ITSMA E-ZINE	December 2005

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Editor's Notebook: Making the Shift to Account-Based Marketing

Account-based marketing is hot. As E-ZINE readers know well, ITSMA has been on its soapbox for several years promoting the value of connecting dedicated marketing resources with sales account teams to create customized programs and trusted relationships with your most important clients (see the ABM section on our Website). As 2005 comes to a close, a growing number of technology and services companies are actively exploring the approach.

As more marketers invest in ABM programs, however, it is also clear that truly making the shift is proving difficult indeed. Three challenges in particular stand out, as evident from numerous discussions at ITSMA's ABM workshop last week.

• Starting with the customer. Being a trusted advisor means beginning with the account's business issues and then working back toward potential solutions. But many initiatives start with specific products or services that need a revenue boost, and then design the highly targeted pushes that might yield near-term sales.
• Doing your homework. Building deep account insight, such as understanding the account's most essential business imperatives and alternative futures, requires substantial time and energy well beyond the typical sales and market information. Companies often want to move quickly to the actual campaigns but skimping on the insight usually means less compelling dialogue and offers.
• Resisting rapid scaling. Doing ABM right is a labor-intensive process. Although there could be modest economies of scale, it's hard to escape the need for skilled marketing personnel devoting extensive time to one or a few accounts. After seeing early results, however, some companies are trying to scale immediately to dozens or even hundreds of accounts—without anything close to the resources required to do the job.

The more we learn about and experience ABM, the more convinced we are that it can create tremendous value for providers and customers alike. But the technique is not for everyone and it is not likely to be appropriate for thousands or perhaps even hundreds of accounts at even the most enthusiastic organizations. As a reflection of the move to more targeted and customer-centric marketing, ABM is a great illustration of a general approach that all companies need to adopt. But as a specific technique, it should be kept in its proper perspective as a vital but limited program for a company's most strategic accounts.

—Rob Leavitt

What's Hot: Marketing on the Verge, Part Two

Several months ago, I wrote about "Marketing on the Verge," suggesting that technology and services marketers are standing at the edge of three great transformations: leading the creation of customer-driven corporate cultures; taking a more strategic role in the business; and shifting communications from one-way broadcast to interactive conversation.

More recently, ITSMA explored the specifics of the theme with more than 150 marketing leaders from across the industry at our annual conference at the beginning of November in Cambridge, MA.

From Product-Out to Customer-In. Organizing for its next wave of growth, SAP has redesigned the entire value chain, with marketing playing a leading role in creating a Customer Solutions and Operations unit that has total responsibility for revenue and profit. According to Sami Hero, SAP's vice president for marketing operations, the new organization puts the customer front and center for everything the company does, and leads the way in translating emerging customer needs into product innovation, go-to-market strategy, and delivery of the total customer experience.

Similarly at Amdocs, marketing helped reorganize the company around what it calls "the intentional customer experience," an integrated approach that overcomes traditional functional and divisional silos. By unifying around a clear positioning strategy, expanding solutions capabilities, and pushing its own resources closer to the customer, marketing at Amdocs has become a vital change agent for the company as a whole. The result, according to marketing group vice president Charles Born, is greater customer intimacy and more trusted relationships that support longer-term growth.

Bringing the customer-in priority to the most strategic relationships, HP's Karen Walker, worldwide vice president of strategy, marketing, and alliances for services, described her company's 1to1 marketing program. A few steps ahead of most companies' account-based marketing initiatives, HP's program involves almost 80 accounts across the US, EMEA, and Asia-Pacific, with about 20 dedicated field marketers and a worldwide program office to provide overall guidance, support, processes, and tools. Along with increased revenue and campaign response rates, the initiative has facilitated improved customer relationships, especially at the senior level.

Elevating marketing's role. For Gail Rigler, former vice president of field marketing at EDS, the really big marketing challenges have to do with understanding the big picture of where the business world is heading. Rigler called on marketers to consider how the global workforce is changing (only three percent of the world's new job seekers over the next decade will come from Europe or the US), how technology is shifting (automated highways by 2020), and how people from "high context" cultures (where social trust is primary) will shift the balance away from today's "business first" Western model.

Marketing is also playing a critical role in business change at Fujitsu Services in the United Kingdom. Along with its traditional objectives of building awareness and demand, said acting group marketing director (and also ITSMA vice president) Philip Oliver, marketing is helping develop and deliver the company's true differentiators in the market. These include a simpler corporate structure to make it easier for customers to do business, a flexible contracting approach that supports the client's business and value measures, and a unique way of delivering infrastructure and desktop support projects.

And at Mercury, marketing has “become the engine,” driving aggressive growth for the company and substantially influencing product and business plans, channel strategy, and sales operations. Marketing is still responsible for developing a point of view and "inciting greatness" internally, explained Carole Gum, senior director of corporate marketing, but its mandate now extends far beyond the marcom role it held just a few years ago.

