ITSMA E-ZINE	February 2006

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Editor's Notebook: In Search of Trusted Advisors

Technology marketers spend a lot of time trying to become trusted advisors to their customers. It's not surprising; customers often say they want trusted advisors, and certainly it's a better to be perceived as such than as a "vendor."

I wonder, though, if we spend a little too much time trying to be the trusted advisor and not enough time trying to find customers who can serve as trusted advisors to us. Given the dizzying pace of market change, couldn't we all use a few more customers committed to giving us honest and in-depth feedback about what's working and what's not? And who doesn't want help in truly understand which initiatives are worth pursuing and which might be less relevant?

Maybe I'm crazy, but this seems to me not only desirable but also quite doable. If your firm is providing any kind of essential service to the market, there are undoubtedly buyers with a clear interest in your continued success. More than likely, at least some of them are quite open to moving from passive interest to active support—if only you ask. The challenge is to go beyond the typical requests for immediate marketing and sales assistance (references, testimonials, event presentations, etc.) to more strategic level discussions. Advisory boards, executive councils, and other high-level bodies are good options, as are personal C-level dialogues. To make these work, of course, you need to make them serious endeavors, and your customer advisors need to see that their advice makes a difference. But if you're willing to ask for and listen to such advice, you'll probably find not only the trusted advisors you need, but also gain that coveted status with some key customers a bit more readily yourself.

Are you investing enough in developing and taking advantage of customer advisors? What works best in your organization?

—Rob Leavitt

What's Hot: Naked Marketing

Well, sort of. Marketers aren't exactly running around in states of undress (at least not in BtoB IT services), but there is a growing sense that the old clothes don't fit any more, and it's not clear what to put on instead.

The notion that business technology buyers are highly skeptical and pay little attention to traditional marketing ploys is widely accepted within the marketing community, and there is an almost frantic search for new ways to connect with customers. Blogging, podcasting, microsites, account-based marketing (one of our favorites), solutions demonstration centers—-the list goes on and on.

Indeed, much of the broader push toward solutions marketing is designed to counter buyer skepticism. The solutions push is all about focusing on business issues, developing highly targeted messages, and showing customer proof points.

And yet…something still seems to be missing. Don't get me wrong; the solutions push is important and can be highly effective. Business buyers are much more interested in business value than product features and functions. Understanding their issues and demonstrating value delivered is absolutely necessary to even get into the discussion.

The big question is whether marketers—and the technology and services companies they represent—are changing fast enough. For all the value verbiage punched out from the keyboards of technology marketers these days, there remains the nagging suspicion on the customer side that it really is just rhetoric. Scratch beneath the surface and there remains the same old mentality of build it and they will come. Design the products and services first and then persuade people they can't live without them.

What buyers really want to know is whether they can trust you. And the only way to build trust is to build relationships. Real relationships. Human relationships.

Herein lies the problem. Marketers talk a lot about relationship building, and design all sorts of programs ostensibly to do just that. But too often relationship marketing is a mechanical process of increasingly focused communication activities: emails, Webinars, newsletter subscriptions, seminars, individual briefings, and so on. The formulaic progression reflects the weakness of the approach. Real relationships don't follow a formula. They're messy and unpredictable and each one is different.

So the big challenge is how to build real relationships, and for large companies with hundreds or thousands of customers and prospects, that's a really big challenge. Of course, big companies also have hundreds or thousands of sales and delivery people, and they're building relationships every day (or they should be!). In fast-changing and hypercompetitive markets, though, sales and delivery relationships are not enough. Marketing has (or should have) a critical role to play in figuring out which relationships are the most important ones to have, and cultivating those more strategic relationships to gain essential insight, advice, and constructive criticism about current performance, near-term priorities, and future direction.

For marketers to help build real relationships, however, they need to shed a lot of old clothing and stand a bit more naked in the marketplace. They need to drop the pretense of all knowing and infallible "market leadership" and expose a bit more reality. They need to stop talking so much and listen a whole lot more. And they need to show that listening leads to action, that it's not just going through the motions while the company continues to march along its internally-directed path.

