What’s the Best Internal Communications Channel?

By Julie Schwartz, Senior Vice President of Research and Thought Leadership, ITSMA

Each month, ITSMA receives a number of queries through Ask ITSMA, a resource designed to give members a quick and easy way to get insight on important services and solutions marketing questions they face. In this column, we will publish some of our favorite questions, along with excerpts from our replies.

Q: What are the best communication channels for internal marketing communications across the organization?

A: There is no silver bullet that applies to every company. Each company has its own culture and history. For example, email might work well in one company. In another company, emails might be ignored due to overuse. Some companies have had great success with wikis. Others find that internal “radio” programs that people can download to their computers or MP3s are very effective. We have also seen weekly conference calls, microsites, online bulletin boards, and so forth . Here’s a great example of a new internal communication channel developed by Xerox:

Often faced with the same key competitors, Xerox Global Services needed a new way to share information and differentiate itself from the competition. It needed to find a way to gather competitive information from thousands of individuals and disseminate it to the entire sales force. That’s Competipedia. It replaced multiple internal content repositories with a comprehensive wiki-based Website that can be updated and edited —at anytime, by anyone —thereby creating an ongoing knowledge exchange portal for both the sales force and headquarters.

You can find more information about this and other MEA-winning programs on our Website: http://www.itsma.com/news/09-mea-winners/.

	Do you have a sales or marketing question? Visit Ask ITSMA to access our experience, insight, and research results.

Services Marketing News

HP and Cisco’s breakup, management challenges at Xerox, and changes at CSC lead this month’s news.

• Cisco backs away from HP partnership as the lines between services and products blur further.
• PwC talks about its best practices in social media strategy.
• CSC names new president of global sales and marketing .
• How IBM links Smarter Planet to its portfolio.
• Top five cloud applications for 2010 from IDC.
• ITV in UK signs outsourcing deal with Accenture.
• Report on the changing dynamics at Dell.
• Vendors most likely to be acquired or to go out of business before the end of 2010.
• Excellent profile of Xerox’s Ursula Burns: “I want us to stay civil and kind, but we have to be frank.”

For up-to-the-minute services marketing news, follow ITSMA on Twitter: @itsma_b2b.

Upcoming ITSMA Events

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Tackling the Primary Impact Points for Sales Enablement and Productivity

Online Briefing
March 16, 2010
8:00 am Pacific – 11:00 am Eastern – 16:00 London (Duration: one hour)
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In 2009, salespeople and business developers averaged 23% of their time on indirect selling activities that were almost all marketing related. That’s unacceptable. Though marketing budgets have been cut, marketers need to focus the resources they do have on five areas critical for high performance in sales enablement that will be discussed in this online briefing.

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Avoiding the Social Media Silo: How to Integrate Social Media into Your Marketing Strategy

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March 25, 2010
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March 31, 2010
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April 7, 2010
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Attend ITSMA’s In-Person Briefings to learn how to use social media to complement—rather than compete with—existing strategies and tactics. Using ITSMA research data and in-depth case studies from successful B2B social media practitioners, we will discuss the skills, processes, tools, and thinking needed to make social media a valuable piece of the marketing strategy.

ITSMA Featured Research

Services Marketing Budgets and Benchmarks: 2010 Budget Allocations and Trends

This report delivers a detailed look at the state of the services marketing profession as it exists in early 2010. It provides data on services marketing budgets, budget allocations, and marketing priorities from a range of companies across the technology and consulting industries.

Get more information.

Recent ITSMA Thought Leadership

ITSMA’s 2010 State of the Profession Address

In this Online Briefing, Dave Munn and Julie Schwartz share data from ITSMA’s 2010 Marketing Budgets & Trends Survey, to give marketers practical insight on how to take advantage of the changes that await in the year ahead. We have also prepared a free executive summary of our findings.

Listen now.

ITSMA’s Top Ten Marketing Ideas of 2009

ITSMA clients voted for these ideas with their computer mice. These are the ideas contained within ITSMA research documents that were downloaded most often in 2009, in order of popularity. We’ve created a special report with excerpts from these most-popular research documents, which you can download for free.

Download it for free.

How to Format White Papers for Readability

Formatting is critical for pulling readers in and imparting value, even when they don’t read every word of your white paper. Here’s how to do it right.

Read it now.

Leveraging Reference Programmes to Help Customers Choose You

An effective client reference is one of the most influential factors in the sales cycle. In this Online Briefing, Paul Smitherman explores how to enhance the sales and marketing life cycle of value-based case studies and create strong propositions and programmes using client referral to drive sales. In addition, Patrick O’Halloran from Orange Business Services offers a case study examining Orange’s approach to reference management.