Shifting communications. Technology and services marketers have worked hard in recent years to shift focus from product features to business concerns. It's a start, said Brian Fugere, former CMO at Deloitte Consulting and co-author of Why Business People Speak Like Idiots, but too many marketers continue to pump out jargon and consulting-speak. Customers are desperate for straight talk and personal connections, he said; it's time to stop the jargon and data dumps and focus instead on story telling, empathy, and emotional connection.

Building on Fugere's theme, Larry Weber, founder of the PR firm Weber Shandwick and the new W2 Group, stressed the importance of the new community-oriented digital tools, such as blogs, RSS, social networks, podcasts, and wireless. The explosion of consumer and enterprise generated media, both formal and informal, marks a substantial democratization of the business conversation. Marketers need to catch up to the new spheres of influence, said Weber: "Embrace the idea that your customers are talking about you. There's going to be a huge change from transaction-based sites to community-based sites."

Amid the digital excitement, Eric Faurot, senior vice president and managing director, Technology Media Group, MediaLive International, reminded participants that face-to-face connections remain paramount. But here, too, a shift is necessary. Creating customized experiences at conferences and trade shows, investing in smaller executive dialogues, and bringing services demonstrations on the road to customer sites are some of the newer priorities.

The bottom line, according to ITSMA's president and CEO, Dave Munn, is that marketers today are faced with sizable strategic and tactical challenges. It's a daunting agenda, and some organizations are as likely to fall short or simply run in place as to rise to the occasion. But those marketers able to tackle the big picture business issues as well as the tactical transformation can bring marketing into the true leadership position that companies increasingly need as the industry consolidates and matures.

Echoing Munn's scenarios, Jessie Paul, CMO at Wipro Technologies, provided a double-edged perspective on the growing debate about the outsourcing of marketing. "You have to make some hard calls about the things you're not so good at and consider outsourcing them," Paul told the conference participants. Hopefully, of course, those are the more routine tasks. "Part of our problem as marketers," she said, "is that we don't spend enough time on the work that allows us to shine."

—Rob Leavitt

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Marketing Excellence Awards: 2005 Winners Include Sprint, IBM, Lucent, IKON, Accenture, BT, and more

As businesses put the finishing touches on their business plans for 2006, we’ll wager that you don’t have a whole lot of time to savor and reflect on the year just past. But there have been some amazing advances in marketing this year (podcasts, anyone? Or how about GE’s admission to BusinessWeek that it aims to become a marketing-led organization?), and it’s been a great year for services and solutions marketing, too.

In November, ITSMA announced the winners of its annual Marketing Excellence Awards program. From launching a new online community for customers to bringing a new solution to market in less than half the standard time, the winners listed below have achieved results to be proud of. We hope that they will inspire you to reflect on your own successes in 2005 and to reach even higher in ’06.

2005 Award Winners

Launching New Solutions
Diamond Award: Sprint—Industry First: Sprint Managed Mobility Services
Gold Award: BEA—The BEA Solution Frameworks Initiative

Generating New Demand
Diamond Award: IBM Australia—IP Communications: Targeting Growth in the Midmarket
Gold Award: BearingPoint—Using a Central Platform to Generate Demand and Prove ROI

Increasing Sales Effectiveness
Diamond Award: Lucent Technologies—Revenue-Driven Client Reference Program
Gold Award: Hewlett-Packard—Customer-Focused 1to1 Marketing

Improving the Customer Experience
Diamond Award: IKON Office Solutions—IKON Service Excellence
Gold Award: AT&T—AT&T’s Networking Exchange

Strengthening Brand Differentiation
Diamond Award: Accenture—High-Performance Delivered Brand Positioning
Gold Award: IBM—Business Value Campaign

Enhancing Marketing Leadership
Diamond Award: BT—How Marketing Has Helped Redefine the Customer and Market Engagement Model Globally
Gold Award: SAP—Optimizing Global/Regional/Local Marketing Efficiencies and Effectiveness

For more details on the winning programs, visit http://www.itsma.com/News/mea/recent_winners.htm.

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On the Job: Acquiring Minds Want to Know: How IBM Australia Grew Its Midmarket Customer Base

For those of us in the tech sector, quite a few interesting M&A deals have been struck lately: Qwest and Verizon duking it out over MCI. eBay’s out-of-nowhere bid on Skype. And who could forget the long and drawn-out saga that was Oracle’s hostile takeover of PeopleSoft? But down in Australia, a quieter deal was unfolding—one that was well researched, well planned, and highly successful.

