Slowly but surely, B2B marketers are coming to grips with the growing
impact of social media on their future prospects. More and more tech
and IT services companies are following the example of industry leaders
like IBM, Sun, Microsoft, Cisco, and HP and getting into blogging,
podcasting, social networking, online communities, and even virtual
worlds like Second Life. Creating more open and genuine conversations
with customers and others is the main motivation, along with simply
keeping up with the competition.
The move to more of a community orientation at B2B companies raises
a number of organizational questions, including:
People. How do we hire, train, support, and reward the right
people to do the right things?
Content. How can we develop enough of the right kind of
compelling, non-selling content to make legitimate contributions
to the right ongoing conversations?
Programs. How can we move from the old-style broadcast,
narrowcast, and promotional campaigns to the right kind of interactive,
conversational, and truly collaborative activities?
Coordination. Assuming we're not simply tossing out everything
we used to do, how can we best coordinate and integrate the various
traditional and new style programs in a coherent and constructive
whole?
Metrics. How can we determine the most important metrics,
track them, and use the findings to improve performance and return
on community?
Most important of all is our overall mindset. Tapping the power of
social media can be enormously effective in gaining deeper insight
into customers' wants and needs, creating stronger relationships and
supporting more effective collaboration on new solutions. But little
of this is possible without transcending the typical "them" and "us" mentality
and replacing it with the community mindset of "we."
What's
Hot
Enhancing Customer Loyalty: Four Priorities for Marketing Leadership
By Rob Leavitt
For marketers in IT services and solutions, loyal customers have always
meant faster sales cycles, greater lifetime value, easier acceptance of
premium pricing, and all-important references and referrals. In short,
as loyalty guru Fred Reichheld has argued in multiple books (and in a
recent E-ZINE
interview), loyal customers are the most important driver of profitable
growth.
Today, however, the loyalty issue has become even more central to marketing
strategy. For one thing, loyalty itself has become more important. Along
with the traditional reasons, two new realities in particular have put
a greater premium on loyalty:
Globalization and the corresponding need for deeper, more reliable
insight into a faster-changing marketplace
The growing importance of co-creating new solutions with customers
In both of these areas, companies with truly loyal customers are much
better positioned to succeed.
Unfortunately, as customer expectations rise and market alternatives
proliferate, it's perhaps not surprising that loyalty scores are going
down. According to a recent
survey from CIO Insight, CIOs today are "disgruntled and disappointed"
with vendor performance. And ITSMA's own research with the CIO Executive
Council last spring showed that a vast majority of CIOs believe marketers
over promise and under deliver.
It's not as though marketers are ignoring the challenge. Indeed, ITSMA
members and other top firms are investing in a wide range of customer
relationship, satisfaction, and loyalty-oriented programs, from new monitoring
initiatives and reference management to key account planning, executive
forums, and advisory councils. Too often, though, such programs suffer
from disconnected management and a one-sided approach. If customers are
hit from multiple directions with fragmented programs ostensibly designed
to help them, the effect can be more negative than positive. And if most
of those programs are focused more on "getting" value from customers than
on giving value to them, as is typically the case, their positive impact
will be severely limited.
The foundation of loyalty, of course, is excellent services and solutions.
Without that, the rest hardly matters. But delivery excellence is table
stakes. Marketers need to do what they can to ensure it, but they should
also supplement delivery excellence with four key initiatives:
Deliver value at every touchpoint. Marketers should take the
lead in auditing the entire customer experience, from initial pre-sales
contacts through the sales cycle into delivery and through post-delivery
engagement. Consider all the touchpoints from all relevant groups, including
sales, marketing, delivery, accounting, customer service, and even partners,
if they're relevant. Are you helping customers improve their business
at every touchpoint? Are you investing enough in thought leadership
that provides useful insight for customers and prospects, rather than
simply promotional material or events?
Cultivate key accounts and individuals. Customer satisfaction
and loyalty programs often focus on identifying and reacting to problems
and complaints. Surely this is important; you want to keep customers
happy and minimize the risk of negative word of mouth. But it is also
important to focus on your best and most satisfied customers, too, cultivating
them further to support greater market insight, advocacy, and co-creation.
Reference programs are a key initiative here: Are you providing enough
value to sustain your best customers' excitement about participation?
Are you building executive-level relationships to foster ongoing loyalty
and advocacy on your behalf?
Leverage communities. Customers are often more interested in
talking with their peers than with you. Investing in community-oriented
initiatives can make a substantial contribution to improved customer
loyalty by facilitating meaningful interaction across your customer
base. Your customers benefit from peer insight and connections; you
benefit as well from the halo effect, insight, and relationships. Well-planned
events, councils, and user groups have often done this, but the intensity
of competition for your customers' time suggests that the bar is quite
high for effective community building these days. Are you tapping into
the newer online conversations and social networks? Have you refreshed
your executive council and event programs to ensure that they are providing
real ongoing value to the right customers?
