The best marketers take risks. We’ve all seen them: the CMO who throws out 5 million prospects and doubles his company’s business in just five months; the marketing manager who stuck her neck out five years ago and insisted that her company develop a strategy for engaging with blogs. These are the kinds of marketers who make things happen. They’re the ones who achieve real and game-changing results.
For the last 10 years, ITSMA’s Marketing Excellence Awards program has honored the services and solutions marketers who change the game for their companies by delivering real results. This year, we want to hear from you.
The deadline for award submissions is June 13, 2008. Categories for submissions include:
On a separate note, I wanted to let you know that Chris Koch, our associate director of thought leadership and a former executive editor of CIO magazine, will be taking over as the editor of the E-ZINE in March. You may contact him at ckoch@itsma.com.
Despite the dark clouds hanging over the economy and growing fears of
a recession in 2008, services and solutions marketers are optimistic about
the year ahead. In fact, according to new ITSMA research, our members
are predicting robust revenue growth, bigger marketing budgets, and increased
headcount in 2008.
Services Revenues Expected to Grow 18 Percent; Services Marketing
Budgets and Staff on the Rise
ITSMA members reported services revenue growth of 19% in 2007. Survey
respondents expect that growth to keep right on going, anticipating 18%
services revenue growth for the year ahead.
Services marketing budgets are also expected to rise, with 61% of the
respondents predicting an average increase of 18.9%, 15% of respondents
predicting an average decrease of 9.9%, and 24% of respondents predicting
that their services marketing budgets will stay the same.
In addition, 40% of survey respondents reported that they expect to increase
headcount over the course of the year, 48% expect their staffs to stay
the same size, and only 12% indicated that their departments will shrink.
Interestingly, although headcount is expected to increase, the percentage
of the services marketing budget spent on personnel costs continues to
decrease for the fourth year in a row. We attribute this trend to the
increasingly global nature of business today; as companies employ more
staff outside of North America and Europe, their personnel costs go down.
(Personnel costs take up approximately 49% of the services marketing budget
in North American and EMEA companies, while Indian firms spend a mere
15% of their services marketing budget on personnel.)
Budget Allocations: Sales Enablement, Offering Management, and Marcom
Are Key Categories for '08
Looking to increase marketing's impact on the business, 67% of the respondents
say they will funnel more resources into sales enablement initiatives
in 2008, with only 15% indicating that they will decrease spending in
this area. Other budget categories that are expected to receive higher
levels of investment in 2008 include:
Strategy and market planning
Offering management
Marketing communications
In terms of the marcom budget breakdown, it's clear that the emphasis
is on building relationships and engaging customers and prospects in dialogue.
Look for increased investment in digital marketing, face-to-face events,
and thought leadership in 2008.
More Marketers Recognize That Experimentation = Success
The best marketers are the ones who take risks, make mistakes, and learn
along the way. Even though the economy looks a bit precarious, you can
be sure that the best marketers aren't conservatively sitting on the sidelines.
They're getting their hands dirty experimenting with new tools and approaches—especially
digital ones.
This year, marketers are especially high on search, with 70% of the respondents
reporting that they are increasing their investment in search engine marketing
(both paid and organic). Between 50% and 60% of the respondents also indicated
that they're increasing spending on:
Online communities
Microsites
Intranets
Webinars
Blogs
Podcasting
Wikis and virtual worlds like Second Life were less popular: Fewer than
30% of the respondents expect to increase spending in these areas in 2008.
It's important to note that experimentation shouldn't be limited to digital
marketing channels and techniques. In addition, ITSMA recommends that
companies look into approaches and tools such as:
Word-of-mouth marketing
Green marketing/sustainability
Data mining and analytics
Persona marketing
Experiential marketing
Top Marketing Priorities
In 2008, marketing's priorities are more measurable than ever, demonstrating
how important it is for marketers to be able to prove that their activities
are having an impact on the business. This year, the top five priorities
for services marketers are:
Differentiating the company or offerings
Enabling the sales force
Generating demand
Improving customer satisfaction and loyalty
Developing thought leadership
Although it didn't make it into marketers' top five priorities for 2008,
increasing the use of digital tools and online marketing channels rose
from number 16 on the list in 2007 to number 7 in 2008—a dramatic leap
that ITSMA is happy to report, given that recent research showed that
the best marketers are experimenting more with newer marketing techniques
such as blogging, podcasting, and social networking. As the next generation
of business leaders comes of age and joins the workforce, Web 2.0 will
only become more prevalent, so marketers who are not yet experimenting
with these tools need to start now!
