Dear ITSMA Friends and Colleagues,
It's hard to believe with 18 inches of new snow in Lexington, but spring is indeed just around the corner. For ITSMA, spring is the season for many of our multiclient research studies, including in-depth studies on benchmarking services marketing performance, pricing services, services sales effectiveness, and brand awareness. We've sent detailed prospectuses to all members; please take another minute to review those packages, or scroll down in the E-ZINE for more information and links to the online sign-up forms. And if you're up here in the Northeast, be careful out there!

Rob Leavitt, director of member advocacy, editor of ITSMA's E-ZINE

What's Hot: Sergio Zyman on the CMO Agenda

Sergio Zyman, former chief marketing officer for Coca-Cola, is the keynote speaker at ITSMA's April 18-20 Chief Marketer's Conference. Zyman is the author of The End of Marketing As We Know It and CEO of ZMarketing, Inc. ITSMA recently asked Sergio to comment on the emerging agenda for CMOs in IT and IT services.

Why has the role of CMO become so important for IT and Telecom companies?

Competition in a market filled with generic products requires strategic differentiation to prevent customer defection, promote conversion, and increase ROIs. A high quality CMO is a crucial part of accomplishing these objectives.

How do you see the role of the IT CMO changing in the coming months?

The CMO title is overblown, and is often given to a marketer as a recruiting gimmick. In reality, these “CMOs” are not given the authority and responsibility of directing corporate strategy, thus making the job more like a Marketing Director. A real CMO is in charge of strategy and directing the total efforts of a company to achieve growth, but there aren’t many companies out there with positions like that. Given the recent disappointing earnings, we believe that many more companies should be looking to empower true CMOs to direct corporate strategy going forward.

What are your thoughts regarding IT and Telecom companies who downsize and choose to greatly reduce or eliminate their marketing departments?

Those companies will eventually pay for it in terms of results. Marketing is not an expense, it is an investment to increase sales. If you don't invest in these initiatives, you will not achieve desired sales and profits.

How should IT and Telecom firms approach branding in order to be successful in 2001?

These companies need to continuously understand their users and analyze their competitive landscape. They also need to be proactive and boringly methodical about their brand planning processes. Reducing acquisition costs and eliminating churn are also good ideas. I would tell them to not be afraid to redefine the rules.

How can they best establish metrics around these branding efforts?

Use a scientific approach and realize that if your efforts don't have a clear measurable return you shouldn't do them.

For more information on the Chief Marketer's Conference, see below or visit http://www.itsma.com/Events/event_desc/E04180101.htm

Research Desk

New Report: ITSMA's 2000 Benchmarking Study Provides Baseline for Services Marketing Excellence

How do your services marketing practices measure up against those of industry leaders? How much are you spending on marketing activities? How do you compare with industry peers on growth and profitability? How much should you invest in developing new services? These and many more questions are answered in ITSMA's just-released Benchmarking Study on Services Marketing Practices 2000.

Jam-packed with the latest information on everything from spending and sales practices to new services development, pricing, and client satisfaction, ITSMA's renowned Benchmarking Study provides services marketers with must-have data to evaluate their performance, current shortcomings, and key challenges. The three-volume study includes extensive analysis of best practices and emerging trends, along with special volumes on Web marketing and the ways in which customers define value in the new economy.

For more information or to order your copy, visit http://www.itsma.com/Research/abstracts/b010.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

New Report: Leveraging the Sales Force: Sales Study Highlights Coverage Models, Incentives, Tools, and More

Services marketing and sales executives face four fundamental challenges in maximizing sales force effectiveness:

• Implementing the "right" coverage model
• Providing the right tools to the sales force
• Motivating the right behavior
• Appropriately measuring sales performance

ITSMA's new Sales Practices and Metrics Study utilizes a unique data set provided by leading IT hardware, software, networking, and professional services firms to assess each of these challenges. Key findings and conclusions highlight such issues as the value of dedicated services sales forces, hiring practices, channel mix, training methods, compensation levels, and the role of the Internet.

ITSMA's Sales Practices and Metrics Study will soon be sent to all subscribers to ITSMA's Services Sales Effectiveness Program. The report is available for sale to other members and nonmembers.

