As marketers, we're all used to thinking about how to build brand
equity for the companies that employ us. How can we make more people
aware of our company and its capabilities? How can we make them more
apt to choose our company over the competition? How can we make sure
that every time they think of us, they get a warm, fuzzy feeling that
makes them want to buy, buy, buy?
A few days ago, ITSMA published a new
Marketing Tool that helps marketers calculate their companies'
brand equity scores. This got me thinking about how to measure my
own personal brand equity, so I found an "Online
Identity Calculator" that gave me a score based on how many times
my name showed up in a Google search and how many of those entries
were relevant to me and my area of expertise.
One could argue that this "online identity" score is equivalent to
the awareness and possibly even the familiarity metric that goes into
ITSMA's Brand Equity Index. But measuring preference is much harder
to do and is more about the quality of your references than the number
of hits you turn up on the Web. (LinkedIn can
be a useful tool for aggregating references and testimonials about
your performance.)
So keep getting your (and your company's) name out there, but remember:
Awareness is nice, but it doesn't pay the bills.
What's
Hot
Combating Commoditization and Upholding Value: Marketing's Role in Shaping Negotiation Strategy
Buyers today are aggressive. As recent
ITSMA research shows, they want their B2B technology and services
providers to be reliable, competent, and responsive, but they also want
low prices. According to Julie Schwartz, senior vice president of thought
leadership and research at ITSMA, "It used to be that low cost was equated
with poor quality. But now, with globalization and the advent of offshoring,
this just isn't the case anymore."
At the same time, systems companies, software providers, consulting firms,
systems integrators, telcom and networking firms, and others are increasingly
vying for the same business, and converging technologies have eliminated
competitive restrictions based on place or time. The sales force is no
longer selling to the IT director based on "speeds and feeds" but is instead
facing senior business buyers who care less about features and functionality
and more about business value. Deals are bigger, opportunities are fewer,
and the sales cycle is longer and more complex. The sales force is struggling
to adapt.
A Vicious Circle
According to a new
research study by the Strategic Account Management Association (SAMA)
and Think! Inc., a vast majority
(80%) of the 361 study respondents said that "they see mounting irrational
competitive behavior, such as competitors drastically lowering prices
or giving away services." This type of behavior, added Barrett Moore,
a negotiation consultant at Think! Inc., is a problem because "giving
away value tarnishes brand perception and signals competitors to do the
same, lowering margins for everyone."
Only 9% of the study's respondents reported that "they have a well-defined
strategy to respond to competitive behaviors like drastically lowering
prices or giving away services," and a mere 5% of them "rated their capability
in customer negotiation as highly effective." To break the irrational
sales circle they're caught in, companies must develop a clear negotiation
strategy.
Turning the Ship Around
The report stresses that, contrary to popular belief, negotiation is
much more than "a set of soft skills made up of reactive verbal tactics
… [It's] also about far more than determining mere price for volume. It's
about everything you have to offer that the competition doesn't, from
length of contract to delivery and from follow-up to customer support
and service." In other words, positioning plays a large role in strategic
negotiation, and this is where marketing must be involved.
Effective positioning starts with a thorough understanding of market
and customer needs. Marketers need to conduct research that gives them
a solid understanding of what their customers value so that they can ensure
that the company develops relevant offerings and is able to articulate
their value in a language that customers will understand. In addition,
it's extremely important for marketers to know how customers perceive
their company in relation to competitors. This knowledge enables the company
to sharpen competitive differentiation, which is essential to avoiding
commoditization.
Next, marketers need to create clear and compelling value propositions
for each and every product, service, and solution the company offers,
and they need to make sure that this information is available to sales
in the formats sales finds most useful and instructive. Obviously, the
more closely marketing and sales collaborate, the better the results will
be. For example, companies that employ Account-Based Marketing (ABM)—an
approach that treats an individual account as a market in its own right—at
this stage of the game are able to target value props not just to a certain
customer segment, but to specific individuals within specific customer
accounts. This strengthens the sales rep's position during negotiation
and leads to better results.
