Three Priorities for Marketing Maintenance and Operational Services

9 May 2005—Companies that minimize marketing investments for maintenance and operational services (M&OS) risk serious damage to a critical component of profitable growth, according to participants in ITSMA’s recent marketing roundtable in Paris. M&OS sales and contracts often account for 25% or more of technology company revenue and an even greater share of profit. Yet marketers responsible for M&OS suggest that companies are typically more focused on cutting costs than on developing new marketing approaches to create and deliver greater value to customers.

Roundtable participants from a wide range of technology companies note that customers today have many more choices in purchasing M&OS and are therefore able to demand more substantial proof of measurable business value from services providers. Customers are scrutinizing potential contracts more closely, questioning the need for annual or multiyear contracts, and looking more seriously at bringing support in-house.

Sustaining profitable growth for M&OS in this environment, according to the participants, requires much more attention to understanding, communicating, and delivering the increased value that customers are demanding. Specifically, this means:

• Achieving deeper understanding of how customers perceive value through more sophisticated segmentation
• Creating more targeted and differentiated value propositions
• Executing a more integrated push and pull approach to communicating value

Segmentation

Traditional segmentation schemes for M&OS highlight product line, company size, industry, geography, and/or technology or application adoption. Most of these techniques are commodity descriptors that yield little insight into customers’ purchase preferences and priorities. Newer techniques such as goal-based segmentation are much more effective in uncovering what customers really value.

Value Propositions

Deeper customer insight allows marketers to create more targeted and differentiated value propositions. A simple rating exercise at the roundtable suggested that value propositions in the M&OS market are generally weak and undifferentiated. They fail to demonstrate the business value of the services as defined by the target buyer. Building on a more sophisticated segmentation scheme, marketers can craft more compelling value propositions with stronger business cases for very specific customer types—and even individual customers.

Integrated Communication

ITSMA research demonstrates that the majority of the services marketing communications budget is dedicated to direct and electronic/interactive marketing campaigns and collateral. But these traditional “push” techniques are much less effective than they used to be. Today’s M&OS buyers are proactive; they do their own research and do not wait for vendors to contact them. By integrating “pull” marketing techniques such as customer reference programs, thought leadership campaigns, search engine marketing, and public relations, M&OS marketers will generate more awareness and interest in their services, thus paving the way for more effective follow-on communications.

Maintenance and operational services may not be the most exciting elements in the portfolio, but most companies unwisely ignore their contribution to profitable growth. As buyer demands and options continue to rise, M&OS marketers must keep pace with more sophisticated approaches to analyzing and communicating value or risk losing a significant amount of business.

—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.