Listen now.

But let’s not allow that excitement to cloud our vision. Social media is no silver bullet. Other channels are more effective for reaching high-level B2B buyers—and that situation may never change. We’re not saying that because our own research shows that B2B marketers are decidedly skeptical about the effectiveness of social media. It’s clear that social media are still new, and most B2B marketing groups haven’t gotten the hang of them yet. It’s too early to reach any definitive conclusions on effectiveness.

It’s tempting to say that because B2B sales depend greatly on relationships, social media will eventually reign supreme. But B2B’s nature makes it harder for companies and customers to have a satisfying relationship that’s entirely virtual than it is for B2C companies.

We all know that B2B decisions take a long time and are made by committee and specified criteria rather than by individuals and impulse. It’s hard to imagine that kind of a complex, long-term, multiperson relationship ever happening entirely or even mostly in social media. At the C-level especially, face-to-face remains the killer app for everyone involved.

This doesn’t mean we should discount social media, however. Social media can be powerful for “activating” (as my Digital Influence Group co-presenter, Michael Smith, puts it) our content with the C-suite—another way of getting a few minutes of their attention.

Looking at social media in isolation distracts us from the real revolutionary trend, which is that marketing strategies must shift to an emphasis on content and relationships.

Social media simply makes starkly plain what we’ve known for some time but haven’t had to face yet: We don’t have a lot of content capable of generating trust and relationships.

Trust comes from buyers deciding that providers are as interested in their concerns and needs as they are in selling stuff. The only way we can do that is by providing a range of different content—thought leadership, news, education, training, support—in a range of different channels—events, white papers, communities, private meetings—at all phases of the buying cycle.

If you look at social media in isolation, you won’t see the larger strategic issues until they slap you in the face: bloggers with nothing to write about; LinkedIn groups with no substantive conversation; Twitter streams that link to nothing but brochures and press releases.

That’s why in our briefings, we’ll turn the social media conversation toward integrating social media into the overall marketing mix and arming marketers with the additional skills they need to make it happen. It’s why we left strategy and metrics out of the four components of social media management. The strategy is a marketing one, and the metrics should happen across everything you do. We hope you can join us at our briefings.

Please join us at our in-person briefings, Avoiding the Social Media Silo: How to Integrate Social Media into Your Marketing Strategy.

There are well-defined processes for new product development. We need to apply the same rigor to new-service development. There is no reason the services of B2B companies, from computer maintenance companies to electric utilities, should not be as enticing, distinctive, and profitable as those offered by companies like Disney or Virgin Airways.

Innovation Needs a Process

A process for what we call new service design (NSD) is especially important for commoditized services to slow profit erosion. It allows marketers to create a new perception of value for the core service. They can create different versions of the core service for different segments of buyers and introduce innovations, both large and small, that enhance the existing service and improve its perceived value over time.

Many leading service organizations now use a formal stage-gate innovation process. But most of these organizations are B2C, whose high-volume business demands (and justifies) investments in careful process design and technology deployment. American Express, for instance, has a highly developed process with strict controls over eight development gates.

But not all of the NSD specialists work in huge, global corporations. The venerable British law firm Allen & Overy (which specializes in highly customised advice) has an innovation committee that reports to its leadership team on programmes to capture and exploit creativity. It has successfully sponsored the launch of a series of IT-based services that, at the most sophisticated level, automate a number of their clients’ processes.

As a general rule, high-volume, low-margin, easily reproducible services can be more easily developed using a rigorous design plan than highly customised services (like consultancy or other professional services). But as firms like Allen & Overy demonstrate, it is possible to apply the rigorous stage-gate innovation process to professional services through NSD. There are nine important steps to doing it well:

