ITSMA E-ZINE	May 2005

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Editor's Notebook: Markets as Conversation, or Beyond the Bull

Are business marketers getting the message? Six years ago, The Cluetrain Manifesto sounded the alarm: corporations unwilling or unable to forgo bureaucratic marketing-speak risked being left behind in the age of instant communication and transparency. Two years ago, a group of consultants at caused a stir with the launch of Bullfighter, a software utility that sniffed out useless marketing jargon in Word and PowerPoint documents. Now, the bullfighters are back with Why Business People Speak Like Idiots, a humorous dissection of the gibberish that still afflicts the majority of business communications, especially (sad but true) in the realm of technology marketing.

We know that buyers of technology services and solutions rely most on personal references and referrals, and that many of our marketing messages fall on deaf ears. But do we have to make things worse by producing acronym- and hype-filled "content" that even our colleagues won't read? Our potential buyers actually do want to talk with us...provided we can engage in a real conversation about real business problems and solutions.

Marketers these days are blessed, or perhaps cursed, with more communications channels and tools than they know what to do with. Unfortunately, a bull-filled blog or video or podcast is no more likely to connect with a customer than a jargon-filled piece of snail mail or PowerPoint presentation. Writing clearly, concisely, and maybe even with a bit of personality at least gives you a chance.

Far be it for me to throw too many stones; I've tossed around too much jargon myself to stand outside the ring. I know I can do better and I'm certainly going to try. How about you?

—Rob Leavitt

What's Hot: Mastering Solutions: Lessons Learned from Lucent, IBM, and HP

Moving to a solutions orientation tops the agenda for many technology companies. They recognize that competitive pressures and customer demand requires them to integrate products and services in innovative ways to deliver clear business value.

ITSMA's recent Marketing Leadership Forum on “Mastering Solutions” provided an insightful glimpse into the ongoing transitions at three industry leaders: Lucent, IBM, and HP. Each firm comes to the challenge from a unique position, but they share six specific priorities.

Solutions Taxonomy. Each company has dedicated substantial energy to sharpening solutions language and definitions and building a formal solutions taxonomy. They realize that, without clear terms and categorization, they run the risk of confusing customers and employees about the value of their solutions—not exactly the desired end goal for each company's marketing team. At HP, a new taxonomy enables internal consistency around the development of high-value, cross-business unit solutions. Similarly, at Lucent, a major initiative to “clean up the language” around offers and solutions has supported more effective internal and external communication.

Executive commitment. As with any major change, the move to solutions requires top-down leadership. IBM's solutions push began in the mid-1990s with then CEO Lou Gerstner's commitment to get all of the company's divisions working together to provide integrated solutions to customers. Ten years later, according to Joann Duguid, vice president of solutions and sector marketing for IBM in the Americas, that executive commitment continues. “It's not the occasional email,” she noted. “It's top people really discussing and working through the issues. And then organizing town hall meetings, Webinars, face-to-face meetings, and small group roundtables to help people really understand.”

Customer Focus. “The move to solutions begins with understanding your customers' customers,” says John Giere, chief marketing officer at Lucent Technologies. “You have to focus on helping your customers serve their end users.” For Lucent, this means shifting from thinking about network-centric boxes for its telecom service provider customers to developing solutions that support the digital lifestyles of end consumers across the economy. And, according to Giere, it means “losing the Not Invented Here syndrome” in favor of doing what is right for the customer and end user.

For Volkhard Bregulla, vice president of solutions marketing for HP's Technology Solutions Group, customer focus also means becoming more of a trusted advisor. According to HP research, only 20% of customers characterize their current relationship with their IT providers as “strategic partner” compared with 60% who describe the relationship as “transactional.” Strategic advisors think of how to meet customer needs first, and of selling products, services, and solutions second. The good news is that there's plenty of room to grow; by focusing on the customer segment that views these relationships as transactional, IT providers can dramatically improve their credibility with customers, potentially boosting sales.

Collaboration and alignment. HP has invested heavily over the last several years in reorganizing for solutions and building a new solutions governance model. The goal, as at IBM and Lucent, is to promote and support more effective cross-organizational collaboration and alignment around integrated solutions. The better the internal communication and collaboration, the better the external communication and collaboration will be as a result. And the better the external communication and collaboration, the better the sales will be.