For more information or to order your copy, visit http://www.itsma.com/Research/abstracts/s002.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

New Report: "Pioneering" New Business Opportunities: CSC's Opportunity Assessment Process

With the economy slowing, managing the business development process to qualify, prioritize, and win the right opportunities becomes essential. However, providing the sales force with the right tools to do those jobs and getting everyone in line to use those tools are among the most difficult tasks in services marketing today. The development and global adoption of the Computer Science Corporation (CSC) Pioneer Program over the last six years provides a great example of how companies can, and must, work over time to build best-practice business development methodologies. ITSMA's new Sales Effectiveness Best Practice Case Study on Pioneer covers the background, initial development, global adoption, and lessons learned from CSC's initiative.

Computer Sciences Corporation: "Pioneering" New Business Opportunities was recently sent to all subscribers of ITSMA's Services Sales Effectiveness Program. The report is available for sale to other members and nonmembers.

For more information or to order your copy, visit http://www.itsma.com/Research/abstracts/sc0030.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

New Report: High Risk, High Reward: Marketing CRM Services

The fast-growing market for customer relationship management (CRM) services has attracted competitors from every corner of the IT industry. CRM is moving to center stage for most industries, and the expense and complexity of the technology are creating enormous opportunity for providers that offer strategy, design, integration, outsourcing, and/or training services. As costs for CRM solutions continue to escalate, though, clients are beginning to scream foul. The potential for a backlash against overly expensive, under-performing systems is quite large and is exacerbated by the current economic slowdown. ITSMA's new report, High Risk, High Reward: Marketing CRM Services, provides new data on how IT services firms are marketing CRM services and pinpoints the most important challenges for marketers today.

High Risk, High Reward will be sent to all ITSMA member sponsors and delegates in early March and is available for purchase by nonmembers.

For more information or to order your copy, visit http://www.itsma.com/Research/abstracts/u0032.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

Sign Up Now! ITSMA's 2001 Multiclient Research Programs

Every services marketing organization needs benchmarks and performance metrics to guide planning and improvement initiatives. ITSMA's multiclient research programs enable services marketers to quantify marketing parameters, identify best practices, and compare their performance with that of industry peers as well as "best-in-class" companies. The ITSMA portfolio for 2001 includes four unique offerings:

• The 2001 Benchmarking Study. Introduced in 1995, this study covers the full spectrum of services marketing issues and offers participants benchmarks, best-in-class comparisons, and actionable performance metrics. This year's special section will focus on field marketing.
  
  
• The 2001 Services Sales Effectiveness (SSE) Program. Launched in 2000, this year-long program delivers research on sales metrics, models, and best practices, including two surveys, a field survey of services sales reps and one focusing on corporate models and metrics. This year's focus will be on team selling and solutions sales.
  
  
• The 2001 Professional Services Pricing Study. New for 2001, this study will deliver both qualitative and quantitative data on the bill rates, pricing methodologies, target margins, and policies surrounding professional services offerings. Participants will also benefit from custom peer-group comparisons and a customer survey.
  
  
• 2001 Services Brand Awareness Research. Initiated in 1999, this research program provides a marketplace perspective on services positioning and branding. Brand Awareness Research is conducted every six months. Each survey focuses on one specific services segment: e-professional services, CRM services, and network and telecom services for the enterprise and carrier markets.

A detailed prospectus for each study is available online at http://www.itsma.com/research/research.htm

To discuss or sign up for multiclient research sponsorships, contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

Research Excerpt: Recurring Revenue: A Preeminent Asset

Recurring revenue is one of the primary advantages of being in the services business. Recurring revenue adds stability, predictability, and profitability. Sales costs are lowered, and the delivery organization can better plan for required resources and skills. Best-practice companies know how to cultivate customer relationships and build recurring revenue into their revenue streams:

• On average, 69% of operational services revenue is recurring. The average percentage of recurring revenue drops to 28% and 27% for education and training services and professional services, respectively.
• The degree of recurring education and professional services revenue varies a great deal across industry subsectors, depending on the actual types of services offered. Many professional services are project based; others are more ongoing in nature.
• Recurring operational services revenue is the factor that correlates most with high-performance marketing (Figure 1). This relationship has held in ITSMA's benchmarking studies since the Services Marketing Performance Index was introduced in 1996. The one exception to the high correlation between marketing performance and recurring revenue is education and training.

