ITSMA E-ZINE	February 2005

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Editor's Notebook: Blogmania Continues

Wow! Even The Economist is talking seriously about blogging. Last week's article about Robert Scoble, Microsoft's famous blogger, suggested "his example might mark the beginning of the end of 'corporate communications' as we know it." According to the venerable British weekly, "the Scobleizer" has succeeded far more in giving Microsoft a credible human face than have legions of PR professionals.

Blogging is certainly on a roll these days, with bloggers taking "credit" for, among other things, the recent takedowns of Dan Rather at CBS News and top executive Eason Jordan at CNN. Rare was the year-end pundit who didn't put blogging on a top ten list for 2005.

The death of PR might be a stretch, but the hype is well deserved. Consider the tuning out of traditional marketing and sales messages, the rise of peer-to-peer networking in every imaginable business and social environment, and the wealth of recent, inexpensive communications tools such as blogging, RSS, instant messaging, online communities, wikis, and even podcasting. For the technology industry, add in the credibility gap wherein skeptical buyers trust almost any voices other than the suppliers themselves. And then factor in the increasingly dispersed nature of buying decision making to the point where you're not even sure who to talk to.

To me, it means we need to radically rethink communications strategies. One-way messaging is out; conversations are in. But how can we even enter the conversations swirling around us, build credibility with the new influencers on the marketplace, and dialogue with potential clients that generally don't want to hear from us? Blogging is no magic bullet, but it is an important part of the new equation.

What's hot on your communications agenda? Has blogging taken hold in your organization?

What's Hot: Walking the Line: Balancing Strategic and Tactical Marketing Priorities

ITSMA's 2005 budget survey uncovered a difficult dilemma facing a great many services marketers: How can they balance activities between the strategic initiatives required for sustainable growth in a maturing market with the tactical priorities of increasing demand now and supporting the sales force?

Preliminary data from the survey with 19 member companies suggested that services marketing budgets are not keeping pace with the growth in services revenue. The good news is that services revenue itself is growing. ITSMA members project services growth of almost 14% in 2005. But marketing budgets for services are only inching ahead. Almost half the survey participants reported increasing budgets, but by an average of only 3.4%. Only a few participants are still dealing with budget cuts, but almost half are staying level with 2004. Services marketing personnel are similarly in a holding pattern, with slightly more firms actually cutting headcount than adding to it.

In the context of relatively flat budgets and headcount, services marketers are caught between competing short- and longer-term priorities. The top two priorities reported in the survey reflect this dilemma perfectly. The top priority is supporting the sales force—the quintessential tactical activity. Running a close second, however, is positioning and differentiating the company and its offers—a more strategic initiative. Indeed, differentiation is widely viewed as the most difficult challenge in today's marketplace,

When push comes to shove, survey participants admitted that supporting sales is clearly their number one objective. This is not surprising given the continuing pressures on both the top and bottom lines at most IT services organizations. But most ITSMA members remain committed to the difficult balancing act, determined to push ahead with the more strategic initiatives as well, including developing more sophisticated market segmentation, refining the services and solutions portfolio, and sharpening corporate and offer-level differentiation.

Three initiatives in particular reflect marketers' efforts to straddle the line. The first is a growing emphasis on thought leadership. Services marketers are investing more in thought leadership activities both to reinforce competitive differentiation and to generate immediate opportunities for high-level dialogue with potential buyers.

The second initiative is targeted or micro-marketing, including segmenting, profiling, and mapping of marketing mix and messages to a target audience. By narrowing their focus, marketers can create more effective offers and value propositions, which similarly supports both near-term lead generation and longer term advantage.

Finally, marketers are also experimenting more aggressively with account-based marketing, launching programs aimed at individual clients and prospects. By working hand-in-hand with sales-driven account teams, marketers are able to identify new opportunities, improve competitive positioning, and strengthen priority relationships far beyond the next quarter.

These three initiatives are certainly not the only areas in which marketing needs to invest for sustainable and profitable growth. Areas such as opportunity analysis and client experience management also cry out for increased investment, not to mention marketing training and skills development. But the ability of many marketing organizations to maintain their strategic and tactical balance amid heavy pressure to do more with less bodes well for companies seeking advantage in the emerging market reality.

