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Editor's Notebook: Rethinking Marketing Budgets It's budget season for a great many marketers, and the anxiety over available funds, program priorities, and necessary tradeoffs is substantial. Doing more with less is the usual mantra, but more of what? Courtesy of Kathy Sierra, the Passionate blog ("Creating passionate users") has posted a great list of suggestions for tossing out the old and bringing in the new. For example:
The common threads are improving offers, focusing on the customer experience, being more transparent, and giving something back. Hard to argue with the basic approach, but are folks willing to make real budgetary changes in Sierra's direction? Dramatic change is hard, especially in large organizations. But we're living at the edge of a fundamental shift in how buyers buy, and my sense is that incremental change is not enough. What do you think? Is Sierra on the right track? Will your budget reflect dramatic change in priorities for next year?  [TOP OF PAGE] What's Hot: The Race for New Ideas Does anyone really read white papers? MarketingSherpa estimates there are 48,000 white papers currently being promoted online by business-to-business marketers. If even 10% are written with the idea that IT executives at large banks might find them useful (which seems reasonable given how everyone seems to target the financial services industry), the CIO at Citibank, for example, has almost 5,000 purportedly "relevant" white papers on his reading list. How likely is it that he will read yours? Demonstrating innovative thinking is clearly important in a market characterized by global competition, industry consolidation, and commoditization. Not surprisingly, ITSMA members estimate they dedicate about 20% of all services marketing spending to thought leadership-related activities. And a recent survey suggests that two-thirds of them are planning on increasing investment in this area, with the rest holding steady. But are they getting a decent return? ITSMA research suggests at least three significant challenges in thought leadership marketing for IT services and solutions today:
Developing the right ideas. First and foremost, presumed thought leaders really do need new ideas. At best, these are "game-changing" ideas, in the words of one ITSMA member—ideas that provide a substantially different approach to a major technology or business challenge. Not everyone can do that, and certainly not all that often, but it's important to set the bar where it belongs. It also suggests that competitive assessment is an essential part of thought leadership marketing. If you don't know what your competitors are talking about, how can you put forward different ideas? Two other issues are especially germane to developing the right ideas. First is balancing input from the field and the lab. You have to make sure your ideas are relevant to current and prospective customers, but relying on the field alone can be too limiting. Investing in an "idea lab" that draws on more aggressive and speculative research on future business and technology directions is a vital complement to the field. Second is collaboration. No matter how large a thought leadership program you can afford, it's doubtful you can succeed by going it alone. Collaborating with business partners, outside experts, academic specialists, and especially customers on the development of new ideas is critical. This ensures a greater chance of creative breakthrough, a greater likelihood that the new ideas will be grounded in the needs of the market, and a head start in building buzz. Engaging the right audiences. The questions here include both who to engage and how. Ultimately, of course, customers and prospects are the most important audiences, but reaching them depends heavily on influencing their key influencers. This suggests a targeted approach that emphasizes the most important media, analysts, consultants, and other market gurus as well as customers and prospects themselves. Successful thought leadership programs have a detailed view of exactly who those influencers are (e.g., the top 100 influencers for a given market), and put special attention into packaging new ideas in the most effective possible formats for them. And don't forget internal audiences, either. The greatest impact comes with a broad effort to promote and reinforce new ideas with all customer- and market-facing staff. Combining formal education activities with an internal champions program helps ensure a consistent new ideas approach to the market. How to engage key stakeholders is no simple question given the myriad communication channels now available. Generally speaking, face-to-face briefings are the most effective, although getting the meetings and having enough experts to conduct hundreds or thousands of them is a daunting challenge. Beyond dedicated briefings, we're seeing a steady move toward more sophisticated online approaches: Issue-based websites, special portals, webinars, microsites, online sponsorships, rich email, and blogs. The rise of consumer-generated media is particularly important here. As business buyers become increasingly involved with blogging, online communities, wikis, and the like, marketers will need to demonstrate thought leadership more and more through venues they don't control themselves. Measuring the Impact. Proving the value of thought leadership remains more art than science. ITSMA research suggests that few companies can confidently provide solid financial metrics for the value of their efforts. Quantitative measures are certainly available, such as media hits, speaker placements, and seminar attendance, and most companies track these and similar measures to help gauge programmatic impact. Many marketers emphasize softer measures as well, such as competitor response, analyst commentary, industry buzz, and key client reaction. The biggest measurement challenge is connecting thought leadership directly with sales. It's far from easy, given the long sales cycle