Published on the 08/10/2024 | Written by Heather Wright

Trustworthy, but…

The tyranny of distance, so neatly sung about by Split Enz some 40 years ago, still applies for Kiwi tech providers looking to export according to new research which shows location and distance, matters – even if you don’t need to ship anything on any leaky boats.

The New Zealand Trade and Enterprise research on global perceptions and awareness of the New Zealand tech sector followed on the heels of the 18 months ‘We see tomorrow first’ campaign which aimed to raise New Zealand’s global tech profile.

“Our nation is actually a proxy as to our capability to meet tech buyers’ needs.”

Emily Lynch, New Zealand Trade and Enterprise market research specialist, says the survey of 1,845 B2B technology decision makers in Australia, the United States, United Kingdom and Singapore, dispels some myths about tech buying and provides something of a roadmap for Kiwi tech sellers wanting to export.

One of the biggest myths which appears to have been blown out of the water is the notion that tech buyers are location-agnostic.

“Often we hear this preconception that because tech is such a weightless export, a lot of buyers are location- or origin-agnostic, and we wanted to verify whether this was accurate,” Lynch said during a recent NZTE webinar.

Just over 60 percent of respondents said a technology providers’ country of origin or location mattered to them.

“There was a little bit of nuance to this. Many said they were open to working with international or non-local providers, providing certain criteria were met.”

Lynch says across all markets, respondents consistently highlighted country of origin as being important to them because it told them something important about the provider – it let them gauge a providers trustworthiness, told them something about the quality a provider would give, and gave them an indication of the level of support or communication they could expect.

Reasons for why country of origin mattered differed by market. While the United States buyers – who were the most likely, at 68 percent, to say country of origin was an important factor – were more aware of geopolitical considerations and risk, Australian buyers emphasised local support, engagement and communication – likely indicative of the lack of support Southern Hemisphere buyers often feel from some big Northern Hemisphere based providers.

“We can start to see that collective New Zealand tech story we tell becomes important because according to three-fifths of buyers, our nation is actually a proxy as to our capability to meet their needs.”

Location was perceived as slightly more important than country of origin, with support related factors including language barriers and access to providers cited as key reasons.

“It may be in the interests of New Zealand tech companies to start promoting New Zealand as their country of origin to indicate things like trustworthiness, and we know positioning around technical quality, support, security and communication can alleviate some hesitancy buyers might have,” she says.

Tech companies can use information on the importance of provider location strategically, to inform decision making on physical market entry, in-market partnerships and how support and communications capabilities are positioned to customers.

The survey also looked at how visible New Zealand’s tech sector is internationally and how it is perceived and found a lack of significant recognition of New Zealand’s technology capabilities.

“We tend to land in the middle of the pack [in terms of tech innovation], however we are very much second tier to larger and more established competitor countries, such as the US or China.”

Among the positive perceptions was New Zealand being seen as trustworthy and environmental strengths – something not regarded as important for most tech buyers surveyed.

However, a lack of awareness of New Zealand’s technology may be negatively impacting perceptions of New Zealand’s capabilities, Lynch says.

Many, particularly in Singapore(42 percent) and the US (39 percent), flagged New Zealand as being ‘too far away’ to be a good tech partner for them.

A perceived lack of local knowledge, ‘naïvety’ or a lack of business acumen and being ‘too small’ were also key concerns.

“The general lack of awareness has an impact on perceptions of New Zealand’s technology capabilities. Because that has a flow-on effect as to our ability to ability to dispel potential objections, so there’s a little bit of a waterfall there.

“We really have work to do to raise the overall profile of our tech sector and mitigate some of the potential negative perceptions.”

Lynch says there’s an important theme in the concerns around perceived distance to market or lack of understanding, which speaks to a need to create the feeling of proximity to customers – whether physical or not.

“That might be in-market presence, or in-market visits, making sure you have local proof points, that you’ve ticked all the regulatory for a given market. There are ways to create that feeling of proximity without physically being there.”

Using partnerships with local providers as an avenue to entering the markets, and emphasising local knowledge, awareness and support in go to market strategies and propositions are low-hanging fruit that will likely go far in offshore markets.

When it came to the biggest purchase drivers for tech decision makers, as expected industry expertise, right pricing and proven experience topped the list across all markets, while alignment of cultural and ethical values was ranked least important.

She urged NZ tech companies to dial up messaging and value propositions that correspond tightly to those factors, ensuring industry expertise and proven experience are core components of a company’s proposition when marketing to buyers in the specific markets, and focus on pricing that reflects the value of their products to customers.

“We are absolutely not encouraging our customers to come in with the lowest price. It’s really that ability to communicate value to your buyers.”

Lynch says when the decision-making factors are overlayed with current perceptions of Kiwi technology we can see there are gaps between what decision makers value and what New Zealand is recognised for in two key areas: Local knowledge and distance to tech export markets.

“We can see those areas are opportunities for New Zealand tech companies to really move the dial with international tech buyers.

“While we can absolutely hammer away on things like our environmental strengths or our trustworthiness, there are these gaps we would like to fill and we know the really big impacts will come from being able to shift the dial on those negative perceptions.”