Julie Schwartz, jschwartz@itsma.com, and Bev Burgess, info@itsma.com

For more information on how companies are "walking the line," see ITSMA's new briefing, 2005 Marketing Budgets, Trends, and Priorities: U.S. and Europe. This briefing is available at no charge to ITSMA members and for sale to all others. For more information, visit http://www.itsma.com/research/abstracts/olb021505.htm

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On the Job

2004 Award Winner: Novell's New Dashboard Offering Highlights Move to Solutions

Since November, the ITSMA E-ZINE has featured summaries of winning programs from ITSMA's 2004 Marketing Excellence Awards. This month highlights Novell's award-winning program to move from a technology to a solutions orientation through a new approach to offer development. The program won ITSMA's Gold Award in the Developing New Solutions category. Here is Novell's summary of the award entry in the company's own words.

Business Challenge

In evaluating the market for performance visibility solutions, Novell identified a clear opportunity. We realized that although there were numerous point products in the space, no vendor was providing a foundation to underpin the delivery of business intelligence data. As a result, this information was generally difficult to access, limited in scope, lacking in security, and too dated or generic to provide real value to enterprise decision making or regulatory compliance.

Given Novell's strengths in secure identity management, data integration, and enterprise portals, we realized that we could fill these gaps. Doing so, however, required us to bring together technologies from various brands and secure a partner to provide the business intelligence functionality we lacked. Additionally, this initiative required us to develop innovative messages to communicate the importance of foundational technologies to a business audience that didn't often concern itself with technology components "under the hood."

Finally, we faced challenges aligning our sales force with the solution focus this offering clearly represents. Training sales representatives, consultants, and other customer-facing employees to address high-level business challenges, target executive-level contacts, and clearly communicate Novell's relevance to this audience was a significant challenge—and critical to the initiative's success.

Program Objective

Novell's primary objective for the secure enterprise dashboard solution initiative was to create an offering that provides long-term strategic value for our customers and their shareholders. We also sought to supplement our strong reputation among technical executives with value propositions for business-level decision makers. Finally, we hoped to leverage Novell's technical expertise and analytics consulting experience to gain traction in the rapidly growing performance visibility market.

Tactically, we knew that achieving these goals would require solid prospect-targeting strategies, well-segmented messages, and effective marketing and demand-generation activities. These activities, in turn, required us to fully understand the challenges and language of business executives interested in this space. We needed to convert our technical taxonomy into bottom-line business value for executives concerned with enterprise decision making and regulatory compliance.

Program Execution

The success of the Novell exteNd secure enterprise dashboard solution initiative hinged on several factors:

• Developing a solid understanding of the market
• Identifying the compelling fit between Novell technology and performance visibility needs
• Offering a flexible and scalable platform that supports phased deployment and the reuse of existing investments
• Maintaining a global solution focus
• Inviting cross-functional project involvement and accountability
• Creating a strong partner relationship
• Ensuring consistent messages and campaign execution across geographies

Our corporate solutions team managed the solution development and marketing process—working closely with sales, product marketing, consulting, alliances, and several other groups across the organization to ensure success.

Targeting and training our internal sales force was a critical part of the process. Rather than trying to engage all teams at once, we identified regions of the world in which interest and potential for success was high and created "solution champion" teams to pursue opportunities, create sales momentum, and provide peer support in these regions. These teams have been the focus of our early training efforts and the beneficiaries of significant sales cultivation and support.

Finally, we navigated each step of the execution process with a customer perspective in mind—continually casting solution functionality in terms of concrete benefits that business decision makers could relate to. The two promotional messages included in this summary reflect the way we have captured the solution's unique benefits in compelling, customer-oriented terms.

Business Results

The successful launch of the Novell exteNd secure enterprise dashboard solution has been an important proof point of Novell's overall solutions focus. It provides evidence of Novell's success in transforming itself from a technical, product-oriented company to a business solution-selling firm.

The results, in more concrete terms, have been impressive as well. We have seen significant uptake in our own field sales organization, with interest and commitment moving beyond our initial group of "solution champions" to sales teams and partners at large. Several Novell areas and geographies have selected this solution as a particular area of focus, and field-initiated sales events are beginning to take shape. We are also engaged with partners—not only a business intelligence partner, but several potential system integrator partners as well—to lend strength, new customer channels, and delivery capability to this initiative.

We have also positively affected Novell's bottom line through a number of long-term solution engagements—representing significant revenue—currently in progress. Finally, we are gaining the attention of market watchers and analysts, many of whom recognize that Novell is redefining the business intelligence space and delivering on the term "solutions provider" through this initiative.

The approach used to launch the Novell exteNd secure enterprise dashboard solution has helped Novell move to the next level. It has been a true market-oriented solution approach that will ensure success now and well into the future.

ITSMA's new report, Novell Secure Enterprise Dashboard: A Solutions Development Success Story, provides more detail on Novell's new offer development and launch process. This ITSMA Case Study is available at no charge for members and for sale to all others. For more information, visit http://www.itsma.com/research/abstracts/CS0010.htm.

