In the June 2008 issue:

• First: Solutions: Beyond the Buzzword
• What's Hot: A Dramatic Shift in Marketing Priorities
• Case Study : Account-Based Marketing at Unisys
• Research Desk:
  • Ask ITSMA: What Are the Attributes of a High-Quality Service Offering?
  • Recent ITSMA Thought Leadership
• News & Notes
  • Marketing Excellence Awards
  • Upcoming ITSMA Events

First

Solutions: Beyond the Buzzword

By Chris Koch, ckoch@itsma.com

Pity the poor buzzword “solutions.” Some would argue that it has so many meanings that it has none at all. For most companies, it is a swap-out word for a product or service—the idea being that a solution sounds more valuable than a plain old product or service.

If you’ve hung around with ITSMA for a few years, you know that we take the word way more seriously than that. We think of a solution as a combination of products and/or services along with a special sauce of IP that makes it unique and fitted to the particular business need of a customer.

We haven’t given up on solutions, because we have a group of 23 different companies that we call the ITSMA Solutions Council—and they haven’t given up on it. They are actually fulfilling the promise of solutions from the customer perspective.

This is not to say that a solutions strategy is an easy path to take. It means a longer sales cycle; it means knowing the customer inside out; and it requires unprecedented levels of cooperation both inside the organization and with external partners supplying pieces of the solution. Yet at our most recent meeting of the Solutions Council this month in London, we may have made a breakthrough in terms of managing some of the complexity.

Integration Is the Key

ITSMA research shows that a critical competence in solutions is integration—the ability to integrate products, services, people, and external providers together into a solution that meets the specific needs of customers. But the interesting thing we’re learning is that the level of integration varies quite a bit. Not all solutions require a mind meld with customers and two-year consulting engagements. Some may only need a tiny bit of customization to fulfill the need.

For this reason, the level of organizational integration necessary to back up a solution can vary quite a bit—even for solutions offered inside the same company or even at the business unit level. For example, within a telecom group of one of the Solutions Council organizations, solutions drive a close integration of multiple, independent P&Ls. The strategy is driven by the buying behavior of telecom customers, who increasingly come from the business side rather than IT. They demand an integrated solution—a billing system, for example—rather than tolerating being sold individual pieces of software or hardware. Thus, the general manager for the telecom group has a large number of people dedicated to solutions and can draw on resources from other business units to deliver components optimized for that industry.

Meanwhile, in other areas of the organization, solutions are at the opposite end of the spectrum. The primary component of the solution is marketing—a small group of marketers backs the solution with a campaign. There is very little customization or integration necessary, so fewer employees are devoted to supporting the solution. Indeed, the organization has the market-leading software in the category and a team of consultants that can optimize the processes that the software controls. The solution consists of marketing those capabilities together so that the consultants can then customize them for each customer.

Switch the DNA

So you can see there is a big range of possibilities. However, there is one major constant across all solutions: the need to switch the organizational DNA from transactional selling (Here’s what we got; do you want it or not?) to relationship-based selling (What are your biggest business challenges and how can we help you solve them?). You can’t sell a solution if you can’t figure out what customers need. This is a huge challenge. It requires a new level of integration and cooperation between marketing and sales. It also means big changes in the sales force in terms of training (and perhaps new staff).

The key issue is to decide what level of integration (and its attendant organizational disruption) you need—or have the stomach for. We’re working on a model that defines the different levels of organizational integration needed to support various types of solutions. We’re trying to define each stage of integration along the following parameters:

• Executive role
• Organizational structure
• Metrics
• Employee skills
• Governance
• Incremental customer value
• Internal/external supplier ecosystem

What's Hot

Beneath the Surface, a Dramatic Shift in Marketing Priorities

By Katie Gustin, kgustin@itsma.com

In case you’re still wondering, the online marketing train has definitely left the station. That point came across clearly in ITSMA’s 2008 Budget Allocations and Trends Survey.

But what’s more surprising is how the emergence of online has busted up marketing’s overall priorities.

We all know that marketing has limited resources—especially when economic times tighten. When we choose a new strategy or campaign, it usually isn’t in addition to everything else we’re already doing. More often the new comes at the expense of something else—we borrow money and resources from other areas or eliminate them altogether.

Clearly, marketers are facing this kind of dilemma for 2008—and beyond.

Behind the perennial mantras of differentiation and sales force enablement—which top the list of priorities this year as they almost always do—marketers have shifted their priorities dramatically. Priorities have changed so much that priorities number two (developing and refining the marketing strategy) and number four (deepening customer insight) from 2007 do not even make the top 10 this year. Generating demand and improving customer satisfaction and loyalty have moved up the list to the number three and four spots, respectively.

