse buying with minimal research. When technology decisions are made without proper evaluation, it’s easy to overspend or select solutions that don’t align with your existing infrastructure. Without that upfront diligence, institutions may face integration challenges or end up with features that add little real value.
- Lack of vendor communication. A vendor’s ability to support your CFI as you fully integrate a technology purchase is more important than its marketing or sales practices. Without asking questions about integration requirements, timelines, ongoing support, usability, and training, your CFI could end up with technology that doesn’t meet your expectations.
- Newer models are released after purchase. Advances in software, particularly where it concerns generative AI, occur at lightning speed. Without considering how to future-proof the tech your CFI invests in, it can lead you to allocate the budget to software that quickly becomes outdated.
Strategies To Implement for Big Tech PurchasesThere are a number of strategies your CFI can implement to avoid those common scenarios of buyer’s remorse. To ensure that your funds, especially if you are working with a tight budget, go toward upgrades that give your CFI a competitive edge and meet your business’ objective, consider making the following part of your process:
- Conduct your own research first. Be thorough by reading reviews and user feedback through trusted sources and viewing product demo videos to understand how the software works. Ensure you have a thorough understanding of how your existing system will migrate to the new technology, especially if there is a learning curve involved for your teams.
- Go in knowing what business needs you’re addressing. Establish what pain points this software upgrade is meant to address and what use cases, such as tracking sales, streamlining data management, or automating repetitive tasks, you want this upgrade to improve. This allows you to be more intentional with your selection instead of choosing software that doesn’t fully address your needs.
- Resist completely relying on your IT team. IT plays a huge role in upgrading your CFI’s technology — 52% of small- and mid-sized businesses solely rely on their IT department to evaluate and purchase new software — but they can’t make decisions in a silo. The technology will be used by your marketing, sales, customer service, and finance departments, as well. Consult the various departments affected by the new software to give IT a clear picture of their needs, so they are not inadvertently forgotten about in the purchasing process.
- Ask questions. In order to really understand how the new software works and how it can work for you, ask the vendor detailed questions about its features, capabilities, limitations, how to integrate the software into your business, and what support you can expect for future system changes or if your business needs change. This ensures the software will meet your expectations now and well into the future rather than fall short of them.
To avoid buyer’s remorse, consider what measurable effect you want new technology to have at your financial institution and how these advancements can help you remain competitive and efficient. Careful consideration ahead of time will go a long way in ensuring that your technology budget is put to excellent use toward software upgrades that go the distance for your business.
