The first anniversary of September 11 puts a somber cast on our return from summer holidays. Anniversaries are traditionally a time for reflection and we attempt below to sort out some of the primary effects the past year has had on marketing. This month's E-ZINE includes as well some food for thought on sales training, brand transformation, customer satisfaction, marketing management, and more. We're also reviewing the E-ZINE's editorial agenda, so please let us know how we can better meet your information wants and needs in the coming months.

-Rob Leavitt, editor

9/11/02: New Realities for Marketing

Looking toward the first anniversary of September 11, marketers have focused mostly on immediate tactical concerns. Should we conduct marketing as usual? Should we run special advertisements? How can we best acknowledge the anniversary? To their credit, many firms have organized special memorials and/or community service initiatives. Many are also refraining from normal telemarketing or events.

The anniversary naturally inspires deeper reflection as well, however. Looking back at an extremely difficult year, it seems clear today, as perhaps it was not immediately after 9/11, that IT marketing is now operating in a fundamentally new world.

Consider the following:

• Government attitudes toward business have changed substantially. September 11 converted an economic downturn into a more fundamental political/economic turning point. The economic fallout from 9/11 was substantial, and was greatly exacerbated by the series of corporate scandals that developed soon thereafter. But the political reaction, also exacerbated by the scandals, could prove to be even more far reaching. Essentially, 9/11 initiated a wholesale political challenge to the leave-business-alone movement that had dominated U.S. and most Western politics since the late 1970s. The new trend is toward greater government intervention into business operations and the economy.
  
• Maintaining credibility has become the primary business challenge. This is only partly due to 9/11, of course. The dot-com crash, overblown technology claims, and especially "Enronitis" have contributed mightily to the credibility crisis that pervades US business. But the existential blow to American confidence last September 11 should not be underestimated as an important contributing factor. Regardless of the weighting of various factors, there is no doubt that business on September 11, 2002, faces far more skeptical customers, investors, employees, analysts, regulators, journalists, and members of the public than it did a year ago.
  
• Planning for the future is now much more difficult. Business strategists tend to focus on market and technology trends, competitive threats, and emerging opportunities. The shock of 9/11 added a host of safety and security-related concerns to this already complex challenge. Perhaps even more important, the attack also raised the visibility of some deep international fault lines, with enormous potential consequences. The degree to which forces of social, economic, and political integration and cooperation overcome the forces of disintegration and conflict over the next few years could have a far greater effect on a given business's prospects than the actions of customers and competitors. (See, for example, Accenture's Business in a Fragile World, a review of alternative scenarios which business might face over the next decade.)

Marketers might not have the capacity to contend with these new realities by themselves. But they can play a central role in larger corporate initiatives to adapt to the new environment.

The continuing economic slump means that most technology marketers have their heads down, focused almost exclusively on immediate revenue opportunities. Pulling out of the slump in a sustainable fashion, however, will likely require strategic reorientation as well as tactical excellence.

How do you view the impact of 9/11 on marketing? Have you revised your marketing and business strategies to address the new social and political realities of the post-9/11 environment?

-Rob Leavitt

Research Desk

Tracking the Sales Training Gap

Participants in ITSMA's 2002 Sales Performance Study confirmed that their sales forces face an enormous challenge in making the transition from taking product and services orders, as in the boom times of the late 1990s, to proactive account mining and selling to new opportunities. The requirements for selling solutions in today's market include greater knowledge of individual accounts and industry trends as well as enhanced skills related to justifying solutions' benefits and relationship management.

According to the study, sales forces require greater training in at least six specific aspects of solutions selling:

• Communicating effectively at an executive level
• Quantifying the business benefits of services and solutions
• Understanding the customer's business
• Selling consultatively
• Building long-term relationships
• Working in teams

Meanwhile, these same firms have had to drastically reduce investments in sales training. Current sales training investments average about $2,600 per representative, according to the 2002 ITSMA study, down from almost $5,000 per rep in 2000.

Much of this reduction can be attributed to a greater reliance on computer-based training, online seminars, and on-the-job training. As such, firms have been able to keep up the total of training hours, with most firms providing 5-10 days per year for sales training. However, increased investments in sales training are definitely needed if sales forces are to make a successful transition from product-led selling to services- and solutions-led selling.