Meanwhile, online marketing rose from number 16 on the list in 2007 to number seven in 2008. This is a dramatic leap, but it supports ITSMA’s recent research. Marketers who identify themselves as having a significant impact on the business are experimenting much more with online tactics such as social networks and blogging than are marketers who say they have limited impact on the business. As the next generation of business leaders comes of age and joins the workforce, Web 2.0 will only become more prevalent. The marketers who are experimenting with Web 2.0 now will be in a much better position to communicate with the next generation than the marketers who are taking a “wait and see” approach.

Online Marketing Budget on the Rise

Despite the continuing controversy over whether online marketing is having real business impact, ITSMA research shows that the best marketers are forging ahead with experiments. Indeed, among marketers who told us that they are having the biggest business impact, a large majority are getting their hands dirty working with new digital tools and approaches.

Almost 80% of respondents plan to increase their digital/online budgets. Additionally, ITSMA members are shifting more of their marcom budgets from offline to online in 2008. In 2007, online activities made up 29% of marcom budgets. However, this year marketers are allocating 34% of their marcom budgets to online.

ITSMA believes this trend toward online marketing will continue. This marketing vehicle is a less expensive way to create opportunities for clients and nonclients to get together with each other than traditional customer engagement activities such as conferences and social events. Furthermore, marketers have realized that they can no longer control their messages or reputations. They can, however, shape and amplify them by influencing the right people. One way to do this is through online tactics.

Online Budget Allocation

So where are marketers placing their bets? This year, marketers are especially high on search engine marketing, with 70% of the respondents reporting they are increasing their investment in search, both paid and organic (Figure 10). Between 50% and 60% of respondents also indicate they are increasing spending on:

• Online communities
• Microsites
• Intranets
• Webinars
• Blogs
• Podcasting

Wikis and virtual worlds like Second Life are less popular. Fewer than 30% of the respondents expect to increase spending in these areas in 2008.

To get more information about ITSMA’s 2008 Budget Allocations and Trends Survey, please visit www.itsma.com.

Case Study

Elevating the Focus on Customers: Account-Based Marketing at Unisys

By Chris Koch, ckoch@itsma.com

Customers make or break an Account-Based Marketing strategy. Pick the wrong ones and it’s like unrequited love: a lot of effort for very little return. It’s critical to have a clear, rigorous process for selecting ABM customers that is accepted across the organization.

As part of a move toward a more account-centric business strategy, technology and consulting company Unisys has identified a list of 500 top global accounts with which it hopes to build tight relationships through various means, including ABM. Within the top accounts list are 50 customers that are “blueprint accounts.” Each blueprint account has a full-time dedicated client account executive who leads sales representatives in a common cross-BU, cross-geography client business planning session held each year. At least one salesperson from each business unit is in contact with the various decision makers of every top account in any given period. In addition, Unisys has identified other clients, classified as “emerging accounts,” that are candidates to become blueprint accounts in the next two or three years.

Based on this list of accounts, Unisys marketing selects accounts for ABM treatment based on four criteria:

• Size of account. Bigger is better because ABM is labor intensive. There should be enough revenues to cover the costs of ABM treatment while maintaining or improving margins on the account.
• Future growth potential of account. There should be room for growth in the share of wallet for the account. ABM shines at uncovering new areas of penetration within existing accounts.
• Vertical market. Knowledge of the vertical is a critical element of ABM. Unisys in Continental Europe focuses on the verticals in which it has significant knowledge, experience, and a critical mass of customers: Public Sector, Financial Services, Communications, and Transportation.
• Internal sales support for ABM approach. Some important accounts were pushed down the ABM list because of a lack of mutual understanding between sales and the ABM marketers. ABM cannot succeed unless there is tight collaboration with the account sales team and full support from the account executive as to what marketing can—and cannot—bring to his or her business goals.

Unisys’ goal in its selected ABM accounts is to do what all providers promise but few actually deliver: moving from being a supplier to a partner. “We want to understand the customers’ business goals and issues to the point where we can provide recommendations, help them, and direct them to the right innovations for them,” says Jessica Scale, vice president of marketing and communications for Continental Europe. The primary benefit to Unisys from all this understanding and relationship development is a greater share of wallet.

A New Way of Thinking

As Unisys’ experience shows, ABM is as much a way of thinking about customer relationships as it is a process or methodology. The basic principles of engaging in deeper customer research, creating customized value propositions, and building stronger relationships with the right people are widely applicable in many different scenarios. Indeed, Unisys has different tiers of ABM-inspired programs that each involve varying levels of marketing investment, focus, and customer involvement.

Every marketer talks about getting closer to customers. With ABM, Unisys has actually done it.

Research Desk

Ask ITSMA: What Are the Attributes of a High-Quality Service Offering?

