Marketing on the Verge

In the last 50 years, few industries have been identified so strongly with innovation as technology has. From the rise of commercial mainframe computers in the 1950s to the explosion of the Internet and its myriad offspring in the 1990s and early 2000s, the tech industry has pulsed to the beat of constant invention.

From a marketing perspective, however, the tech sector has lagged far behind the cutting edge, particularly on the business-to-business side of things. Long characterized by a build-it-and-they-will-come mentality, the industry has traditionally invested most of its energy in breakthrough product development—then sat back and watched the business roll in.

It hasn't always worked, of course. Such a dynamic industry has had more than its share of creative destruction. Until recently, however, marketing has played a relatively small role in the industry's fortunes. Unlike more mature consumer products industries, where marketers play central roles in business strategy and planning, the enterprise tech sector is characterized by small "m" marketing—lead generation and sales support focused on advertising, trade shows, brochures, and, more recently, Web sites and online campaigns. Strategic thinking has traditionally been left to the entrepreneurs and engineers. During the periodic slowdowns, a quick injection of sales force energy would pick up the slack.

Until now. As the tech industry matures in a post-bust world and hunts for its next wave of growth, the locus of innovation is shifting toward the marketing department. Indeed, marketing leaders are on the verge of three dramatic transformations.

First is marketing's role in changing corporate cultures from product-out to customer-in. The technology industry is grappling with an historic shift from a seller's to a buyer's market. No longer interested in purchasing the next new thing, business buyers are more knowledgeable, more skeptical, and more demanding of demonstrable business value for any technology investment. They want much more specific solutions for their precise business challenges.

Marketing's job in this new buyer reality is to put the customer front and center for the whole company. Most important, as marketing immerses itself in customer needs, it can more effectively exert leadership in the crucial offer development process. The goal is for marketing to utilize customer input and insight to guide research and development rather than simply waiting for the engineers to throw new products over the wall and then scrambling to sell them.

At Sprint, for example, marketing is leading a charge to develop new solutions for business customers by deploying small "market sensing" teams that ferret out opportunities in specific market niches. The teams work hand in hand with offer development groups that pull resources from across the company and from partners to meet individual customer needs. It's a far cry from build first and market later, and it's beginning to show real results.

Second, spurred by this mandate to become customer-centric, is marketing's elevated role in the business. Historically relegated to the supporting cast, tech marketers in the enterprise arena are stepping up to provide guidance around corporate strategy, partnership alliances, and M&A, as well as shaping the company's overall agenda regarding investors, employees, and customers. Cost-cutting and operational efficiency will always be important factors in guiding corporate decision-making, but understanding the market and executing on visionary thinking is fast emerging as the new path to achieving sustainable growth.

The recent transition at data storage leader EMC is a powerful example of a company that has been redefined by its marketing department. A top performer through the go-go 90s, EMC was hit hard by the tech crash after 2000. With marketing taking the lead, EMC has since turned itself from an engineering and sales-driven "box" company focused on bigger and better storage devices to a diversified information systems and solutions company with services and software accounting for more than half its revenue. Key to the shift was marketing's clear understanding of industry consolidation, product commoditization, and customer demand for more sophisticated approaches to managing and securing critical data. Marketing's ability to help reorient the firm's strategy, expand the addressable market, pursue strategic acquisitions and partnerships, and develop higher-end consulting capabilities were central elements of EMC's successful shift.

Third is the transformation of marketing communications from one-way broadcasting about features and functions to interactive dialogue about business solutions. The current hype in the marcom world revolves around online tools like blogs, podcasts, RSS, and vertical search. Cool tools may well have a place in tech marketing's next iteration, but the more important innovation is recognizing the need for a new mindset that embraces the idea of participatory marketing.

Tech buyers on the business side have little patience for generic pitches. They're not answering the phone, reading the [e]mail, or responding to free seminar invitations. They know their own agenda, they're checking you out behind your back, and they'll come to you if, and only if, they think you have particular insight into their most immediate needs.

Creating real conversation in this harsh climate begins with creative ideas and clear-eyed humility. Valuable and original ideas are actually rather difficult to develop, and the most valuable solutions derive from collaborative initiatives. Buyers don't expect tech firms to have all the answers; they do expect them to engage in dialogue that moves everyone down the right path.

The blogging explosion in the tech industry precisely reflects precisely this mindshift from pronouncement to collaborative problem-solving. IBM's blogging guidelines, announced with some fanfare back in May, capture the new spirit in stressing two main reasons for IBMers to blog: to learn from clients and others, and to contribute to the future of the business, technology, and the world at large. At Sun Microsystems, president and COO Jonathan Schwartz's popular blog both demonstrates and reflects the company's larger commitment to "the age of participation."

The shift to marketing-led innovation in the business-to-business technology sector is far from done. Marketing is still relegated to the old-line marcom and sales support role at many tech companies, and product innovation continues to loom large (although often with good cause, since the flow of gee-whiz products continues to amaze). But the savviest leaders have recognized the signs of a maturing, customer-driven industry, and are looking to more innovative and sophisticated marketing to sustain continued success.

This commentary was originally published online by CMO Magazine as "Tech Takes Back the Market."