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Editor's Notebook: Influencing the Influencers Auren Hoffman caused quite a stir recently when he launched the Silicon Valley 100, an A-list of the Valley's top venture capitalists, entrepreneurs, lawyers, and other leading lights. Hoffman's goal was simple: Create a high-powered group of social and business influencers, send them cool stuff from sponsoring companies for free, and watch the buzz begin. The image was irresistible, with media outlets from Newsweek to GQ sounding off on the ethics and efficacy of "turning connectors into Public Relations flacks," in the words of one commentator. Hoffman, head of the marketing agency Stonebrick Group, was tapping into the influence marketing game, popularized especially by Malcolm Gladwell's book, The Tipping Point. Thus far, it has been mainly consumer marketers who have tried to capitalize on Gladwell's insight into the power of so-called connectors in accelerating the spread of ideas, fashion, and products throughout society. Hoffman's project builds directly on the multitude of clothing, soft-drink, and music companies pushing free product into the hands of trend-setting teenagers in the inner city. But B2B technology marketers cannot be far behind. For one thing, business buyers are pretty much tuning out all the direct pitches that clutter their voice and email in-boxes. For another, the old approaches to "influencing the influencers" are becoming rather outdated in a world of pervasive opinion and expertise. Mainstream journalists and industry analysts remain important, but so too are a host of newer influencers in online communities and the blogosphere. As the influence game gets increasingly complex, tech marketers will have little choice but to take a hard look at what's truly effective in promoting a favorable environment for their latest wares. What's happening with your influencer program? Are you focused on the top "connectors" for your markets?  [TOP OF PAGE] What's Hot: The Solutions Imperative Technology companies are facing a fundamental challenge with their business buyers. “Build it and they will come” worked for much of the twentieth century, with some aggressive selling to smooth out the periodic downturns. But the industry upheavals in recent years have gone beyond the typical up-and-down cycle. Buyers are now in charge, and they're less and less interested in the old ways of the industry. The shift to a buyer's market pushes technology providers in two directions at once. First, as buyers perceive increasing numbers of products and services to be simple commodities, they demand continually lower prices. Tech firms can choose to play in the commodity arena, although the global competition to be the low-cost provider is daunting indeed. At the same time, business buyers are also looking to create more strategic partnerships with a chosen few technology providers, developing relationships focused on the provision of high-value services and solutions to address critical business needs. Tech firms can therefore also attempt to move up the value chain, providing more comprehensive and business-oriented solutions. Opportunities for growth exist in both directions. And a third choice is possible: focusing on providing components of solutions (hardware, software, and/or services) to other solutions providers. Yet moving to a solutions orientation seems to be the preferred route for most top tech firms today, for three reasons:
The changes required to win with solutions go well beyond marketing. Solutions success relies heavily on cross-functional and cross-business unit collaboration, along with a relentless commitment to putting customers' business needs at the forefront of all activity. For companies built on distinct business units, profit centers, and engineering-driven development, this means rethinking virtually every aspect of the way they go to market. Marketing is necessarily at the center of the move to solutions, however. If solutions providers have to work from the outside in, marketing must taking the lead in the most important areas, including analyzing opportunities, learning from clients, developing the right offers, generating solutions demand, supporting a refined sales process, and managing the total client experience. Marketing organizations do not always have the authority or even the skills to lead the solutions transformation and move ahead with the initiatives described here. As companies rethink marketing strategies, priorities, and tactics, they may well need to review organizational structure and competencies to ensure that internal capabilities are up to the challenge. Recognizing such shortcomings cannot be an excuse for inaction, though. It should only suggest the urgency of moving faster. This commentary is excerpted from Rethinking Marketing for a Solutions World, which provides detailed recommendations on seven initiatives companies must take to succeed in marketing and selling solutions. This ITSMA Update is available at no charge to ITSMA members and for sale to all others. For more information, visit http://www.itsma.com/research/abstracts/U0049.htm. The marketing priorities for solutions will be a major focus of ITSMA's first "Marketing Solutions" forum on May 4-5 in San Francisco, with presentations by experts from Accenture, BearingPoint, HP, IBM, Lucent, and other top firms. See event details below and online. Features Four Keys to Reference Management The