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.

From the client’s perspective, what are the attributes of a high-quality service offering?

Service quality is evaluated on both the outcome (Does the solution work?) and the process of service delivery (Did they work collaboratively with me? Did they add value through their previous knowledge and experience?).

Quality services mean:

• Technological expertise (competence)
• On time, on budget (reliability)
• Keep customer informed/detailed project status reports (communication)
• Proven track record (credibility, trustworthiness)
• Responsiveness
• Professionalism/courtesy
• Risk mitigation
• Understanding and knowledge of the customer

There is a good book on this topic: Delivering Quality Service, by Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry.

In our customer research, we stopped asking about many of the elements of quality services, such as technology expertise, because we found that they are table stakes that do not differentiate among providers.

	Do you have a services marketing question? Visit Ask ITSMA to access our experience, insight, and research results.

Recently Published ITSMA Thought Leadership

Services Marketing Budgets and Benchmarks: 2008 Trends and Outlook

FREE DOWNLOAD
http://www.itsma.com/research/abstracts/U0060.htm

Although the economy is definitely losing air, there is good news for marketers. The optimism from 2007 is carrying over to 2008 with predictions of increasing budgets, services revenue, and staff, according to ITSMA’s 2008 Budget Allocations and Trends Survey. In addition, after a few lean years, marketing’s stature and acceptance within the organization have improved. Learn more in this free download.

Permission to Play: Penetrating New Accounts

Presentation and playback available
http://www.itsma.com/research/abstracts/OLB080311.htm

In this Online Briefing, marketing veteran Jeff Sands shares the latest ITSMA research and his many years of accumulated wisdom on the key issues in finding and keeping new customers, including understanding the processes your customers and prospects use to select their services and solutions providers and picking the sales enablement tools that are most effective at supporting the new account acquisition process.

The Software Gap: How Emerging Generations and Markets Will Impact Marketers—An Interview with Bruce Richardson

http://www.itsma.com/research/abstracts/V0039.htm

Many emerging trends, not only in the software industry but in all businesses, are causing companies to change the way they work. Baby Boomers are on their way out, transferring their power to the younger generation. As these younger groups join the workforce, they are bringing with them new communication and collaboration technologies. Bruce Richardson, Chief Research Officer at AMR Research, has been studying the software industry for over 20 years. In this Viewpoint, Bruce shares his thoughts on what exactly will be different and gives some examples of how some companies are already embracing these changes.

News & Notes

Marketing Excellence Awards Entries due June 13!

Share your services and solutions marketing successes with ITSMA by submitting an entry to our 2008 Marketing Excellence Awards program. Learn more at http://www.itsma.com/News/mea/default.htm.

Upcoming ITSMA Events

To view all events, please go to http://www.itsma.com/aspfiles/events/calendar.asp.

The View from the Other Side: B2B Marketing Practices from Other Industries

Web Briefing
June 12, 2008 (11:00 a.m. ET)
Free for ITSMA members

Hosted by ITSMA's Chris Koch, this Web Briefing will examine other industry sectors beyond technology to discover tools and techniques to help us all improve.

http://www.itsma.com/Events/event_desc/08OB06G17.htm

Making Marketing "Atomically Global": How the "Flat World" Is Changing the Way Marketing Is Organized and Managed

Roundtable: Invitation-only for ITSMA members
June 18, 2008
Boston, MA

How do the economic climate and the flattening of the world impact the way your marketing team is organized and managed? At this Executive Roundtable, ITSMA’s Dave Munn and Ajit Maira will share the results of ITSMA’s latest research on marketing operations and management and will facilitate discussion with a group of your peers.

http://www.itsma.com/Events/event_desc/08RT06N18.htm

The Role of Brand in Shaping Customer Experience

Inner Circle Meeting: Invitation only for Executive Sponsors
June 24, 2008
London, U.K.

http://www.itsma.com/Events/event_desc/08DM06E19.htm

Pump It Up: Generating Increased Demand for Services and Solutions

Breakfast Briefing
June 24, 2008
Boston, MA
Free for ITSMA members

Join ITSMA’s Jeff Sands during this Breakfast Briefing for a discussion of best practices in retaining current accounts and acquiring and penetrating new accounts.

http://www.itsma.com/Events/event_desc/08BB06N36.htm

Taking Solutions to Market: Best Practices for Developing, Marketing, and Selling Solutions

Workshop
July 29-30, 2008
San Francisco, CA

This advanced workshop includes ITSMA’s proven approach to marketing a wide range of solutions and will engage you in the models, tools, and examples you need to effectively grow your solutions business. Led by ITSMA’s Ajit Maira and Tammy Ribaudo, the workshop is infused with practical exercises, case studies, best practices, and lessons learned.

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