Figure 1: High-Performance Services Marketers Build Sources of Recurring Revenue

Source: ITSMA, 2000 Benchmarking Study on Services Marketing Practices.

For more information on ITSMA's 2000 Benchmarking Study visit http://www.itsma.com/Research/abstracts/b010.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

Download Now: Profiting from "Voice of the Customer" Research (Online Briefing)

Far too often, IT services marketers leap into mission-critical initiatives with only anecdotal information about customer preferences, beliefs, and feelings. Lack of time or budget is the most common rationale. But well-executed "voice of the customer" research ultimately saves time and money by enabling a much more efficient services launch, relaunch, or expansion. On February 20, 2001, ITSMA explored the benefits of voice of the customer research, reviewed common pitfalls, and presented recommendations.

Click here to download a PDF version of the presentation.

Professional Development: Refining Sales Training

Developing the right mix of training topics and approaches is central to any effort to increase services sales productivity and reduce sales force turnover. To gain a competitive advantage, organizations need to emphasize training that directly helps salespeople sell complicated services with confidence. According to sales representatives themselves, the most important types of training relate to information about customers, the services offered, service delivery capabilities, and consultative selling (Figure 1).

Effective sales training must combine a variety of methods beyond the classroom. Hands-on and Web-based training provide a combined high-tech, high-touch approach that responds well to the power of experiential learning and just-in-time information. Bring in delighted clients to talk about what works best. Involve services delivery people to build personal relationships with the sales team. Create videos and virtual tours online and on CDs to communicate training lessons widely and in ways that accept people's time constraints. Finally, don't forget to train about your limitations so that sales reps can present to customers with credibility and know when to simply walk away from an inappropriate deal.

- Lori Weiner, lweiner@itsma.com

Figure 1: Sales Training: What's Important and What's Desired

Note: Importance was measured on a 5-point scale, in which 1 = not at all important and 5 = very important. Source: ITSMA's Closing the Sales and Marketing Gap, 2000

Upcoming Events: Sign up for events online and receive a 5% reduced fee!

March 20, 2001, 12:00-1:00 p.m. EST: "Making Your Case for Marketing Investment" (Online briefing, free for ITSMA members)

Investment in internal marketing correlates strongly with high performance services marketing organizations, according to ITSMA benchmarking research. But only a minority of IT services marketing organizations have a formal internal marketing budget. Without well-funded and well-designed programs, it becomes extremely difficult to make an effective case for your total marketing investment. Steve Hurley, ITSMA's vice president of learning and performance excellence, will highlight the most effective strategies and tools to build your internal case. Steve will talk about how to create a balanced scorecard approach, and how best to target all relevant internal audiences.

For more information or to register online, visit http://www.itsma.com/events/event_desc/E03200101.htm

March 28-29, 2001: Creating Market-Centric Mindsets Workshop, with Dr. Lynn Phillips (San Jose)

ITSMA research shows that above all else, services sales representatives want their marketing colleagues to provide them with compelling value propositions. Marketers know well the importance of value propositions, but crafting them is unfortunately much easier said than done. ITSMA's perennial favorite workshop with Dr. Lynn Phillips gives services marketers a proven framework and set of tools for developing winning value propositions. This workshop will be held only once in 2001, so sign up now!

For more information or to register online, visit http://www.itsma.com/Events/event_desc/E03280101.htm.

April 18-20, 2001: Chief Marketer's Conference (Palm Springs)

An exclusive event for marketers at the director or vice president level or above, ITSMA's first Chief Marketer's Conference is designed to address the new role of marketing and its effect on marketing agendas. The conference provides a unique opportunity for peer discussion and networking on the challenges of marketing in the next phase of the "new economy." Featured speakers include Sergio Zyman, former CMO at Coca-Cola and author of The End of Marketing As We Know It; along with top marketing executives from IBM Global Services, Sun Microsystems, Nortel Networks, Sapient, GartnerGroup, Babson College, and ITSMA. If you lead a services or corporate marketing organization, you can't afford to miss this vital program on the next phase in the evolution of IT services marketing.

