Marketing and the Bottom Line: Key Takeaways from ITSMA’s Annual Marketing Conference

“Marketing has to drastically improve how it measures, tracks, and communicates its impact on the business.”

This call to arms was issued by 9, president and CEO of ITSMA, to kick off ITSMAs Annual Marketing Conference on November 15 and 16. Under the banner “Marketing and the Bottom Line: Leading the Growth Agenda,” Munn offered evidence that there is a positive correlation between marketing’s impact and measuring results: The discipline of measuring the return on marketing activities leads to better resource allocation, which in turn leads to improved results—a virtuous cycle.

He then introduced an agenda of speakers who all presented ideas to help marketers increase the impact of their programs on business success.

Increase the Impact of Ideas and Messages

The most important element of marketing’s impact is its ideas and messages. Undifferentiated, unremarkable content cannot improve overall business success, no matter how many marketing metrics are in place. Chip Heath, professor of organizational behavior at Stanford University, revealed his research into ways to make ideas and messages memorable, or “sticky”:

• Simple: Memorable ideas are simple enough to spark conversations and make operational decisions—think FedEx’s overnight delivery concept.
• Unexpected: The Atkins Diet is memorable because it shatters accepted expectations about dieting.
• Concrete: B2B marketing messages should be as clear as the instructions on a prescription bottle.
• Credible: Ask a question that is credible—for example, “Where’s the beef?”—and that puts the audience on the path to understanding what is better about your product or service.
• Emotional: Marketing messages are more powerful when they connect with the core identity and beliefs of the audience. For example, “Don’t Mess with Texas” is a successful anti-littering message because it relates to Texans’ pride in their state.
• Stories: Compelling, extraordinary stories about a company’s offerings or its operations stick in customers’ minds.

Get People Talking

Peers are customers’ most trusted source of input for purchasing decisions, according to ITSMA research. Marketers need to actively create and manage those peer conversations, said Paul Rand, an executive board member of WOMMA and president and CEO of the Zócalo Group. Successful word-of-mouth marketing campaigns focus on finding and engaging the 300-400 people in each vertical market who are most influential in shaping discussion and making recommendations to their peers. According to Rand, “Eighty-one percent of all marketers say that, within five years, they will spend 50 or more percent of their marketing dollars on word-of-mouth or conversational marketing.”

Make an Impact with Thought Leadership and Ideas

Discovering and researching issues that are important to customers—and creating managed discussions around those issues—is a good way to have maximal marketing impact on a limited budget, said Srinivas Uppaluri, global head of marketing for Infosys. Uppaluri worked with Infosys consultants to develop points of view about four emerging trends in global business: the growing impact of emerging economies like India and China, demographic shifts in age and working populations around the world, technology ubiquity, and increased regulations. The emphasis on ideas rather than selling helped Infosys garner the attention of high-level executives in existing customers and prospects; a focus on managing the conversations (mostly) online helped save marketing dollars.

Experiment for the Future

The business impact of online marketing tactics such as social networking is controversial, but that does not mean marketers should ignore them, said 5, ITSMA’s senior vice president of thought leadership. ITSMA research shows that marketers who identify themselves as having a significant impact on the business are experimenting much more with online tactics like social networks and Webinars than marketers who say they are having limited impact on the business. Both Schwartz and Bruce Richardson, chief research officer at AMR Research, emphasized that, to get the biggest impact from online marketing, marketers should focus on younger customers who have made these new Web 2.0 platforms and communities an integral part of their lives. This way, marketers will be ready when the next generation of customers—who will want to communicate using Web 2.0 tools—arrives.

Look Forward, Not Back

Marketing metrics usually rely on past data, which limits marketers’ ability to perform predictive analysis—especially as market conditions and strategic intentions change. Lynn Anderson, vice president of influencer marketing, Technology Solutions Group, Hewlett-Packard, has implemented a model for measuring and managing marketing campaigns on a portfolio basis rather than measuring each campaign individually. The model allows HP to compare the effectiveness of different categories of outbound marketing tactics (such as events and direct marketing) against one another over time and make projections on future returns to make better investment decisions.

Measure Value on Three Levels

Most marketing groups evaluate the value they deliver on a single level: the ROI of specific marketing programs. However, marketing needs to expand its measurement horizons to two additional levels: value to the business and value to the business’s customers, said Bob Baginski, senior vice president, Member Engagement for ITSMA. “We can’t continue to leave value to the business and value to the customer to chance,” he added.

Find the Right Customers for Innovation

As product life cycles continue to shrink and globalization opens up many new and diverse markets to serve, companies are going to become more reliant upon customers and external partners to help them innovate, according to IBM research. However, not all customers will be valuable collaborators, said Robert Painter, vice president of marketing, IBM Global Business Services. Marketing needs to engage with customers to find the 20% who can help define and develop the products and services of the future. For example, at IBM Global Business Services, marketing owns client profitability segmentation analysis and uses that data to develop programs designed to collaborate and build deeper relationships with the company’s best customers.

Use Solutions to Combat Commoditization

Though Northrop Grumman IT (NGIT) continues to develop some of the world’s most advanced IT products and services, customers in its key markets increasingly believe that IT services are commodities and so shop on price, said Steve Perkins, sector vice president for NGIT. To continue to build revenues and profits, NGIT began using a solutions strategy to create a portfolio of repeatable solutions that leverage NGIT’s underused intellectual property portfolio.

Talk with—Not at—Customers

Customers have taken control of marketing messages through tools like blogs, collaboration software, and social networking Websites, said Larry Weber, chairman of the W2 Group. In this new era, marketers need to begin segmenting customers by behavior rather than through traditional demographics and to build brand through dialogue rather than message control.

Next Year

ITSMA’s 15th Annual Marketing Conference will take place on November 4 and 5, 2008, so save the date!

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ITSMA specializes in helping companies market and sell services and solutions more effectively. We work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA annual program clients include business leaders such as Avaya, BT, Cisco, Deloitte, Hewlett-Packard, IBM, Microsoft, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing℠, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.