ITSMA E-ZINE	July 2006

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Editor's Note: Reflecting on Marketing Excellence

July is one of my favorite months at ITSMA, not only because I usually take some long-awaited vacation days, but also because I get to pore through many of the submissions for our annual Marketing Excellence Awards before sending them off to our superb panel of external judges for the real review and selection effort. It's a great reminder of just how much creativity and excellent work there is in our industry—especially amid the constant pressure we all face to keep doing more. Even a cursory glance at this year's submissions shows a wonderful diversity of success stories cutting across the full range of technology companies and marketing functions. The bar clearly continues to rise for marketing excellence in technology services and solutions.

We still have a ways to go before announcing the finalists in September and the ultimate winners at a special awards dinner during our 2006 Marketing Conference in Cambridge, MA, on November 15. Until then, I hope you can take a moment to reflect on your own success stories, and perhaps even gain a little more appreciation from your colleagues for all your good work. In that context, you can also read on for some new insights into digital marketing excellence, how to build a breakaway brand, and Steria's secrets of successful partnering, among other items in this issue of the E-ZINE. Enjoy!

—Rob Leavitt

What's Hot: Best Practices for Managing Online Conversations

New digital tools and channels such as blogs, podcasts, and online communities are here to stay. Marketers experimenting with these new tools recognize that they can use them to help build more open, honest, and collaborative relationships with customers and prospects. As the era of direct marketing draws to a close, it is these new online tools that will give marketers a real way forward.

During ITSMA’s Marketing Leadership Forum back in April, three digital marketing pioneers participated in a panel discussion about how and why they're making the shift to more participatory, conversation-based marketing. Here are summaries of five key takeaways from their conversation:

1. Online conversations about your company are happening—even if you’re not directly participating in them. This might seem obvious, but many companies are simply not paying enough attention to what is being said about them online. Because of the amplifying power of the Internet, customers who might not have much reach offline can now broadcast their opinions on a much broader scale. Companies that don’t pay attention to what’s happening in the online spheres of influence do so at their peril. You might remember how not paying attention to the blogosphere burned bike lock maker Kryptonite back in 2004 when a bicyclist revealed, on an online community for cycling enthusiasts, how to pick a U-lock with a pen. Five days and more than 450 posts later, the mainstream media picked up the story, with outlets from NPR to the New York Times to CNN Money publishing the news. How much do you want to bet that Kryptonite wishes it had caught the story sooner and responded more quickly to its customers’ concerns?

2. Strong corporate policies can ensure that a sense of order and control are retained. There’s a perception out there that the Internet, particularly once you branch out beyond the company Website, is like the Wild, Wild West: no law, no order, no command and control. Although it is true that marketers can’t easily spin out untrue or exaggerated messages anymore, it’s also true that some companies are engaging in real, honest, and open online conversations without compromising trade secrets. According to Scott Anderson, director of enterprise brand communications at HP, “When we built our blogs program, we actually put together some fundamental requirements. HP has a standard business contract that all our employees sign, which lays out that we’re a company of high integrity and that when you join HP, you can’t give up your partner’s trade secrets, you can’t reveal confidential information, you can’t make forward-looking statements that are illegal to the SEC, and so on. We hold our bloggers to those standards the same way we hold employees who speak at public events to those standards.”

3. Companies that want to leverage the new tools must ensure that the executive team, legal department, HR, and other stakeholders are all on the same page. Like any major marketing initiative, there has to be support from the top for a digital conversation program to fly. Mike Smith, director of global e-business and Internet at BMC, explains that “one of the challenges we faced at the start of our initiative was to explain the value of these new online conversations to BMC’s management, PR department, investor relations department, and, most important, the legal department.” If you try to start a program without gaining support at almost every level of the organization, you will run into trouble down the line.

4. Companies that are successful with the new channels provide interesting, educational content that showcases their points of view. The whole point of a digital conversation program is to allow company experts who would not normally interact much with customers and prospects to share their unique points of view. Says Anderson, “At HP, we’re focusing on how we can bring our unique point of view to the market. We’re still doing traditional marketing promotional activities, but alongside that, our goal is to provide interesting content to the marketplace so that they’ll search for us, want to come into contact with our experts, and seek out content directly from us rather than through a third party.” Smith adds that “one of the best podcasts we've ever done was with someone who contrasted technology to the game of golf. It was successful because people thought it was interesting, funny, educational, and delightfully wonderful to listen to.” In other words: Don’t give us the same old boring messaging packaged in a shiny new blog—nobody's going to care. Solid new content will win out every time.

5. Transparency is everything. If you're not open and honest, your audience will find out! Again, this point might be obvious, but customers today are good at detecting lies or exaggerations, and they have all kinds of resources at their fingertips to help them get to the truth, the whole truth, and nothing but the truth. According to Anderson, “If you’re going to blog, you have to be yourself. You can’t have your marketing communications team or an editorial staff blogging for you. If you’re going to blog for HP, you have to be open for comments. When the ugly comments come in, you can’t censor them or erase them. They have to stay there. That’s part of the game.”