For more information or to register online, visit http://www.itsma.com/Events/event_desc/E04180101.htm.

Event Sponsorship Opportunities

As the premier industry association for IT services marketing, ITSMA offers event sponsorship opportunities to member companies throughout the year. Event sponsors benefit from direct access to services marketing executives and managers from the world's leading IT services firms as well as the broader association with ITSMA.

For more information on event sponsorship opportunities, benefits, and costs, visit http://www.itsma.com/events/other_desc/01_sponsorprg.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

Click here to view ITSMA's complete events calendar for 2001.

Toolbox: The Satisfaction-Loyalty Equation

Each month ITSMA highlights a new idea, book, application, or other type of tool that services marketers can use immediately to strengthen their programs and organizations.

Customer loyalty experts, such as Frederick Reicheld, have long noted the importance of differentiating customer satisfaction from loyalty. Satisfied customers often leave; loyal customers don't. This does not mean that promoting and measuring satisfaction is irrelevant, but rather that the limits of satisfaction are important to understand. Most important, satisfaction looks backward, and does not necessarily reflect changing customer needs or future behavior. Creating and documenting high levels of customer satisfaction can create a false sense of security about future business, leave money on the table with satisfied customers, and accept vulnerabilities to competitors.

Loyalty reflects satisfaction with total performance of the company looking back as well as confidence in performance looking ahead. Loyal customers believe that the company will continue to meet their needs in the future, so there is little need to look elsewhere.

For the complete article, and a tool to identify different loyalty-satisfaction scenarios, click here: http://www.itsma.com/research/toolkit_free/loyalty_eq.htm

Member Voices: SMPP Assists IIS Customer Loyalty Initiative

Andrea Cavanaugh, Director of Service Quality at Integrated Information Systems and SMPP Graduate:

"Putting programs in place to enhance customer loyalty doesn't necessarily yield short-term results. The value in these programs is seen over the long term (years), and in a growth- and revenue-pressured environment, it is difficult to get others to make such programs a priority. But we've started to look at the right things now, like in-account growth, number of contentious projects, and overall satisfaction, and we've come a long way in a year. We had to go through layoffs and restructuring this past December, and one of the only nonbillable groups that came out of that is a new research and development group. This group is focused specifically on improving processes, sharing best practices, measuring service quality, and developing new programs for customer satisfaction, retention, and loyalty. ITSMA's Services Marketing Professional Program (SMPP) helped us create the framework for the whole initiative and gave me both the discipline to stay focused and the access to the resources I needed."

Click here for complete article: http://www.itsma.com/press/member_voices/mv_0301.htm

In the News: ITSMA Supports CitySkills.org

"Given the dearth of IT workers, why not train and hire workers from the urban community? ... As an umbrella organization that links the individual urban training centers together as one unit, CitySkills' programs provide a resource and spread best practices and tools to urban training programs so they can be more efficient... Boston-based companies such as New York Times Digital-owned Abuzz.com, ITSMA, and Allaire Corporation, which donated $250,000 worth of software to the training centers, have offered financial support."

Click here for the complete article: http://www.siliconalleydaily.com/issues/sar02162001.html#Headline7737

$2,500 Reward: Refer a Colleague to ITSMA and Help Us Grow

ITSMA is growing fast, and we can't do it alone. Opportunities to expand our highly regarded research, consulting, and professional development services abound, and we're looking to fill a number of new positions. If you know someone who can help us grow, let us know. We're currently hiring highly successful thinkers and doers in marketing, consulting, research, and sales. If we hire one of your referrals, we'll pay you $2,500, no strings attached, 30 days after that person starts work.

For more information, visit the career section of our Website at http://www.itsma.com/corpinfo/corpinfo_jobs.htm or contact Joanne Tibbetts at +1-781-862-8500, ext. 11, or mailto:jtibbetts@itsma.com.

Reproduction or disclosure of this or any other ITSMA document, in whole or in part, to other parties shall be made according to the ITSMA Citation Policy.

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About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we provide research, consulting, and training to the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.