In the July 2008 issue:

• First: Is Demand Generation Merely “Air Cover?”
• What's Hot: ITSMA's Vertical Maturity Model
• The Interview: Build an Effective Lead-Nurturing Process
• Research Desk:
  • Ask ITSMA: What Is the Best Way to Reach CIOs?
  • Recent ITSMA Thought Leadership
• News & Notes
  • Upcoming ITSMA Events

First

Is Demand Generation Merely “Air Cover?”

By Chris Koch, ckoch@itsma.com

I talked with a senior marketer at a technology company the other day who says that marketing has become overly defensive, obsessed with proving its value rather than generating real impact on the business. This defensiveness has driven a focus on managing leads rather than driving new demand.

She asks a tough but valid question: Are we really focused on impact or just activity?

She talks about engaging customers much earlier in the sales cycle—indeed, before they have articulated a need. It is the thinking that underpins of one of ITSMA’s big shticks, Account-Based Marketing—which boils down to treating important customers as markets of one and building a relationship in which you help them articulate their needs.

Yet here’s the nut: Marketers tell me that it’s notoriously difficult to trace front-end demand generation all the way down to the point where there is a well-defined opportunity.

But what’s the alternative? Research says that marketing is providing less than a quarter of the leads that result in a sale. Perhaps focusing earlier in the sales cycle could bump up the numbers. Surveys, research, and thought leadership help attract customers who are still trying to decide what their real needs are.

The Skeptics Speak

But it’s harder to measure demand-generation activities. They generate awareness, they build credibility, but all that can be lost on the way to a sale. Indeed, this marketer says she had a lot of resistance to her thought leadership program that focused on ideas rather than products. “Air cover,” sniffed detractors—blather that extended the sales cycle unnecessarily.

It took time and effort to turn that perception around. And it took a different kind of metrics—metrics that looked at how the thought leadership campaign improved the company’s share of voice with media and analysts and moved the discussion with customers up to a higher level in the organization.

Still, it’s hard to connect the dots directly to more customer pull. Upper management has to do that. Says this marketer: “Did the campaign contribute to our increase in overall customer pull? I would say yes it did. Now, did we measure that and connect all the dots? No, we didn’t have to. It was pretty obvious to the management team that that was what was going on.”

That strikes me as a controversial assertion. We all know that loyalty is fleeting. What’s to stop customers from attending all your thought leadership conferences, learning everything there is to know and then throwing you over for another?

Emphasize Lead Nurturing

The answer is to build a lead-nurturing process that closely tracks the people who are downloading your white papers and attending your events. Research shows that 80–90% of leads aren’t ready to buy, so throwing them over the wall to sales too soon isn’t going to get you anywhere. Furthermore, sales and marketing need to agree on when a lead is ready to pursue. And leads that don’t pan out can’t fall into a black hole; they need to come back to marketing to be nurtured some more.

In this month’s interview, BearingPoint’s Paul Dunay talks about how he is creating this kind of closed-loop process for lead nurturing. Read on to learn more.

How do you prove the effectiveness of demand generation? Contact me at ckoch@itsma.com.

What's Hot

The Steps to Vertical Market Leadership: ITSMA’s Vertical Maturity Model

By Chris Koch, ckoch@itsma.com

Vertical market knowledge is table stakes for gaining credibility and access to top customers these days. Gathering vertical market knowledge and experience isn’t difficult—it comes naturally in the course of working with or talking to customers. But in most companies, information and experience remain trapped between the ears of individual employees or simply lost as employees move on to the next project or the next conversation.

Even in companies that have structured themselves around verticals, knowledge and expertise aren’t guaranteed. They may be a hollow shell—driven by an effort to chase competitors or to shore up flagging sales.

Agree on Competence Levels

That puts marketing in a bind: Without an objective sense of the company’s vertical experience and expertise, it risks over-marketing the company’s capabilities and alienating customers, or under-marketing because it is unaware of some pocket of brilliance hidden somewhere inside a vertical practice. To help marketers find their place along the vertical market maturity continuum and develop appropriate marketing strategies for each stage, ITSMA has developed a conceptual framework. The framework gives companies an agreed-upon way to gauge progress of vertical market competence and perception and match the right marketing strategies and resources along the way.

The model measures vertical competence on a scale from 1 (undifferentiated) to 5 (leadership). It ranks the company’s vertical market expertise on six different attributes:

• Market perception
• Thought leadership
• Reference management
• Offer development
• Delivery capability
• Marketing role and organization structure

The model brings a certain level of objectivity and consistency to what can be a very subjective and emotional discussion: the competence and reputation of employees and offerings in the marketplace. It also provides a common language for corporate executives to compare progress across the various verticals.

Marketers pay a price when they try to develop a market strategy without understanding where their company sits along the continuum of vertical market expertise and perception. Indeed, marketing will be very different for companies that are lower on the maturity curve than vertical market leaders. The most brilliantly executed marketing program will be a flop if it tries to capitalize on a perception of vertical market expertise that simply isn’t there.