importance of customer references to selling IT services and solutions is widely agreed. Yet many companies struggle to build an effective program; they rely instead on ad hoc, underfunded, tactical initiatives that fall far short of the potential value of a truly strategic program. More than 80 customer reference professionals gathered in Phoenix last month to explore best practices in reference management and the keys to creating more effective programs. Customer Reference Forum 2005, organized by Lee Communications and sponsored by ITSMA and Point of Reference, brought together reference managers from 50 companies across the technology industry to explore such issues as building internal support, collaborating with sales, and developing more effective support systems. Presenters included reference program leaders from such companies as Unisys, Microsoft, Intel, Lucent, NetIQ, and HP, along with ITSMA. The event provided valuable insight from leading reference managers on what it takes to maximize the value of customer reference programs. Speakers and participants focused especially on four critical issues:
Making the Business Case Gaining senior executive buy-in and support is critical to building a successful customer reference program. That means building a business case for the program and tying it to your firm's strategic goals. Critical initiatives, according to event participants, include:
Building Internal Support Successful customer reference programs often require the support of a number of internal groups. Key constituents typically include sales and delivery leadership, professional services, bids and proposals, corporate and regional marketing, and sales support. It is critical to identify all internal stakeholders to ensure that no group is left out of efforts to build internal support. One key takeaway: After getting buy-in and active involvement of senior leadership, regularly inform them of important contributions to the program by people in the field. This will engender a sense of competition and similar desire for recognition by others who are critical to your program. Collaborating with Sales Sales is such an important contributor to customer reference programs that it merits top-priority attention from program managers. Absent sales buy-in, it is extremely difficult to recruit and manage references. Unfortunately, according to many participants, organizational changes may be necessary to gain substantial support from sales. Making this happen will rely on four key initiatives from reference program managers:
Strengthening Support Systems Reference program managers know well that keeping up with customer data is a huge challenge. Developing an effective support system isn't just a matter of finding the best platform and a big budget. Reference management systems are often quite complex in themselves, yet they must interact with other systems and gain ongoing input from other groups. Tips for building effective support systems include:
Every company is different, and company size has a great impact on the requirements for effective reference management. According to forum participants from a wide range of large and up-and-coming technology firms, however, focusing on making the business case, building internal support, working closely with sales, and strengthening support systems will go a long way toward reference management success. —Bill Lee, President, Lee Communications. Customer Reference Forum ONLINE will continue the discussion begun in Phoenix, with moderators from Lucent, Unisys, and NetIQ. For more information on participating in the online forum or future events, visit http://www.customerreferenceforum.com. The Politics of IT: A Call to Action Many information technology (IT) companies virtually ignore Washington as they go about their business. Yet the often volatile politics of such issues as global sourcing, privacy, security, and spyware, to note just a few, can have a tremendous impact on industry prospects. Technology companies need to become more involved politically, according to Harris Miller, president of the Information Technology Association of America (ITAA), and a leading industry representative in national, state, and local policy debates. ITSMA recently asked Miller to outline some of the key issues and dynamics affecting the politics of IT in Washington. Washington likes winners. They loved our industry in the '90s. They couldn't get enough of it. Everybody wanted to have his or her picture taken with executives and entrepreneurs from the IT industry because it was all about growth, jobs, and the “new economy.” But as times got tougher and as bubbles burst, the level of interest in spending time with us lessened, especially since the activities of our industry are not naturally politically inclined. In fact, many people in our industry think that politics is something dirty or beneath them. They were in the "other" school. They were in the engineering school or the science school, and all the politicians were in law school or other places. There is no question that the bloom is off the IT rose. Now that we are in this more mature phase of the industry, we are not quite so popular. Washington has lots of questions and concerns, although it does remain a generally favorable environment for IT. They have concerns about IT's impact on the economy. Does IT create a cornucopia of high-paying jobs? Does IT create wealth for investors and a reasonable return on investment for