Once the value proposition for any given offering has been created, the
company must determine what negotiation success should look like. The
SAMA/Think! Inc. study recommends that leaders from across the company's
silos come together to establish what a successful negotiation looks like
for each of them as well as what the collective vision needs to be. For
example, product management might be entirely pleased if a sales rep sells
software to a customer and throws in maintenance services for free. Maintenance,
finance, and services marketing, on the other hand, will not be happy.
There need to be clear boundaries around what can and cannot be offered
during negotiations. Together with sales, marketing can take the lead
on initiating these cross-functional meetings.
Marketing will probably be less involved in defining the negotiation
process for the sales force, but this is also, according to the study,
a critical step in combating commoditization and upholding value. In fact,
Moore has seen companies experience a 200% ROI within six months of making
improvements to their negotiation strategies and processes.
So don't ignore the irrational behavior of your sales team; by taking
the steps outlined in this article, marketers can help break the vicious
circle of discounting and giving away services for free.
New
Thinking
Marketing to CIOs: An Interview with ITSMA's Chris Koch
We recently sat down with Chris Koch, former executive editor of CIO
magazine and ITSMA’s new associate director of research and thought leadership,
to discuss the four CIO "archetypes" and what these archetypes mean for
technology marketers.
ITSMA: While you were at CIO, you wrote about four CIO
"archetypes." Could you tell us about them?
Koch: I should preface this by saying that the archetypes describe
four different skill sets that bring value to an organization above and
beyond the basic ability to run IT as an efficient utility. An actual
CIO won’t be constrained to one archetype but will likely have a combination
of the different skills described. The four archetypes are:
The operational expert. This CIO has the most traditional set
of IT skills: making sure the computers and networks are running properly,
maintaining and upgrading software, and fulfilling new project requests
from the business. These CIOs distinguish themselves by excelling at
project management—delivering on time and on budget. However, if their
company views IT as strategic, these skills might not be enough. CEOs
yearn for CIOs who can go beyond the pure technology operational role
and think strategically about the business. That is why, increasingly,
you tend to see this type of CIO at companies that do not see IT as
strategic or at companies that are smaller and resource constrained.
The business leader. This CIO is more focused on the business
than is the operational expert; he or she possesses a solid knowledge
of business processes and strives to use IT to improve these processes
to demonstrate real business returns. Indeed, some of these CIOs have
taken on additional business operational responsibilities for functions
or processes that rely heavily on IT—supply chain, for example. This
CIO has good interpersonal skills, interacts frequently with other C-level
executives, and may emphasize IT governance as a tool for aligning with
the business—forming a cross-functional executive committee, for example,
that meets regularly to discuss IT and business issues.
The turnaround artist. With a deep background in IT operations
and consulting, this CIO's top priority is to "turn around a sinking
IT ship." Change management is therefore a top priority: How do you
maintain morale when outsourcing, cutting staff, or bringing in a new
team? Turnaround artists possess very strong motivational and leadership
qualities, and they're able to give the organization a sense of confidence
that its IT transformation will have serious benefits in the long term,
even if the measures it must take to get there are painful in the short
term. Due to the nature of their mission, these CIOs tend to have short
tenures—averaging about three years—at any given company. Aggressive,
impatient, and eager to perform their next great feat, these CIOs are
easily bored—if you don't tell them their job is done, they might tell
you.
The innovation agent. This CIO can be found at companies that
genuinely love and "get" IT, often smaller companies that are willing
to experiment and take risks. Innovation agents are strategic thinkers,
planners, and great salespeople who can convince their companies to
take a risk on IT. (In fact, these CIOs frequently have sales and marketing
experience.) They are less interested in "keeping the lights on," focusing
instead on driving real innovation. The innovation agent tends to focus
on customer-facing systems because they have the most direct payback,
but because of his or her risk-loving personality, this CIO could promise
results that he or she ultimately can't deliver.
ITSMA: Is one of these archetypes more prevalent than
the others?
Koch: Right now, we tend to see a lot of CIOs who fall into the
"business leader" category. All CIOs are expected to "keep the lights
on," so pure operational experts aren't in high demand anymore—at least
among companies that view IT as a strategic asset. Turnaround agents are
highly prized—their compensation is highest of the archetypes—but they
tend not to be in it for the long haul. And most companies today aren't
ready for innovation agents; they still spend between 70% and 95% of their
IT budget on "keeping the lights on," leaving a mere 30% or less for potential
innovation. It's the business leader CIOs who can achieve operational
excellence and ensure that the company's IT strategy aligns with the goals
of the business that are most common.