Integrate programs to improve the total experience. ITSMA research
suggests that those marketing organizations with authority over customer
satisfaction and loyalty have a more significant impact on the business
than those that do not have such authority. Having this authority is
a critical step toward a more integrated approach that maximizes the
benefits of multiple initiatives and minimizes confusion and cross-purpose.
Do you have a program office and director—ideally at a senior level—that
can help ensure that satisfaction research, account planning, relationship
marketing, customer councils, and the like are all moving in the same
direction and not stepping on each others' or the customers' toes?
Ensuring customer loyalty in today's market is not easy, but the rewards
are well worth the investment. Doing this well requires careful attention
to the entire customer experience and an intense focus on delivering
real value to customers at every stage of the relationship. Marketers
have a great opportunity to play a leadership role on the loyalty issue,
thereby making a strong contribution to both their own role within the
business as well as to the business overall.
New
Thinking
How to Compete in the Global Market: An Interview with Cognizant's Malcolm Frank
Malcolm Frank, senior vice president of marketing and strategy at
Cognizant, recently shared insight he's gleaned from over two decades
of experience in the IT sector related to the five key elements for profitably
competing in the global marketplace and why employee marketing is so vital
to the success of a global firm.
ITSMA: Why is it so important for IT marketers to have
a global outlook today?
Frank: In his book, The World Is Flat, Thomas L. Friedman
says, "It is now possible for more people than ever to collaborate and
compete in real time with more other people on more different kinds of
work from more different corners of the planet and on a more equal footing
than at any previous time in the history of the world." Technology has
leveled the playing field. The production of goods and services no longer
recognizes political boundaries, and corporate DNA is task based, not
geography based.
What was recently perceived as a threat is now seen as a great opportunity.
Today businesspeople think, "How do I tap into these deep pools of incredibly
talented, incredibly motivated people?" Look at IBM. They've announced
that they'll have 60,000 people in India by the end of 2007. One of every
five IBM employees is going to be based on the subcontinent. And they
are not just doing call center work. They'll be doing primary research
and development, complex systems development, value-added business process
outsourcing (BPO), and consulting. These are the types of work that are
now going onto a global platform.
ITSMA: What are the implications of the flattening world
for marketing?
Frank: I've learned from experience that there are five key elements
to keep in mind for successfully competing in a global market:
Employ "naked" marketing. In today's global world, spin no
longer works. Customers, and even your employees, have unbelievably
strong "BS filters." If marketers don't understand this phenomenon,
they risk being designated as corporate liars.
Understand cultural differences: What's the same? To be successful
globally, you need a strategic intent and corporate culture that transcend
national boundaries. Marketing's role in communicating the strategy
and essence of the culture is invaluable.
Understand the cultural differences: What's different? Marketers
need to pay attention to the way people in different regions learn.
Marketing is all about educating; if you can pique people's interest
and educate them in a way that feels natural to them, people will be
receptive.
Be "atomically" global. You have to globalize at the smallest
level of activity so that the work takes place seamlessly across the
globe, with the best person for each task doing each task, regardless
of his or her physical location.
Internal marketing programs are vitally important! With global
delivery, consultants might never see their clients, and this creates
some very strange situations from a management perspective. How do you
close the gap between supply and demand in this circumstance? The answer
is internal marketing programs.
ITSMA: Tell us more about how Cognizant ensures that
all its employees, wherever they are in the world, are on the same page.
Frank: Cognizant operates with two-thirds of its team 6,000 miles
away. Consultants might never see the client, or they see the client four
days a year, but there really isn't that close-working, day-to-day, water-cooler,
let's-go-have-a-beer-later relationship. We use the power of marketing
to bridge the gap between supply and demand.
At Cognizant, we have approximately 36,000 employees. How can I turn
these 36,000 people into brand ambassadors? Employees have a hierarchy
of needs that we must address, from employee benefits and compensation
to personal growth and a sense of purpose. We do this through employee
marketing. This means putting the employees in the middle and surrounding
them with our brand.
Here are a few examples of how we communicate our message and continually
reinforce the sense of purpose and intimacy so that, even though it's
a global platform, people feel that it is a very intimate place:
iPods for every employee. When we recently surpassed $1 billion
in annualized revenue, we bought iPods for every employee. Not only
did this show our appreciation to the employees, but we now have the
infrastructure for podcasts, blogs, and Webcasts to continually communicate
with our employee base.