After a strong year in 2007, marketing is poised to make even more headway
in 2008, gaining new responsibilities and new respect. We look forward
to seeing how the year plays out!
Share your services and solutions marketing successes with ITSMA by
submitting an entry to our 2008 Marketing Excellence Awards program. We've
just announced this year's categories. Learn more at http://www.itsma.com/News/mea/default.htm.
New
Thinking
Making B2B Marketing Messages More Memorable: An Interview with Chip Heath
As a professor at Stanford University, Chip Heath has listened to
his students pass on the same ridiculous urban legends that he heard as
a student—that we only use 10% of our brains, or that the Great Wall of
China is visible from space, for example. He became curious to discover
the attributes of urban legends that make them "sticky," or
durable over time, so that he could apply those lessons to more useful
ideas. The results of his research are outlined in a book he co-wrote
with his brother Dan, called Made
to Stick: Why Some Ideas Survive and Others Die. In this interview,
he shares some of the ideas in the book.
ITSMA: Why is it so difficult to get marketing messages
to stick in people's minds?
Chip Heath: B2B marketers have a very high standard of communication
that they have to impart. A group of psychologists and behavioral economists
has called this "the Curse of Knowledge." As we become experts,
it becomes harder to imagine not knowing what we know. Think about how
doctors and lawyers talk. They speak in such abstract, complex, convoluted
ways that we're never quite sure we're getting the message. And it's not
just people with fancy titles who have a problem with the Curse of Knowledge.
Pick any 11-year-old boy and ask him to describe his favorite video game.
You will be on the other side of the Curse of Knowledge. That 11-year-old
cannot fathom the depths of your ignorance about that video game.
All of us are like that 11-year-old video gamer in our domain of expertise.
We know the services that we're selling; we know the need for those things
in the external marketplace. But the trick in getting our message across
is to overcome the Curse of Knowledge.
ITSMA: Can you give us an example of a sticky idea?
Heath: In 1961, John F. Kennedy proposed that our nation put a
man on the moon and return him safely within the course of the decade.
Now, that was an idea that crossed boundaries. It organized the efforts
of thousands of people across dozens of organizations, public and private,
for the better part of 10 years. So when Dan and I started writing Made
to Stick, we decided to survey the stickiest ideas in history, ranging
from urban legends to corporate strategies that actually affect people's
behavior and public health messages that actually work.
ITSMA: What were the common attributes across all the
sticky ideas you researched?
Heath: We found six common themes. Sticky ideas are:
Simple
Unexpected
Concrete
Credible
Emotional
Stories
Scrabble fans will note that there is a little acronym built into this—SUCCESS
without the final S.
ITSMA: What do you mean when you say that sticky ideas
must be concrete?
Heath: Urban legends stick because they are concrete. They are
sensory and visceral. There’s one that circulates about a gang of human-organ
thieves that drug their victims and steal their organs. The victim wakes
up in an ice-filled bathtub with a kidney missing. I can't hear that story
without my body starting to shiver a little bit because of that ice-filled
bathtub.
Now business language, on the other hand, is anything but tangible, sensory,
and concrete. We pick buzzwords and combine them: strategic empowering
vision … reciprocal cost-based reengineering.
I had a client that sold RFID (radio frequency identification) tags and
software. They were practicing their business pitch and it was going badly.
They were talking about "enterprise mobility solutions" and
all sorts of technology details. I asked for an example and the client
started talking about a law office that could attach an RFID tag to an
important contract and never again lose it due to misfiling or because
it's in an associate's office. A hospital could attach a tag to a prescription
bottle and you could track the pills from the pharmacy all the way up
to the patient's room. All of a sudden, those concrete examples helped
the audience understand why everyone might want this service.
ITSMA: How can B2B marketers create memorable stories
about their products and services?
Heath: Most of us make claims rather than telling stories that
illustrate our claims. We say, "We have excellent customer service,"
or "We have partners that will tell you how good we are."
Instead, we should be telling stories that will imprint those claims
with customers in a memorable way. For example, there is a concierge service
called Circles that will do anything to help your employees so that they
can spend time at work, as opposed to running around getting gift baskets
or dinner reservations or house cleaning. Most of Circles' business is
these mundane day-to-day things. But what they also have is a couple of
stories about their ability to deliver extraordinary service: they call
them sheep stories.