Amid a recent blogosphere discussion about why so few Fortune 500 companies have yet to launch serious blogging initiatives (only 3-4% according to Wired magazine), the predominant opinion was that the big companies (i.e., big company marketers) are simply afraid of uncontrolled communication. I think that's exactly right, and it's a huge problem. It's not that blogging is the answer to marketing's problem. But real relationships are built on uncontrolled communication. And if marketers are not able to give up the idea of control, they'll have an increasingly hard time developing the trusted relationships that matter most.

Are you ready to give up control and "get naked" with your customers?

—Rob Leavitt

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The Interview

Learning from CIOs: An Interview with the CIO Executive Council’s Mark Hall

Mark Hall, CIO of CXO Media and general manager of the CIO Executive Council, recently sat down with ITSMA to discuss why CIOs are eager to join this community, what they wish vendors would do differently, and what they hope to accomplish by becoming a united force.

ITSMA: The CIO Executive Council officially launched in April 2004. Today, there are more than 300 members representing companies such as the American Red Cross, the Department of Homeland Security, FedEx, GE Capital Real Estate, and Toyota Motor Sales. Tell us about the Council’s mission and what makes it so attractive to such a diverse group of CIOs.

Mark Hall: The Council was formed in order to extend CIO magazine’s mission, which is to advocate for the CIO and give voice to the concerns of the CIO community. The CIO Executive Council does this in two ways. First, we’ve created a peer network that allows our members to act as trusted advisors to each other. So far, we’ve arranged for more than 370 private, peer-to-peer conversations about everything from past experience with a certain vendor to questions about governance models—and just about everything in between.

Second, we believe that there is great value in strategic outreach and collectively addressing some of the larger issues that keep CIOs up at night. To that end, we’ve established four standing committees: Vendor Relations, IT Workforce, IT Leadership and Governance, and Technology Strategy and Transformation. Council members recognize that they are more likely to make an impact in these areas when they present a united front versus reaching out as individuals.

ITSMA: Our audience is obviously very concerned with building and maintaining good relationships with CIOs. Can you tell us what the Vendor Relations Committee hopes to bring to the attention of technology providers?

Hall: One of the issues that is top of mind for Council members is a feeling that, although vendors make every attempt to solicit feedback from CIOs, a lot of the R&D efforts at IT companies are still done in a vacuum. There seems to be a disconnect between listening to what customers have to say and acting on their input.

Another issue that comes up regularly is how to develop true partnerships with vendors. The most successful partnerships are those where the successes and failures are shared, because something is at stake for both parties. Today, it’s too easy for IT providers to sell us something and walk out the door. So sharing risk is an area many Council members hope to explore further.

Some of the other issues we’re looking at include licensing practices, service level agreements, and developing a vendor reference network to help CIOs better inform one another about their experiences—both good or bad—with specific vendors.

ITSMA: How do the Council members feel about vendors’ sales and marketing initiatives?

Hall: There’s a real sense right now that the sales and marketing efforts are overwhelming. Many of the CIOs I talk to get anywhere from 10 to 50 sales touches a day. The number of companies trying to sell to us is infinite, and we can’t possibly listen to even a fraction of them.

ITSMA: What do you suggest as an alternative?

Hall: To be honest, we haven’t got it all figured out just yet, but it’s one of the issues our CIOs are eager to jointly address with IT companies. One step we’re taking is to build an independent vendor reference program so that CIOs can ask their peers who they trust. In effect, the program allows CIOs to get underneath the marketing messages and see what working with a particular company is really like.

ITSMA: Some IT providers might not be very comfortable with that!

Hall: We’re in a business of information-sharing and too often, there’s a real gap between what an IT company promises and what is actually delivered. We’re hoping that our reference network will help to close that gap. But we’re not out to get the IT companies! Ultimately, we want to help them do their jobs better, because that’s going to help CIOs do their jobs better.

