January 7, 2009
Subscribe  |  Forward to friend

Featured Articles

Buck the Budget Trend: Can You Save Your Marketing Programs?

By Chris Koch, ckoch@itsma.com

As the economy continues to absorb the kinds of body blows not seen since the Great Depression, we are witnessing the ways that many businesses will pass on the pain to marketing. We see three approaches:

• Slash and burn. Some companies—even those that have not yet experienced a real drop in revenue—are making major knee-jerk cuts in marketing staff and spending.
• Selectively cut. Another set of businesses have made a first wave of selective cuts and freezes but are starting to look deeper at more permanent cuts, given the bleak 2009 projections.
• Maintain and grow. A handful of businesses are paying attention to history, which has repeatedly shown that companies that continue to invest in marketing during downturns emerge stronger and with a head start on competitors.

We will review which way businesses are turning during our next Online Briefing, ITSMA's 2009 State of the Marketing Profession Address: Making the Right Choices in Uncertain Times, on January 22. We’ll be revealing some of the highlights of our annual Marketing Budgets and Trends Survey and putting those results in the context of the worst economic downturn most of us have ever seen. We will offer advice on what marketers need to do to have the greatest impact while making sure marketing is as efficient and cost effective as possible. I recently did a preview interview with ITSMA President and CEO Dave Munn, who will lead the briefing along with Julie Schwartz, our senior vice president of research and thought leadership, who will present the data (the survey is now out in the field). Here’s an excerpt:

ITSMA: Dave, research shows that companies that maintain or increase marketing investment in downturns are more likely to grow and be better positioned when the economy turns around. Yet with all that is going on today economically, how can marketers make this argument without sounding self-serving?

Dave Munn: First, I think marketers have to cite that data, because it's true. We have referred to numerous studies of B2B firms that have shown that companies that maintain or increase marketing spend grow faster and increase share when they come out of a downturn. But marketers also have to be armed with real facts that show what will happen if they are forced to cut their programs. Unfortunately, many companies don't have that kind of data and can’t make a strong enough argument without it. In one of our surveys earlier this year we were finally starting to see an increase in marketing measurement spending. I’m now worried that those investments will be in jeopardy going forward at a time when they are needed the most.

Second, I think companies that maintain or increase marketing spending during this downturn will be the exception. Most marketers are being told how much they need to cut and are making decisions for 2009 based on that. In some cases it’s forcing marketers to cut back in areas that may have needed cutting back anyway. In other cases, marketers are being forced to cut important programs and activities that will have a very real negative impact on growth over the long run.

ITSMA: If companies have to cut back on marketing, what things shouldn’t be cut?

Munn: I’m truly shocked at how deep some companies are already cutting back in marketing. Some will not recover from it. I’m also amazed when I hear that many of those same companies are holding sales expenses steady or even increasing the number of sales resources. Here are some important areas that companies need to maintain during the recession:

• Lead generation and nurturing. Without marketing to develop and nurture leads for an easier sale, I can’t see how that extra investment in sales is going to pay off. The way to reach skeptical customers isn’t to sell them even harder; it’s to educate. Only marketing can do that, through carefully targeted value propositions, offerings, and proof points.
• Sales support and customer research. Sales is also going to need even more customer insight and customer knowledge, yet we see companies cutting back on a wide range of customer and market research activities. We think that’s going to hamper some companies and make those who continue to invest in research stand apart from competitors. With these areas under attack and underfunded, marketers need to reach out to sales to get its support for funding programs that are important for enabling sales.

ITSMA: Events are among the most consistently successful ways to reach customers, but they are also expensive. How should marketers think about their relationship-building programs during the recession?

Munn: Marketers need to rethink all of their customer relationship-building programs, from user conferences and advisory councils to reference programs and senior-level events. They cannot be one-off types of activities any more; they all have to be used for developing and nurturing longer-term relationships. If they aren’t doing that, then marketers may want to cut them.

