Capitalizing on New Opportunities

14 February 2005—ITSMA’s recent Inner Circle Dinner in London highlighted three pockets of opportunities that are capturing substantial attention these days among technology services marketers: e-government, outsourcing, and midtier clients. Opportunities like these supported the cautiously optimistic mood that characterized the ITSMA dinner, where 20 top services marketers discussed marketing’s key challenges for 2005.

Capitalizing on such opportunities, however, requires a recognition that industry consolidation is creating a “burning platform” for most marketers, according to dinner participants. Marketers need to rethink their roles and priorities and focus even more intensively on the value they provide their organizations.

The first opportunity reflects the continued progress European states are making with e-government. Sweden and Denmark lead the way in both the sophistication of e-government services and citizen readiness to use them, and most other European countries are working hard to increase similar services and educate their citizens about the benefits of e-services. This opportunity will especially benefit those suppliers willing to invest in the education process, working both within governments themselves and directly with citizens.

Another significant pocket of opportunity lies in the latent demand across Europe for outsourcing services. The pace of outsourcing adoption varies widely in different countries, but once again the key to persuading buyers of the benefits of outsourcing depends heavily on education. Buyers are taking the initiative to educate themselves about outsourcing, and European marketers are seeing increased networking among buyers to exchange stories about successful and unsuccessful projects and suppliers.

Marketers are also seeing an increasing use of third-party intermediaries to scope potential outsourcing projects, build requests for proposals, and evaluate outsourcing providers. The growing role of these intermediaries for outsourcing puts yet more pressure on marketers to demonstrate credibility, especially as short lists for the larger projects appear to be getting even shorter.

The third opportunity noted at the dinner is in the mid tier, an increasingly attractive sector as the competition for clients in the top tier continues to intensify. Marketers see attractive growth potential in the mid tier, as well as significant challenges in marketing. Specifically, capturing growth in this tier rests heavily on commitment to ongoing research, sophisticated segmentation techniques, and the development of new value propositions.

As services marketers look to capitalize on these and other opportunities, they see a growing commercialization of their own activities. Some companies are merging sales and marketing under one director, for example, encouraging marketers to take a more integrated approach with the direct sales channel to target and build profitable clients. An increasing focus on micro- and account-based marketing reflects this new emphasis.

At the same time, marketing is closing ranks with the rest of the business, integrating more with human resource and delivery teams to ensure consistency of message across the company and that both clients and employees fully understand the points of difference that make their company unique.

The emphasis on demonstrating return on marketing investment continues, according to dinner participants. Many marketers have strengthened their approach to marketing metrics and are developing more sophisticated initiatives to communicate the value they are providing to internal stakeholders.

With budgets flat or down and headcount still under pressure, some marketing teams are seeking opportunities to generate revenue directly through billable marketing services such as designing internal communications programs for clients as part of enterprisewide technology projects. A number of marketing organizations are building central shared service areas to cut costs and looking more aggressively to send some tasks, such as list management and Web design, offshore if that can further reduce expenditures.

In all, the maturing of the industry in Europe is inspiring a similar maturation in the marketing function, which bodes well for creating the sharper, more commercial breed of marketer needed to take advantage of the opportunities that are still emerging.

—Bev Burgess, info@itsma.com

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About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we provide research, consulting, and training to the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.