• Research customer needs. Companies often begin service design based on their existing offerings or in-house capabilities rather than on customer needs. Good service design begins with understanding customer needs.
• Generate ideas. It makes sense to stimulate ideas from staff and customers deliberately before putting effort into new service creation. Some technology firms, such as Orange and Fujitsu, now use the concept of an advisory board of customers to help at this stage.
• Prioritize development alternatives. Prioritization should be based on criteria related to the firm’s mission, strategy, and objectives, the need to generate more funds from customers, and the need to develop a new area of expertise. But alternatives should not be limited by current capabilities. Too many companies throw out ideas that they don’t have the skills to deliver. Instead, they should ask: Does this make sense for our strategy, and do our customers want or need it? If yes, do it. Then figure out how you can deliver. Do you need to acquire, hire, train, or partner?
• Design the service. It is important not only to design all the basic components of a service but also to ensure that they work together to create an integrated experience that meets all the buyer’s expectations without interruption or aberration. Integrated service is a like a ballet performance. In a ballet, the production’s components are prepared and rehearsed so exactly that, at a particular beat in the bar of a particular piece of music, the point of a ballerina’s toe will come down on a particular point on the stage that will be lit by a particular light. In the same way, a service’s components must be identified and integrated to make the service experience enjoyable and complete.
• Create the (simple) value proposition. The key elements of a good value proposition are:
  • A clear understanding of the buyers the value proposition is aimed at, including their rational and emotional needs
  • An integrated view of the offer’s tangible and intangible components and their value to the buyers
  • The proposition’s benefits
  • An understanding of the offer’s differentiation, or unique selling proposition
  • A short market-based description of the offer, sometimes called the elevator pitch
• Create the concept representation. Develop the marketing plan “ready for prime time” representation of the value prop that can be shown to potential customers during the concept testing.
• Test the concept with customers. Do some research with customers to determine whether the service really meets their needs. Revise as needed.
• Write the business plan. Each aspect of the service, including marketing materials, sales process, and service delivery, are summarized into a detailed business plan, which will test the viability of the service through financial rigour and research.
• Pilot the service. Select patient, happy, loyal customers—and give them incentives to remain that way should the pilots hit bumps.

NSD can teach firms valuable lessons about how to turn the acknowledged expertise of their service delivery managers and consultants into a much more lucrative competitive service offer, whether with the firm’s core service, added-value services, or brand-new offers. Getting to grips with this important part of the business should be high on the marketer’s agenda. It is not at all easy to create an offer that is distinct and different from others; but it has been done many times before—and can be done again.

Bev Burgess and Laurie Young are co-authors of the book Marketing Technology as a Service, which will be published by John Wiley and Sons on March 26, 2010.

Other marketers know what happens to leads—sometimes—because they keep manual, often inaccurate, spreadsheets. As a result, many leads are lost. We know that it can take up to 12 to 15 touches before a lead is ready to buy. And many times, when it comes to services and solutions, leads may not be ready to buy for months or even years.

That is why companies must have a system in place to maintain and build relationships with leads even when they are not ready to buy. But to do that, marketers need content! Marketers need to use the content from their content-generation engine to create multiphase campaigns designed to progressively move leads from one stage of the buying process to the next.

The Benefits of the Closed-Loop Process

The main obstacles preventing companies from knowing what is working are lack of systems and disparate data. Marketers need a closed-loop system for demand generation and lead nurturing.

Unfortunately, very few services marketers have formal lead-nurturing and lead-tracking programs. In fact, in ITSMA’s annual Budget and Trends Survey this is a priority for just one of the companies we surveyed.

Still, some companies have made great strides in this area. They have linked their customer relationship management (CRM) and marketing automation systems. As a result, they are experiencing many benefits:

• Ongoing personalization of marketing materials
• Closed-loop feedback with sales
• Lead tracking
• Performance metrics

And perhaps most important, these companies are gaining the ability to demonstrate marketing’s impact on the sales pipeline and on closing deals.

To find out how CapGemini is creating an automated lead management process, read ITSMA’s Manifesto for Marketing Transformation in 2010.

The major areas where ITSMA believes transformation is necessary for marketers include:

• Developing a stronger, more detailed content generation and dissemination strategy and engine
• Integrating marketing and sales systems to be able to track marketing’s impact on sales
• Investing in marketing analytics and reporting

All of these activities must be supported by new roles and skills that need to be created or brought into marketing, as well as new organizational structures and models to help enable them.

From our most recent Budgets and Trends Study, we see that these areas of transformation are already taking shape with marketers’ top priorities for 2010. As usual, enabling sales is at the top of marketers’ list. However, developing new and more targeted thought leadership is becoming more important, as is measuring marketing’s impact on the business and reskilling the marketing team. In previous years, these were not as high on the priority list; some weren’t even in the top 10.

To learn more about these transformational areas, you can listen to ITSMA’s 2010 State of the Profession Address or read our most recent Update, ITSMA’s Manifesto for Marketing Transformation in 2010.

But here is what really concerns us at ITSMA. Services marketing budgets are at all time low. Funding has dropped to the point where we are concerned about marketing’s health, relevance, and impact. What is the perception of marketing in the organization today? Even if marketing is not yet marginal, it will be soon if funding continues this way. Something has to change.

