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Editor's Notebook: Embracing Corporate Transparency It's no secret that there are essentially no more secrets. Governments are slowly coming to grips with this fact, and businesses are close behind. Project screw-ups, disgruntled customers, bureaucratic infighting—it all hits the Net sooner or later, and usually sooner. For the technology industry in particular, where the rise of open source so vividly demonstrates the power of transparency, openness should be a relatively easy sell. Many tech companies, however, still grasp the illusion of restricted information and communication. The blogosphere, of course, is the supreme symbol of transparency today, and the degree to which companies are engaging with it is a reasonable measure of their more general attitude toward corporate openness. For marketers used to controlling the message, welcoming the seeming chaos of open access and uncontrolled conversation represents a significant reorientation. If creating trusted relationships with customers is a primary goal of marketing (and it generally is), achieving this without true openness is difficult indeed. Beyond customers, the increasing ability of all corporate stakeholders to ultimately get to the truth of matters should further tip the scales toward transparency. And, if that's not enough, just consider the potential benefits of increased insight and collaboration that can emerge from a give-to-get approach to the market. With a whole new wave of tech applications and entire companies emerging on the basis of community-based development—which is only possible with transparency—the benefits should be transparently clear.  [TOP OF PAGE] What's Hot: Integrated Reference Marketing: Next Steps in Leveraging Customer Success Customer references have fast become mere table stakes in marketing and selling technology solutions. Prospects demand them, and most companies can point to a set of testimonials and success stories highlighting the value of their offerings. Indeed, woe is the company these days that cannot pull out a stack of compelling case studies to show off its success. With so many companies crowding the reference market, breaking out from the pack requires a more sophisticated and integrated approach. All too often, reference programs exist largely as a resource for disconnected marketing and sales support activities. Sales managers dip in on Monday, the PR director on Tuesday, and the advertising head on Wednesday, with little coordination or planning. A more effective approach would emphasize the deliberate and integrated use of references at every stage of the buying cycle. At AT&T, for example, an initiative to integrate reference marketing has led to a new Success Marketing program that ties together advertising, public relations, marketing campaigns, and internal communications. From a disparate set of activities, AT&T now has a coordinated approach to customers themselves and a much more effective program to utilize references and success stories across multiple communication channels throughout the buying cycle. But ensuring that there is a coordinated program in place for mining references that align to each stage of the buying cycle is only the first step in overhauling the company's reference program. Two other initiatives are particularly important:
Sharpening reference marketing. Technology buyers are obviously most interested in references that closely parallel their own situations. Success stories about implementing content management systems for banks are not particularly useful to the pharmaceutical company questioning your capabilities in disaster recovery. Part of the challenge is just producing materials that truly demonstrate business value delivered. It's an obvious point, but many reference materials still emphasize what we did rather than what business results the client received. The bigger part, though, is developing and maintaining the right kind of references for the right situation at the right time. This means investing in the full range of static and live reference types to cover the major issues around which you go to market, the most important segments you're trying to reach, and the specific solution areas on which you are depending for profitable growth. Accenture does a good job of tying success stories to all its major marketing initiatives and solution sets. Visitors to Accenture.com, for example, are greeted not only with case studies on the home page, but a comprehensive linkage between Accenture's thought leadership, promotion of different types of solutions, industries served, and client success stories. Exploring new channels. Word of mouth has always been central to references and referrals, but the Internet and the explosion of blogging and online communities has greatly enhanced its impact. Buyers are talking with much larger groups of peers and experts, and the online echo chamber extends far beyond the direct reach of planned marketing initiatives. The challenge here is how to bring references and success stories into the ongoing conversation. For example, the CIO Executive Council, sponsored by CIO magazine, is launching its own reference and referral network—of, by, and for CIOs only. It's a great example of how customers are talking to each other about their providers completely outside the scope of the providers themselves. Is there a way to influence these discussions? Yes, but only with a lighter and more constructive touch than is often the case with reference marketing. Rather than touting the latest success story in a polished case study on the Website, it could mean talking openly on an employee blog about what worked and what didn't in a recent project. Rather than splashing ads in the trade journals, it could mean podcasting interviews with customers on an outsourcing resource site. In the most recent Edelman Trust Barometer survey of global business and opinion leaders, Microsoft emerged as the world's most trustworthy company. This is quite a change from the years of antagonism at the supposed evil software empire, and some experts suggest that the company's aggressive move into the blogosphere has made a dramatic contribution to that shift. That same survey found that rank and file employees are more trusted than official corporate spokespeople. Looking ahead, it's not hard to see that honest peer-to-peer dialogue, mostly online, is likely to become increasingly influential in reference discussions compared with standard issue case studies and success stories. Some things never change. The most important element in reference marketing is simply having the successful engagement with customers to draw upon in developing references in the first place. Absent top quality work, the most sophisticated program in the world is meaningless. Assuming success in the field, however, it is incumbent on marketers and reference managers to explore the next steps in leveraging such success, including better alignment across the buying cycle, clearer ties with priority issues, segments, and solutions, and new initiatives to influence opinion leaders in the networked world.