When given a chance to rate themselves on the adequacy of existing training, study participants produced a mean rating of only 2.9 on a 1—5 scale. Participants felt they were doing okay in the areas of training on company and product knowledge but not nearly well enough in services knowledge, selling skills, understanding customers' business, and justifying the value of services and solutions.

—Julie Schwartz, jschwartz@itsma.com

ITSMA's 2002 Sales Performance Study: Benchmarks and Best Practices from IT Services Leaders provides detailed data and analysis to help services organizations gauge sales performance, identify best practices, enhance sales coverage models, and improve productivity. The report is available for sale at member and nonmember prices. For more information or to purchase this report, visit http://www.itsma.com/Research/abstracts/s003.htm.

Brand Transformation: From ICL to Fujitsu

The transformation of ICL, one of the United Kingdom's best-known technology firms, to Fujitsu Services represents one of the largest IT rebranding efforts in Europe in the last decade. Far more than a name change, the launch of Fujitsu Services on April 2, 2002, marked a substantial reorientation of ICL's vision, organization, and go-to-market strategy. As the largest IT services unit of Fujitsu, Ltd., its corporate parent in Japan, Fujitsu Services aims to spearhead Fujitsu's global push for IT leadership in Europe.

For ICL, implementing the new strategy involved a transformation of the entire business. Prior to the public rebranding, ICL and DMR Consulting (now Fujitsu Consulting) worked together to both clarify their respective strategies and priorities and create a set of rules and linkages for ongoing collaboration. To support this "restreaming," ICL/Fujitsu Services transferred some 800 employees from one of its divisions to Fujitsu Consulting.

Beyond the restreaming, ICL also reorganized its business structure and updated its corporate strategy. The reorganization created a smaller number of customer-centric business units. The new strategy emphasizes leveraging the broader capabilities of the entire Fujitsu organization, including Fujitsu Consulting, to go after the largest infrastructure services opportunities in Europe.

Finally, the effort involved an extensive set of communications activities to help reposition the firm in the minds of employees, customers, prospects, partners, and others.

A period of several months is too short a time to enable any definitive judgment, but the early results suggest that the effort is paying off. Internal and external reaction has been positive; increased collaboration across Fujitsu is under way; and the rebranding effort has inspired greater marketing discipline and focus.

Read the full case study: Brand Transformation: From ICL to Fujitsu is available free to all ITSMA members and for sale to nonmembers. For more information or to download or purchase this report, visit http://www.itsma.com/research/abstracts/CS0004.htm.

Customer Satisfaction at Kronos

Growth in today's economy relies first and foremost on satisfying existing customers. Kronos, a provider of human resources, payroll, and labor management software and solutions, has outperformed much of the software sector in recent years. The company undertakes regular satisfaction surveys of its 40,000 customers and uses survey findings to drive process improvements and organizational changes, especially in customer service and support.

A key element of the strategy is a monthly analysis of detailed satisfaction data. The analysis focuses on data disaggregated to the regional and area service management levels where Kronos manages the day-to-day interface with its customers. It is at this level of line management that the organization can most rapidly implement operational and procedural changes. For example, when data from a particular region indicates problems in services delivery or performance, management reaches out to specific, previously surveyed customers for additional feedback as well as bringing in process experts and best-practices managers to take corrective action.

The firm's intensive focus on satisfaction has led to extremely high ratings among its customers and enabled the firm to highlight customer satisfaction as a strategic differentiator in the market and a key reason to purchase Kronos products and solutions.

Read the full case study: Kronos Incorporated: Managing and Marketing Customer Satisfaction is available free to all ITSMA members and for sale to nonmembers. For more information or to download or purchase this report, visit http://www.itsma.com/research/abstracts/CS0003.htm.

Tech Poll: CIOs Project Continued Sluggishness in IT Spending

The CIO Magazine Tech Poll provides a monthly assessment of technology buying trends from a broad cross-section of chief information officers, mostly from North America. The latest survey, conducted August 15-18, 2002, shows that although CIOs still project modest spending growth over the next 12 months, they continue to reduce their growth projections.

