Dear ITSMA Friends and Colleagues,

ITSMA begins 2001 with a bang: a new millennium Website! We've modernized the look and feel of the site, improved navigation, and added yet more content. Check it out when you get a chance and let us know what you think. Other highlights this month include a new case study on Web marketing, our annual "state of the profession" online briefing, recommendations for marketing CRM services, and a preview of all 2001 events. And we're still offering a $2,500 reward for your top-notch job referral. Have a great January!

—Rob Leavitt, Director of Member Advocacy, Editor of ITSMA's E-ZINE

In This Issue

• What's Hot: Year-End Philanthropy; New Year's Website
• Professional Development: Get Smart with ITSMA Sign up for events online and receive a 5% reduced fee!
  • Babson College, ITSMA's Education Partner, Designs MBA Program for Intel
• Upcoming Events
  • January 25, 2001: IT Services Marketing: State of the Profession (Online Briefing, free to members)
  • February 20-23, 2001: Client-Centric Marketing Course (San Jose)
  • March 28 and 29, 2001: Creating Market-Centric Mindsets Workshop (San Jose)
• Research Desk
  • Web Marketing at PricewaterhouseCoopers (New Case Study)
  • New Challenges for Marketing CRM Services (Research Excerpt)
  • E-Consulting Firms 2.0: Prerequisites for Profitability (New Article)
  • Brand Study Sponsorships Still Available: Sign Up Now!
  • New Professional Services Pricing Study: Sign Up Now!
• Toolbox: Listening to the Customer
• Reader Survey: Another Winner!
• $2,500 Reward: Refer a Colleague to ITSMA and Help Us Grow

Please forward this E-ZINE to interested colleagues!

To SUBSCRIBE a friend or to UNSUBSCRIBE, e-mail our office at siozzo@itsma.com.

Reader Survey: Click here http://65.202.39.35/surveys/ezine_survey.asp to respond and to enter a monthly drawing for an ITSMA fleece pullover.

What's Hot: Year-End Philanthropy; New Year's Website

ITSMA wrapped up a great year in 2000 by making sizable charitable donations to two important causes on behalf of all of our members:

• CitySkills is a national nonprofit organization dedicated to the job training and hiring of underemployed urban adults into Internet careers. This is a young, exciting nonprofit that works with local community and training centers around the country to develop curricula and expand training opportunities for traditionally under-served communities. CitySkills is a great example of connecting a serious social need (urban unemployment) with a vital IT industry need for more skilled people. For more information on CitySkills, visit http://www.cityskills.org/.
• NetAid.org uses the Internet to empower people, companies, and nonprofit organizations to take action on extreme poverty around the world. Launched in 1999 by an unusual public/private partnership between Cisco Systems and the United Nations Development Program, with major support from KPMG and Akamai Technologies, NetAid.org is an independent and innovative philanthropy that is tackling some of the most difficult but urgent global issues, including hunger, refugees, pollution, human rights, and Third World debt. For more information on NetAid.org, visit http://www.netaid.org/.

As ITSMA grows, we are committed to giving something back to the community locally, nationally, and globally. We're interested in your philanthropic efforts, too, and welcome your stories, ideas, and suggestions.

We're also committed to strengthening the ties across ITSMA's own community of members, partners, and professional colleagues, and our newly redesigned Web site is one of the ways we hope to do just that. As before, the ITSMA site enables members and other IT services marketers to learn about and register for upcoming educational events, review and purchase new research, and, for those with full online access, take advantage of ITSMA's unique online Membership Research Library. Now the new site offers a fresher look and feel, easier navigation, and a stronger emphasis on useful news, tools, and analysis.

Over the next year, we'll continue to add new features and functionality to the site. In the meantime, please give the site a run-through and let us know what you think. We welcome any and all comments, suggestions, problem reports, and grandiose new ideas. Direct all feedback to me or to Collin Earnst, Manager of PR and Communications, at +1-781-862-8500, ext. 18, or cearnst@itsma.com.

Professional Development: Get Smart with ITSMA

Babson College, ITSMA's Education Partner, Designs MBA Program for Intel

Babson College, an internationally renowned leader in entrepreneurial management education, recently announced an agreement with Intel, the world's largest chip maker, and Cenquest, a leader in online education, to deliver a custom MBA program designed primarily for Intel employees. Babson is ITSMA's partner in all services marketing education courses.

The collaboration between Intel, Babson, and Cenquest to develop a company-specific curriculum marks a radical change in the way academia and corporations work together. Babson will develop the new Intel curriculum around real Intel work projects, thereby creating an MBA program that is both academically rigorous and immediately relevant to company-specific objectives. Cenquest will work with Babson to adapt the curriculum to include media-rich online components with the Intel classes. Cenquest will also market the Babson onsite/online hybrid MBA program to other corporations.