InterviewBuilding a Customer-Advocacy Strategy: An Interview with MIT's Glen Urban Glen Urban, chairman of MIT’s Center for eBusiness, professor of marketing at MIT’s Sloan School of Management, and author of Don’t Just Relate—Advocate!, recently sat down with ITSMA to talk about the rise of customer power, how to build a customer-advocacy strategy, and why marketing isn’t always the best driver of customer advocacy throughout the firm. ITSMA: In your new book, you write about how companies need to move to a trust-based strategy in response to the rise of customer power. Tell us about that. Glen Urban: In the past, customers were at the mercy of suppliers, but access to Internet-powered information and buying options has fundamentally changed that. Buyers today can easily compare products and services, and they can easily find other customers who will recommend or warn against specific offerings. Instead of traditional push efforts, companies need to pull customers in, convincing them of the merit of their offerings rather than bombarding them with hype. For a great example, look at eBay or Amazon.com, which provide customers with purchasing alternatives and ratings of both product and retailer quality. Moving forward, the only way to achieve long-term business success will be through transparency, trust, and a customer-advocacy strategy. ITSMA: What does a “customer-advocacy strategy” look like at a BtoB technology firm? Urban: BtoB firms have always taken care of their big customers through direct sales. When you ask the really good sales reps why they are successful, they will tell you that they work hard to earn their customers’ trust. When you ask how they do this, a lot of them will tell you that they sometimes suggest solutions from other companies, if they truly believe those solutions are more suited to the customer’s IT needs. These reps understand that when they advocate for their customers, those customers will in turn advocate for them, coming back to them for advice and purchases and also referring colleagues and friends. Direct sales is a great model for building trust, as long as you’ve got sales people who are good at consultative selling, which isn’t always the case. Add to that the fact that most companies can’t afford to personally sell to all their customers, particularly SMBs, and you understand the need for introducing a company-wide advocacy initiative. A few steps technology firms can take to execute on an advocacy strategy include:
ITSMA: But what if your offerings compare unfavorably with the competition? Urban: First off, you need to understand that you can’t hide a bad product anymore. You can’t go to market with an inferior offering and expect it to do well because of great marketing. Customers will see through the marketing, and they’ll see through it fast. Shifting funds away from push marketing techniques and moving them into R&D is critical; you need to create higher product and service quality and improve customer satisfaction so that you will compare favorably with the competition. ITSMA: Many of our readers don’t have that kind of influence over the R&D agenda. Given this reality, what can they do to help build a customer-advocacy strategy? Urban: Customer advocacy isn’t just a marketing issue, it’s a corporate issue. The CEO needs to be the number-one customer advocate in the firm. Companies like AMD, Cisco, and Siemens have recognized that marketing isn’t always the best seat of customer advocacy, and they’ve created new departments—customer advocacy groups—to ensure that the company represents customers’ interests across marketing, IT, product design, finance, and customer service. Where marketing can best help, however, is in building a better understanding of customers, how they make decisions, and what they would like to see changed to better represent their interests and needs. When a company has that kind of understanding, it can engage in activities that can give it a significant competitive edge. ITSMA: The kinds of activities that you’re experimenting with at MIT’s Center for eBusiness? Urban: Yes, exactly. Right now, we’re helping one company build and evaluate a Customer Advocacy Website for marketing broadband telecommunication services and testing its impact when we allow it to “morph” dynamically to match individual cognitive styles. When you have trusted relationships with customers, they’re much more willing to participate in this kind of cutting-edge research with you. For more information on MIT’s Center for eBusiness, visit http://ebusiness.mit.edu/about. For a copy of Glen’s book, go to Amazon.com. On the JobBreaking the Marketing Mold: The Unisys Integrated Marketing PlanIn 2004, the server marketing team at Unisys experienced an epiphany: Its campaigns were effective at the program level, but they lacked the coordinated messaging, tactics, and timing necessary to build strong, consistent relationships with customers and prospects. “Customers were basing their perception of Unisys technology offerings on whichever program they had most recently encountered,” said Jim Fields, senior marketing manager at Unisys and project manager for the Integrated Marketing Plan. “When you’re trying to sell enterprise solutions to senior-level decision makers within customer organizations, a disjointed view and lack of understanding about everything the company has to offer hurt your ability to gain mindshare.” The program managers, aware of the problem, banded together to change their approach to an integrated, customer-centric one. Step One: What Do Customers Want? To identify the three main areas in which Unisys could help its customers achieve a holistic view of Unisys technology offerings, the marketing team conducted a great deal of primary and secondary research, including:
The issues that consistently rose to the top and aligned well with Unisys’s server portfolio? Cost, risk, and growth. The team now possessed the information it needed to develop its unified messaging and consistent marketing approach. Step Two: Devising the Plan To figure out how to integrate program messaging and demand-generation activities across the company’s full technology portfolio—and to stop the internal battles between groups for marketing funds—the grassroots team broke itself down into four subcommittees:
Step Three: Enlisting Partner Support Because the total cost of the projected Integrated Marketing Plan significantly exceeded the team’s budget, one of the keys to the initiative’s success was gaining participation and funding from strategic business partners, including Intel, Microsoft, EMC, and Novell. Gaining this support was no easy feat. Partners were accustomed to doing business with Unisys in the same program-by-program manner by which the technology business had been running its marketing campaigns. Gaining partner support for the new, integrated plan meant that Unisys was forced to sell its message higher into the partner organizations—excellent practice for selling to more senior people in its customer accounts! In a testament to the power of the new marketing plan, partners ended up contributing more than half the costs of the 2005 IMP activities. Step Four: Into Action—and Experimentation Beyond the fact that the Integrated Marketing Plan has completely changed the go-to-market process for Unisys servers, it has also enabled the marketing team to take creative risks and break free from the company’s historically conservative approach. Although in 2005 the team did execute a substantial number of “more traditional” (and highly successful) lead-generation activities such as seminars and Webinars, it also found itself able to experiment with new online tools as well as a lighter, more humorous approach. One excellent example of both is the viral marketing campaign the company ran in 2005. The partner-supported awareness campaign—designed to reinforce the “trusted advisor” status that Unisys and its partners sought to achieve with their customers—featured Dr. Jeffrey, a fictional (and crazy!) psychologist, and came complete with video clips that people could share with friends. Unisys’s e-strategy has become central to the company’s technology marketing approach. A large goal for the server marketing team is to drive people to Unisys’s e-community, where they can view Webinars, network with peers in chat rooms, and find relevant content to help them address their business and technology needs. As a bonus, subscribers can also read the first Unisys eBook, The Smarter CIO, which chronicles the life and times of a fictional CIO who faces problems any CIO can identify with. The book was written by Alisa Oswalt of Unisys, with valuable input from C-level executives, including the Unisys CIO and CFO. “There are currently about 25,000 subscribers to our e-community,” said Fields. “It’s an excellent source of prospects who have actively opted in to learn more about how to overcome a specific challenge. When we have something that’s relevant to them, we notify them. When we don’t, we leave them alone.” Step Five: 2006 and Beyond Through direct mail, Web marketing, and telemarketing tactics, the technology marketing team communicated its consistent message to more than a million contacts at prospect companies in 2005 alone. To date, organizations participating in activities laid out in the Integrated Marketing Plan have generated more than $60 million in revenue and $140 million in the Unisys sales pipeline. The integration of marketing for the server business in 2005 was an essential starting place for the more complete integration of the whole Unisys portfolio in 2006. Grouped under five message “pillars” aligned with strategic business initiatives, the company is now marketing the pieces of its full portfolio together, from IT services and consulting to outsourcing and servers, focusing on its top 500 accounts. According to Guy Esnouf, vice president of server marketing communications at Unisys, the company is looking to deepen its customer relationships even more this year. “Clearly, mass marketing is no longer effective,” said Esnouf, “so we’re concentrating on smaller events, more customized communications, and more marketing through the sales team. Without a strong, integrated marketing approach, this kind of coordinated, relationship-based marketing wouldn’t be possible. The Integrated Marketing Plan has served the company incredibly well.” —Meghann Grandy, info@itsma.com EuroNotes: Inverting the Triangle: How Account-Based Marketing Insight Can Support Sector MarketingRecent conversations with ITSMA members in Europe reiterate the fact that technology services companies are doing business in a buyers' market. Buyers are demanding that potential suppliers have deep insight into their specific business problems, and yet—and yet—they are reluctant to seriously commit to any one provider, as evidenced by the decreasing number of mega-deals signed over the past few years. (According to ComputerWire, the number of deals with a value of more than £1 billion fell to 15 in 2005, down from 25 in 2004 and 29 in 2003.) Multi-sourcing seems to be on the rise as buyers hedge their bets. Despite the decreasing number of large deals signed, however, anchor accounts are as critical as ever, particularly because collaboration with key clients can lead to new offer development, as well as references that prime the sales pipeline. And total contract value is still dominated by the larger deals. This leaves providers torn between two approaches to marketing: find and engage with customers and prospects that are likely to deal big, or line up to take advantage of smaller or multi-sourced opportunities. But there might be a better way. What if you could use an account-based marketing (ABM) strategy for high potential clients and large deals, while maintaining a broader approach to pick up some of the smaller opportunities with lower-potential clients? At ITSMA, we think that the answer might lie in inverting the sector marketing triangle. So far, ABM has largely been an add-on for sector marketing teams, which have struggled to add pilot projects to their already heavy workload. The predominant approach continues to rely on sector-based research, value propositions, and go-to-market programs driving opportunities. This approach is represented graphically in Figure 1.