In mid-2003, IBM Australia started to get serious about exploiting two big opportunities for growth. One was IP Communications, which was about to hit a tipping point for mainstream adoption. The other was the midmarket, which IBM had traditionally courted with limited success. Market research confirmed that these two areas did indeed represent significant opportunities, but those within the company also knew that they faced two major obstacles:

• IBM’s lack of intellectual property and skills around IP Communications
• The midmarket’s unfavorable perceptions of the IBM brand

The team quickly realized that organic growth just wasn’t going to cut it if the company hoped to capitalize on the opportunity in a timely fashion. So, in March 2004, IBM Australia acquired the Australian arm of Logicalis, the largest provider of Cisco IP solutions in Australia. The acquisition served a double purpose:

• It rounded out IBM Australia’s IP Communications portfolio, turning IBM into the largest network services provider in the country
• It provided immediate penetration into the midmarket

But integrating Logicalis into IBM Australia posed yet another challenge: Simply absorbing the acquired company would not enable IBM to hold traction with the midmarket. A full 80% of Logicalis customers indicated that they would prefer for the acquired company to maintain an identity separate from IBM. In response, the IBM Global Services team decided to do something unprecedented within IBM: create a separate brand to address a specific market segment.

“Was it a risk? Absolutely,” said Tennille Merrigan, marketing manager at IBM Global Services, Australia. “But we had to do something different in order to build credibility with smaller customers. Some people within the company were nervous that a new brand would take away from the overarching IBM brand. But we needed to get into the midmarket in a serious way, and our risk has paid off.”

In April 2005, after much research and careful planning, the team launched the new brand, “Cerulean—an IBM Australia company.” The new name has enabled the acquired entity to maintain a unique identity in the marketplace, at the same time demonstrating that it is underpinned by the strength and stability of IBM.

In addition to the rebranding, the IBM Global Services marketing team was tasked with increasing demand for IP Communications in the midmarket. To do this, they: •

• Briefed relevant industry analysts prior to the announcement of the acquisition
• Developed case studies that would resonate with the target midmarket audience
• Created online banner ads that drove linkage back to an IBM landing page that contained more information
• Built internal awareness of the new IP Communications capabilities
• Participated in numerous trade shows to demonstrate the new solutions
• Built two new centers for client demonstrations in Sydney and Melbourne

As a result of these activities, the infrastructure services division within IBM Global Services Australia grew 5.2 points between 2003 and 2004—two points over and above the combined pre-acquisition share of Logicalis and IBM.

“This initiative is a classic case of a successful portfolio management strategy,” said Merrigan. “We saw that we needed to find a new growth area to replace declining ‘cash cow’ businesses. The combination of the acquisition and our aggressive demand-generation campaign has allowed us to capitalize on the midmarket IP Communications opportunity and grow at more than twice the market rate.”

IBM Australia won a 2005 ITSMA Marketing Excellence Award for this initiative. To read more about the program, please visit http://www.itsma.com/News/mea/recent_winners.htm.

—Meghann Wooster, info@itsma.com

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Research Desk

Turning Thought Leadership into Inspirational Marketing

Sixty-seven percent of technology marketers recently surveyed by ITSMA are planning to increase their level of investment in thought leadership in 2006. None of the survey participants plan to decrease their investments. This is hardly surprising given how crowded and competitive the marketplace has become. A really good idea has the power to spread widely and quickly, and we all want to inspire this kind of viral marketing.

Is your company currently planning to increase, decrease, or maintain the level of investment for each of these programs?

But because everyone is chasing after the same goal—generating a powerful idea that motivates people to buy—our target audiences tend to pay a whole lot less attention to what any one company has to say. According to MarketingSherpa, more than 48,000 white papers are currently being promoted online by B2B marketers. How many of those 48,000 concepts have actually caught on in a meaningful way?

Thought leadership, particularly as companies use the term today, mostly centers around smaller-scale ideas—ideas for a new offering, a new application of technology in the workplace, or changes to an existing offer that will improve results. Granted, most thought leadership is useful (for some people, at least), but it’s not earth-shattering. It can even be a little bit boring or dry.

Inspirational marketing, however, emphasizes a Big Idea behind all the small-scale ideas and ties those smaller ideas together. It identifies a Big Idea and harnesses the internal thinking around it. Accenture, for example, approaches its thought leadership from a “High Performance Delivered” perspective. Salesforce.com approaches its ideas from a foundation built on its “No Software” point of view. For Capgemini, the Big Idea is “The Collaborative Business Experience.” And for Mercury, it’s all about “Business Technology Optimization.”

The Big Ideas are the ones that grab the audience’s attention; they’re the ones that stick. So, in 2006, put your stake in the ground and figure out what your company’s Big Idea is. Once that’s in place, you’ll have a much more compelling platform on which to build thought leadership.

—Meghann Grandy, info@itsma.com

ITSMA's recent Briefing on Inspirational Marketing provides additional details and examples on how marketers can increase the impact of thought leadership initiatives. The briefing is available at no charge to members and for sale to others. For more information, visit http://www.itsma.com/research/abstracts/olb111705.htm.

Upcoming Events

Marketing Mandates 2006: ITSMA's Annual State of the Profession Address
January 24 Online Briefing
http://www.itsma.com/Events/event_desc06OB01N01.htm

Thinking Strategically about Relationship Growth: Priority Initiatives for Key Accounts
February 16 Online Briefing
http://www.itsma.com/Events/event_desc/06OB02N03.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.