Editor's Notebook: Gearing Up for Growth

With December fast approaching, balancing time and energy between finishing the year strong and laying the foundation for next year becomes ever more difficult. Bolstering year-end numbers usually takes precedence; it's hard to forgo any opportunity to boost results even a fraction of a point. Looking ahead, though, the likelihood that next year will be at least as challenging as the last few suggests that extra preparation now would be a worthwhile investment.

The nature of next year's challenges is the subject of our lead article this month, a report on ITSMA's recent annual conference. Running through that report is the theme of leadership. Now that buyers seem to be loosening their purse strings, marketers have both the chance and the need to exert greater leadership internally and externally if they are going to succeed. Which brings me back to the question of balancing priorities in the coming weeks: Are you doing enough in the coming weeks to prepare for growth in 2004? This month's E-ZINE points to a number of leadership ideas, issues, and resources to consider as you ponder next year's agenda—including our upcoming Client-Centric Marketing Courses in London and San Francisco. As always, let me know if we can help in any way.

—Rob Leavitt

What's Hot: ITSMA Conference Highlights Marketers' Priorities for 2004

Bringing together more than 100 services marketers from a range of top technology and consulting companies, ITSMA's October 21-22 conference in Berkeley, California, "Marketing Returns: Leadership, Innovation, and Results," highlighted four critical priorities for marketers in 2004:

• Strategic discipline
• Competitive differentiation
• Marketing-led sales
• Marketing accountability

Strategic Discipline
Increased scrutiny by top executives, intense competition, and rapidly changing markets place a premium on strategic discipline throughout the marketing function. No longer can marketers afford to have different teams marching in different directions. At Hewlett-Packard, for example, the first-ever chief marketing officer, Michael Winkler, recently launched Operation One Voice to align all marketing initiatives around a common company strategy.

Maintaining strategic discipline does not necessarily mean adhering to a fixed strategy for very long, however, according to ITSMA Vice President Philip Oliver, former head of strategy for IBM Global Services. Rather, strategy today should be a continuous process, with marketing taking a lead role in constantly identifying market changes, opportunities, and threats to support ongoing strategic decisions and initiatives.

Competitive Differentiation
Me-too marketing is the bane of buyers' existence. When everyone says they can provide "proven solutions" to "core business problems," it all sounds the same and customers tune out.

Part of the challenge is focus. Don't just key in on a specific industry vertical, argued Rick Olivieri, director of service marketing for retail networks at Vanguard Managed Solutions; go after even narrower sub-segments to make it easier to become truly expert in those markets. Olivieri attributed a great deal of his company's success in collaborative marketing with AT&T to the fact that the initiative focused on only six out of 20 segments within the wide world of retail.

Beyond focus, services marketers need to take a hard look at communications tactics, according to Brian Fugere, chief marketing officer at Deloitte Consulting. Stop telling people what you can do and just show them, he said. Fugere and colleague Chelsea Hardaway, global director of brand communications, stressed the promise of "branded content," products and activities that provide real value to potential buyers, often for free, while reinforcing the corporate brand. Rather than brochures, Webcasts, and press releases, they said, produce books, films, diagnostic tools, and demonstrations.

Fugere and Hardaway outlined five rules for the new approach:

1. Stop talking about yourself; eliminate "we" from marketing communications.
2. Stop the hype; the nonsell is what sells.
3. Entertainment is more than half your job, even in high-end IT services.
4. Design is almost everything; kill deadly PowerPoints.
5. Authenticity is absolutely essential in a cynical market.

Marketing-Led Sales
The idea that customers no longer respond to sales calls ran through the entire conference. Reporting on several recent studies, ITSMA Vice President of Research Julie Schwartz noted: "The message is clear: 'Don't call us, we'll call you.'" For this reason, marketing must play a larger role in generating demand and leading sales into discussions with prospective customers.

At Wipro Technologies, a global marketing-led sales effort has demonstrated impressive results in developing new business with Fortune 1000 accounts. By investing in an integrated program to target desired prospects and carefully cultivate new leads, Wipro's chief marketing officer, Sangita Singh, and her team have increased leads by more than 350% in one year, shortened the sales cycle, and contributed directly to 40% of new business compared with very little two years ago.

Similarly, a marketing-led "value selling" program at Cisco Systems has revamped the sales effort for high-end services to focus much more on understanding customers' business issues, quantifying potential benefits in financial terms, and integrating marketing, sales, and delivery into a more seamless value delivery chain. The initiative has contributed directly to at least $100 million in new business.