For summaries of all 2004 award winners, visit http://www.itsma.com/News/mea/recent_winners.htm.

Getting Started with Account-Based Marketing:
An Interview with Accenture's Charles Doyle

Account-based marketing—or client-centric marketing, as Accenture calls it—is taking the technology services industry by storm. The approach revolves around marketing initiatives to build business and strengthen relationships within single accounts. Working in partnership with sales-led account teams, account-based marketing can provide a more strategic and sustainable program for long-term success with key clients and prospects.

ITSMA spoke recently with Dr. Charles Doyle, who leads all of Accenture’s marketing staff and programs in the communications, high technology, media, and entertainment industry groups. Accenture is one of the most advanced and successful practitioners of account-based marketing and received an ITSMA Marketing Excellence Award in 2004 for its work in this area.

To do good client-centric marketing, you need to do good research. You're effectively applying the same techniques to a client that you would apply to the market. Think: How do I position what I have to the client?

Instead of it being the wireless sector or the media sector or the storage sector, we're now talking about this client or that client in that division and that buying group within that division and the three buyers and the four people who affect them and who influence them politically, and perhaps the three consultants they're talking to and their two suppliers that influence their choice. It's very complex.

Generalist approaches are no longer enough in today’s competitive market. No more going to big industry shows and trying to get clients to come along. This time, you customize the show, the roundtable, and the thought leadership for the group of clients that you have worked out. You still have to do the big shows to create the awareness, but it's no longer the basis of the professional services marketing.

[To get started] you need a good understanding of the following:

• The current state of the relationship
• Knowledge of who you work with inside the client and their place in the power structure
• The client’s perception of your company and its services
• The client’s business needs
• The client’s views on your delivered work
• The client’s culture and values
• The client’s buyer values
• The gap between how you are actually perceived and how you wish to be perceived

You also need to follow an action plan. Immediate items on that action plan should include conducting primary perception research, determining perceptual gaps, and setting the metrics that will be captured. Short-term items include building the client-centric marketing plan for each client and each segment of the client based on the assessment results, then creating programs by client segmentation and targeted individuals within each business unit.

Other items on the action plan should be refreshing the marketing plan, building campaigns and tools to enable enhanced engagements with clients, and measuring and publicizing successes and results.

The challenge is that it has to be done globally and holistically. It can't be done through cities and regions in the way we arrange sales teams. Some of the clients that we've got act globally and expect us to do the same. They expect us to be global with them rather than hand batons between regional sales forces.

Dr. Doyle's comments are excerpted from An In-Depth Look at Account-Based Marketing: An Interview with Dr. Charles Doyle, Global Marketing and Communications Director, Accenture. This ITSMA Viewpoint is available at no charge to members and for sale to all others. For more information, visit http://www.itsma.com/research/abstracts/V0022.htm.

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Moving to Solutions: Solutions are Here to Stay...But the Media Have Yet to Notice

Enough already, let's stop the debate. The votes are in and the verdict is clear: Solutions are on the radar screen of 80% to 90% of our member companies, and there is no indication that any of them are pulling back from a solutions-oriented strategy. Technology has been and always will be the pilot in this industry, but solutions have now cemented themselves as the copilot.

A quick review of the basic tenets of a solution will remind us of why solutions are here to stay. How many tech companies can say that they don't want to:

• Be able to bring to bear any and all of your assets and resources, including partners, to address a client's problem?
• Work with your client to assess the problem, define the right remedy, and work collaboratively with them through implementation and beyond?
• Help their client achieve measurable business value and satisfaction from its investment in your offering?

Other industries, including financial institutions, travel and leisure companies, and construction companies, have figured this out. I experienced this myself a few weeks ago after deciding to lure my neighbors over to watch the Super Bowl. Naturally this required buying the biggest, baddest television on the block. I did my “technology review” and visited all the electronic discounters—Circuit City, Best Buy, Radio Shack, and others. In the end, they were all trumped by Tweeter, a smaller retailer that promised to match the others on component price, install and test the entire system, and come back as often as necessary within a six-month period until my wife and I had actually figured out how to use everything.

Isn't this exactly what your clients want from you? If you want to use a synonym for this, that's OK, but I call this a solution. At the end of the day, your clients don't want to settle for anything less. Why would you offer anything less?

Media Misses the Solutions Angle at HP

I picked up BusinessWeek the other day to see how the media is treating HP following Carly Fiorina's sudden exit. With a cover headline screaming “Can Anyone Save HP?,” the company is portrayed as a bleary-eyed boxer on the ropes in the 10th round. But in a five-page article, services were given merely a single sentence, and the company's focus on solutions was not mentioned at all.

