Walking the Line: Balancing Strategic and Tactical Marketing Priorities

ITSMAs 2005 budget survey uncovered a difficult dilemma facing a great many services marketers: How can they balance activities between the strategic initiatives required for sustainable growth in a maturing market with the tactical priorities of increasing demand now and supporting the sales force?

Preliminary data from the survey with 19 member companies suggested that services marketing budgets are not keeping pace with the growth in services revenue. The good news is that services revenue itself is growing. ITSMA members project services growth of almost 14% in 2005. But marketing budgets for services are only inching ahead. Almost half the survey participants reported increasing budgets, but by an average of only 3.4%. Only a few participants are still dealing with budget cuts, but almost half are staying level with 2004. Services marketing personnel are similarly in a holding pattern, with slightly more firms actually cutting headcount than adding to it.

In the context of relatively flat budgets and headcount, services marketers are caught between competing short- and longer-term priorities. The top two priorities reported in the survey reflect this dilemma perfectly. The top priority is supporting the sales force—the quintessential tactical activity. Running a close second, however, is positioning and differentiating the company and its offers—a more strategic initiative. Indeed, differentiation is widely viewed as the most difficult challenge in today’s marketplace,

When push comes to shove, survey participants admitted that supporting sales is clearly their number one objective. This is not surprising given the continuing pressures on both the top and bottom lines at most IT services organizations. But most ITSMA members remain committed to the difficult balancing act, determined to push ahead with the more strategic initiatives as well, including developing more sophisticated market segmentation, refining the services and solutions portfolio, and sharpening corporate and offer-level differentiation.

Three initiatives in particular reflect marketers’ efforts to straddle the line. The first is a growing emphasis on thought leadership. Services marketers are investing more in thought leadership activities both to reinforce competitive differentiation and to generate immediate opportunities for high-level dialogue with potential buyers.

The second initiative is targeted or micro-marketing, including segmenting, profiling, and mapping of marketing mix and messages to a target audience. By narrowing their focus, marketers can create more effective offers and value propositions, which similarly supports both near-term lead generation and longer term advantage.

Finally, marketers are also experimenting more aggressively with account-based marketing, launching programs aimed at individual clients and prospects. By working hand-in-hand with sales-driven account teams, marketers are able to identify new opportunities, improve competitive positioning, and strengthen priority relationships far beyond the next quarter.

These three initiatives are certainly not the only areas in which marketing needs to invest for sustainable and profitable growth. Areas such as opportunity analysis and client experience management also cry out for increased investment, not to mention marketing training and skills development. But the ability of many marketing organizations to maintain their strategic and tactical balance amid heavy pressure to do more with less bodes well for companies seeking advantage in the emerging market reality.

5, jschwartz@itsma.com, and 6, bburgess@itsma.com‘

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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 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.