• During August, the Tech Poll panel projected that IT budgets will increase 4.9% over the next 12 months, down modestly from a 5.5% projection in July. The projected budget growth is the lowest estimate since February 2002.
• Smaller firms (less than 500 employees) project an 8% increase for next 12 months while firms with more than 500 employees expect increases of only 3%.
• Weak profits remain the primary constraint on IT spending, with more than 40% of panelists citing this weakness as the primary factor affecting spending plans.
• Some 44% of panelists do not expect to see a pickup in IT spending until 2003, whereas only 11% expect a pickup in the second half of 2002.
• Security software continues to show the strongest demand among eight specific IT categories, with almost 53% of the panelists expecting to increase spending and only 5% expecting to decrease spending. Other areas with projected strong increases include storage systems and computer hardware, although computer hardware showed a substantial decline from July projections.

August Tech Poll figures are based on 300 survey responses, with 97% from North America. CIOs made up 85% of the total. The respondents represent a broad cross-section of industries including technology services, manufacturing, finance, state and local government, healthcare, and wholesale and retail distribution.

For complete survey results, visit http://www.cio.com/info/releases/090302_techpoll.pdf.

Call for Sponsors: ITSMA Market Positioning and Brand Awareness Studies

Take the pulse of today's market and get actionable data to improve your market position! Industry leaders and challengers regularly rely on ITSMA research to assess their progress in building awareness and preference for their services and solutions. ITSMA Market Positioning and Brand Awareness Studies provide corporate sponsors with timely and extensive data on such critical issues as unaided and aided awareness of market leaders, favorability and preference ratings, comparative positioning, key sources of information, and purchase evaluation criteria.

Fall 2002 studies include in-depth analyses of IT professional services, enterprise network services, and security solutions. For more information, download the study prospectuses:

• IT Professional Services
  http://www.itsma.com/research/prospectus/mk0303_ps02.htm
  
• Enterprise Network Solutions
  http://www.itsma.com/research/prospectus/mk0310_ent02.htm
  
• Security Solutions
  http://www.itsma.com/research/prospectus/mk0286_sec02.htm

Professional Development: Four Keys to Managing Complex Marketing Projects

Services marketing professionals are facing greater complexity in managing programs and projects. With a growing emphasis on solutions, typical marketing programs within large IT services organizations involve teaming with different functional areas such as research and development, training, manufacturing, and communication, as well as with business partners. Further, global marketing organizations require managing collaboration across numerous cultures and time zones.

While marketing projects are getting more complex, the margin for error is shrinking. In today’s environment, marketing managers need to assure top management of a clear and strong return on marketing investment (ROI).

An increasingly common response to these two pressures is the establishment of a “project management office”—a relatively flat and agile team that creates a project-centric mindset using formal management methodologies and tools. For some marketing organizations, such “offices” provide the rigor necessary to ensure marketing success amid the many forces that so often undermine project efficiency.

Although such a structured approach might not be necessary or appropriate for every organization, virtually all marketing professionals today need to use a highly disciplined approach to project planning, implementation, and measurement. There are four keys to success:

• Invest in project planning. Assign an overall project manager and/or create a formal project management team. Clearly define the project. What is the overall objective? What are the success criteria? What expected results will be tracked and measured? What does the project include and not include? What is the budget? Who is the executive sponsor? Note: It is critical to gain high-level support for the project—and to be clear about what the project will not fix. List the tasks, owners, and dependencies for each task. Keep an updated issue log and scorecard to ensure accountability and visibility.
  
• Use the latest meeting technologies. Web conferencing offers the benefits of decreased travel, immediate access from anywhere there is a PC and Internet connection, and low cost. In a typical project, participants are “delighted” with the effectiveness of Web conferencing tools.
  
• Leverage team knowledge. Create a central Web-based repository for primary research, data sheets, competitive information, and other data. Most team members will go to the central repository first for information needs.
  
• Evaluate. Take the time to create and analyze appropriate metrics (including ROI) and conduct a serious program retrospective. What worked well and what didn't? Use the success criteria developed at the beginning of the process to measure the results. Identify and share best practices from the project. Identify the top three “to-be-fixed” items for next time.

These four success keys might seem obvious, but many IT marketing organizations fail to use them or follow them only in a half-hearted way.

Project management doesn’t always come easy to marketing professionals, who tend to focus more on the “creative” side of the work. In today’s environment, however, we can’t afford to ignore such an important contributor to marketing success.