For example, we’re seeing the decline of the traditional hospitality-style events, and that’s okay. Sure, some customers still love to attend special sporting or cultural events, but how much business value are they really adding, and will the “right” customers (i.e., C-level executives) attend them these days? Not much and probably not.

In general, customers would rather attend events that are more topic focused and peer focused. They want to learn about new ideas, new approaches to tackling different problems they are facing, and they want to be in the room with peers and subject matter experts. And they’re looking for continuity.

ITSMA: What are some ways marketers can cut cost without cutting value?

Munn: We’re seeing companies do a number of things:

• Move from broad to narrow. Marketers need to continue migrating away from the big, broad, and expensive mass marketing activities to ones that are targeted more efficiently at narrow audiences, such as industry, role, and Account-Based Marketing programs—especially the latter, because companies are having success using those programs to increase loyalty and share of wallet.
• Shift from offline to online. Marketers have been cutting back on physical collateral and spending more on search engine marketing, online newsletters, virtual thought leadership events, and online communities.
• Use the urge for continuity to cut costs. Customers want to be part of programs where they learn new things on a continuing basis and can build relationships with peers. If the program is valuable enough, they will tolerate some corner cutting. For example, you could create a customer advisory council that meets regularly to address a specific topic. But instead of having all the meetings in person, shift one or two of them to a high-end HD videoconference roundtable discussion. Or instead of meeting for two days, meet for a half day.
• Go offshore for productivity, not just cost. What's surprising is that some companies aren’t just saving money offshore; they're getting the same or more productivity out of some offshore groups than they were actually getting before. But arriving at this point takes time, so companies should begin slowly and on a limited basis with different activities. Of course, there are many activities that should never be outsourced, but marketers need to continue to look at all different types of outsourcing because clients are telling us that they are having a lot of success.

ITSMA: Our research is showing that many marketers are rewriting their value propositions to reflect what’s happening in the economy. What are some tips for making concerns about the economy sound genuine—while still building interest?

Munn: Customers today are very sensitive to value propositions that step over the line in three areas:

• Overzealous. When times are tough, you have to be careful about making dramatic claims. Skeptical impulses are magnified during hard times. Customers want real solutions to real problems, so avoid overhyping your proof points.
• Generic. Customers are worn out from trying to figure out what’s behind marketing messages. Clarity and specificity will stand out more than ever.
• Rosy. Times are tough and people are not feeling confident in the future. Overly rosy value propositions will come across as trite—or even offensive.

Learn more at the ITSMA 2009 State of the Marketing Profession Address: Making the Right Choices in Uncertain Times, which will be heldon January 22.Click here to register. Or contact Dave Munn at dmunn@itsma.com.

What Should Never Be Outsourced?

By Bob Baginski, ITSMA, bbaginski@itsma.com

New CMOs often are brought in as part of a change agenda. Under such circumstances, they must rapidly introduce a new marketing vision and improvements. One way is to develop a framework for sourcing some of marketing’s most important processes, programs, and tasks. With this approach, CMOs can make quick decisions about how to get their team’s work done faster, better, and cheaper.

And be sure to revisit your list often, because circumstances change. What should never go outside the company today may be a worthy candidate in a year or two.

Here we list some of the most important processes and programs that should remain inside the organization. Of course, in your company and integrated marketing model, you might choose to focus on additional programs and will need to determine how you will source them as well.

• Program management. Regardless of the marketing program you’re talking about, whether it is research, thought leadership, or advertising, you wouldn’t relinquish the ultimate accountability and direction of the most important areas of marketing. If nothing else, certainly your management holds you accountable.
• Account planning. As marketing gets closer to sales and becomes more integrated into the account planning process, marketing organizations can bring significant insight, knowledge, and value to the traditional account planning process.
• Internal communications. This should never go outside the company, because to communicate effectively internally, you have to know all about the culture and the processes of the company—and the people. You also have to understand the key focus areas and priorities of the company and know who is who. Freelancers can get snippets of information but can’t be fully informed unless they are living within that company.
• Analyst relations. There are at least three good reasons to keep analyst relations inside the company. The first is that it is generally a top priority for marketers (and should be). Second, the direct investment is relatively low—a small group can handle the important analyst relationships. Third, it’s important to build long-term relationships with analysts, who tend to move around among different firms over the course of their careers but rarely leave their specialty areas. Internal people can track the analysts’ movements and maintain continuity in the relationships.

