Services Marketers Optimistic About 2008

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.

‘

Comments are closed.

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 AT&T, Cisco, Deloitte, EMC, Fujitsu, Hewlett-Packard, IBM, Microsoft, SAP, 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.