As more and more marketers are asked to build ABM programs for key clients, they will find that by analysing their priority accounts for an ABM approach, they will gain knowledge around the overall industry environment, key industry success factors and KPIs, common issues in buying, and competitive dynamics. This knowledge will provide a platform for the broader industry propositions and sector marketing programs, making ABM a truly integrated element of their sector marketing approach, as represented by Figure 2.
In this inverted model, marketers can better leverage their ABM efforts as well as create tighter integration between marketing and sales in the sector because the relationship will be built on a commercial focus and driven by results at the account level. Ultimately, this approach will put the company in a better position to profit both from the large deals and the smaller, multi-source opportunities. —Bev Burgess, info@itsma.com Moving to Solutions: Solutions Metrics: Start Simple Many companies have made important strides in developing and delivering solutions, but debate continues within companies about the business benefits of moving to a more aggressive solutions orientation. For most companies, solutions still represent a new way of doing business—and they have not yet found the most effective way to measure the business payoff of their solutions strategies. One of the biggest challenges is simply identifying what to measure. For example, the solutions value chain typically integrates multiple value chains from product divisions, services lines, business partners, and even the customer, which makes solutions profitability hard to grasp. Step one, according to ITSMA research with a range of companies moving to solutions, is to focus initially on the drivers that led you to enter the solutions business in the first place. Sample metrics for a handful of key drivers are outlined in Table 1. Table 1. Start with Your Solution Drivers
For more suggestions and best-practice examples of what IBM, BT, and Lucent are doing to meet the measurement challenge, see our new Update, Solutions Metrics: Quantifying and Reporting the Value, at http://www.itsma.com/research/abstracts/u0050.htm. —Naomi Steinberg, nsteinberg@itsma.com For more on solutions, be sure to attend ITSMA’s 2006 Leadership Forum, Solutions from the Outside In. The April 25–26 event will feature research from the CIO Executive Council, a panel discussion with large enterprise CIOs, case studies from executives at Avaya, BEA, Cognizant, CSC, IBM, and more. For more information and to register online, visit http://www.itsma.com/leadershipforum. Research Desk Marketing Budgets Shifting Away from Marcom The percentage of the overall services marketing budget allocated to marketing communications at ITSMA member companies continues its steady downward trend, declining from 42% of the total budget in 2002 to 30% this year. ITSMA has two hypotheses about the origin of this trend:
We expand on each of these theories in this article, and then, using a quick reader poll, ask for your opinion of what’s behind the trend. Priorities Are Changing Marketing is becoming more strategic. Consequently, marketing’s activities are also becoming more strategic. ITSMA suspects that as marketing assumes more of a leadership role within the company—helping to develop new solutions, define new markets, and simplify the portfolio, for example—it is adding new activities that are eating into marcom’s share of the budget.
Marcom Is Cheaper At the same time, the decreased spending on marketing communications does not necessarily mean that companies are doing less of it. Marcom activities today are far less expensive than they were at the turn of the millennium. As the effectiveness of mass marketing has decreased, marketers have begun to migrate away from traditional advertising and large public trade shows to less expensive interactive activities and smaller, more intimate seminars. In addition, less money is spent on printed collateral, since up-to-date information is easily available on the Web or printed on demand. So which is it? Shifting priorities or more cost-effective activities? Participate in our quick reader poll to let us know what you think. We will publish the results of the reader poll in the April issue of the E-ZINE. —Julie Schwartz, jschwartz@itsma.com ITSMA’s 2006 Budget Allocations and Trends Study is now available for purchase at http://www.itsma.com/research/abstracts/b016.htm.
Upcoming Studies: Sponsorship Opportunities ITSMA is currently recruiting sponsors for three 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 Marketing in the New Spheres of Influence 2006 Professional Services and Solutions Brand Tracking Study Upcoming Events Customer Reference Forum Digital Priorities: New Tools for Connecting with Customers Software 2006: Unifying the Ecosystem Solutions from the Outside In: ITSMA's 2006 Marketing Leadership
Forum Collaborating For Growth: ITSMA's Annual European Marketing Forum
Ask ITSMA! Do you have a services marketing question? (c) Copyright 2006, 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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