Marketing accountability
If marketing truly is to "return," participants agreed, it must become much more accountable for business results. Brian Eckert, executive vice president of marketing at Dimension Data, suggested that marketing should have direct responsibility for sales. Describing his own commitment to return $10 in sales for every dollar invested in marketing, Eckert noted, "This certainly makes you think differently about how to spend your marketing dollars." Top marketing priorities at Dimension Data include customer research, highly targeted "micro-campaigns," and sales-related incentives for marketing staff.

Building on the same theme, Leigh Alexander, chief marketing officer at Unisys, described a yearlong process to create a globally integrated marketing measurement system. Tied to the company's top business objectives, the measurement system helps ensure that all marketing activities are measured against their contribution to one or more of these objectives.

For all the focus on rigorous planning and measurement, however, a final conference message was the continuing importance of the unknown. Perhaps most important, as keynote speaker Howard Rheingold noted, the emerging reality of pervasive information and communication promises yet more upheavals in both the technology industry and in the practice of marketing itself. Rheingold, author of Smart Mobs: The Next Social Revolution, outlined the profound yet still unknowable implications of the mass global convergence of wireless communication, Internet connectivity, and ubiquitous computer chips. "We're about where the PC was in 1980 and the Internet was in 1990," he said.

—Rob Leavitt

Features

Best of the Best: 2003 Services Marketing Excellence Award Winners

A new approach to "business blueprinting," a comprehensive rebranding in 90 days, a corporate turnaround centered on "customer delight"—these and nine other exceptional initiatives represent the best of the best: the winners of the 2003 Services Marketing Excellence (SME) Awards.

"As more technology firms bet on services and solutions, they increasingly understand that investing in services marketing is the best way to generate profitable growth," according to Dave Munn, president and CEO of ITSMA. "This year’s SME Award winners demonstrate the dramatic results that are possible with great marketing, even in today’s extremely challenging environment."

Launched in 1998, ITSMA's annual SME Awards focus exclusively on the largest and most dynamic segment of the technology business: services and solutions. The awards, announced October 21 at ITSMA's annual conference, honor excellence at two levels. Diamond award winners are best in class for the industry, as measured by innovation, execution, and business results. Gold winners demonstrate standout performance in those same three areas.

Unlike many marketing awards that emphasize advertising and communications, the SME Awards reflect ITSMA's comprehensive approach to marketing. This year's awards program covered six categories: developing new solutions, managing brand and reputation, marketing with partners, strengthening customer loyalty, increasing sales effectiveness, and measuring marketing results.

2003 Winners Developing New Solutions    Diamond Award: Unisys    Gold Award: EMC Corporation   Managing Brand and Reputation    Diamond Award: BearingPoint    Gold Award: IBM Business Consulting Services Marketing with Partners    Diamond Award: Vanguard Managed Solutions    Gold Award: Hewlett-Packard   Strengthening Customer Loyalty    Diamond Award: Alfa Wassermann    Gold Award: Cisco Systems Increasing Sales Effectiveness    Diamond Award: Cisco Systems    Gold Award: DecisionOne   Measuring Marketing Results    Diamond Award: Unisys    Gold Award: Wipro Technologies

Services marketing has gone through tremendous changes over the last decade. The economic roller coaster has led to budgetary ups and downs, yet the SME winners demonstrate the great degree to which services marketing continues to mature and to become an ever more strategic function in the lives of technology and IT services firms. Hats off to all the winners.

Read more about the 2003 SME Award winners

Download 2003 SME Awards booklet (PDF, 190KB)

—Rob Leavitt

Meeting the Leadership Challenge: Joe Vales' 12-Step Program

Only a die-hard optimist would see today as the best of times for IT services marketers. The market at best is inching forward, buyers are ignoring just about every pitch, offshore providers are grabbing market share, and executives are demanding bottom-line justification for every expense.

"What a great time to be in marketing," says Joe Vales, strategic marketing consultant and former managing director of global marketing for business process outsourcing at PricewaterhouseCoopers. It's a great time because marketers now have a tremendous opportunity to take clear leadership in building their company's businesses. Industry turmoil and the growing recognition that the sales force can't grow revenue by itself have created an important opening for marketing leadership.

The challenge, according to Vales, is for marketers to design and implement more sophisticated and integrated programs that manage the entire customer life cycle, from lead to close to satisfaction. "IT services firms need a new breed of marketing executive—one who has the business acumen, leadership, and vision to really take charge of marketing and make it a driving force to win new business," he says.