As more companies begin to participate more fully in the conversations that are happening on the Web, we expect to see more best practices emerge. In the meantime, I’ll leave you to ponder a point made by Mike Smith during the panel discussion: “If you think about Websites 10 years ago, we all had debates about whether or not our companies needed a Website. Today, you'd have to be crazy not to have a corporate Website. In a lot of ways, I think that the trajectory for blogging and podcasting will be the same. In a few years, if you don’t blog—if you’re not willing to open yourself up to discussion—people are going to wonder what you’re hiding."

—Meghann Grandy, info@itsma.com

Join ITSMA on September 21 for a workshop on how to build a comprehensive digital marketing strategy. The workshop, Blogs and Beyond: Marketing in the New Digital Channels, will take place in Boston, MA, and feature a keynote dinner with W2 Group's Larry Weber on September 20. The cost for ITSMA members is only $795. Sign up today!

For more from the panel discussion at the Forum, see our new Viewpoint, Managing Online Conversations: Naked Marketing in a Digital World.

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The Interview

Breakaway Branding: An Interview with Fran Kelly, Arnold’s President and CEO

Fran Kelly III, president and chief executive officer of advertising giant Arnold Worldwide and co-author of the new book, The Breakaway Brand, recently sat down with ITSMA to discuss why it's so hard to successfully differentiate in today’s market, what kills great branding, and the dramatic shift that's occurred in marketing in the last 18 months.

ITSMA: As a veteran advertising executive, you’ve worked on developing brand communications strategies with companies ranging from Volkswagen to Titleist to HP Medical Products. What do you think is the biggest challenge for companies trying to build and maintain a strong brand?

Kelly: In general, there’s just so much choice out there. Thousands upon thousands of brands exist today, causing an ultracompetitive marketing environment. In the face of this brand proliferation, a brand that stands out is invaluable. Yet some marketers make the mistake of thinking that there will be short-term payback for their brand-building efforts. If they don’t get instant gratification, they abandon their initiatives, and that’s a big mistake.

For IT firms with a product heritage, I think the big challenge is that they rely too much on great products. Often these companies don’t think to start building their brand until after the product isn’t so new and unique anymore. They rely on the “wow factor” early on, and then the market is flooded with “me-too” alternatives, and the first company loses its edge.

Another problem for technology firms is that they’re such siloed organizations. It’s very hard to build a strong brand when the budget is chopped up and shared across a hundred different business units. Breakaway branding requires a shared vision and a real focus on coordination across the company.

ITSMA: What are the requirements for success with breakaway branding?

Kelly: When a prospective client approaches Arnold for help with its brand communications strategy, there are three things I look for:

1. A leadership team that’s committed to brand building
2. A real basis for differentiation at either the company or the offering level
3. An ability to aggressively execute on the brand strategy across all the company’s touchpoints

ITSMA: Differentiation can be very difficult for services companies because they’re dealing with intangibles. You mostly focus on the consumer space, but do you have any advice around services differentiation that ITSMA members would find useful?

Kelly: There was a Bain study on differentiation a few years ago that made a lasting impression on me. The two big findings were that companies that excel at differentiating themselves do two key things:

1. They are aggressive about bringing new offers to market.
2. They consistently outspend the competition on marketing.

The first point might seem more challenging for a services company than a product company, but companies that continuously look for new and better ways to do business—whether by introducing a new product or coming up with a better methodology for integrating IT—will always come out ahead.

And the second point isn’t just about spending more marketing dollars. It’s about being bolder and more aggressive with your message than your competitors. Following all the rules kills breakaway branding.

ITSMA: You’ve certainly branched out from traditional marketing activities by promoting your new book using a number of newer techniques such as blogging, video interviews, and a word-of-mouth marketing campaign. How has digital marketing impacted branding?

Kelly: I’m not someone who believes that the Internet has killed TV or the 30-second spot. I do believe, however, that in the last 18 months we’ve reached a tipping point for digital marketing: Everyone knows it works, and it has become an important part of the marketing mix. Companies are trying to find the right balance. I’d say that the biggest lesson they’re learning is the importance of maintaining a core brand concept across all channels. Buyers have quick, easy access to just about everything on the Web, so if your messaging isn’t coordinated across all your offerings, it’s going to hurt you.

ITSMA: Any parting thoughts?

Kelly: Most companies are risk-averse when it comes to branding. They won’t take a chance on something that could backfire, possibly undermining profits and upsetting shareholders. But if you adhere to the rules set by the category leader, you will not be successful at promoting your brand in a new and different way.