and multiple touch points that typify IT services and solutions selling. The growing emphasis on online interaction makes it somewhat easier, since most online activities can be tracked. Improving the overall lead tracking system is also important—making sure to include where leads come from and how they are moved through the cycle. At the end of the day, measuring the impact of thought leadership comes down to shaping industry debate. Have you been able to reframe discussion around the issues your organization addresses? Are customers and market influencers using your terminology or approach to describe business and technology challenges? Have you changed the game? In Conclusion Opting out of the white paper morass may be an option. There are certainly other and often better ways to articulate new ideas and engage key stakeholders. But opting out of the thought leadership thicket is not an option. Business buyers are constantly looking for new ways to gain an edge, but they're paying little attention to direct promotions of products and services. Investing the time and resources to develop the right ideas, engage with the right audiences, and measure the impact are more important than ever. FeatureHow Well Do You Listen? An Interview with Tapestry Networks' Mark BonchekMark Bonchek, managing director and co-founder of Tapestry Networks, a company that helps organizations create networks of market leaders to effect organizational, economic, and social change, recently sat down with ITSMA to discuss how marketers can recapture their place in the boardroom, why executives need to listen more, and how customers can become your most trusted advisors. ITSMA: Lately we've heard increased discussion about the importance of relationships in marketing: community-based marketing, participatory marketing, and account-based, or one-to-one, marketing, for example. Are personal connections becoming more of a force in today's business climate? Bonchek: Personal relationships have always been important for sales teams. What's changing is the growing importance of executive-level relationships and more collaborative connections. Gone are the days when senior-level decision makers relied solely on analysts and gurus; today’s buyers want to kick the tires for themselves and get unmediated insight straight from the market leaders. Senior buyers don’t want marketing pitches. They want to engage providers in an open dialogue on the strategy of the company, the future of the industry, and the best way to create value for their business. ITSMA: On the surface, that seems easy enough. Why are many large companies struggling to get these conversations going? Bonchek: In most cases, executives want to have these types of discussions with their customers, but they fear not having all the answers. Most companies are used to talking about strategy after the decisions have been made. They don't know how to bring the customer into a meaningful dialogue about the company’s direction, even though this is the best way to earn trust with a senior executive. Also, most marketers are expert at broadcasting messages to audiences, but many don't have opportunities to engage executive customers in meaningful dialogue about strategic product and corporate direction. Yet it is this type of dialogue that will enable marketers to recapture a seat of power in the boardroom—as a change agent who uses the voice of the customer to connect a company with its market. ITSMA: Where should companies start? Bonchek: It takes a systematic approach, but a good first step is transforming your existing customer advisory council. Most of these councils are too tactical and are positioned too low in the organization. Councils should be like boards of directors, addressing strategic issues such as differentiation strategy, go-to-market model, and strategic alliances. Most councils also have too much “tell and sell” and not enough “listen and learn.” It’s a warning sign if executives are presenting the same slides they gave at a recent customer briefing, sales meeting, or analyst event. ITSMA: Why would a customer invest time and attention in helping a vendor get its strategy right by sitting on one of these councils? Bonchek: Most companies don’t trust a simple truth: Your customers really want you to win. They want you to deliver solutions that create value. They want you to deliver great service at a fair price. They want to have a long-term relationship and extend the life of their investment. They want your strategy to track with theirs. So being able to influence where you're going is extremely valuable to them. Another source of value is interaction with other members. Senior executives rarely get enough time for candid conversation with their peers. When they attend a conference, they are usually on a panel or at a lectern. Council meetings give them a chance to sit around a table and compare perspectives and experiences with others who have faced the same challenges. Who gets enough time for that these days? ITSMA: How can a company make sure the customers on its councils are gaining the insight they need to keep coming back? Bonchek: Ensuring reciprocal value takes a lot of work, not just at the meetings, but year-round. We often see companies overlook the following best practices:
For more information about Tapestry Networks, visit: www.TapestryNetworks.com. On the JobHewlett-Packard: From “Speeds and Feeds” to a Tight Customer FocusAs the technology industry matured, HP noticed that its customers were no longer buying based on product attributes and technical specifications. They'd begun searching for solutions to their particular business challenges, and they wanted their IT providers to tell them about technology that would meet their needs—not simply about product "speeds and feeds." "HP has always had a rich product history," said Eric Goh, vice president of AP and Japan Technology Solutions Group Marketing. "Moving the company toward a more consultative, customer-focused sell has been a strategic shift that resonates with our high-value services- and solutions-focused approach to marketing." To move to a more consultative sales approach, the company decided to focus marketing resources much more specifically on individual customer needs. Not groups, not segments, but single accounts. In 2002, the company pulled together a small 1to1 Marketing team to test the one-to-one, or account-based marketing (ABM), concept. Based on the success of the pilot, HP knew it wanted to move to a one-to-one approach more generally, but it needed to figure out how to roll the program out on a larger scale. To start, the 1to1 Marketing team documented the staffing model and skill sets necessary to scale an ABM approach across the different regions HP serves. It developed a resource tool for calculating program costs that takes into account factors such as:
Next, the team detailed the company's seven-step approach to executing a one-to-one campaign. This tested, working methodology enables HP marketers around the world to easily replicate the success of past one-to-one marketing plans rather than reinventing the wheel. Once the methodology was documented, the team turned its attention to creating standard tools to retain and share customer intelligence. Most of the main tools can be grouped into one of two categories:
"By building our tools once and leveraging them around the world," said Hillary Saffer, director of Market and Customer Intelligence and 1to1 Marketing at HP, "we are able to provide a consistent experience for our customers—not to mention saving a huge amount of time, money, and energy for our regional marketing teams!" Analytics are also an important part of HP's 1to1 strategy. By developing models for determining customer value and customer segmentation, the company is able to target the best candidates for its one-to-one efforts. "There's no doubt that account-based marketing requires a great deal of investment and commitment," said Bev Burgess, vice president and managing director of ITSMA Europe. "It can be very difficult to decide which accounts merit the kind of investment that ABM demands. By taking a hard look at its customer data, HP is definitely on the right track. Bringing some objectivity into the process, not choosing based on gut feelings or revenue alone, gives the company a much greater chance of successfully picking accounts that will respond positively to an ABM campaign." Finally, the HP team developed an in-depth series of training modules that provide HP marketers with the knowledge they need to become adept at one-to-one. After all, as Saffer noted, "Resource models, processes, and tools are all well and good, but they don't mean much if our marketers don't know how to use them." Additionally, the 1to1 Marketing team built a dashboard to track one-to-one results. Campaign-specific metrics such as open, click-through, and conversion rates are among those measured. By June 2005, the number of 1to1 accounts within HP had grown from seven in 2004 to more than 60. All of HP's regions have experienced significant increases in funnel size, revenue, and margin in their 1to1 accounts. In fact, revenue from 1to1 accounts increased an average of 16%. "This program has been very successful," concluded Saffer. "By aligning the one-to-one marketing methodology to our sales process in support of customers' business needs, we've been able to seriously improve our results. For HP, one-to-one is definitely the way to go." For more on HP's 1to1 Marketing strategy, be sure to attend ITSMA's rapidly-approaching Annual Conference: Marketing on the Verge, which will feature Karen Walker, Vice President, HP Services Marketing. For more on the conference, or to register online, visit: http://www.itsma.com/conference. —Meghann Grandy, info@itsma.com EuroNotesHerding Cats, Breaking Codes, and Other Key Functions of the Professional Services MarketerWe all know that marketing professional services is an uphill battle. Differentiating your services, enhancing your reputation, and attracting and deploying the best employees are just a few of the challenges you face. Fortunately, when you belong to a community of peers who understand and deal with the same challenges as you do on a daily basis, it is easier to keep a sense of humour and share tips on how to cope with difficult aspects of the work. In this spirit, we're building on the experience and insight shared at a recent roundtable discussion in London to outline three alternative job titles for the professional services marketer:
The Cat Herder Marketing professional services is described by many as akin to herding cats. For marketers, this process starts with trying to establish more strategic focus for the company. It can be difficult to achieve internal agreement and alignment on the areas that will drive profitable revenue for the firm when you are dealing with:
The answer to this challenge lies in marketing playing a more facilitative role, thinking holistically about the company's goals and proposing a strategy process that everyone is comfortable with, getting cross-functional participation in the process, and ensuring that the process is informed by high-level market and competitive intelligence. The Code Breaker Differentiation in a professional services firm is less about what is done and more about how it is done. And “the way we do things around here” is inextricably linked with the culture of the firm—its DNA, if you like. DNA codes are hard to break, and identifying what makes up the culture of a firm from the inside is almost impossible. The first step for marketers here lies in building an objective picture of the company using a 360-degree brand research approach. With an objective snapshot in place, marketing must work with the management team to make decisions about the future of the brand. Is the current brand strategy working? Do customers differentiate you from your closest competitors? What needs to change to make people see the firm as you want them to? Once the overall direction has been determined, marketing must reaffirm the essence of the brand and its values at all levels of the organisation—internal and external, from the CEO to the customer to the front line and support staff. Marketing's role in this process can involve:
The Matchmaker Professional services marketing is also a lot like running an executive dating agency. Professional services are sold through relationships; either you have a relationship with a client or someone else they have a relationship with recommends and introduces you. It is very difficult to get traction in any other way. So the professional services marketer is a true relationship marketer, concerned with fulfilling the “would like to meet” requests of the professionals in the firm or, through pull-marketing techniques, of the clients in the target market. Strategic management of customer reference and satisfaction programs is therefore vital. Once the initial introduction is made, marketing works to support the blossoming relationship by keeping it fresh and never letting clients feel they are being taken for granted. Relationship marketing means constantly researching and creating new value for the company and the delivery teams to offer clients, above and beyond the main service purchased. This can take many forms: customer councils, thought leadership initiatives, blogs, loyalty incentives, online communities, and so on. After all, when you’re happy with your partner, there’s no incentive to look around! On a Serious Note . . . Silly as these alternate job titles may be, the truth is that professional services marketers must have all these basic skills in their bag of tricks. And all three functions take an incredible amount of work. Establishing strategic focus across the business, ensuring that everything the company does accurately reflects the brand, and maintaining strong relationships with customers are not tasks that can be accomplished overnight. So be sure you get out of the office every once in a while to hear how your peers are faring; not only will this give you great ideas for improving your marketing, but it might just save your sanity as well! —Bev Burgess, info@itsma.com Research Desk Companies Have a Long Way to Grow …Although most technology companies are investing heavily in relationship-growth programs, a few troubling trends came to light in a recent ITSMA survey on the topic. First, although most companies have a number of programs in place designed to maximize relationship growth with customers, 38% of the respondents indicated that their organizations are not effective at coordinating these programs. Further, only 31% of the respondents believe that their companies are effective or extremely effective at ensuring that information is shared across programs. This leaves a large percentage of companies somewhere in the murky middle, with "somewhat effective" coordination between activities. This lack of integration can result in mixed messages to customers, repeated requests for the same information, and a lack of understanding across the enterprise of the customer's current business needs, among other things.
The second red flag the survey revealed is that there is a significant gap between the value of the various relationship-enhancing activities to companies and their customers. For example, the respondents indicate that a reference management program is the most valuable relationship-enhancing activity they run, with a mean rating of 4.6 out of 5, with 5 being "extremely valuable." However, when asked how valuable reference management programs are for their customers, the respondents ranked these programs in the middle of the pack, with a mean rating of only 3.3. The gap is a problem because if customers do not derive value from these relationship-growth programs, they will not be motivated to participate. ITSMA will be running a Breakfast Briefing on Tuesday, November 29, in Santa Clara, CA, to explore ways to create stronger, more collaborative relationships with customers. Collaborating with Customers for Competitive Advantage will address the question of how to improve coordination across a range of relationship-oriented programs to ensure maximum overall effectiveness. For more information about the Breakfast, please visit: http://www.itsma.com/Events/event_desc/05BB12N31.htm. —Adnelly Reyes, areyes@itsma.com
Spotlight on Software
ITSMA's new study on the business intelligence/analytics market is now available. Find out who's buying BI, which companies customers prefer to do business with, as well as the attributes they look for when they're making a purchase decision. For more information on the study, please visit: http://www.itsma.com/research/abstracts/BSS001B.htm Human Capital Management Brand Tracking Study Do enterprise buyers prefer to work with full-suite providers or with specialists in human capital management (HCM)? Which company are customers most likely to call for HCM solutions? For the answers to these questions and more, please visit: http://www.itsma.com/research/abstracts/BSS001H.htm Sponsorship Opportunity: 2006 Software Brand Tracking Study ITSMA is beginning to recruit sponsors for our 2006 Brand Tracking Study on Enterprise Software Applications and Services, which will provide the data, analysis, and recommendations that companies need to understand enterprise software customer priorities, monitor the competitive landscape, and improve their branding and positioning strategies. For more information on the study, please visit: http://www.itsma.com/research/prospectus/mk0560_sw06.htm. [TOP OF PAGE] Upcoming Events Invigorating Live Marketing: New Approaches to Connecting with Communities Mining Markets of One
Inspirational Marketing: New Ideas, Thought Leadership, and Taking
a Stand Maximizing Relationship Growth: Marketing's Role in Building Relationships
and Creating Customer Collaboration Increasing Your Impact In Key Accounts: Designing and Delivering Account-Based Marketing
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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