Though achieving vertical market leadership requires big investments of time and effort, when the payoff does arrive, it could be significant. More important, once leadership is achieved, its benefits become self-reinforcing. Market leaders attract the best talent, which attracts the best clients. Virtuous cycles don’t get much better than that.

Want to learn more? ITSMA members can read all about the Vertical Maturity Model here: http://www.itsma.com/research/abstracts/U0061.htm.

The Interview

Close the Loop: How to Build an Effective Lead-Nurturing Process

What do you do with the people who aren’t ready to buy today? You win them over with patience, pacing, and relevance. Services marketing expert Paul Dunay has developed a process for retaining the people who aren’t hot sales leads and nurturing them until they heat up.

ITSMA: Paul, how do you define a lead at BearingPoint?

Dunay: Here, five things define a lead:

• We have had a conversation with the person
• The conversation is around a topic area that we can deliver on
• A need has been identified in the topic area we discussed
• A budget has been allocated
• A timeframe has been set

I can't deliver all five of those things to sales, but I can certainly deliver the first three with our lead-nurturing program.

ITSMA: Explain your process for doing that.

Dunay: Let’s say I have a person who downloaded something and he is in banking and security. I have a publishing calendar that’s going to tell me that we need to communicate with a very specific cadence—say, every two to three weeks—in order to nurture this person.

The cadence has to happen at a pace that’s okay for the client and the content has to be relevant. That doesn’t mean the content needs to be completely personalized. You can put the client in certain groups. So, if this person is in the banking group and the security group, we are going to send any new pieces of thought leadership, case studies, podcasts, videos, etc. in those particular areas.

ITSMA: How do you segment people so that the content is relevant but you aren’t running out of resources trying to serve too many different segments?

Dunay: At first we went about segmenting in a very, very granular sense. You read books on marketing strategy and they talk about how you shouldn’t put people in big, broad buckets. But at the end of the day, we end up having to do that because your segments have to be in tune with what the organization can actually produce from a content perspective.

So, for example, if security isn't one of your main thrusts—if you can’t produce something thoughtful about it every three or four weeks from within your organization—then it’s probably too narrow and you need to combine it with something else, like risk management.

I look at it like a buffet table. When you go to the buffet, you have a little soup, you have some turkey, you have some chicken, you have some steak, and maybe you have a little ham. But then you come back and have seconds on the steak. So your true need eventually emerges.

For example, I can show you several profiles where someone exhibits a passing interest in technology, risk, security, banking, and compliance. But at the end of the day, he is a tech geek because he keeps coming back for more technology-oriented materials. Maybe he is weighing in on some specific technology projects and he wants to be better educated around that. Your true need emerges over time.

ITSMA: It sounds like continuity is key.

Dunay: Exactly. Continuity and sustainability. You have to be able to fulfill on this. Otherwise, if it’s a one-hit wonder, then you need to move on or combine the lead into another related track and try to keep him that way. So let’s say you closed a line of business. You are not doing airline reservation systems anymore, but you are doing customer-centricity kinds of stuff. You can try putting him in there and see how that works out.

Of course, we check back with them as far as updating their preferences for content. We try to do it every six months. Once a quarter might be a little too much, but you have to do it at least once a year. Most of the time we see that people take more, not less, than what they are currently opted in for.

But while consistency is important, you have to be aware of the idiosyncrasies in people’s lives. For example, just before summer begins, we will put together a “best of” package to send out before people start checking out. That’s so we are not pestering people every three weeks or four weeks with content, and it’s also because we slow down, too; we don’t have as many events going, we don’t have as much thought leadership flowing out.

Paul Dunay had much more wisdom to offer in our interview. ITSMA members will receive the full-length Viewpoint with Dunay later this month.

Research Desk

Ask ITSMA: What Is the Best Way to Reach CIOs?

By Julie Schwartz, Senior Vice President and Chief Research Officer, ITSMA

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.

I realize that CIOs are bombarded with information and sales calls, so I'm wondering where the best place is to put our marketing efforts. Is it in advertising, trade shows, direct mailings, emails?

You are right: CIOs are getting bombarded with unsolicited emails and cold calls. They don't like to be rude, but if they responded to every message and every phone call, they would have little time to do anything else.

Therefore, they are very proactive. Every once in a while a cold caller or email message will catch their attention, but mostly they will call you.

They find you by doing extensive research on the Web and by reading the trade press. They also attend seminars, conferences, selected trade shows, and user group meetings for their primary technology vendors. They are looking for new technologies and creative ideas on how to apply those technologies to solve business problems. In other words, they are looking for thought leadership, not the same old story.

Sometimes a connection is pure luck. You are at the right place at the right time. In other cases, you can plan to be where the customers will find you. Think about speaker placement, exhibiting at your business partner shows, cosponsoring value-added seminars with business partners, getting article placements (or at least quotes) in the trade press, and getting your message in multiple locations on the Web—not just your Website. Work the search engines to pop up on top of topical searches.