Management blogs. Because we are a global company, employees
could go a full year and see our CEO in person only once. We use management
blogs to create intimacy. The blogs take on a personal voice and have
proven very popular.
The Cognizant ticker. This ticker is similar to what you see
at the bottom of the TV screen when you're watching CNN or Fox News.
When employees are on the Cognizant network, they can turn on the ticker
and it will give them company news updates and advice.
Cognizant FM. This is Cognizant's talk radio. The talk radio
format provides depth of information on key issues as well as a sense
of intimacy across 36,000+ employees.
Internal blogging. Cognizant now has more than 600 internal
blogs. This creates a sense of community for our key employee demographic.
Essentially, they can communicate professionally in the same manner
they prefer in their personal lives.
You can't just assume that employees are paying attention to the external
programs; dedicated internal marketing programs are vitally important
for global firms.
For a longer and more in-depth explanation of the five elements for
successfully competing in the global marketplace, please see our new ITSMA
Viewpoint, Five
Lessons for Competing in the Global Market.
On
the Job
Northrop Grumman Leverages Account-Based Marketing to Win a $2 Billion Deal
Northrop Grumman's Information Technology sector knew a good opportunity
when it saw one: In 2003, after the Commonwealth of Virginia created the
Virginia Information Technologies Agency (VITA) to consolidate all state
IT services under one single agency, the newly formed VITA began looking
for a partner that could help the state improve its IT infrastructure
and deliver managed services to more than 90 executive branch agencies.
The $2 billion IT Infrastructure Partnership, the largest IT award in
state government, would span 10 years and support economic development
in multiple regions of Virginia.
Northrop Grumman knew it was well qualified to do the work, but it had
a perception problem to overcome: In Virginia, the company was viewed
largely as a builder of ships and submarines, and its depth of experience
at both the IT and state levels was not well recognized or understood.
Understanding the Customer, Collaborating with Sales
To better position itself to win the contract, Northrop Grumman took
an account-based marketing (ABM) approach. Early in the process, the company
devoted significant effort to networking with key players to better understand
VITA's key issues, concerns, and objectives as well as to gain insight
into how those influencers perceived Northrop Grumman.
It quickly became clear that VITA was looking for a partner with:
Best-in-class IT expertise
A significant presence in Virginia
A commitment to economic development in the most depressed areas of
the state
A focus on delivering the best possible options and offers to the
state employees potentially impacted by the program
According to Liz Schwatka, director of marketing and communications for
Northrop Grumman's Commercial, State, and Local Group, "Building a deep
understanding of VITA's goals and objectives was a critical first step
in winning this contract, and our business development team played an
invaluable role in defining key themes and identifying target audiences.
Marketing and business development were 'joined at the hip' on this positioning
and branding initiative for three years. We worked together to figure
out how to reach the right people with the right messages at the right
times and places. It was a very collaborative effort, and we couldn’t
have implemented the campaign without them."
Planning and Executing the Marketing Campaign
Building on its knowledge of VITA's goals and objectives, Northrop Grumman's
communications and marketing team designed an integrated marketing campaign
to raise awareness of the company's technology expertise and solid Virginia
roots. Consistent messaging across all communication channels was key
to the campaign:
Advertising focused on Northrop Grumman as a vital, longtime member
of the Commonwealth's business community as well as on the company's
people-focused culture.
Sponsorships and speaking opportunities were selected based on the
technology content, and subject matter experts were chosen based on
their technology know-how.
The company's grassroots efforts focused across the state, particularly
in southwest Virginia, where company executives spoke at local community
events and higher-education venues and submitted op-ed pieces to local
newspapers.
The company also developed a video featuring Northrop Grumman employees
talking about their individual experiences working for the company and
working in Virginia.
As a result of its branding campaign, Northrop Grumman received more
than 200 media hits in local, state, and national publications regarding
the VITA contract. Anecdotal feedback also suggested that state executives
were taking notice of Northrop Grumman, its presence in Virginia, and
its technology expertise.
Communicating Via the Customer Experience
Schwatka was quick to point out that although the branding campaign certainly
had a big impact on the success of Northrop Grumman's bid, it was really
the customer experience that clinched the deal. "At every single touchpoint
with the client, Northrop Grumman wanted to reinforce that it had the
expertise and Virginia roots that VITA was looking for. Our employees—from
the most technically oriented delivery people right on up to Ron Sugar,
our Chairman and CEO—went to great lengths to make sure that VITA felt
confident in Northrop Grumman's abilities and comfortable with us every
step of the way."
She stressed that the participation of senior-level executives was particularly
important because their participation in media interviews, speaking engagements,
and community outreach demonstrated to VITA just how committed Northrop
Grumman is to the state's success.
