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Editor's Notebook: IBM and the March of the Blogosphere IBM's new blogging promotion, "Blogging Means Business," is one of the latest signs of blogging's accelerating move toward the tech industry mainstream. Featured on IBM's high profile On Demand site, the "webumentary" features interviews with two senior executives extolling the importance of blogging as a core component of customer interaction. Practicing what they preach, IBMers are launching all manner of public blogs, building on the reported thousands of internal blogs already in use. At the high end is Irving Wladawsky-Berger, the technology guru who developed IBM's e-business strategy in the mid-1990s and led its on demand business more recently. Recent posts on Wladawsky-Berger's blog include thoughtful essays on such topics as "The Changing Nature of Technical Talent," "Business Innovation in an On Demand World," and "Enabling the Next Generation of Applications," as well as notes from travels in Japan, and a meditation on mid-September baseball. Other IBM bloggers represent (officially and unofficially) various hardware and software divisions, technical and marketing groups, and miscellaneous corporate functions and concerns. Beyond Big Blue, we're seeing similar moves from a number of tech and other companies as more and more people understand the potential power of blogs to connect with customers, participate in the most timely and active discussions about core business issues, and learn from the broadest possible community about what matters and what works. Blogging is far from a magic potion, and it's not easy to do well. But as Ed Brill, an early IBM blogger and a business unit executive with IBM's Software Group, explains, blogging can contribute substantially to success: "I get a sense as to what is going on in the market, and my customers know that they have a source for up-to-the-minute, unfiltered information. I've been able to win in the market, and especially been able to defend against competitors who are more liberal with their use of fear/uncertainty/doubt in the market, all through the voice of the blog and the blog-o-sphere."  [TOP OF PAGE] What's Hot: Tapping the Social Web The ability to gather insight and opinion from a vastly expanded universe of experts and peers is one of the most important aspects of the next phase of the Web. Indeed, the very premise of "Web 2.0" is that the combination of new online technologies, pervasive broadband access, and 10 years of experience is creating a fundamentally new level of online interaction and collaboration. For buyers of IT services and solutions (and almost anything else), the emerging Social Web means that there are endless new sources to tap in considering investments and options. For marketers, it suggests a shift from authority-based presentation to community-based interaction, because buyers will be more focused on discussions with and advice from peers and other experts than on listening to anything that smacks of marketing or sales. "Community" is a huge buzzword this year, and it's easy to poke fun at the hype. But the reality beneath the buzz is that buyers are casting their nets much more widely in a search for ideas and evaluation, and formal and informal online communities are increasingly the arenas of choice. In short, customers more and more want to talk with each other about what works, and the expansion of the social Web is making it easier and easier to do this. The choice for marketers now is to invest more in facilitating the interactions or stand aside and watch as the conversations about you and your competitors grow up without you. At ITSMA, we're already seeing growing interest among member companies in expanding and improving community-oriented marketing programs such as customer councils, user groups, online networks, and blogs. Although such initiatives remain generally at the margins of marketing strategy, recognition of their value is on the upswing, and the questions increasingly are focused on "how," and not "whether." Moving community-oriented programs more to the center of strategy, however, suggests a number of important changes in existing marketing thinking. Six challenges in particular stand out:
Perhaps the most important change is one in the overall mindset. For decades, marketers have strived to direct the discussion with customers and prospects, focusing on the offerings and capabilities that could meet customer needs. Looking ahead, marketers need to focus more on connecting with existing communities, facilitating peer interaction, and contributing to the ongoing dialogue. Giving up the illusion of control for the power of participation is no simple shift, but one that can bring rich rewards. FeatureLiving in a Digital World: An Interview with W2 Group's Larry Weber Larry Weber, chairman and CEO of W2 Group, a next-generation marketing services organization focused on digital constituency management, recently sat down with ITSMA to discuss the future of marketing and how to survive in a digital world. ITSMA: As the founder of Weber Shandwick, you grew the company into the largest technology PR firm in the world and then the largest PR firm in the world, period. What made you decide to leave and start W2? Weber: My main interest in business has always been innovation and growth. I founded The Weber Group in 1987 and, by the time I left in 2004, it had been acquired by