Transcending organizational barriers in a large company, however, is an enormous challenge and typically brings substantial conflict. But as Joann Duguid notes, “You can't collaborate without conflict. People often opt out to avoid conflict, but you can't allow that. You need to embrace the conflict.” Having recently organized a new solutions council at IBM that brings together marketing leaders from many of the company's different brands and business units, Duguid has been able to work through the different views to create more compelling offers, messages, routes to market, and demand generation programs.

New processes and tools. All three companies have invested in new tools and processes to support the move to solutions. IBM is centralizing all relevant data, messages, events, and other activities to support more effective marketing programs around solutions. Joann Duguid reports that IBM's database "highlighted all the overlap [from different divisions] and showed the possibilities for integration.” HP, meanwhile, has developed a cross-company message map to improve consistency in mapping customer needs, messaging, customer benefits, proof points, and differentiation in its solutions marketing and sales initiatives.

Accountability and metrics. For John Giere, it is critical to focus on “role clarity.” For example, “product marketers still have allegiance to their products. So we make sure that events are led by customer marketers who can lead with solutions but pull in the product marketers as needed.” Lucent has also created specific metrics for solutions managers, customer acceptance, market perception, and revenue momentum for solutions. IBM and HP have similarly invested in new measurements for solutions performance and success.

Duguid, Giere, and Bregulla are the first to suggest that their companies have a long way to go before “mastering solutions.” Yet their initiatives have already demonstrated substantial results. As John Giere noted, “Lucent has lost 60% of its traditional business in the last several years. If we hadn't [begun to develop and offer solutions], we wouldn't exist. Today, our services business is growing faster than the industry and this is totally tied to solutions.” Other tech firms looking for insight into the solutions transformation would do well to keep a close eye on these three industry leaders.

—Rob Leavitt

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Marketing Excellence Awards:

Marketers Who Matter: Nancy Lyskawa, Senior Director, Support Services Marketing, Oracle

PeopleSoft's decision to purchase J. D. Edwards in June 2003—followed closely by Oracle's takeover bid—created an enormous challenge for Nancy Lyskawa and the PeopleSoft Support Services team. They needed to work quickly and effectively to migrate more than 6,700 J. D. Edwards customers to PeopleSoft support programs, communicate the value of the program changes to customers, and create a repeatable sales process to ensure that the sales team could confidently articulate the value of PeopleSoft's support.

By creating innovative new sales tools, a new sales certification program, and a comprehensive global marketing campaign, PeopleSoft transitioned nearly all the former J. D. Edwards customers to PeopleSoft support programs, logging an astounding 99% renewal rate.

Last fall, ITSMA took notice, awarding Nancy and her team a Diamond Award for Marketing Excellence in Increasing Sales Effectiveness. A few months later, Oracle sat up and took notice as well, tapping Nancy to help lead the integration required by its merger with PeopleSoft, along with its customer support marketing efforts. Congratulations, Nancy!

Are you ready to showcase your success? The submission deadline for this year's Marketing Excellence Awards is June 15. View details and submission guidelines at http://www.itsma.com/news/mea.

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Win a
Complimentary Seat
to ITSMA's Growing Your Solutions Business Workshop

All right, we admit it. The word solution has become a bit of a cliché over the past few years. But that doesn't mean customers aren't demanding them...or that best-in-class IT companies aren't providing them.

What it does mean is that becoming a successful solutions provider involves rolling up your sleeves and digging into marketing's newest priorities, strategies, and tools for leading the charge in today's marketplace.

For all of you who've wrestled with solutions, tell us (in 200 words or less) what the word solution means to you for the chance to win a free seat to one of our next Growing Your Solutions Business workshops, held in both Massachusetts and California this June.

Visit http://www.itsma.com/solutions for guidelines, entry forms, and more information on the workshops themselves.