companies that embrace it? Does IT enhance productivity? Plus we have a series of social issues concerning the sometimes undesirable ways people use technology: spam, spyware, privacy invasion, cyber theft, and other abuses. There has been some progress, but overall not enough. We've seen some improvements, for example, with taxation of offshore operations. One very important piece of legislation was an 18-month extension of the research and development tax credit. This is very important because research and development are absolutely critical to the future of IT companies. Without this tax credit, which is now available and is often much more generous in other countries around the world, we are not going to see the kind of investment in R&D that we need. On a less positive note, Congress did not extend the Internet tax moratorium. This is a provision that would stop the states from trying to have discriminatory taxes on business done over the Internet. The IT industry itself has to become more involved. We need more IT companies to exercise market leadership through thought leadership and active engagement on public policy issues. We need to be more involved in getting out to vote. We need to work together to clarify Washington's misunderstandings and work to control the hype. We need to understand global competition better, including a focus on workforce and education issues. We need to address privacy and security issues. Most important, we need to form a strong presence in Washington to keep Congress moving ahead with decisions and avoid filibusters. The technology industry needs to step up and become a political force to reckon with. Harris Miller's comments are excerpted from IT Politics: Building Industry Influence in Washington. 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/V0023.htm. Moving to Solutions: The Game Has Changed; Has Your Marketing Strategy? I continue to be surprised that clear changes in client buying behavior have inspired precious few companies to change their marketing strategies. Through both our research and our consulting activities, we are seeing 2003 and 2004 marketing plans being re-used in 2005, with little difference. Change the dates; cut (or increase, if you're lucky) the budget by 5%; load and fire. At the risk of being irritating, I'll say it one more time: Your clients are buying differently; it's time to market differently. To win in the new buyer reality, ITSMA has suggested a number of ways that marketers can reorient their activities and programs. But I'm continually surprised at seeing the “same old, same old” attitudes. Consider just three data points from our Solutions Roadmap assessment database. Representatives of more than 50% of our member companies have taken the assessment.
We all know how hard change is. It took a decade-long thrashing by the Japanese auto industry to finally push Detroit to redesign manufacturing and a couple of Enron-like debacles to change financial reporting. What will it take to change how we market solutions? —Steve Hurley, shurley@itsma.com EuroNotes: Taking Segmentation Seriously Serious marketing strategies for IT services and solutions always begin with the customer, not the product. As soon as you look at any business-to-business market, you find out it is not homogenous and everyone does not want the same thing—including the cheapest price. You have segmentation issues right away: Where are the segments? What do the different segments want? Which segments do we want? Although it is true that B2B businesses tend to be more product-focused than B2C businesses, too many B2B marketers seem to believe that this means customer focus somehow doesn't work—and that B2B marketing is mostly about events and brochures. Nonsense! When the sales curve slows down and we get into mature markets like hardware, software, and IT solutions, either we learn to give groups of customers what they really want or we will end up "merging" with a competitor.
Research Desk
Brand Tracking Studies: 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
2005 EMEA Brand Tracking Study: Telecom Services—Services Provider
Market
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.
[TOP OF PAGE] Upcoming Events Rethinking Brand and Reputation: New Priorities for Sustaining Competitive
Advantage Making Marcom Matter: Content, Community, and Conversation
Sand Hill Group Software 2005 Conference
Ask ITSMA! Do you have a services marketing question? (c) Copyright 2005, ITSMA Please forward this newsletter, but only in its entirety. Public citation or publication of any information herein is encouraged but subject to U.S. and international copyright law and conventions. Any citation must include full attribution to ITSMA. Individual graphics or paragraphs can be published without permission as long as attribution to ITSMA is included. Publication of longer selections or complete articles requires ITSMA permission. For permission or more information, contact pr@itsma.com. [TOP OF PAGE] Subscription Information Subscriptions are available in text and HTML versions. To SUBSCRIBE or to change the format of your subscription, visit http://www.itsma.com/aspfiles/press/ezine.asp. To UNSUBSCRIBE, please email us at unsubscribe@itsma.com or mail us at ITSMA Subscriptions, 420 Bedford Street, Suite 110, Lexington, MA 02420, USA. Back issues of ITSMA E-ZINE are available at http://www.itsma.com/News/ezine/default.htm. |
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