ITSMA: What are the implications of these archetypes
for marketers?
Koch: Being aware of the CIO archetypes can help marketers better
target their messages. Most marketers today are aware that if they have
a product or service that can help companies align IT with business goals,
that message resonates with a lot of CIOs. Marketers can also help sales
account teams better understand the type of CIO they're dealing with,
which can enable them to identify appropriate offers, talk about those
offers in the language that will most appeal to the specific CIO they're
dealing with, and close more deals. For example, marketers could develop
a sales tool that maps out how to classify CIOs into the different archetypes
based on personal information such as educational background and work
experience and on characteristics of the organization at which the CIO
is employed, including size, financial performance, and so on.
Another tip for marketers: The cost-cutting mentality that was applied
to IT after the dot-com bust has become more or less permanent in most
companies. Good CIOs are expected to take money out of their IT operational
"utility" (networks, hardware, maintenance, etc.) each year, regardless
of the economic situation. The good news is that constantly plummeting
hardware and bandwidth costs make that possible; the bad news is that
businesses often take those savings out of IT rather than reinvesting
them in new or improved IT capabilities. Marketers who can offer solutions
that reduce operational costs while adding new capabilities will find
a ready market among CIOs, who need help building a business case for
innovation.
On
the Job
Building Stronger Relationships: Account-Based Marketing at Xerox
In early 2004, Xerox Global Services faced a number of challenges as
it worked to build stronger relationships with its largest accounts. Sales
teams were confident about how to sell Xerox equipment but hadn't found
an effective way to talk about and sell the company's consulting and outsourcing
expertise. Sales were made opportunistically, with little planning or
strategy around how to sell the company's consulting services, and marketing
was underused, viewed simply as a source for collateral and sales tools.
Aware that it needed to make changes, Xerox decided to pilot Account-Based
Marketing (ABM)—a practice ITSMA introduced four years ago that treats
an individual account as a market in its own right—in order to:
Compel marketing and sales to work more closely with each other
Increase services opportunities and revenue within Xerox's largest
accounts
Strengthen and deepen relationships with the company's top customers
ITSMA's Model for Account-Based Marketing
Phase 1: Program Planning and Design
It was immediately clear that Xerox lacked sufficient information to
select the right pilot accounts for its ABM program. The company hired
an outside firm to help develop account profiles, which contain publicly
held information such as account financials and organization structure,
as well as deeper research into such issues as the account's perceptions
of Xerox, its buying behaviors, and its cultural dynamics.
Using the account profiles as a common source of information, Xerox selected
three pilot accounts—two in financial services and one in manufacturing—based
on two major criteria:
Which accounts presented the best opportunities for growth
Which accounts had Xerox sales teams that were:
Ready to embrace services as their selling focus
Ready to embrace marketing as a full partner
Phase 2: Account-Specific Project Implementation
Understanding and Analyzing Accounts
The account profiles carried their importance past the account selection
phase, becoming an ongoing information resource for sales representatives,
sales support staff, and even marketing managers.
After considering the profiles, the ABM teams for each of the pilot accounts
entered into account-specific workshops facilitated by ITSMA. A unique
aspect of this process is the involvement of executives from the target
account, who help define, quantify, and validate the business issues the
target account is facing.
Defining and Selecting Plays
Next, the ABM team focused on how an expanded relationship with Xerox
would be beneficial for the target accounts. The approach centered on
stepping into the customer's perspective and identifying the services
niche it needs filled. As a result, Xerox was later able to tailor its
offerings and sales efforts directly to that need, rather than trying
to create a need for Xerox's preexisting offerings. In ABM lingo, these
tailored offerings are known as "plays."
Building, Executing, and Measuring the Sales and Marketing Plan
Within the account-specific workshops, the Xerox ABM teams evaluated
a variety of campaigns and tactics, ultimately selecting those most appropriate
for each account, each play, and specific individuals within each account.