We hope that the CIOs who take advantage of our reference network bring issues back to the vendor and say, “Hey, how are you going to address these concerns?” We hope they’re able to have a more real and honest conversation because of the third-party information they’ve received. Communities are based on trust, and if IT companies truly want to become a part of the CIO community, they need to start participating on the CIO’s terms—not on spin. We think that our reference network is a big step in the right direction.

To learn more about the CIO Executive Council, visit http://www.cioexecutivecouncil.com

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On the Job: A New Way of Doing Business at BEA

In late 2002, BEA faced a problem that many technology companies were running up against: In a post-bubble world, buyers were holding their purse strings more tightly, and they were no longer responding to the highly technical pitches that many technology companies had traditionally relied on. Instead, they wanted products and services that could help them solve their business needs and quickly deliver ROI.

“The marketing department knew it needed to do something to help the company adjust to this new buyer reality, and we knew that making the move to solutions was the right thing to do,” said Sarika Agrawal, vice president of solutions marketing at BEA. “We had to be very systematic about proving the value of solutions to the management team.”

The Solution Frameworks Initiative, designed to help BEA develop customizable solution offerings and a unified go-to-market approach, has fundamentally changed how the company does business in several key ways, including:

• Encouraging cross-functional collaboration
• Enhancing the research and development process
• Catalyzing sales transformation

Encouraging Cross-Functional Collaboration

Previously, marketing within BEA had been viewed as operating in a corporate ivory tower. The marketers produced good base collateral, but they were not completely in synch with the reality of sales, delivery, and the field. Furthermore, sales, marketing and services were siloed organizations and achieving cooperation between the groups often proved to be a challenge.

When the Solution Frameworks Initiative first got off the ground, strategic marketing held responsibility for its success. This quickly changed, however, as one of the early goals was to build a cross-functional team of sponsors who would develop the solutions strategy and rally internal support.

According to Agrawal, working with a cross-functional team became even more important during the pilot phase of the initiative. “We had point people on the team from marketing, sales, services, consulting, our internal IT department, and select ISVs and systems integrators,” she said. This cross-functional team worked together to craft reusable solution templates, demos, and best practices.

Now that the Solution Frameworks Initiative has become a company-wide go-to-market priority, a Solutions Program Office has been put in place to ensure alignment between sales, marketing, services, sales engineering, and participating partners. The Solutions Program Office is also in charge of building a complete, consistent set of solution assets, and of ensuring that all participating groups are ready to execute at the time of a solution launch.

Enhancing the Research and Development Process for New Offerings

In contrast to a typical situation whereby a company’s product capabilities drive its solution offerings, BEA has demonstrated how solutions can drive the product agenda. “The first step here,” said Agrawal, “is building a comprehensive picture of customers’ business and technology needs around specific issues both by role (e.g. line of business, IT architect, or IT developer) and vertical industry (e.g. banking, telco, or retail).” Next comes needs-based segmentation and opportunity analysis. The third step in the process for BEA is to test the solution with a select group of pilot customers in order to validate the market need and round out BEA’s working knowledge of exactly how to implement each solution.

By following this three-step, customer-led process, BEA has not only created approximately 20 new offerings based on its solutions, it has also developed new products. One example of such a product is the WebLogic Communications Platform, which came directly out of the company’s efforts to build a solution for telecommunications service delivery.

Catalyzing Sales Transformation

Over the past three years, as the Solution Frameworks Initiative has grown in strategic importance to BEA, the sales team was challenged to step up and rethink its approach. This was necessary for a number of reasons, including:

• Buyers wanted to know about the technology’s relevance to their business, not about product superiority
• Customer IT budgets became smaller due to the change in the economic climate, and the sales process required justification in terms of business value
• BEA needed to find a way to drive repeatable revenue from repeatable opportunities
• Early pilot solution deals led to larger deal sizes and new customers, which demonstrated a potential path to grow license revenue and enter new markets