Like all good consultants, Vales has a plan. In his case, it's a 12-step program for marketing leadership and success in today's environment. Here are the highlights:

1. Know and own the client and prospect. Marketing is too often excluded from working relationships with clients. But client ownership is the foundation for gaining a deep understanding of each client's needs and delivering services that meet or exceed expectations.
2. Bring back the marketing mix. Marketing has to think in terms of integrated marketing programs and use the right mix of all available resources, materials, and tools to implement them. One-off projects are a waste of time and money.
3. Hire leaders who can lead and drive with passion. It's more than just "doing" something—it's the spirit of "winning" something. Marketers have to feel the excitement of getting the deal, beating the numbers, and trouncing the competition.
4. Assess your brand; build a new strategy to take advantage of the changing market. Marketing has a tendency to become reactive to both the external marketplace and internal operating requirements. Yet marketing is in the best position to set the strategic vision for the firm because of its broad mandate to understand best how to fulfill customer wants and needs.
5. Build a unique value proposition that reflects the changing market. IBM introduced the on-demand computing concept as a differentiator, and it clearly distinguishes IBM with a customer-oriented positioning. As first mover, IBM owns the concept and can shape it to the firm's strengths—and that's what great marketing is all about.
6. Refocus your sales approach to C-level executives. Marketing needs to help the firm reach top executives and engage them in a meaningful business dialogue that leads to securing major engagements.
7. Strip and rebuild your sales proposal process. The team has to score high marks every step of the way if they are to win the client's confidence and vote, which means maintaining top management focus, substance, and impact in all meetings, proposals, references, and presentations.
8. Court the new players who control key distribution channels. The coming IT services transformation will change the fundamental way IT services are delivered to customers, and bring many new players and distribution channels. Marketing should have a good handle on the trends and potential new partners.
9. Become known to the influencers. This is all about relationship building. Marketing must commit the time and money it takes to cultivate effective working relationships.
10. Become the thought leader in your market segment. Thought leadership involves more than just publishing white papers. It should support your firm's strategic business plan and important growth areas with a coordinated program of activities to support your overall competitive positioning.
11. Control your messages and brand globally. All communications must be clear, consistent, and unified to reinforce the company's message.
12. Own client satisfaction. The best way to build the business is through client referrals and success stories, and marketing must champion client satisfaction as a fundamental way of doing business.

Read the complete version of Joe's 12-step program. The Leadership Challenge: A 12-Step Program for Marketing Success is available without charge to ITSMA members and for sale to all others. Details at http://www.itsma.com/research/abstracts/v0021.htm.

Research Desk

Services Marketing Budgets and Benchmarks: 2003 Data Now Available

How does your marketing budget stack up against industry norms? Do you need help in justifying next year's budget?

Despite difficult economic times, services marketing budgets have held steady as a percentage of services revenue, according to ITSMA's 2003 annual study. In that study, participating companies reported spending an average of 1.9% of services revenue on services marketing, about the same percentage as the last two years, and up from an historical average of around 1.5 in the mid-to-late 1990s.

Earlier this year, ITSMA conducted its annual services marketing budgets and benchmarks study on a give-to-get basis. Participating companies received detailed data on 2003 services marketing budgets, budget allocations, and trends. The data are now available to non-participants as well.

With budgets still tight but companies looking more to marketing to lead the way to growth in 2004, ITSMA's report, Services Marketing Budgets and Benchmarks: 2003 Budget Allocations and Trends, provides useful benchmarks to support marketing strategy, planning, and justification.

Topics covered in the PowerPoint-style report include:

• Services marketing budgets as a percentage of services revenue
• Services marketing budget allocations
• Differences in services marketing spending priorities between product-based firms and pure services firms
• Services growth rates and margin trends
• Top services marketing challenges

Among the study's key findings are the following:

• Although services margins across the industry appear to be holding their own despite customer pressures, services margins are clearly decreasing at pure services companies while doing much better at product-based companies.
• Services marketing budgets are showing greater emphasis on marketing communications (marcom), reversing a steady trend in recent years away from marcom spending.
• Services marketers at product-based firms are spending their money quite differently than marketers at pure services firms, with relatively more spending on personnel and marketing collateral and relatively less on advertising, PR, events, and internal marketing.

Services Marketing Budgets and Benchmarks: 2003 Budget Allocations and Trends is available for sale at member and nonmember prices. Details at http://www.itsma.com/research/abstracts/b013.htm.

ITSMA will soon initiate its 2004 study on services marketing budgets and benchmarks. If you are interested in participating, please contact Adnelly Reyes at areyes@itsma.com.

CIOs Project Moderate Spending Increases for Third Month in a Row (Tech Poll)

CIO Magazine's Tech Poll provides a monthly assessment of technology buying trends from a broad cross-section of chief information officers (CIOs), mostly from North America. The latest survey, conducted October 9-16, 2003, suggests that CIOs have solidified plans for spending increases of around six percent in the year ahead. According to CIO Magazine publisher Gary Beach, "This is the most positive frame of mind chief information officers have been in since the fall of 2000."