Interpublic and become the largest PR firm in the world. I'd done all I could do there. Also, about two years ago, the management and Board at Interpublic asked me to analyze the next five to ten years of the marketing services industry—what's going to happen, where's the money going to be spent, those kinds of questions. So I met with about 200 different companies and put together a report that laid out the coming trends in marketing. One of the huge trends I saw was the increasing impact of the unpaid side of the Internet, which at the time meant blogs. Blogs! I thought the executives at Interpublic were going to laugh me out of the room! But it became clear to me that the traditional model of marketing was about to be inverted, and I saw a big opportunity to be an innovation leader in the new world of marketing. That's why I formed W2. ITSMA: When you say that the traditional marketing model is about to be inverted, how do you see that playing out? Weber: In the 60 years of modern marketing, I believe that there have only been two real phases, and we're just starting to move into a third. The first was the broadcast, or one-way, phase—"we're going to shove this message down your throat." The second phase, direct marketing, started in the early 1980s and over time evolved into one-to-one marketing. But do we really have to know everything about you to sell you something? I don't think so. The third phase, the one we're just entering now, hinges around the idea of community-based marketing. This phase is based on the fact that people have various points of interest, and they gravitate toward others who share those interests. The points of interest can be anything: a profession, a health issue, a sports team, and so on. These interest-based communities are gathering together now more than ever because of the Internet. With the rise of the social Web, traditional marketing techniques like advertising and direct campaigns are moving to the periphery. Customers are skeptical, and they don't trust traditional advertising or direct marketing messages anymore. But they trust their peers within their communities. Companies that want to succeed in the age of community-based marketing have to be able to attract the right communities on the Web. ITSMA: Most of our readers are from technology companies and have been on the Web for years. What can they do to make the transition to community-based marketing in a digital world? Weber: Companies and marketing people need to recognize that the digital world has become the nexus, the starting point, of everything. They have to start really living in a digital world and not just treat the Web like an add-on program. To do this, you first have to gain an understanding of the new digital influencers. Right now, that means getting your head around who's writing for the important blogs. There is no newspaper in the United States with more than 2 million readers anymore. But guess how many blogs there are with more than 2 million readers? Twenty-seven. Second, you need to recognize that unpaid corporate content is a huge draw. And by corporate content, I don't mean brochures. I mean knowledge, thought leadership, and ideas. You have to map out a content strategy to attract your target audiences. If you have compelling content, you are going to aggregate the right people around your ideas and core competencies, and they, in turn, are going to spread the word among their peers and communities. Third, I'd also get much closer to the people who are touching my digital constituencies, like the Webmaster and the IT guys who are buying the software that customers use. I'd really wrap my head around what's going on there to ensure that I'm providing the best possible experience for my digital audiences. Ultimately, content is still king, and customers are still the number-one priority. But where the content and customers are living has shifted, and you've got to go digital if you hope to survive. We'll continue the conversation with Larry at ITSMA's 2005 Annual Conference: Marketing on the Verge, November 7-9 in Cambridge, MA. For more information about the conference, or to register online, visit: http://www.itsma.com/conference. On the Job: Building a Networking Community at AT&TIn Q4 2004, AT&T was looking to take its relationships with customers to the next level. Primary research results revealed that, although there had been a common perception that customers were overloaded with e-mail and other communications, the customers themselves actually wanted more contact from providers, albeit in a simplified electronic format and targeted to their needs. "One thing we discovered when we conducted our research," said Brenda Crawford, director of AT&T Market Positioning, "is that customers are hungry for thought leadership that will keep them on the leading edge of networking technology. They're constantly looking for new ways to squeeze competitive advantage out of their networking investments. We needed to find a way to leverage our vast knowledge base in that arena and improve the customer's experience of working with us at the same time." Although AT&T’s enterprise business Web site contained a great deal of useful information, it was not organized for customers to readily find relevant strategic, tactical, and technical intelligence and insight. To figure out a better way, AT&T turned to its customers. It conducted surveys, solicited input from its executive and