The company set out to help sales adopt a more consultative approach by:

• Choosing horizontal solutions for the pilot phase that were conceptually easier for sales representatives to grasp while still filling a true market need
• Creating business-oriented value propositions, sales tools and demand generation campaigns
• Providing training on solution-selling
• Working with early adopters who had potential for success
• Creating internal heroes out of successful sales representatives
• Combining separate sales, services, and marketing groups into one “field operations” organization
• Introducing a company-wide, phased roll-out program for field readiness and communication
• Setting solution revenue targets

Solutions Success

To date, the Solutions Framework Initiative has increased license bookings, increased the license pipeline, and increased BEA’s penetration into its top enterprise accounts. In doing so, Solutions Framework has become one of the company’s top three go-to-market growth initiatives. There is pull from both BEA’s customers and the field organization to expand the solutions portfolio beyond the current set. In addition, many industry and financial analysts now recognize the initiative as the key to increasing BEA’s mind- and wallet-share in the industry.

“When I came on board as CMO in late 2004, it was clear that BEA’s solutions had the potential to be a major driver of revenue and growth for the company,” said Marge Breya, senior vice president and chief marketing officer at BEA. “I’m happy to report that our results-to-date support this view, and that we remain committed to expanding our solutions business as we move forward in 2006 and beyond.”

—Meghann Grandy, info@itsma.com

To hear Marge Breya, CMO at BEA, speak in greater detail about BEA's Solutions Framework Initiative, be sure to attend ITSMA's Marketing Leadership Forum on April 25-26 in San Francisco, Solutions from the Outside In. For more information and to register online, visit http://www.itsma.com/Events/event_desc/06MF04N11.htm.

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Moving to Solutions: Partnering for Solutions

As technology companies focus more and more on developing, marketing, and selling integrated, business-oriented solutions, many are discovering that companywide collaboration is no longer enough. Certainly, working across silos is imperative, but creating and fostering strategic relationships with select partners can inject valuable new thinking around customers’ business needs—not to mention additional manpower, additional capabilities, and access to new and different markets.

But working with partners is rarely a walk in the park. As we all know, it’s difficult enough to convince our teammates of the best way of attacking new challenges and opportunities. Magnify that by about a hundred when a partner brings a whole new set of expectations, goals, and processes into the mix. However, if you clearly, carefully, and jointly address the following questions, you’ll have a much greater chance of achieving joint solutions success.

1. Is there a win-win opportunity? Does a true market opportunity exist? Is it an opportunity that your company can reach on its own or do you need the support/expertise of someone else? Is the opportunity a one-off or is it recurring? Is the opportunity substantial enough that both companies will benefit? Are the opportunities local or global?

2. Can we set clear goals and objectives? Have you outlined your joint objectives and shared them across both organizations? Have you created a scorecard to keep track of them? How often do you review your objectives and metrics? How have you tied incentives to these metrics? What are the critical success factors in making the partnership work?

3. Will executive sponsors at each partner organization step up? Who is executive sponsor at each partner company? Where in the organization do sponsors reside (business unit, geographic region, and management level)? How involved are they with setting and tracking the objectives of the partnership?

4. Can we establish a realistic go-to-market campaign that leverages both partners' strengths and customer lists? What are your strengths? Your partners’ strengths? How can you best utilize them both in a joint marketing plan? Have you carried out competitive analysis? If not, who will fund the research? Who is responsible for creating and overseeing marketing efforts? Sales? Will you encourage collaboration between the sales teams? Are there materials that can be shared? What is the most effective way of materializing the partnership (e.g., joint venture)?

5. Are we willing to make internal investments? How will you communicate with internal stakeholders to ensure that they understand the alliance and how they are affected by it? Have you determined what the compensation schemes will look like? Is there a revenue sharing plan? What intellectual property will be shared? What types of resources (common workspaces, templates, case studies) will be shared? Is there a budget for training? What is the process for identifying areas for training?