Clearly, HP faces daunting operational problems and has to decide what it will do with the PC and printer businesses. But isn't the media missing a rather important piece of the story? HP has made a substantial commitment to services and solutions in recent years, reflecting the company's intense focus on technology enablement, deeper client relationships, and ultimately greater market share and profitability. A few insights into HP's progress in these areas would provide a more complete picture.

—Steve Hurley, shurley@itsma.com

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EuroNotes: Capitalizing on New Opportunities

ITSMA's recent Inner Circle Dinner in London highlighted three pockets of opportunities that are capturing substantial attention these days among technology services marketers: e-government, outsourcing, and midtier clients. Opportunities like these supported the cautiously optimistic mood that characterized the ITSMA dinner, where 20 top services marketers discussed marketing's key challenges for 2005.

Capitalizing on such opportunities, however, requires a recognition that industry consolidation is creating a “burning platform” for most marketers, according to dinner participants. Marketers need to rethink their roles and priorities and focus even more intensively on the value they provide their organizations.

Read the full story

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Research Desk

Tech Poll: Spending Projections Drop for Third Straight Month

CIO Magazine's January Tech Poll showed a drop in IT spending projections for the third straight month. After an upward trend through almost all of 2004, projections began to drop in November. In December, CIOs forecast an increase in IT spending of 6.7% for the year ahead, compared with November's 8.4% projection. In January, CIOs projected spending growth of only 5.4% for the next 12 months, the lowest projection since November 2003.

In a related survey, CIO Magazine found three main reasons for the declining projections. According to CIO publisher Gary Beach, "CIOs claim a perfect combination of lowered profit expectations, no compelling need to invest and the commoditization of technology through lower hardware prices and open source software models have combined to dramatically reduce spending expectations for the coming 12 months."

Tech Poll organizers do point to several bright spots within the generally declining projections. For example, over 40% of CIOs expect their budgets to increase over the next year—more than twice the number who expect spending to decrease. More than half of all CIOs continue to expect spending increases for storage and security. And among CIOs from the very largest firms, almost half expect to increase spending on eBusiness software.

The biggest challenge facing CIOs, according to the survey, is driving growth and innovation while managing costs.

Tech Poll provides a monthly assessment of technology buying trends from a broad cross-section of CIOs, mostly from North America. The latest survey, conducted January 6-13, 2005, included 255 respondents. Large firms with more than 5,000 employees represent 20% 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.

Brand Tracking: Storage Solutions and EMEA Telecom Services

ITSMA's Brand Tracking Studies provide an affordable complement or alternative to high-priced custom research projects. As multiclient-sponsored programs, the studies pool resources to generate detailed data in key market segments at a fraction of the cost of going it alone.

New sponsorship opportunities include the following:

2005 Brand Tracking Study: Storage Solutions
http://www.itsma.com/research/prospectus/mk0498_st05.htm

• Investment in storage solutions is a top priority for most companies, but the competitive landscape for storage providers is more intense than ever. ITSMA's annual Brand Tracking Study for storage solutions in North America helps hardware, software, and consulting companies better understand buyer perceptions and craft more compelling campaigns.

2005 EMEA Brand Tracking Study: Telecom Services—Services Provider Market
http://www.itsma.com/research/prospectus/mk0501_sveu05.htm

• In a recovering telecom market, services and consulting are key contributors to growth. Designing effective marketing campaigns for these offerings requires detailed knowledge of telecom and service provider buyer needs, concerns, perspectives, and purchase criteria. ITSMA's first European study in this market will analyze how both network and business executives at telecom service providers assess the leading vendors of telecom services and solutions and the market as a whole.

For more information on sponsoring any of these studies or on ITSMA's brand research capabilities more generally, contact ITSMA at +1-781-862-8500 or info@itsma.com.

Upcoming Events

Growing the Business with Micro- and Account-Based Marketing
March 9 Breakfast Briefing (Newton, MA; no charge for members)
http://www.itsma.com/Events/event_desc/05BB03N07.htm

Positioning and Competitive Differentiation
March 10 Executive Roundtable (Boston, MA; invitation-only for members)
http://www.itsma.com/Events/event_desc/05RT03N06.htm

Marketing Maintenance and Operational Services
March 15 Roundtable (Paris, France; invitation-only for members)
http://www.itsma.com/Events/event_desc/05RT03E09.htm

Rethinking Brand and Reputation: New Priorities for Sustaining Competitive Advantage
March 23 Online Briefing (no charge for members)
http://www.itsma.com/Events/event_desc/05OB03N08.htm

Complete Events Calendar

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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.