Later this month, ITSMA program clients will receive an ITSMA Marketing Tool with the full framework that lists recommendations for processes, programs, and tasks that should remain inside the organization, those that should be performed outside the organization, and those that should be blended internally and externally.

Why Our Customers Aren’t Listening to Us

By Malcolm Frank, Senior Vice President, Marketing and Strategy, Cognizant Technology Solutions

We marketers are not talking to our clients in a candid, direct, and understandable way. Instead, in far too many cases the marketing in our industry can become so, well, grandiloquent that our communications confuse rather than clarify and alienate rather than disarm prospective clients. We’ve all seen it: Websites and brochures promising “synergies” via “new paradigms” by “leveraging” “capabilities” to “drive essential advantage” with “next-generation solutions” for our “multipolar world.” You get the point …

The Deeper Issues of Marketing-Speak

The problems with messages like this are deeper than we think. Here are some of the problems we’re causing with our language:

• Customers aren’t just confused—they’re offended. Clients think they're being had—that marketing is trying to bowl them over with vagueness and ambiguity. It isn’t just that we’ve been unclear. Clients think we’ve been manipulative, and they think it's disrespectful. In fact, in one instance it led a client to refer to a competitor’s marketing department as the “designated corporate liars.”
• Big prices + lack of specificity = frustration. We are selling complex, expensive products and services. Customers want us to solve their specific business problems, but often they don’t see what our messages have to do with them and the resolution of their business problems. They look at our messages and ask, "How does that solve my data integration problems? I've got a very discrete issue that needs to be addressed, and yet you're talking in this hyperbolic language. You’re selling a blender as a ‘produce integration apparatus,’ and that doesn’t build trust.”
• The sin of inclusion. We try to satisfy everyone in all our different markets, verticals, and geographies. But by doing so, we satisfy no one. Our marketing becomes diluted and so inclusive that it no longer means anything. These issues combine to create the Thesaurus Effect, where marketers reach for big words to hide the fact that they don’t have anything specific to say in the first place. We can’t be specific because if we are, it could be contradictory across some of our various markets. And so our message is further diluted out of fear that we not offend anyone or leave anyone out.
• All marketing-speak sounds the same. The very language that we think differentiates us from our competitors—our value propositions—makes us all sound the same to customers. At Cognizant, we went through a rebranding exercise that caused us to look at each of our primary competitors and compare all their value propositions (something that our clients do all the time). But if you remove the logos and fancy type fonts, they are all indistinguishable. It's as if the marketing teams for all the firms in this industry were given the same 12 words (think of those word magnet games on refrigerators) and then were given the task of jumbling them together.
• Marketing-speak makes the purchasing decision more difficult. Clients can’t compare what they can’t understand. At Cognizant, we look at our sales pipeline on a very active basis, and it turns out that we are running into the same six competitors with great consistency because our industry has become very consolidated. Our clients are coming back to us and are saying, "It's really tough at the initial phase to understand what really distinguishes you guys"—meaning "you guys" collectively as an industry. We are making the purchasing decision more difficult for them.

Want to learn how to make your marketing speak more clearly? ITSMA program clients will receive a Viewpoint by Malcolm Frank later this month explaining how.

Ask ITSMA: How Do CIOs Get Their Information About Vendors?

By Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA

Each month, ITSMA receives a number of queries through Ask ITSMA, a resource designed to give program clients 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.

How do CIOs get their information about vendors?