Key findings:

• CIOs plan to increase technology spending 6% over the next 12 months, up just slightly from a 5.9% projection in September, and representing the third month in a row around 6%.
• Some 40.5% of CIOs expect to increase spending over the next 12 months, the second month in a row that figure has been over 40% (which it had not been in any previous month in 2003).
• While there was little difference among forecasts by company size, CIOs in health care, financial services, business services, and utilities were more optimistic than their counterparts from other industries.
• Spending projections for telecommunications equipment showed the most positive results in more than two years, with more than 37% of CIOs planning increases and only 17% planning decreases. According to Gary Beach, CIOs point especially to interest in voice-over-Internet systems and networking for wireless devices.
• Projections for Internet-based purchasing of goods and services reached almost 24%, the highest figure in the three-plus-year history of the Tech Poll.

October Tech Poll figures are based on 243 survey responses, with 95% from North America. CIOs made up 85% of the total respondents. Large firms with more than 5,000 employees represent 17% of the results. The respondents represent a wide range of industries, including technology services, manufacturing, finance, state and local government, health care, and wholesale and retail distribution.

For complete survey results, visit http://www.cio.com/techpoll.

ITSMA Brand Tracking: Competitive Positioning in Key Services Markets

ITSMA's multiclient brand tracking studies enable companies to analyze customer awareness of top providers, knowledge and preference of various firms, competitive positioning, desired attributes, and much more. Read the prospectuses for details on the following upcoming studies:

• 2003 Managed Services—Europe
  http://www.itsma.com/research/prospectus/mk0398_eums03.htm
• 2004 Professional Services and Solutions (Secondary Sponsorships Only)
  http://www.itsma.com/research/prospectus/mk0402_ps04.htm
• 2004 Network Services: Buyer Preferences in the Enterprise Market
  http://www.itsma.com/research/prospectus/mk0410_ent04.htm

EuroNotes: Marketing to Key Accounts

ITSMA Europe's most recent Inner Circle Meeting focused on the hot topic of marketing's role in driving business generation and loyalty within key client and target accounts. Gathering last month in London, services marketers from a range of top IT and consulting firms delved into three specific issues:

• Defining key accounts
• Targeting decision makers
• Developing effective account-based marketing and selling

Read the full story

More EuroNotes

Marketing Toolbox: Marketing Plan Reality Check

For many of us, it's planning time again. Time to dust off last year's plan, pull out the crystal ball, and whip together a new plan to blow the doors off in 2004. Or something like that.

The reality is that no matter how many marketing plans you've written or how many articles and books you've read on the subject, developing an effective services marketing plan can be a difficult and frustrating experience. The only thing you know for certain is that everything you address—resources, organizational priorities, market environment, and so on—will change rapidly.

But planning effectively is even more critical in an environment of constant change. ITSMA's Marketing Plan Reality Check provides marketers with a checklist of 10 critical questions that will help ensure that plans have the maximum potential for success.

Download the Tool

More Marketing Tools (membership online access required)

Upcoming Events

Marketing Metrics and Corporate Change: Using Metrics to Guide Value Creation and Delivery
November 18 Online Briefing (No charge for members)
http://www.itsma.com/Events/event_desc/03OB11N16.htm

Marketers have always understood the importance of measuring the value of their efforts, but yesterday's luxury is today's urgent priority. Join Steve Hurley, Jeff Lowe, and Tim Ambler to learn how you can use a marketing scorecard to drive corporate change and improve marketing and sales performance.

Marketing's Role in Business Development
December 2 Online Briefing (No charge for ITSMA Europe members)
http://www.itsma.com/Events/event_desc/03OB12E12.htm

Marketers too often leave business development to sales, consultants, and partners. As companies move to a solutions orientation, marketers need to take more of a hands-on approach to driving individual business opportunities. Join Bev Burgess for a discussion of best marketing practices in business development in Europe.

ITSMA Executive Roundtable
December 15 (By invitation only; Boston, MA)
http://www.itsma.com/Events/event_desc/03RT12N22.htm

ITSMA's invitation-only, half-day executive roundtables provide senior marketing executives a great opportunity to discuss current challenges with peers from other member companies. Facilitated by ITSMA president and CEO Dave Munn and vice president Steve Hurley, this roundtable zeroes in on two key strategic issues: marketing-led sales and solutions marketing.

ITSMA in the News

• IT in Stats: Sales Mismatch with Financial Services Sector (Financial Times)

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

(c) Copyright 2003, 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.