Here's one: There was a business manager who was taking a trip to Kenya.
Through a weird combination of events, he was meeting with a tribal chieftain.
In that area of Kenya, it is appropriate to show your gratitude to chieftains
by delivering sheep. And so Circles managed to deliver a flock of sheep
in Kenya for a business meeting.
Now that story gives me a lot of faith that they could do anything I
need them to do. The challenge for marketers is to find those stories.
The sheep story is more powerful than a page of statistics. If you want
your message to stick in the marketplace, find your story.
On
the Job
Smart Segmentation on a Shoestring Budget: How Autotask Threw Away Five Million Prospects and Doubled Its Business in Just Five Months
Autotask Corporation, a provider of Web-based professional services automation
(PSA) software, was limping along in a crowded category with 70 competitors.
To make matters worse, it was operating on a shoestring marketing budget.
The software was originally aimed at more than 6 million professional
firms that provide billable services, and although the company was generating
inquiries, the prospects came from a huge cross-section of business types,
making each sale a slow, consultative process.
Realizing that something had to change, Autotask brought in a new CMO.
As one of his first tasks, CMO Bob Vogel literally called every single
Autotask customer to find out who they were, how they used the solution,
and what the business drivers behind their purchase decision were. "When
I came on board," Vogel said, "Autotask's customer base looked an awful
lot like Noah's Ark—a huge, messy amalgamation of every type of customer
company imaginable. It was time to get more focused and hone in on the
customers who would receive the most benefit from our solution."
Out of the chaos of the existing customer base, Vogel noticed that IT
services providers represented a disproportionately large percentage of
the base compared to the market. The company drilled down into this segment
to determine what it was about these customers that interested them in
Autotask's solution. They uncovered two important insights:
In general, IT services providers are quick to embrace new technology
and were thus attracted to the on-demand, Web-based delivery of Autotask's
software.
Although most of Autotask's other customers were using only one or
two of the solution's modules, the IT services providers were using
the whole thing, and they were therefore realizing bigger business benefits
than were other customers.
After determining that the IT services provider segment of the market
was big enough to support Autotask's goal of becoming a $100 million company,
Autotask decided to focus 100% of its marketing horsepower on this one
market niche.
Repositioning the Company to Reach the Target Market
To more effectively reach IT service providers, Autotask had to completely
reposition itself. A new tagline—"Autotask®. Makes your IT business run.
Better.?"—kept everyone focused on the right customer segment. It then
overhauled its messaging, sales process, and training curricula so that
it would all speak to IT services providers.
Next, the company concentrated on leveraging the Web as a lead generation
"machine," pushing every lead to the Web, where it is able to capture
important qualifying information and kick off the sales process. With
this system in place, it was then time to raise Autotask's visibility
within its target market. It did this by executing a marketing strategy
that entailed:
Web marketing. Detailed, continuous testing of keyword ad
campaigns and experimentation with bid levels, ad copy, and landing
page content.
Website/native search. Revamped the Website to focus exclusively
on IT services, creating reams of new content.
Webinars. Ran weekly Webinars for prospects, offering up business
tips, market research, and product demos.
"Drip" marketing. Conducted weekly email drops to different
segments of the company's internal list of 10,000+ inquirers.
Events. Identified and attended more than 40 highly targeted
events drawing 20 to 400 IT services businesses.
PR. Built relationships with the most influential editors in
the IT services space, becoming a "go-to" resource for them.
Marketing and sales integration. Built a "closed-loop" system
in which if the sales team could not make progress within two weeks,
the leads returned to marketing, where an aggressive, ongoing email
"remarketing effort" ensued.
Partner marketing. Established meaningful partnerships; ran
joint Webinars and engaged in cross-references, trade-show collaboration,
and reciprocal emails.
According to Vogel, the "crown jewel" of the company's marketing efforts
is its ability to track and forecast the impact of each marketing campaign.
Each marketing initiative has a unique tracking code and is funneled through
an automated Web form, allowing the company to identify the exact source
of over 90% of all leads. For this reason, Autotask is able to effectively
forecast incoming leads within +/-5% accuracy each month, which helps
the sales team pace themselves through the pipeline and gives the CFO
an accurate picture of where the business is headed.
Results
Before it decided to narrow its focus to IT services providers, Autotask
generated an average of 50 leads a month from a wide range of business
types looking for a wide range of point solutions. One year after repositioning
itself and focusing on one small segment of its former market, Autotask
had:
Generated 10,375 inquiries from more than 100 discrete, identifiable
sources.