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 (or delegating the research to their staff) 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 it 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, co-sponsoring 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 so that your organization pops 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 sales or marketing question? Visit Ask ITSMA to access our experience, insight, and research results.

Upcoming ITSMA Events

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

ITSMA's 2009 State of the Marketing Profession Address: Making the Right Choices in Uncertain Times

Online Web Briefing
January 22, 2009
8:00 a.m. Pacific – 11:00 a.m. Eastern – 16:00 London (Duration: One hour)
(Free for ITSMA program clients)
http://www.itsma.com/Events/event_desc/09OB01G01.htm

During an economic downturn, marketers need to make the right choices in terms of where to ramp up, where to maintain, and where to scale back—in some cases permanently. Join Dave Munn, President and CEO, and Julie Schwartz, Senior Vice President, Thought Leadership and Research, to hear highlights from ITSMA's 2009 Marketing Budgets and Trends Survey, learn what choices marketers are making in response to the current economic environment, and gain practical insight and recommendations on how to turn adversity into opportunity.

Recent ITSMA Thought Leadership

What You Need to Know About Marketing Analytics
http://www.itsma.com/research/abstracts/olb081216.htm

It’s critical that marketing improve its ability to analyze data to inform decisions, predict buyer behavior, and forecast trends. This requires a foundation of quality data, collaboration between marketing and finance, and a willingness to experiment before making big commitments to programs and campaigns. In this Online Briefing, ITSMA’s Chris Koch, analytics guru Pat LaPointe of MarketingNPV, and Samir Bagga, Vice President, Global Marketing & Communications, for professional services company Satyam reveal highlights from ITSMA’s survey on marketing analytics and provide insights and best practices in marketing analytics.

Two Extremes That Will Clarify Your Launch Strategy
http://www.itsma.com/research/abstracts/V0045.htm

Product and service launch strategies are framed by two extremes: blow open the market right away with a big marketing push or build awareness slowly over time. Wharton marketing professor Peter Fader calls these extremes “penetration” and “skim.” In this Viewpoint, Fader explains how marketers can use skim and penetration as guidelines for developing the most appropriate campaigns.

Marketing in a Downturn
http://www.itsma.com/research/abstracts/SV4320.htm

ITSMA clients are beginning to feel the effects of the financial markets crisis. Although pipelines remain strong in the fourth calendar quarter, companies are issuing cautions regarding 2009. There is little to no visibility for 2009 customer demand. In response, marketers are changing their strategies and tactics.

How Customers Choose Solution Providers, North America, 2008, Focus Report
http://www.itsma.com/research/abstracts/F014.htm

ITSMA's 2008 How Customers Choose Solution Providers Study revealed a number of important insights. Through detailed research and analysis of customer buying behavior, we have concluded that marketers need to engage customers earlier than ever before—during what we call the epiphany phase of the buying cycle. Based on interviews with 216 U.S.-based business and IT buyers of business and technology solutions, the report helps marketers better understand the marketing activities that will deliver the desired results at three major stages of the buying cycle: epiphany, awareness, and interest.

Classic Insight

Check out these ITSMA Online Briefings that have been rated highly by ITSMA program clients:

Thought Leadership Marketing for Professional Services: Getting Attention in a Competitive Marketplace
http://www.itsma.com/research/abstracts/OLB070612.htm

Today's crowded market for professional services puts a tremendous premium on thought leadership. Featuring ITSMA research, a mini case study on how Accenture develops and packages robust points of view, and The Bloom Group's seven hallmarks of thought leadership, this Briefing will help you successfully leverage thought leadership to achieve differentiation, build awareness, and generate leads.

Account-Based Marketing: Best Practices and Critical Success Factors
http://www.itsma.com/research/abstracts/OLB070213.htm

ITSMA's Jeff Sands, IBM's Naomi Wilsey, and Xerox's Liz Vega copresent this Briefing on best practices and critical success factors for Account-Based Marketing (ABM), a hot new approach that helps companies deepen relationships and increase revenue with key accounts.