Upcoming Events

• January 25, 12:00-1:00 p.m. EST: Online Briefing: IT Services Marketing: State of the Profession (free for ITSMA members). It's that time of the year again—time to take stock of the past year and look ahead to the new year. Join Julie Schwartz, ITSMA's vice president of research, as she reviews the most prominent trends and issues impacting services marketing and sales. Using ITSMA's latest research results and five years of extensive benchmarking data on services marketing and sales practices, Julie will reveal the practices that differentiate high-performance services marketing and the most immediate things you can do to improve results in 2001. For more information, or to register online, visit http://www.itsma.com/Events/event_desc/E01250101.htm.
• February 20-23, 2001: Client-Centric Marketing Course: Accelerating Services Growth Through Client-Focused Initiatives (San Jose). ITSMA's highly regarded core course for professionals with less than five to seven years of IT/networking services marketing experience covers a broad range of topics critical to services marketing. Built on ITSMA best-practice research, the course provides case examples on core topics such as market analysis and positioning, new services development, building customer loyalty, and e-marketing. MBA credit is available to attendees through Babson College. ITSMA's ongoing partnership with Babson, a top MBA and executive education school, adds considerable value to the design and delivery of all ITSMA courses. For more information, or to register online, visit http://www.itsma.com/Events/event_desc/E02150101.htm.
• March 28 and 29, 2001: Creating Market-Centric Mindsets Workshop, with Dr. Lynn Phillips (San Jose). Join one of ITSMA's top-ranked faculty members for one of our most highly-rated events, formerly known as Building a Market-Focused Services Strategy Workshop. The workshop is designed to help services marketers deal with many of your biggest challenges, including ensuring that customers perceive superior value from your offering, translating customer needs into viable services products, and gaining competitive advantage through developing a market-focused organization. This popular 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.

Other highlights for 2001 include the Chief Marketer's Conference (April 18-20), featuring keynote speaker Sergio Zyman, former CMO at Coca-Cola and author of The End of Marketing As We Know It; our annual E-Business and Professional Services Marketing Forum (May 16 and 17); the Services Sales Forum (August 22 and 23); and annual conferences for marketing IT services (October 15-17) and telecom services (November 12-14).

Visit www.itsma.com/aspfiles/Events/calendar.asp to view ITSMA's complete events calendar for 2001.

Research Desk

Web Marketing at PricewaterhouseCoopers: New Best Practice Case Study Details Online Marketing Success

PricewaterhouseCoopers has built a multi-billion-dollar business in business process outsourcing (BPO) during the past several years, and the firm's aggressive and creative use of the Web has played a central role in PwC's success. Indeed, the BPO marketing story demonstrates convincingly that online marketing is now fundamental to the future of selling even the most complex, high-value professional services. ITSMA's new Best Practice Case Study, PwC and Business Process Outsourcing: Using the Web to Dominate Thought Leadership, digs deeply into the strategy and tactics of the BPO marketing team. The case details how PwC has utilized the basic tools of online marketing to build a pervasive presence on the Web, develop substantial thought leadership in the BPO arena, and use that leadership to win a series of enormous, multi-year BPO contracts.

PwC and Business Process Outsourcing: Using the Web to Dominate Thought Leadership was distributed recently to all ITSMA member delegates. Additional copies are available to members for a nominal reprint charge and to non-members for $795. For more information or to order copies, visit www.itsma.com/research/abstracts/C0030.htm or contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com.

New Challenges for Marketing CRM Services (Research Excerpt)

The massive growth of the customer relationship management (CRM) market was one of the big IT stories of 2000, and forecasters predict more of the same for 2001. On the services side, IDC estimates that CRM services will skyrocket to more than $125 billion by 2004, with a compound annual growth rate of 29% from 1999—more than double overall IT services growth.

Not surprisingly, competition in CRM services has become red hot. About two-thirds of ITSMA members now offer CRM services or will do so in the near future, according to the latest ITSMA member survey. Entrants into the booming market are coming from all sides, including software application firms building up their services organizations, traditional and newer professional services firms, traditional IT services providers, and application service providers (ASPs).

Looking ahead, ITSMA emphasizes eight specific challenges for CRM services marketers:

• Prepare for a potential backlash against overly expensive and time-consuming CRM system installations.
• Invest more heavily in marketing internally.
• Invest in alliance marketing and relationship building with clear metrics for success.
• Target additional vertical markets, especially with partners that specialize in those industries.
• Expand capabilities to offer training services that complement CRM solutions.
• Document return on investment for CRM services marketing across multiple measures, using a balanced scorecard approach.
• Explore results-based pricing, tying compensation for CRM services to client results.
• Prepare for a possible take-off in 2001-2002 by CRM ASPs and business solution providers (BSPs).

—Rob Leavitt

To view all the data from ITSMA's recent member survey on marketing CRM services, download ITSMA's December 19, 2000, online briefing, High-Performance Marketing for CRM Services at http://www.itsma.com/Events/online_briefings/online_121900.PDF. To learn more about ITSMA's CRM Services Brand Awareness Study, see the following section, or view a study prospectus www.itsma.com/Brand_Pro/brand_CRM2001.htm online.