functional client advisory groups, and examined industry best practices. Based on that research, the company launched AT&T’s Networking Exchange in early 2005. It is a dynamic online community that provides subscribers with personalized information on key networking business challenges and technology topics. The new program enables AT&T to supply fresh, relevant, and complimentary content to more than 150,000 customers a month. "Our customers were instrumental in guiding the development of the Networking Exchange, and they're instrumental to helping it evolve. The initiative gives us an opportunity to have continuous dialogue with our customers around the issues they care about," Crawford added. Currently, the company publishes somewhere between 20 and 25 pieces for the Networking Exchange each month, retiring old content in a timely manner. The content comes in a wide variety of formats, including:
"We want to be the source of information on networking for our customers," said Pat Heeter, group manager of AT&T Market Positioning. "That means not only showcasing our own expertise but also soliciting thought leadership from unbiased, third-party experts in the field." In the future, the project team plans to make the site more interactive by increasing the number of Web seminars and enhancing the online polling features. It is also exploring "Ask the Expert" functionality to facilitate peer sharing. AT&T attracts people to the Networking Exchange by sending out monthly e-mails that spotlight four or five of the newly published materials and drive users to their personalized homepages. The company also draws traffic to the site through banner ads and links on AT&T's enterprise business site. In addition, the project team has worked to educate the sales teams on the new resource, underscoring the importance of leveraging Networking Exchange materials to reach out to their individual contacts and accounts. Since the launch, AT&T has realized a number of notable results, including:
"As we work to advance our marketing, we're looking more and more to building strong relationships through thought leadership and collaboration—with industry analysts, experts, and our customers themselves," concluded Crawford. "The Networking Exchange delivers pertinent content when and how our customers want it. It is allowing us to engage in more relevant dialogue and build more meaningful, profitable relationships." For more on AT&T's Networking Exchange, be sure to come to the panel discussion on new tools for connecting with customers at ITSMA's 2005 Annual Conference: Marketing on the Verge, which will feature AT&T's Brenda Crawford. For more information about the conference, or to register online, visit: http://www.itsma.com/conference. —Meghann Grandy, info@itsma.com EuroNotes: Building the Foundation for Solutions Success in EuropeTechnology companies face many challenges in making the transition from selling discrete products and services to offering integrated solutions. These challenges, often shared by companies across the board and around the world, include re-educating the sales force, rethinking customer communications, and defining appropriate metrics. European companies (or divisions), however, frequently grapple with several additional, European-specific challenges to solutions success, including:
First, European marketers are tasked with bringing a global portfolio of repeatable offers to market, but the level of buyer sophistication varies from country to country, which makes awareness of each local culture essential. At a recent marketing roundtable ITSMA held in Germany, most participants indicated that they had developed a solutions council or equivalent group to make investment and localisation decisions. BearingPoint, for example, uses its solutions council to set the strategic direction for solutions activity, prioritise investment decisions, manage operational issues, and resolve any delivery or customer issues. Although there is still debate about how best to structure this type of council, in Europe there's a preference for industry verticals to take the lead in attempting to find some commonality across geographic boundaries. Within the overall portfolio management issue, the question arises as to where offer development should take place—in the field versus centrally or globally. On this topic there is a consensus that the best one-off solutions are inevitably developed in the field with specific clients in specific verticals and geographies. If there is one accelerator for solutions growth that is guaranteed to help across Europe, it's hiring local experts from the industry vertical you are targeting—that way you have the insight into both the customer's culture and the business in which you need to take a more "outside-in" approach to solutions. BT, like many other companies, does this by hiring experts from within specific customers' industries—caring less about the experts' understanding of technology than their knowledge of industry dynamics. The company then leverages this expertise by conducting detailed situation reviews to identify the emerging issues within an industry, drilling down to see how these issues impact individual customer accounts. Another critical issue for marketing solutions across Europe is alignment among marketing, sales, and the business leaders. Regional or global marketers may propose solutions campaigns, but ultimately it is the business and sales leaders