However, we cannot afford to continue adding new programs and campaigns on top of old. We need to commit to a new way of doing things if marketing is to avoid becoming marginalized. We believe that 2010 will be a year of transformation for marketing.

We see three major areas where transformation is necessary for marketers:

• Marketers must create a new content development and dissemination engine.
• That engine should be supported by an automated, integrated closed-loop lead management process.
• Marketers must create a fact-based decision culture supported by analytics.

In this ITSMA Update, we will outline in detail the changes necessary for marketing to transform
itself and reverse its decline in relevance.

Services Marketing Budgets and Benchmarks: 2010 Budget Allocations and Trends, a PowerPoint-style report, delivers a detailed look at the state of the services marketing profession as it exists in early 2010. It provides data on services marketing budgets, budget allocations, and marketing priorities from a range of companies across the technology and consulting industries.

Key trends highlighted in the report include:

• Given the economic climate, 2009 was a tough year; marketers are more optimistic about 2010
• Marketing budgets, as a percentage of revenue, are at an all time low
• Heading into 2010, less than half expect budget and staff increases
• Marketers in North America are in better shape than the other regions
• Marketing can’t spend another year of trying to do more with less—Marketing needs to change
• We already see evidence of a slow and steady change—some marketing tactics are becoming less important while others, such as thought leadership and social media, are becoming more important
• Although growing in importance, social media is still a small percentage of the marketing
  budget
• Marketing priorities for 2010 are a departure from past priorities; they set the stage for transformation, rather than continued incremental change
• Marketers must:
  • Create a content generation engine
  • Integrate sales and marketing via the marriage of CRM and marketing automation
  • Invest in marketing analytics to predict and improve results

Topics covered in the report include:

• Services marketing budget size and growth rates
• Services marketing budget allocations
  • Corporate vs. field marketing
  • Staff vs. nonstaff
  • Investment by major budget categories
• Marcom budget allocation
  • Online/interactive/digital budget
  • Thought leadership budget
• Market intelligence/market research budget
• Customer satisfaction relationship management budget
• Marketing automation
• Account-Based Marketing (ABM)
• Solutions
• Services growth rates
• Marketing staffing and operations
• Gross margin trends
• Marketing priorities

Companies included in the study:

Alcatel-Lucent, Atos Origin, Avanade, Avaya, CA, Capgemini—NA, CGI, CompuCom Systems, CSC, Fujitsu, General Dynamics Information Technology, HCL Technologies, Hitachi Consulting, HP, Infosys Technologies, Juniper Networks, Inc., Logica UK, Mahindra Satyam, Microsoft, NCR, NetApp, NSN, Open Text, Oracle, PA Consulting Group, Patni Computers, Pitney Bowes Management Services, Polycom, Rockwell Automation, SAP, SBS Group, Steria Limited, Tata Consultancy Services, The TriZetto Group, and Xerox Corporation.

Study Methodology

In December 2009 and January 2010, ITSMA used a Web-based survey to gather data from its members about services marketing budgets, services growth and margins, and top marketing priorities. ITSMA received 37 responses from 35 unique companies and analyzed the collected
data in four ways:

• The data set as a whole
• Company type—primarily services or product and services
• Company size—less than $1 billion or more than $1 billion in annual services revenue
• Geography—India-based or non-India-based

Respondent Demographics

Report Pricing

Participants: This report is available free to companies that provided detailed data in the study.

If your company is on this list you are entitled to receive the report for free. To order, click the button below, select “Member Price” on the order form (even if you are not a member). Please use your company email address when you fill out the form.

Essential Participants: The full report is available at a discounted price to the following companies that provided only the Essential data in the study.

If your company is on this list you are entitled to receive the full report at a discounted price
of $295. To order, click the button below, select “Non-member Price” on the order form (even if you are a member). Please use your company email address when you fill out the form.

For non-participating companies, this report is available for sale at member and nonmember prices. To order, click the button below.

• See if your company is an ITSMA member
• Download the datasheet (including order form) PDF (379 KB)
• Email ITSMA for more information
• 

Funding for marketing has dropped to a point where we are concerned about its health, relevance and impact. Services’ marketing budgets are at all-time low: 0.8% of revenue in 2009 and 0.9% of revenue forecasted for 2010. What is the perception of marketing in the organization today? Even if marketing is not yet marginal, it will be soon if funding continues this way.