More than 75% of those leads were in the IT services market and highly
qualified, dramatically speeding up the sales cycle. (In fact, of the
leads marketing gave to sales, one in 15 closed—half of them within
30 days.)
Based on the insights and leadership of the marketing department, Autotask
shrank its universe of prospects from 6 million to fewer than 100,000
and doubled the size of its business. Today, the company is well on its
way to its $100 million goal.
Not bad for a company with a shoestring marketing budget, wouldn't you
say?
EuroNotes
Outsourcing and Offshoring: From India to Eastern Europe
When we look at the output from our recent Services Marketing Budget
Allocations and Trends survey, the picture we see is a very positive
one—in spite of the uncertain economic outlook in many quarters. In fact,
ITSMA members are predicting 18% growth in services revenue for the year
ahead! At the first European Inner Circle Meeting of the year, we delved
into why we’re seeing these optimistic growth forecasts given the current
economic climate. One area we discussed was the continued growth we’re
seeing in both near-shoring and off-shoring activity and the potential
impact this trend could have on the overall forecast.
There’s been a lot of talk lately about the growth rate of Indian outsourcing
companies, and a recent article in The Times suggested that rising
costs and falling demand are causing the Indian technology boom to slow
down. The threat of recession in the US has seemingly reduced demand for
corporate IT projects, while the rise in value of the Rupee has weakened
India’s cost-advantage—this second point almost suggests that the Indian
IT companies are becoming victims of their own success.
These reports came about as the four largest Indian IT companies—Tata
Consulting Services, Infosys Technologies, Wipro, and HCL Technologies—reported
average sales growth of about 21% in Q3 ’07, compared with 50% in the
same period ’06. For the last quarter to December ’07, they posted average
net profits growth of roughly 18%, which is apparently the lowest since
2001. While these figures are clearly an indication of a slow down in
growth, they still represent levels that I’m sure many of our members
would be proud of.
You may wonder why I’m discussing the happenings of the Indian technology
boom in the EuroNotes section of this newsletter, and the answer to that
is quite simple: According to a piece of research by Computer Business
Review, the 50 largest IT services providers are taking an increasingly
diverse approach to global sourcing. With the Indian advantage being undermined
by the rising economy and the increasing cost of the workforce, many suppliers
are supplementing their Indian operations with delivery centres in other
low-cost locations such as Eastern Europe.
As the third most popular sourcing location, 17 of the top 50 IT services
companies have a direct presence in Eastern Europe, with much of the action
taking place in Poland, Hungary, and the Czech Republic. These Eastern
European offices provide helpdesk, infrastructure, and back-office processing
support to central and western European clients. With this in mind, maybe
in future years we will be asking whether the growth targets of our members
in Eastern Europe are skewing the overall results of our budget survey—it’s
certainly worth watching.
Research Desk
Ask ITSMA: We Want to Experiment with Digital Marketing. Where Should We Start?
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: My company has traditionally been fairly conservative, especially when it comes to digital marketing. We want to start experimenting with some of the new tools and techniques, but our legal department has put the kibosh on blogging. Where do you recommend we start?
Answer: Given the climate at your company, a great place to start would be using digital tools such as Facebook to market the benefits of working at your company to prospective employees—especially to students who are about to graduate from college. We recommend starting with the college crowd because, although many of us already in the workforce are just starting to use things like social networks, students have been using these tools for years! They're comfortable with the technology, they communicate with their friends using digital tools all day long, and they'll generally be more receptive to interacting with you in digital media than their middle-aged counterparts would be. Some companies have created groups on Facebook and encourage students to join these groups to get a taste of the corporate culture and the day-to-day lives of their employees.
Another way to dip your toes into the Web 2.0 waters is to try podcasting, the practice of creating and posting audio files that people can download from your Website. Today, creating a podcast can be as simple as dialing into a conference number and pressing a button to indicate you’d like to record your conversation. The conference service will email you a digital file, which you can send to your Webmaster to post. You maintain complete control over the content of a podcast at all times, which will put the legal department’s mind at ease while giving your Website a more interactive feel. (The next step, of course, is to allow listeners to post comments about your podcasts, but if your legal department is squeamish, you may want to wait a while before taking this step.)
As with any new marketing program, you'll need to make sure that you have systems and processes in place to learn from the experience with recruits and then transfer your newfound knowledge about digital marketing to the work you do with new and existing accounts. Good luck!
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
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