within a specific country who prioritise where they invest their time for the best local results. The partner ecosystem can also play a very important role in solutions selling in Europe. This whole area is relatively underdeveloped in most companies today, but it will receive more attention in the near future, with dashboards being constructed for the countries and sets of customers the partners want to jointly target. Capgemini is a great example of a company designing and delivering solutions with partners. Using its "collaborative business experience" positioning to guide its thinking, the company partnered with Intel, Cisco, and Microsoft to design and take what they termed "extended retail solutions" to market, letting the company with the best relationship with each target customer take the lead in selling the new solution. Solutions companies in Europe face some unique challenges in developing and marketing their solutions, but most are navigating the difficulties quite well, and much exciting progress is being made! ITSMA would like to thank Dagmar Fischer of Hewlett-Packard for her support in organising and hosting the European solutions roundtable. —Bev Burgess, info@itsma.com Moving to Solutions: A Backlash to Solutions? It’s All About Change I know, I know—it's obvious. Everyone lives with it. We adapt to it all the time. We're even trained on how best to manage it. But that doesn't always mean we like it. The "it" I’m referring to is change. Katrina has given us a cruel lesson that life today has no relationship to what may happen and how we’ll live tomorrow. Technology changes have also been alarmingly disruptive and unpredictable—the well-chronicled "dot-com" period, the rise of Google, and the emergence of VoIP and open source operating systems are just a few examples of ways this industry has dramatically changed in the past 10 years. And, lest we forget, the move to solutions would certainly qualify as a "mega-change factor." For a variety of reasons we’ve detailed in previous E-ZINEs, many technology companies are aggressively pursuing a solutions growth strategy. No matter how you look at it, however, this shift to solutions is really all about change. Depending on the company and its specific challenges, this change might require new twists to the offer development process, retraining the sales force, a new bag of sales tools, tweaking the compensation plan, the requisite shuffling of organizational boxes, and so on. On paper, at least, this seems difficult but doable. The highest mountain to climb, however, is managing the change as companies go through this transition. To many, a solutions model seems like an unnatural act—it conflicts with "how we’ve always done things." To others, it means longer hours at work and less time watching the kids’ soccer games. Corporate Backpedaling While we’ve observed that most of our member companies have made substantial progress in growing their solutions businesses, a new trend has suddenly sprung up. We’re now beginning to see some of our larger member companies pushing the pendulum away from a solutions model. One of our largest member companies, for example, has significantly pared down its solutions marketing staff and appears to be giving more authority to the product P&L groups. Another well-known member company that was moving smartly down the solutions path has pulled in the reins by reorganizing its solutions group. These two aren’t alone—several other companies have decided to take a left turn on their drive to solutions. Why the sudden pullback? While I suppose there is a whole host of reasons, it seems to me that it all boils down to executive buy-in and commitment to change. Moving to solutions is a long, difficult process. It’s a marathon, not a sprint. As companies encounter poor quarterly performance, the whipping boy is often the solutions initiative, for several reasons:
When in Doubt, Listen to the Customers What does the market say about all this? On one hand, buyers continue to be cynical and skeptical in terms of how companies position themselves as solutions providers. According to a recent ITSMA study on buyer behavior, approximately half the respondents see solutions as only "a marketing and sales term," with little or no substance. On the other hand, more than 70% of the same respondents said that they have purchased at least one solution in the past year and that it has been a competitive differentiator. Go figure. Given what's happening in the market, ITSMA’s crystal ball indicates that, like it or not, solutions are here to stay. Let’s review some of the key characteristics of solutions in this industry:
Somehow, we don’t see your customers backing away from these requirements anytime soon. The trick is how meet them. Some companies may have to make massive changes regarding each of the major elements in our Solutions Roadmap, including organization, offering development, marketing, sales, and culture/behavior. Others might be able to get by with a simple tune-up—no major reconstruction required. Staying the Course As the corporate winds continue to buffet solutions initiatives and investments from all directions, the move to solutions is serving many of our member companies well. BEA Systems, IBM, Lucent, and Unisys can all point to significant improvements in their business model since placing a greater emphasis on solutions. I bet that if you asked their leading marketers about growing their solutions business, the old sports adage would apply quite nicely: No pain, no gain. So our advice is to get used to change and stay the course with solutions. Embrace it. The old models won’t work in the future, so be prepared to create a new model. As all strategists and futurists know, change is inevitable—except from a vending machine. —Steve Hurley, shurley@itsma.com