Something has to change. Otherwise, marketing’s stature and impact on the business will continue to be under siege through the recovery and beyond.

Even though 43% of our members forecast a marketing budget increase in 2010, that still leaves nearly 60% whose budgets are flat or still declining. In this kind of environment, most marketers can’t add anything on to what they’re already doing and can’t go back to doing things the way they did before the downturn.

Budgets Aren’t the Only Drivers

Budgets aren’t the only drivers behind the need for marketing transformation, however. Buyer behavior continues to shape and change marketing. Customers have steadily gained more power in the buying process as their access to information has improved, thanks to the internet and social media. This, combined with a nearly continuous atmosphere of cost cutting since the dot-com bust, has made buyers more demanding, selective, and value conscious.

Buyers want more than information today. Telling them about products and services isn’t enough. They are looking for insight and ideas. Marketers have shifted money into creating white papers, Web briefings, private briefings, and the like to try to meet that demand. But ITSMA research has consistently shown that at least 50% of buyers view the content they receive as ineffective in helping them identify and solve business problems.

Technical Changes Drive the Transformation

Technology will also have a big impact on marketing transformation in three ways. First, technologies such as social networking are pushing marketers away from the traditional emphasis on controlled messaging to a more collaborative, dialogue-based relationship with customers, prospects, and influencers.

Second, technology is also changing how we manage and measure marketing activities and integrate with sales. Companies are moving off spreadsheets and leveraging more automated marketing tools for integrating their lead-nurturing efforts with customer relationship management systems to create a closed-loop lead-management process.

Finally, as cloud computing takes hold, it will change how we go to market. For example, there will likely be more partnerships among companies as a cloud ecosystem develops and creates more dependencies among providers offering different pieces of the cloud ecosystem, such as applications that are based on the cloud infrastructure. The cloud will have a profound impact on how you deliver your products and services, what offerings you develop, what companies you partner with, and who you compete with. It will impact marketing as well as, as it becomes a place where marketing services and marketing systems live.

We see three major areas where transformation is necessary for marketers:

• Marketers must create a new content development and dissemination engine.
• That engine should be supported by an automated, integrated closed-loop lead management process.
• Marketers must create a fact-based decision culture supported by analytics.

To see how we recommend tackling the coming transformation, download this free PDF.

ITSMA members can hear these recommendations explained in detail by ITSMA’s Dave Munn and Julie Schwartz by listening to the playback of our Online Briefing: ITSMA’s 2010 State of the Profession Address.

By creating content that offers relevant, timely, and useful ideas and education for buyers at all stages of the buying process, we create the incentives for buyers to engage with us in conversation and community. Whether it’s blogs, Twitter, LinkedIn, or private communities that we build ourselves, the common thread is that by focusing on learning we build and retain buyers’ interest.

One hardwired part of us is the desire to learn. And learning is integral to buying—especially in B2B. Recommend products and services that you haven’t thoroughly researched, and you will most likely be out of a job.

Every buyer wants to learn at all stages of the buying process. But no buyer wants to be sold during all stages of the buying cycle.

Here are the key elements of learning networks:

• Create an internal learning network. You need to build an internal network that focuses on identifying internal thought leaders and building alliances with external academics and customers who can help develop and test ideas. Primary and secondary research provide the inspiration for some ideas and the objective justification for others. Internal knowledge-sharing sessions and reward and recognition programs provide the motivation for thought leaders to emerge inside the organization and help imbue a thought leadership mindset into the culture.
• Create a content development process. Using ideas from the learning network, marketing needs to develop content. Marketers must become publishers, with a process for refining and presenting thought leadership content through various vehicles, such as conference presentations, white papers, and social media. Marketing needs professional content developers who know how to collaborate with thought leaders to develop clear, compelling packages. A calendar helps marketing plan the frequency and focus of its output. Marketing must develop materials that are appropriate to each stage of the buying process, so that customers and salespeople can get the right information at the right time. Marketing and sales need to agree on the alignment of content to the different buying stages so that sales will get the right signals about when and how to approach customers for a sale.
• Integrate the internal learning network and content processes with social media. Your internal learning network should integrate with the ones you want to build for customers. Internal thought leaders should use social media as a test bed and developing ground for ideas that they later disseminate in a more polished form. For example, a tweet or a posting in a LinkedIn forum leads to blog post, which leads to a video, which leads to a conference presentation, whitepaper, or private event for top customers.

If learning is the objective, the rest falls into place. Idea- and education-based content is the fuel for building community. The rest is promotion.