E-Consulting Firms 2.0: Prerequisites for Profitability (New Article)

The final months of 2000 provided a steady stream of bad news from most of the newer e-consulting firms. Revenue shortfalls, stock price collapses, and layoffs made-up the typical story from Scient, Viant, Razorfish, iXL, marchFIRST, and many other late-1990s high fliers. Most of these firms are retrenching, refocusing, and reorganizing to zero in on a quicker path to profitability in 2001, even as skepticism of their prospects continues to grow.

A new ITSMA article in Service Chain Connections assesses the financial performance at IT consulting and e-business professional service firms and highlights the substantial overspending on expansion that contributed mightily to today's problems. In their race to challenge the Big Five and other industry leaders, the new firms spent their venture and IPO capital ramping up capacity at Internet speed—opening new offices, integrating acquisitions, developing technology and knowledge management infrastructures, and recruiting new talent.

With profitability now the key watchword, the firms need to move to a new performance model that maintains the high gross margins they have been able to obtain but holds the line much more tightly on operating expenses. Neither will be easy, given the enormous pressures in the current market environment, but the article proposes a series of strategies that help point the way out of the current crisis.

E-Consulting Firms 2.0: Prerequisites for Profitability is available for download on the ITSMA Website. Visit http://www.itsma.com/press/itsmainthenews/E-CONSULTING%20Q.pdf to view or download the PDF version.

Sponsorships Still Available for Brand Awareness Research: Sign Up Now!

• Networking and Telecom Services Brand Awareness Study, Winter 2000/2001
  Sponsorship slots are still available for ITSMA's Networking and Telecom Services Brand Awareness Study for the enterprise market. Primary and secondary sponsors of the study will gain early and affordable access to fresh data on unaided and aided brand awareness, customer preferences, relative positioning, and other critical metrics in the race for market leadership. Primary sponsors also help shape the survey instruments and influence the respondent profiles. Sponsor fees range from $12,500 to $35,000. Contact Matt Leary at +1-401-635-2148 or mleary@itsma.com to participate, or view a study prospectus online at http://www.itsma.com/Brand_Pro/telecom_prosp.htm.
• CRM Services Brand Awareness Study, Winter 2000/2001
  ITSMA's CRM Services Brand Awareness Study will create a critical research foundation for all CRM services providers seeking to better understand this fast-growing market. Primary and secondary sponsors of the study will gain early and affordable access to new data on brand awareness, customer preferences, relative positioning, and other critical metrics. Primary sponsors also help shape the survey instruments and influence the respondent profiles. Sponsor fees range from $12,500 to $27,500. Contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com to participate, or view a study prospectus online at http://www.itsma.com/Brand_Pro/brand_CRM2001.htm.

New Professional Services Pricing Study: Sign Up Now!

Few issues bedevil services marketers more than pricing. What margins are realistic? What are reasonable billing rates? How should our billing rates be structured? How do we deal with pricing on a global basis? How does our pricing compare to the competition's? Which contract terms and conditions and billing methods make the most sense? And most important, can we use pricing to create a strategic advantage with clients and prospects?

ITSMA's new Professional Services Pricing Study addresses all of these critical issues, and more. This new multi-client study includes qualitative and quantitative data from study participants in a range of IT sectors and from Fortune 1000 service buyers. Participating sponsors will work with ITSMA to refine the study design and survey questions, and will receive an extensive set of unique, valuable, and immediately actionable data to support pricing and sales strategies and programs. Sponsor fees are $7,500 for members, and $9,500 for non-members.

For more information, contact Paul Gates at +1-781-862-8500, ext. 15, or pgates@itsma.com, or visit http://www.itsma.com/Brand_Pro/pricing_prosp.htm to view the study prospectus online.

Visit ITSMA's Online Research Library, the leading resource for specialized studies and reports on branding, online marketing, professional development, sales effectiveness, and other critical marketing topics: http://www.itsma.com/research/research.htm.

Toolbox: Listening to the Customer

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

Tools for Listening to the Customer

Last month's E-ZINE highlighted why and how marketers should spend a day in the life of their customers [see A Day in the Life - http://www.itsma.com/Research/toolkit_free/dayinthelife_tool.htm]. Continuing with that same theme, ITSMA has compiled a set of basic tools for listening to the customer. The handy checklist includes such tools as focus groups, customer panels, customer tours, and more—a baker's dozen in all. The checklist provides a short description of each tool, as well as notes on advantages and disadvantages. Few, if any, companies utilize all these tools but ITSMA does recommend testing and using a diverse range of listening devices to help ensure the maximum possible input into your services design and delivery systems.

Reader Survey: Another Winner!

A special thanks to all those who responded to our E-ZINE Reader Survey in December. Your input is extremely valuable, and we're doing our best to respond to your requests for more research findings, more commentary, and more analysis of services marketing-related news.

For those who have not yet responded to the survey, please take two minutes now to let us know how we can make the E-ZINE more useful to you. Click here for the survey: http://65.202.39.35/surveys/ezine_survey.asp.

And we do have another winner! Congratulations to Pamela Grossman of Lucent Technologies, the winner of our December drawing for an ITSMA pullover fleece. All January survey respondents will be entered into a new drawing for yet another fabulous ITSMA fleece!

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.