How terminology can
influence a purchase decision

By J. Carlton Collins, CPA

Many companies are "suckered" into purchasing a specific product because of its' terminology. Don't be one of them.

Substance vs. Terminology

Every business has its own terminology. For example, many of us refer to our customers as “customers”. However, professionals tend to refer to them as “clients”, while conference organizers refer to them as “participants” or “attendees”. Churches refer to them as “donors” and doctors refer to them as “patients”. Veterinarians sometimes refer to their customer’s as “pets” while television stations refer to them as “viewers”. Boat marinas and real estate management companies refer to their customers as “owners”. The list goes on. This type of specific terminology is rampant throughout all businesses. Here are a few more examples: 

1.   Inventory items (aka “products”, “merchandise”, “materials”, “produce”, “goods”, “commodities” etc.);

2.   Manufactured items (“kits”, “assemblies”, “bill of material processed items”, etc);

3.   Units (“pounds”, “persons”, “cartons”, “quarts, “containers”, “pallets”, “hours”, etc.)

As you would expect, products targeted towards a specific industry will use the appropriate industry specific terminology throughout their product. Products targeted towards many different types of businesses will use more generic terminology throughout their product.  This makes sense – right?

The problem is that many people fall into the trap of concluding that just because a product contains their particular terminology, that it must be ideally suited for their needs. I can assure you, it takes a quantum leap jump to reach this conclusion. Allow me to illustrate with the following exaggerated example:

Two guys working out of their garage in Tampa, Florida have worked for years to produce an accounting software product. However they are not particularly bright and their product is a weak solution by all measures. The product contains bugs, is missing critical functionality, and performs poorly. One day, they come across a doctor who complains that there are no decent accounting software solutions tailored specifically for doctors. They run back to their garage and proceed to change all of their terminology throughout the system to reflect “doctor lingo”. “Customers” become “Patients”. “Employees” become “Nurses”. “Supplies” become “Medical Supplies”. “Invoices” become “Insurance Reimbursement Requests”. And so on. The guys present the revised accounting software solution to the doctor who immediately throws up her hands and says, “halleluiah – I’ll take it”. 

As this story illustrates, changing the terminology within the product did nothing to correct the bugs, add functionality, or improve performance. What it did do is lure the doctor into purchasing an inferior product. This happens all the time…all the time! Trust me on this - you would be far better off with a well proven, widely implemented solution that contains the generic terms, than a non-proven, rarely implemented solution that contains the terminology you are used to. As far as the accounting system is concerned, the system does not care what term is used to describe a particular field, it will still process that information based on the business logic programmed into the system regardless of the field name.

Further, consider this line of thinking: Products that are tailored for particular industries are by definition, targeting a much smaller customer base. For example, MAS 90 is targeted towards a potential customer base of 9,000,000 businesses. Dragon Boat Software (http://www.boatdealersoftware.com/tour.html ) is targeted only to boat sales companies – how many of them could there be? 100,000? 50,000? I really don’t know. My point is that because the target customer base is smaller, the resulting total number of customers will always be smaller. MAS 90 has 85,000 customers. There is no chance that other businesses such as doctors, restaurants, or retail outlets will purchase Dagon Boat Software. I doubt that Dragon Boat has more than a few hundred customers. A smaller customer base will almost always translate to fewer resources to devote towards support, research and development, or continued improvement and expansion of the product. Even if the product is extremely good (which Dragon Boat Software may be), it still must live life under the mathematical law that a smaller customer base will yield fewer revenues, and accordingly fewer resources compared to generic products such as MAS 90.

Carlton’s Conclusion – avoid being lured in by a product’s industry specific terminology. Instead, look past the terminology for specific features, functionality, and modules.

My apologies to Dragon Boat Software if I have unfairly characterized their product in my example above. I really know nothing about Dragon Boat Software. I refer to it only as an example of industry specific solution. If someone from Dragon Boat Software would like to send me an rebuttal, I will certainly post it here.