Like any initiative, ABM plans are only as good as their execution. At
Xerox, the key success factors during the implementation of the pilots
included:
Committed resources from both sales and marketing
Strong project management
Close collaboration between sales and marketing
To measure success, Xerox built a scorecard that included, among other
things, new executive relationships formed and new opportunities generated
for consulting sales. Xerox determined a baseline for each criterion and
designated performance targets over multiple years.
Phase 3: Program Management and Evaluation
Xerox's initial three pilots were very successful, generating:
A 200% increase in new services opportunities
A 400% increase in new executive meetings
A 200% increase in making the shortlist for services
With these results under its belt, Xerox decided to continue to invest
in ABM and is in the midst of scaling the program. Its goals for 2007
include 100% growth in the number of accounts year over year and expanded
geographical reach.
Overall, Account-Based Marketing has allowed Xerox to build stronger
relationships with key clients, form a new strategic partnership between
sales and marketing, and broaden awareness of Xerox's consulting capabilities.
We're all familiar with the reasons that differentiation has become so
important in the technology, communications, and professional services
sectors: a maturing market, a plethora of providers, converging technologies,
an ever-increasing amount of readily available information … the list
could go on and on. But what are the real issues people face when entering
the realms of differentiation? And how are these issues compounded when
you look at the regional model?
Global vs. Local
The European market is very complex. The range of cultures, languages,
and country sizes (and relative importance) presents a significant challenge
in approaching brand differentiation and brand management in the region.
There is considerable debate as to how much autonomy EMEA branches of
global companies really have to adapt branding. There's even a question
of whether this type of flexibility is desirable, given the challenges
it entails: cost-oriented constraints, local language issues, and subtle
cultural nuances, to name but a few.
Most people agree, however, that global organisations should present
consistent core values through their global brand while at the same time
providing an umbrella under which a degree of localisation can be adopted
to account for the different markets and cultures they serve.
Brand Life-Cycle Considerations
It is widely accepted that successful global brands benefit from longevity,
evolving over the years while still retaining and communicating the core
values and essence of the brand. This relative stability is beneficial
in many ways but is also potentially limiting with regard to the speed
and degree of change at local market levels that often sets companies
apart in competitive market sectors.
As with all things, you have to get the framework right to ensure that
the core brand and its values are consistent, but by allowing localisation
through the delivery of the brand—whether a local campaign, the office
worker answering the phone, or the maintenance guy sent to the customer's
premises—you can more closely align with the behaviours expected in the
local market.
Choosing the Right Message
In some areas such as emerging convergence technologies, the very pace
and complexity of technological evolution may offer companies an opportunity
to differentiate through focus on simplification—minimising uncertainty,
lowering risk, and accompanying clients on their journey as a trusted
advisor. This route is one we have seen demonstrated by Fujitsu
Services, which differentiates based on its straightforward, commonsense
approach to doing business rather than specific offerings or capabilities.
This type of experience-based differentiation has struck a chord with
Fujitu's customers; they trust the company's marketing messages around
its pragmatic, honest approach and are thus much more receptive to engaging
with the Fujitsu Services brand.
Reputation Matters
As is apparent from the Fujitsu Services example, what you say about
your company is only half the story. The other half is what other people
say about you—your reputation. And reputation is established via services
delivery and client and employee experiences.
Services and solutions companies often find it challenging to deliver
a consistently superiour delivery or customer experience due to the involvement
of multiple business units, partners, and/or end users. Strong internal
and partner communications and training programs can help ensure that
your customer experience supports the brand promise, regardless of who
is doing the delivery.
Online Reputation Management
Building a strong reputation is rooted in delivering a superiour offering
and customer experience, but it doesn't stop there. Reputation management
is especially important today, given the proliferation of online tools
and channels such as blogs, podcasts, social networks, and so on. Education
and awareness of new channels and media must be key considerations of
any effective brand differentiation strategy. Furthermore, companies must
also develop a plan for the ongoing management of the influencer community.
It's very difficult to influence the way your brand is presented in the
rapidly evolving online space, and the longer you wait, the harder it
gets.
In addition to the online angle, the power and effectiveness of focus
in building and maintaining a superior reputation should not be ignored.