6. Do we have a governance model and a way to enforce it? Is there a set process for review and accountability? Who is responsible for enforcing partnership guidelines? Who funds the formal processes? How are partners selected and approved? How often are partnerships reevaluated? What is the process for realigning underperforming partners and rewarding over-performing partners? What are the rules regarding partner engagement for specific opportunities?

It is clear that creating and managing strategic partnerships is no simple task. Partnerships take commitment, time, money, and a great deal of involvement from both parties, but they can yield outstanding results, particularly when solutions are involved. As you accelerate your move to solutions by forming more strategic partnerships, answering the questions above will help to smooth the way.

—Adnelly Reyes, areyes@itsma.com

For more on how to effectively partner for solutions, join ITSMA at our annual Marketing Leadership Forum, Solutions from the Outside In, to be held on April 25-26 in San Francisco, CA. For details and registration, see http://www.itsma.com/Events/event_desc/06MF04N11.htm.

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Research Desk

Marketing Budgets, Staff on the Increase, ITSMA Data Shows

Blare the trumpets and rally the troops—services marketers are getting some well-deserved relief! After several years of declining budgets and shrinking staffs, ITSMA’s 2006 Budget Allocations and Trends Study shows that the marketing departments at many of our member companies are seeing budgets increase an average of 17% and that many of them are (gasp!) actually hiring new staff.

With all the great things marketing was able to achieve in 2005—including diving into account-based marketing, increasing thought leadership, and working to rebalance push and pull—we expect to see an even greater level of accomplishment as higher budgets and a bigger staff kick in for 2006.

—Lori Weiner, lweiner@itsma.com

For more results from ITSMA’s 2006 Budget Allocations and Trends Study, see our recent Briefing, 2006 Marketing Mandates: ITSMA’s Annual State of the Profession Address, at http://www.itsma.com/research/abstracts/olb060124.htm. The full 2006 Budget Allocations and Trends Report will be available for purchase in the spring.

Upcoming Studies: Sponsorship Opportunities

ITSMA is currently recruiting sponsors for four multiclient studies, each of which provides great opportunities to gain new insight and competitive data on critical market concerns, from brand positioning and differentiation to sales practice and performance to connecting with customers in the new online channels. Click on the links below for more information on each of the upcoming studies.

Selling Professional Services: Benchmarks and Best Practices
Give-to-Get Member Benchmarking Study
Sign up by February 17 to get a free copy of the final report!
http://www.itsma.com/Research/prospectus/mk0585_sp06.htm

Marketing in the New Spheres of Influence
ITSMA Multiclient Research Study, in collaboration with Digital Influence Group
Learn how you fare in online conversations!
http://www.itsma.com/Research/prospectus/mk0575_spheres.htm

2006 Professional Services and Solutions Brand Tracking Study
Multiclient Research Study
See how you stack up against your toughest competitors!
http://www.itsma.com/Research/prospectus/mk0561_ps06.htm

2006 Software Applications and Services Brand Tracking Study
Multiclient Research Study
Learn more about enterprise software customer priorities!
http://www.itsma.com/Research/prospectus/mk0560_sw06.htm

Upcoming Events

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

Marketing’s Top Challenges: Customer Insight, Digital Connections, and Relationship Growth
February 28 Breakfast Briefing (Boston)
http://www.itsma.com/Events/event_desc/06BB02N04.htm

Growing the Business with Micro- and Account-Based Marketing
March 2 Lunch Briefing (New York)
http://www.itsma.com/Events/event_desc/06LB03N06.htm

Software 2006: Unifying the Ecosystem
Sand Hill Group's April 4-5 Conference (Santa Clara, CA)
Big discount when you register through ITSMA!
http://www.itsma.com/Events/event_desc/06PC04N35.htm

Solutions from the Outside In: ITSMA's 2006 Marketing Leadership Forum
April 25-26 Leadership Forum (San Francisco, CA)
http://www.itsma.com/Events/event_desc/06MF04N11.htm

Complete Events Calendar

Ask 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.