Make sure all your messages are integrated and are therefore additive. As you can see, in a world in which the CIOs are proactively finding solutions, marketing is vital.

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

Recent ITSMA Thought Leadership

The Steps to Vertical Market Leadership: ITSMA's Vertical Maturity Model
http://www.itsma.com/research/abstracts/U0061.htm

ITSMA has created a Vertical Market Maturity Model to help gauge progress toward vertical market mastery. In this Update we examine the model and outline the steps necessary to transform a company and its marketing group into vertical market experts.

The View from the Other Side: B2B Marketing Practices from Other Industries
http://www.itsma.com/research/abstracts/OLB080612.htm

If you want to break through and be unique, you need to look at how other industries market. It’s not that they are more creative, it’s simply that they may face different competitive pressures, industry norms, and corporate cultures. In this Online Briefing, we examine consumer packaged goods and professional services and look at ways to organize marketing more effectively to deliver breakthrough demand-generation programs.

Elevating the Focus on Customers: ABM at Unisys Europe
http://www.itsma.com/research/abstracts/CS0017.htm

ABM is an ambitious strategy that views each of a company’s most important customers as a market of one. Though the concept is simple, the follow-through is not. As Unisys Europe discovered, ABM implementation brings significant challenges, including organizational change, shifting marketing competencies, close coordination with sales, and a need to raise marketing to new heights, both inside the organization and with customers. Unisys has already learned some valuable lessons that we discuss in this ITSMA Case Study.

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.

News & Notes

Upcoming ITSMA Events

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

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

Workshop
July 29–30, 2008
San Francisco , CA
Member price: $1,995
Nonmember price: $2,495

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.

http://www.itsma.com/Events/event_desc/08WS07N20.htm

What Really Matters to Decision Makers: Insight into Key Buying Criteria for Services and Solutions

Online Briefing
August 12, 2008
8:00 am Pacific – 11:00 am Eastern – 16:00 London (Duration: One hour)
Free for ITSMA members

Uncertain times call for razor-sharp marketing focus. Companies need to focus on activities that will have a measurable impact on the business, such as demand generation, lead nurturing, and sales enablement. All of this requires a deep and thorough understanding of how customers buy. Please join ITSMA’s Julie Schwartz and Katie Gustin as they reveal the latest results from ITSMA’s ever-popular annual research program, How Customers Buy Services and Solutions.

http://www.itsma.com/Events/event_desc/08OB08G22.htm

The Lasting Legacy of Sustainability: Marketing's Role in the Future

Roundtable
September 10, 2008
London, UK

http://www.itsma.com/Events/event_desc/08RT09E23.htm

Maximizing Marketing’s Influence: The New Marketing Rules

15th Annual Marketing Conference, November 4 and 5
Renaissance Boston Waterfront Hotel

No more excuses: It’s time for marketing to step up to the plate and lead. We’ve dealt with shrinking budgets and staff, mastered complex CRM systems, learned to get great work done within a matrixed organization, and stood our ground with the Board. Now more than ever we need to maximize our influence and create bold, new marketing rules. Join usas we hear insights and success stories from marketing leaders on a wide variety of vital topics—each with a window into what they did, how they led, and the results they achieved. An essential combination of both pragmatic and strategic will be highlighted through presentations, panel discussions, and interactive break-out sessions.

http://www.itsma.com/Events/event_desc/08AC11N32.htm

Subscription Information

ITSMA E-ZINE is a monthly email newsletter that provides highlights of new ITSMA research, analysis, ideas, tools, and events relating to marketing and selling technology services and solutions. ITSMA E-ZINE is available without charge and is sent only to opt-in subscribers.

Subscriptions are available in text and HTML versions. To SUBSCRIBE or to change the format of your subscription, visit http://www.itsma.com/aspfiles/press/ezine.asp.

To UNSUBSCRIBE, please email us at unsubscribe@itsma.com or mail us at ITSMA Subscriptions, 420 Bedford Street, Suite 110, Lexington, MA 02420, USA.

Branch information for recipients located in Europe: ITSMA, Grenville Court, Britwell Road, Burnham, Buckinghamshire. SL1 8DF. Company No: FC023364 Branch No: BR006173. Branch registered in England and Wales. VAT Number GB 840 4681 32.

Back issues of ITSMA E-ZINE are available at http://www.itsma.com/News/ezine/default.htm.

(c) Copyright 2008, ITSMA

Please forward this newsletter, but only in its entirety.

Public citation or publication of any information herein is encouraged but subject to U.S. and international copyright law and conventions. Any citation must include full attribution to ITSMA. Individual graphics or paragraphs can be published without permission as long as attribution to ITSMA is included. Publication of longer selections or complete articles requires ITSMA permission. For permission or more information, contact pr@itsma.com