Results
Northrop Grumman did a number of things right to win the 10-year, $2
billion contract with VITA. First, it made sure that the marketing and
business development teams worked closely with each other to gain a deep
understanding of VITA's issues, priorities, and needs. Second, it took
that insight and translated it into a highly focused branding campaign
that was designed to widen the perceptions of key decision makers within
the state to include knowledge of Northrop Grumman's IT expertise and
its deep Virginia roots. Third, it ensured that every interaction the
customer had with the company would reinforce this new perception.
Today, the company is focused on continuing to demonstrate its commitment
to the Commonwealth of Virginia and is looking to leverage its success
in other states and municipalities across the country. According to Schwatka,
"This is a huge contract that will result in capital investment of nearly
$270 million and create hundreds of new jobs in the state. It was inspiring
to see how the whole company pulled together to help make this happen.
Personally, I found it highly rewarding to have a role in supporting this
partnership, and I'm looking forward to supporting new opportunities through
similar integrated marketing campaigns!"
To learn more about how you can leverage ABM to win deals and strengthen
key relationships, register for one or more of our upcoming ABM events:
As ITSMA Europe discovered a few weeks back, as of 1 January 2007, companies
in the United Kingdom must now include certain regulatory information
on their Websites and in their email footers or they will risk a fine.
Because many marketing departments have responsibility for the company
Website and email communications, we thought it would be useful to lay
out all the required information here.
According to OUT-LAW.com, a resource published by international law firm
Pinsent Masons, the disclosure of much of the information outlined in
this article actually became mandatory in 2002 with the Electronic Commerce
(EC Directive) Regulations 2002. The Companies Regulations 2006, however,
has called for the disclosure of additional information. OUT-LAW informs
us that the following information should be included on your Website (although
fortunately not on every page; the "About Us" or "Legal Info" page will
do) and in email communications:
Company name. This one seems like a no-brainer, but don't forget
that a company's name can differ from its trading name, and this difference
has to be explained.
Email address. Think that the "Contact Us" form on your site
does the trick? Think again. You must provide an actual company email
address to be in compliance with the regulations.
Prices. OUT-LAW specifies that prices must be "clear and unambiguous,"
which could pose a significant challenge for services and solutions
companies, where pricing is frequently dependent upon a number of variables
that change with each prospective client. Let us know if you have good
suggestions for how to tackle this requirement.
Other details to include are:
VAT number
Registration number
Place of registration
Geographic address
Research Desk
Ask ITSMA: What Is the Average Services Marketing Spend?
Each month, ITSMA receives a number of queries through Ask
ITSMA, a resource designed to give members a quick and easy
way to get insight on important services and solutions marketing
questions they face. In this column, we will publish some of our
favorite questions along with excerpts from our replies.
Question: What is the average services marketing spend?
Answer: Our most current budget research, conducted with 44
representatives from ITSMA member companies, shows that—although
services marketing budgets have declined somewhat since the 1990s and
early years of this decade—they appear to be holding steady at
1.5% of services revenue.
It is important to note that, although budgets are holding steady
as a percentage of services revenue, services revenues themselves are
growing, with survey respondents predicting 19% growth in 2007. This
means that, in absolute numbers, budgets are, in fact, increasing.
Beyond increasing services marketing budgets, 2007 is shaping up to
be a good year for services marketers in several other aspects:
The job market is heating up. Fifty-four percent of survey
respondents reported that they expect to increase headcount over
the course of the year. Only 15% indicated that the size of their
departments will shrink.
Gross margins improved in 2006 and are expected to increase
again in 2007. Average services gross margins at ITSMA member
companies hit 33.9% last year, up from 31.6% in 2005 and 29.3%
in 2004, and 68% of survey respondents believe that services gross
margins will increase again in 2007.
For more on the state of the services marketing profession in 2007,
please check out our January 23 presentation, ITSMA's
2007 State of the Profession Address. Please note that in addition
to the PowerPoint slides from the Briefing, you may also access an
archived version of the presentation.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
We'd like to extend a hale and hearty welcome to the two newest members
of ITSMA:
Open Text,
a Waterloo, Canada-based company in the enterprise content management
space
Pomeroy,
a Kentucky-based IT reseller that provides consulting and integration
services
Also joining the ITSMA family is our new marketing administrative
assistant, Stephanie Galvin, a recent Westfield State graduate with
a B.A. in Communications. Stephanie has held a number of marketing-,
sales-, and PR-related internships, and we're pleased to have her as
part of the ITSMA team.
On another note, ITSMA has taken another step into the blogosphere!
Check out our "ITSMA News" blog at http://itsmanews.typepad.com/blog/.
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News & Notes