Research Desk Thought Leadership at Microsoft In the past, Microsoft was known for leading with product features and functionality, according to David Bridger, U.K. Services Marketing Manager, Microsoft. Today, the company is putting more energy into developing and promoting thought leadership for its business buyers and beginning to change the conversation in the marketplace as a result. According to Bridger, "The influencers were used to us talking about products or trying to sell them something. So discussions around the issues that matter to their market or shareholders have been very well received." For more on how Microsoft's Market Impact Program works, please see our recently published Viewpoint, Thought Leadership Marketing: Not Just for Professional Service Firms: http://www.itsma.com/research/abstracts/v0026.htm. For an in-depth discussion of how to create true thought leadership, sign up for our upcoming Briefing, "Inspirational Marketing: New Ideas, Thought Leadership, and Taking a Stand": http://www.itsma.com/Events/event_desc/05OB11N29.htm. —Bev Burgess, info@itsma.com
Solutions: More Than Just a Marketing Term
There are also real differences in the buying process for solutions vs. discrete products and services. There tend to be a greater number of people involved in the decision to buy solutions, and, on average, it takes them significantly longer to reach a final decision. So, while not every customer acknowledges that "solutions" is a real and credible classification, they still buy them, believe they're helpful, and devote more attention to their purchase than they do with discrete products and services. For marketers, this is yet more evidence that you need to hone your messages and activities to get beyond the hype. ITSMA's recent study explored how customers choose solutions in four specific vertical markets. For more information, please see our recent Briefing: http://www.itsma.com/research/abstracts/OLB091305.htm. —Julie Schwartz, jschwartz@itsma.com
Spotlight on Software
ITSMA's new study on the business intelligence/analytics market is now available. Find out who's buying BI, which companies customers prefer to do business with, as well as the attributes they look for when they're making a purchase decision. For more information on the study, please visit: http://www.itsma.com/research/abstracts/BSS001B.htm Human Capital Management Brand Tracking Study Do enterprise buyers prefer to work with full-suite providers or with specialists in human capital management (HCM)? Which company are customers most likely to call for HCM solutions? For the answers to these questions and more, please visit: http://www.itsma.com/research/abstracts/BSS001H.htm Sponsorship Opportunity: 2006 Software Brand Tracking Study ITSMA is beginning to recruit sponsors for our 2006 Brand Tracking Study on Enterprise Software Applications and Services, which will provide the data, analysis, and recommendations that companies need to understand enterprise software customer priorities, monitor the competitive landscape, and improve their branding and positioning strategies. For more information on the study, please visit: http://www.itsma.com/research/prospectus/mk0560_sw06.htm [TOP OF PAGE] Upcoming Events Balancing Regional & Country Marketing In Europe Mining Markets of One Invigorating Live Marketing: New Approaches to Connecting with Communities
Inspirational Marketing: New Ideas, Thought Leadership, and Taking
a Stand Collaborating with Customers for Competitive Advantage Designing and Delivering Account-Based Marketing Increasing Your Impact In Key Accounts
Ask ITSMA! Do you have a services marketing question? (c) Copyright 2005, ITSMA Please forward this newsletter, but only in its entirety. Public citation or publication of any information herein is encouraged but subject to U.S. and international copyright law and conventions. Any citation must include full attribution to ITSMA. Individual graphics or paragraphs can be published without permission as long as attribution to ITSMA is included. Publication of longer selections or complete articles requires ITSMA permission. For permission or more information, contact pr@itsma.com. [TOP OF PAGE] Subscription Information Subscriptions are available in text and HTML versions. To SUBSCRIBE or to change the format of your subscription, visit http://www.itsma.com/aspfiles/press/ezine.asp. To UNSUBSCRIBE, please email us at unsubscribe@itsma.com or mail us at ITSMA Subscriptions, 420 Bedford Street, Suite 110, Lexington, MA 02420, USA. Back issues of ITSMA E-ZINE are available at http://www.itsma.com/News/ezine/default.htm. |
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Although
a great many of the 150 customers recently surveyed by ITSMA believe
that the term "solutions" is nothing more than marketing hype, 72% of
the respondents indicate that they do, in fact, buy solutions. In addition,
75% of those surveyed said that they believe the solutions they buy provide
them with a competitive edge at least some of the time. 
Business
Intelligence and Analytics Brand Tracking Study