Be bold. Take risks. Talk to your customers. This is how the best brands in any business succeed.

For more on how to differentiate your brand in a competitive market, attend ITSMA’s July 27 Web Briefing, Meeting the Differentiation Challenge: Competitive Positioning in a Converging World.

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On the Job: Partnering for Success at Steria

Partnering is a tough proposition. At many technology companies, it’s difficult enough to collaborate effectively across business units, departments, and regional boundaries without throwing external partners into the mix. And yet past ITSMA research has shown that partnerships can significantly increase service revenue.

According to Mike Harding, head of cross-industry marketing at Steria, a European IT services firm with over €1.1 billion in revenue, the key question for Steria when it’s debating entering into a strategic alliance is, Is there potential for the two companies to build a successful differentiated services offering together? If the answer to this question is yes, the next step is to identify where the companies can work together to develop new business opportunities by outlining the joint value propositions and targeted industry sectors.

After that, he says, it’s all about expectations: “It’s really important for organizations that want to work with Steria to understand what would be the most suitable relationship for us both. [The big technology companies] often want to have a discussion with us about how much business we will be doing by quarter, how we are going to train our salespeople in their technologies, how we could run joint seminars with them, and so on. The answer to all of these questions is: We’re not. We solve customers’ business problems; we don’t provide them with technology X or Y. So, while we do resell hardware and software as part of our solutions, we don’t fit the traditional reseller model.”

Harding saves time and effort up front by thoroughly briefing would-be partners on how Steria does business. “We talk to them about which markets we’re in, what sort of solutions areas we’re bidding on, and how we work with our partners,” he says. One of the benefits of this approach is that certain companies realize that a supplier relationship makes more sense for them than a partner relationship. In addition, “some quite significant names are now putting relationship managers in place who understand how a services company works and what is required. The relationships have improved greatly, and our suppliers know that it isn’t all about quarterly volumes!”

If the briefings go well and it still seems that a partnership makes sense, Harding thinks about cultural fit. Key questions to consider include:

• How are people measured and rewarded? (“If you’re measured quarterly and I’m measured annually,” he points out, “we’re going to have problems working together.”)
• How is the investment treated? Will both parties invest similar amounts of time, budget, and resources?
• Are the channel strategies of the two organizations complementary?

“None of these things has to be a showstopper,” says Harding, “but it’s important to explore them up front and start thinking about ways to manage potential issues that may arise.”

Companies that make the cut and enter into partnerships with Steria are carefully assigned to one of four different levels:

• Candidate Partner
• Associate Partner
• Country Strategic Partner
• International Strategic Partner

Each level is defined by what a partnership of that caliber looks like, how it works, and so on. As a partner becomes more trusted over time, it moves up the ladder, earning the right to take on both greater risk and greater reward.

“Good partnerships develop over time, based on understanding, trust, openness, and a common purpose,” concludes Harding. “Things won’t always go smoothly, but there are things you can do to help to ensure that things hold together through some of the tougher challenges.”

With its process for partnering firmly in place, Steria is reaping the benefits of successful collaboration with its partners and building a stronger business step by step.

—Jerry Dixon, jdixon@itsma.com

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EuroNotes: Keys to Collaborating for Growth

European technology companies today face a number of challenging market conditions, including:

• Sluggish, uneven market growth across countries and sectors
• Increasing competitive pressure from both global and local players
• Growing client demand to work across internal silos and beyond company boundaries to win or retain deals

Where cost cutting and operational reform were key to achieving high levels of profitability and growth in recent years, today they are no longer enough.

Today, top-line growth is coming from the ability to leverage capabilities and expertise across the business—internally and externally—to create multiple points of differentiation and make every part of the business better and more competitive. But achieving and sustaining this level of collaboration is an extremely difficult task, particularly for the large enterprise, and many companies have not yet found a way to “institutionalise” collaboration.

In mid-May, ITSMA brought together some of the best and brightest European IT services marketers to explore best practices in collaborating with customers, partners, influencers, and colleagues. Highlights from the session are described here.

1. Make It Real—Collaboration is not just a marketing platform; if your company is not particularly collaborative, you must work to change corporate culture before touting this message. Capgemini has done a good job of delivering on its promise to provide its clients with a “collaborative business experience.” George Miller, Capgemini’s marketing director for the U.K. and Ireland, shared examples such as the Accelerated Solutions Environment workshops that Capgemini uses to scope projects with prospects over several intensive days together. When it has taken this collaborative approach in the U.K. and Ireland, Capgemini has never lost a bid.

2. Be Crystal Clear—Knowing when and how to collaborate with partners is fundamental to your partner strategy, because any inconsistency around this decision can lead to sour relationships and channel conflict. Maureen Vontz Doolan, head of business strategy at Microsoft Europe, highlighted the importance of external partners to Microsoft’s service strategy. With a focus on “blue sky” projects, Microsoft’s own service team is clear about its remit, which amounts to just 7% of all potential service revenues from Microsoft technologies.