—Lori Candau, lori_candau@yahoo.com. Candau, a twenty-year marketing veteran with Hewlett-Packard and Sprint, recently joined her husband at Candau Consulting (www.candauconsulting.com), which specializes in program management for marketing.

Business and Community: Hewlett-Packard, Social Responsibility, and Corporate Credibility

Early last month, Hewlett-Packard CEO Carly Fiorina made her first public appearance since the company completed its merger with Compaq in May. The choice of venue was interesting. Rather than speaking at a major event or showing up on Wall Street, Fiorina elected to spend the day with former Compaq CEO Michael Capellas (now number two at HP) touring nonprofit organizations and meeting with community leaders in Silicon Valley to confirm HP's continuing commitment to philanthropy and community involvement.

Self-serving? Sure. As we approach the first anniversary of September 11, however, it's useful to consider Fiorina's decision in the larger context of how marketing has changed in the last year. In that context, Fiorina's gesture might seem more substantial.

A year ago, ITSMA suggested several guideposts to support "rethinking and rebuilding" marketing in the wake of 9/11 (read the original Commentary). Among other recommendations, we suggested that a stronger commitment to ethics, social responsibility, and community engagement would likely inspire greater loyalty and trust in the more challenging post-9/11 environment.

Since then, of course, the economic scene has only gotten tougher, as a wave of scandals combined with the continued downturn to create an enormous corporate credibility problem. Simply put, customers, investors, and the public don't believe much of what companies say.

In a recent cover story on new ideas for a changing world, BusinessWeek stressed the importance of remake companies into "paragons of corporate responsibility, luring investors via their virtue." Indeed, the magazine continued, "the idea of making a reputation for corporate responsibility an investable theme is one of the best new ideas in Corporate America today."

Community engagement, a la HP, is not in itself going to solve the credibility crisis. Enron, after all, was a generous benefactor of numerous community institutions in Texas. But if BusinessWeek is right, it's not a bad place to start.

What's your opinion? Can increasing and marketing community engagement help close the credibility gap?

-Rob Leavitt

Upcoming Events: North America

September 17 Breakfast Briefing—Winning More Business in the Current Economy, 7:30-9:30 a.m. EDT (free to members—Cambridge, MA)

Buyers today scrutinize IT services providers more rigorously, demand more proof of value, and take longer to decide than ever before. Join ITSMA's CEO, David Munn, for a special briefing at Cambridge's Sonesta Hotel on customer buying behavior, sales best practices, and new ideas to increase sales effectiveness.

For more information or to register online, visit http://www.itsma.com/Events/event_desc/E09100200.htm or contact Ian Cadillac at +1-781-862-8500, ext. 36, or icadillac@itsma.com.

September 17 Online Briefing-Accelerating the Sales Cycle: High-Powered Account Management (free to members), 11:00 a.m-Noon EDT

As companies focus on keeping and developing existing clients, account management has become a top priority. Yet the challenges of coordinating internal organizations, partners, and potentially competing priorities can be exceedingly complex. Join ITSMA's Steve Hurley to sort through the issues and explore best practices that can help accelerate your sales cycle.

For more information or to register online, visit http://www.itsma.com/Events/event_desc/E09170200.htm or contact Lore Griffith at +1-781-862-8500, ext. 19, or lgriffith@itsma.com.

Upcoming Events: Europe

October 8 Online Briefing-Services Marketing Metrics: A European Perspective (free to ITSMA Europe members)

European services marketers are increasingly looking to develop value measurement systems for marketing. Join Bev Burgess for a review of current practice in Europe and recommendations for improving the collection and presentation of critical marketing performance data.

For more information or to register online, visit http://www.itsma.com/Events/event_desc/E10080200.htm or contact ITSMA Europe at +44 (0) 1892 523060 or info@itsma.com.

Complete 2002 Events Calendar: http://www.itsma.com/aspfiles/Events/calendar.asp

ITSMA in the News

• The Truth About Customer References (CIO)
• Buyers’ Preference for Justification Tools (Services Revenue) (PDF)
• Name Game: Deloitte Consulting Becomes Braxton (Tech Republic—free registration required)

More ITSMA in the News

Do you have a services marketing question?
Visit Ask ITSMA to access our experience, insight, and research results.

(c) Copyright 2002, ITSMA

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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.