Account-Based Marketing, an approach that treats an individual account
as a market in its own right, is a very effective and compelling way to
manage brand differentiation at the customer level.
Live the Brand
Ultimately, the best tool you have at your disposal in building your
brand is your company's ability to connect on an emotional and trusted
basis with people such as employees, external stakeholders, influencers,
and customers. Live the brand, and the brand will live on.
We all know that thought leadership is important. In fact, in a recent
ITSMA survey, 97% of respondents said that thought leadership contributes
to their companies winning business. Seventy-six percent said that
thought leadership has become more important in the last two years,
and 65% saw an increase in their 2007 thought leadership development
budget over last year.
However, only 12% of respondents felt that their thought leadership
was comparatively better than that of their competitors. ITSMA's research
uncovered several factors that can help companies improve the quality
of their thought leadership:
A systemized, formal thought leadership development process. Most
companies said they lack a system to evaluate, screen, and promote
the thought leadership that is created across the company. A formal
process—with assigned responsibilities, goals, funding, and
executive oversight—can be highly beneficial.
A dedicated thought leadership organization. Three-fourths
of those surveyed said they lack a separate organization charged
with developing thought leadership. Although broad organizational
support is crucial to the success of any initiative, a steering group—composed
of both internal staff and partners—can be very helpful. Such
a committee can identify issues of importance to clients and targets,
drive a research agenda, help design surveys, conduct interviews,
and work on idea development.
A balanced focus on thought leadership development and delivery. Companies
are spending more time on packaging, marketing, and disseminating
thought leadership than on developing the content itself. This is
a mistake! What good is getting your company's name "out there" if
the content is stale, unexciting, or irrelevant to your target audience?
Companies need to develop thought leadership that builds competitive
advantage with respect to their strengths and resources. Marketing,
typically the disseminator of thought leadership, can and should
also be involved in helping to select, research, and develop appropriate
thought leadership topics.
Incentives. Most respondents (95% of those representing
products and services companies, in fact) said they lack incentives
for people in the field to develop thought leadership. Incentives
are important to capture attention and reward desired actions, but
they must be chosen wisely. For example, aligning annual bonuses
to thought leadership development may increase its quantity, but
not its quality.
Improved measurement of results. Among the top measures
used to track the effectiveness of thought leadership were downloads,
press hits, and inquiries about the content. Measures like these
are indirect and don’t show how thought leadership impacts
the bottom line: 94% of respondents said they are unable to track
the ROI on their thought leadership activities. Though it might not
be easy, attempts to align the use of thought leadership with demand
generation, pipeline development, and closed deals will have greater
relevance.
For more information, check out our recent Web
Briefing on thought leadership.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
Things have been busy here at ITSMA so far this summer. We've welcomed
a new member to the fold, along with a new staff member and a number
of speakers for our Annual
Marketing Conference on November 14 and 15, 2007. (Save the date!)
Here are the details of our latest happenings:
Our newest member is CompuCom
Systems, an IT outsourcing company that provides infrastructure
management services, application services, systems integration,
and consulting services as well as the procurement and management
of hardware and software. Please join us in welcoming them to ITSMA!
We're pleased to announce that Chris Koch, an award-winning writer
and editor, has joined ITSMA as the associate director of thought
leadership and research. Chris most recently served as executive
editor for CIO, a trade magazine for chief information officers and
other IT leaders with a circulation of 150,000, where he explored
the intersection of information technology and business. We're thrilled
to have him on the team.
The agenda for our Annual
Marketing Conference on November 14 and 15 in Cambridge, MA,
is shaping up nicely. We already have a fantastic list of speakers
lined up to present at the event. Confirmed speakers include:
Chip Heath, Co-author, Made to Stick: Why Some Ideas
Survive and Others Die
Robert Painter, Vice President, Marketing, IBM Business
Consulting Services
Paul Rand, Executive Board Member, WOMMA, and President
and CEO, Zócalo Group
Bruce Richardson, Chief Research Officer, AMR Research
Julie Schwartz, Senior Vice President, Thought Leadership & Research,
ITSMA
Srinivas Uppaluri, Head of Global Corporate Marketing,
Infosys
Connie Weaver, Executive Vice President and Chief
Marketing Officer, BearingPoint
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News & Notes