3. Keep It Fresh—Finding new ways to collaborate with existing contacts is key to advancing innovative new thinking—and growth!—to your business. Richard Grove, group marketing director of LogicaCMG, constantly strives to evolve and change the nature of LogicaCMG’s marketing relationships with both internal and external constituencies. He regularly uses his finance director to make sales calls when the company is targeting the FD of a prospect or client organization as part of a sales process. This practice has not only brought marketing and finance together in a new way; it has also improved relationships with prospects.

4. Plan Together—Per Kristiansson, Lucent’s director of marketing and strategy for the EMEA region, underlined the importance of bringing together international teams and different functions to plan for future business growth. Recognizing a need to establish a more structured process for growing the business, the company brought together the services, product sales, business intelligence, and business planning divisions to reassess the market and rethink where to allocate resources to maximise sustainable growth and outperform the market. A centralized budget allocation ensures that resources are allocated only to key focus areas going forward.

5. Go Above and Beyond in Times of Stress—Terry Corby, director of global marketing at Accenture, explored the many ways in which marketing and human resources need to work together every day to build a strong services brand, recruit the right people, and reinforce the right behaviors. He also noted that exceptional situations such as mergers and acquisitions require an even deeper level of collaboration between marketing and HR teams to ensure that the M&A is leveraged beyond the straightforward blending of physical assets. Techniques that work here include:

   • Working together to communicate early and often with staff in each organization
   • Recognizing the differences and acknowledging the strengths of each organization
   • Finding a few things the “acquired” team does right and adopting those techniques into the new parent company
   • Most of all, involving employees in the decisions taken around the future business

Ultimately, the most important thing to keep in mind is that collaborative relationships are just that—relationships. They’re living, breathing things that change all the time, making flexibility and adaptability critical to success. So be firm in your commitment to collaboration, clear in your terms, experimental in your approach, structured in your planning, and dedicated in times of difficulty—and don’t forget to let us know about the progress you're making!

—Bev Burgess, info@itsma.com

More EuroNotes

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Research Desk

Software Support Satisfaction: Third-Party Vendors Come Out Ahead

A few months back, we reported that software support customers are in no hurry to sign up for support services from third-party providers, with approximately 90% of the people we interviewed preferring all-inclusive maintenance contracts that include usage support and bug fixes as well as major software upgrades. However, even though customers are generally loyal to their vendors, those who defect and rely on third-party vendors report higher satisfaction.

It’s unclear why third-party vendors receive higher satisfaction ratings. It could be because they provide a higher level of service due to lower customer volumes and more experienced software engineers on the front lines. Or it could be attributable to a better price/value equation for a comparable level of service for the customers who are not interested in major upgrades. Regardless of the reasons, there is cause for concern among software vendors.

Software vendors need to respond to this issue by ensuring that their customers are getting the highest-quality support possible. Further, the support and maintenance services should be made more tangible, with careful documentation of and feedback on response times, repair times, system availability, number of help desk calls, number of updates installed, proactive support, and so forth.

The question of value delivered via upgrades must also be addressed. Infrequent upgrades or upgrades that do not directly address customers’ needs for new functionality erode the value of maintenance contracts. What’s worse are major upgrades that are designated “new releases” and are therefore not available to the maintenance contract customers. Support marketing, support services delivery, product development, and product management groups must work together to ensure a competitive value equation.

—Julie Schwartz, jschwartz@itsma.com

For more from ITSMA's latest Focus Report, please see: http://www.itsma.com/research/abstracts/F011.htm

Upcoming Events

Enabling Consultative Selling: Marketing's Role in Accelerating the Sales Cycle
July 18 Breakfast Briefing (Boston, MA)
http://www.itsma.com/Events/event_desc/06BB07N20.htm

Meeting the Differentiation Challenge: Competitive Positioning in a Converging World
July 27 Web Briefing
http://www.itsma.com/Events/event_desc/06OB07G22.htm

Lessons From Other Industries – What Can We Learn From Investment Banks, Airlines, And Construction?
September 13 Inner Circle Meeting
http://www.itsma.com/Events/event_desc/06RT09E24.htm

Blogs and Beyond: Marketing in the New Digital Channels
September 21 Workshop (Boston, MA)
http://www.itsma.com/Events/event_desc/06WS06N17.htm

Growing the Business with Micro- and Account-Based Marketing
September 26 Lunch Briefing (Santa Clara, CA)
http://www.itsma.com/Events/event_desc/06BB09N26.htm

ITSMA's 2006 Marketing Conference
Driving Value: Marketing's Emerging Role
November 15-16 Conference (Cambridge, MA)
http://www.itsma.com/Events/event_desc/06AC11N31.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.