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Feature: Revitalizing Maintenance Services at Avaya

In 2002, Avaya confronted a difficult financial reality: contract renewals for maintenance services could no longer be taken for granted as customers began to seriously question their value. Concerned by falling revenue, Avaya's Global Services Marketing Team was challenged to uncover the root causes of the decline and design a major initiative to stabilize the company's maintenance contract business and increase customer loyalty.

To start, the team commissioned a detailed investigation, which uncovered three key factors in the decline:

• A shift in customer decision making from the IT department to the CFO
• Decreased onsite visibility thanks to remote diagnostic tools
• The lack of a value-based sales approach

Armed with this information, Global Services Marketing pulled together a team of experts from throughout the company, including Avaya Labs, Technical Support, services R&D, sales operations, channel development, and services finance, along with a number of national service managers. Together, this group set out to:

• Define the business value of Avaya's maintenance services and test the value proposition with customers to ensure that it resonated with them
• Craft and execute a plan for communicating the value of Avaya's maintenance services to customers and prospects
• Equip all sales channels with the knowledge and tools required to explain and sell the value of Avaya's maintenance services

The cross-functional nature of the team was essential to the program's success. For example, the national service managers, who had been mining service records to review and summarize activities with the largest accounts, alerted the team to these customized reports. This proved to be a critical first step toward uncovering and communicating the value of the company's services.

After analyzing all the data, designing a new value-reporting tool oriented to senior executives, and testing the tool with customers, Avaya rolled out its new EXPERT View reports. Among other things, the reports demonstrate the proactive nature of the company's involvement with its services customers and delineate exactly how many problems Avaya solves.

With such a powerful tool now at the company's disposal, the next challenge for Global Services Marketing was to make sure that the market was up to speed on Avaya's capabilities. The “While You Were Sleeping” campaign included new advertising, Global Services Web pages, customer case studies, trade shows, and direct mail. The campaign also incorporated a targeted customer awareness program that leveraged Webinars, online forums, customer events, road shows, user groups, and CIO advisory panels.

In March 2003, the team launched a broad sales training program to increase sales' understanding of the value of maintenance contracts. The training emphasized how to analyze the data available via EXPERT View and present it to customers; representatives were also introduced to a full range of new tools and resources. One important aspect was that each sales rep had to pass an online test before they could use the new reports.

The results of the training program were impressive. Avaya estimates that its North American sales organization completed the training within three to four months. Following the training, the services sales teams covered nearly 80% of their accounts within three months. Eighty-nine percent of customers surveyed found the EXPERT View reports “valuable to extremely valuable” in understanding the value of the Global Services Maintenance Agreement. At the same time, 90% of the national service managers and sales associates rated the reports “useful to extremely useful” in communicating the value of Avaya's services.

But customer feedback led Avaya to believe that it could do even better. After conducting research that indicated that nonmonitored customer systems were almost 65% more likely than actively monitored systems to have a major outage, Avaya designed two more tools to identify and quantify both the costs associated with ensuring maximum availability of an enterprise communications system and the ROI of an Avaya services maintenance contract.

By early 2004, the Global Services Marketing team's efforts to communicate the value of Avaya's services marketing and drive growth had resulted in major success. The cross-functional team's value-based approach to marketing and selling had stopped the decline in maintenance services renewal rates, spurred new growth, increased services revenue, and strengthened customer loyalty.

—Naomi Steinberg, nsteinberg@itsma.com

This article is excerpted and adapted from Using Business Impact Tools to Communicate Value: How Avaya Revitalized Its Services Business. This ITSMA Case Study is available at no charge to members and for sale to all others. For more information, visit http://www.itsma.com/research/abstracts/cs0011.htm.

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EuroNotes: Three Priorities for Marketing Maintenance and Operational Services

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.

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

Read the full story

Research Desk

One Is the Loneliest Number: Team-Based Selling Takes Hold

As customers continue to clamor for integrated solutions to their unique business needs, team-based selling has emerged as an important practice for increasing customer acquisition, retention, and loyalty. According to ITSMA's new report on best practices services sales techniques, technology companies are putting much more energy into facilitating collaboration across the enterprise—and enabling sales to tap into pooled experience and expertise.

Many vendors are accomplishing this by organizing multidisciplinary teams with members from sales, product management, engineering, marketing, finance, delivery, and even partner companies. In fact, sales reps at IT services firms spend an average of 53% of their time selling as part of teams. These enhanced teams are able to develop a much deeper understanding of their customers than individual sales representatives can, and thus they present a far more effective business case.

Other vendors facilitate cross-business-unit collaboration through such means as personal development programs designed to foster relationship building across the global community as well as via cross-company sales councils and newsletters.

Along with more a collaborative sales model, technology companies are strengthening their focus on account planning strategies that revolve around customers, not products. One network systems vendor, for example, has had great success generating new ideas for meeting customer needs by including customers and experts from across its own organization in account-planning sessions. Further, by keeping marketing closely involved in the account-planning process, the sales force can ensure that it receives the targeted information it needs to address customer needs and pain points.

In other words, many services and solutions providers are recognizing that the more input sales teams get from both internal and external channels, the more successful they will be.

—Meghann Grandy, mgrandy@itsma.com

For more information on the latest trends in selling services and solutions, see Raising the Bar: Selling Technology Services in a Competitive Market. The report includes detailed benchmark data and best-practice examples on the sales organization, account planning and management, sales performance, sales training, and sales costs and compensation. This ITSMA Benchmarking Report is available at no charge to study participants and for sale at member and nonmember rates to all others. To learn more, visit http://www.itsma.com/research/abstracts/S005.htm.

Moving Mountains: How to Generate Awareness Early in the Sales Cycle

In an increasingly crowded marketplace, services and solutions marketers need to step back and ask themselves if their marketing is providing the right motivation to move customer behavior. Gone are the days when direct mail or phone calls from the sales team moved mountains; today's buyers are far too proactive to wait around for a vendor to contact them. If services and solutions providers want to capture customers' attention at the beginning of the buying cycle, they've got to produce three things:

• Business results
• References
• Collateral that reinforces business value (case studies, thought leadership, and analyst firm recommendations, among others)

ITSMA research has shown that recommendations or references from colleagues rank as the single most important factor in capturing a prospect's attention. If you're not delivering results that please customers and turn them into loyal advocates for your brand, it will be difficult to drum up new leads. Similarly, if the content of your collateral fails to reinforce the business value of your offerings, prospects will be less likely to seek out additional information.

Creating awareness and a positive image in the marketplace is critical for services and solutions providers. By focusing on delivering results, harvesting references, and crafting collateral that spotlights technology innovation and customer success, marketers will increase their companies' chances of cultivating new—and profitable—customer relationships.

—Meghann Grandy, mgrandy@itsma.com

For more information on how customers choose IT services providers, see Connecting with Customers: Generating Awareness, Interest, and Confidence for Technology Services. This ITSMA Focus Report is available at no charge to ITSMA members and for sale to all others. To learn more, visit http://www.itsma.com/research/abstracts/F009.htm.

New Research Study: Marketing to Small- and Medium-Sized Business

Amid a slow-growth environment, many technology and services providers view small- and medium-sized business (SMB) buyers as critical sources of revenue and profit. For providers used to dealing with larger enterprise buyers, however, this SMB push requires a rethinking of traditional strategies.

ITSMA's new multiclient study, Marketing to Small- and Medium-Sized Business: Establishing Credibility and Routes to Market, will explore the requirements for SMB success with an in-depth analysis from two perspectives: providers and customers. The study will highlight the latest thinking on SMB marketing for technology services and solutions with input from senior marketers across a range of technology and services companies as well as a representative sample of buyers from the SMB marketplace.

For more information on the study, visit http://www.itsma.com/research/prospectus/mk0525_smb05.htm.

Upcoming Events

The Director's Dilemma: A Changing Role for Marketing
May 18 European Directors' Forum (London)
http://www.itsma.com/Events/event_desc/05AF05E16.htm

Transforming Marketing for a Solutions World
May 25 Online Briefing
http://www.itsma.com/Events/event_desc/05OB05N14.htm

Building Professional Services
June 1-2 Workshop (Columbus, OH)
http://www.itsma.com/Events/event_desc/05WS06N17.htm

Complete Events Calendar

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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.