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Editor's Note: Announcing ITSMA’s Associate Membership Program Few tech companies have the marketing resources of an IBM or HP. But they all have the same challenges, and they all need to stay current on industry best practices. This month, ITSMA is pleased to unveil our new Associate Membership program, specifically designed for technology companies with annual revenue of less than $100 million. Now, by joining ITSMA with an Associate Membership, marketers at these smaller and emerging companies can gain access to our insight and community through our online research library, member briefings, and other services and benefits. We’re excited to open the doors to organizations that are interested in this new membership option. For more information about Associate Membership, visit http://www.itsma.com/Members/mbr_AsoBenefits.htm or contact Dirk Mullenger at +1-661-298-0015 or dmullenger@itsma.com.
 [TOP OF PAGE] What's Hot: Solutions from the Outside In Steve Hurley, ITSMA's solutions guru, drew a chorus of knowing laughter at ITSMA's recent Marketing Leadership Forum as he reviewed the emotional highs and lows companies experience as they move to become serious solutions providers. Titled Solutions from the Outside In, the Forum provided an in-depth look at how far some companies have come in transcending the engineering-driven, build-it-and-they-will-come legacy of most organizations…and how far most of them still have to go. The core challenge for marketers was spelled out clearly by a group of CIOs discussing what buyers want. As Babak Aghevli, CIO of DataPath, put it, "the big problem is vendors not really understanding my business issues. They need to understand what I want and what they can solve. No one can do everything; they need to focus on their strengths and be able to turn down an opportunity if they can't succeed." Gaining a deeper understanding of customer needs has been integral to IBM's recent Information on Demand initiative, said Tom Inman, vice president of strategy and marketing for IBM Information Management Solutions. During his presentation, Inman cited extensive research and analysis of why businesses invest in information solutions, what types of solutions they typically buy, and what the buying process looks like. This research enables IBM to craft more compelling messages, target appropriate influencers and decision makers, and organize integrated campaigns that move interested prospects from business need to solutions approaches to consideration of IBM. At CSC, the outside-in imperative has inspired a major initiative to involve customers and other stakeholders in the solutions innovation process. Long respected as a leader in client responsiveness and service, customer feedback nevertheless suggested that CSC needed to provide more thought leadership, more proactive initiatives to partner with customers, and more effective transfer of best practice experience from customer to customer. As described by Lem Lasher, chief innovation officer at CSC, delivering on the company's new “innovation agenda” revolves around forming teams with customers to co-create new solutions. By bringing together thought leadership and customer research with global alliances and the portfolio team, CSC's Office of Innovation is able to accelerate the conversion of new ideas and field experience into new offerings for and with customers. Focusing especially on the C-suite, Avaya has invested heavily in an executive relationship management program which includes four initiatives:
By investing in a sustained program with a listening-first approach, Avaya has been able to gain new insight into market dynamics, create C-level relationships that help guide company strategy, and develop new solutions and revenue. With relatively slow growth in the enterprise market, many of the large tech firms are moving aggressively to package and sell solutions to smaller and mid-sized business customers. Succeeding in the mid-market, however, is not just a matter of "dumbing down" existing enterprise-scale offers, according to Marci Meaux, vice president of portfolio management at Cisco Systems. Collaborative design and development with both customers and partners, based on an understanding of customers' specific requirements and situations, is essential. One key, said Meaux, is shifting partner rewards from volume to value, providing incentives for partners to add depth and breadth to their solutions capabilities. At the same time, Cisco is moving to integrate its channel program across products and services to further facilitate partners' selling integrated solutions. The challenge of becoming an outside-in organization is an enormous one, typically requiring substantial cultural and organizational change to ensure that corporate direction is truly informed by customer and other stakeholder interests and needs. And the challenge is exacerbated by the rise of the “flat world,” according to Malcolm Frank, senior vice president of strategy and marketing for Cognizant. As globalization begins to dominate the technology industry, Frank stressed that marketers need focus on six specific issues, including:
Ultimately, as Marge Breya, chief marketing officer at BEA, explained, one can think about “four C's” as the cornerstones of institutionalizing outside-in: Customer-driven product and solution development, Coordination to align corporate roles and responsibilities around the sales cycle, Communication with stakeholders focused on customers' business issues, and Cultural adaptation to new organizational structures and processes.
The InterviewCIOs on Trusted AdvisorsThese days, every technology provider wants to position itself as a “trusted advisor” to its clients—all its clients. Three representatives from the CIO Executive Council joined ITSMA in San Francisco for our April 25-26 Marketing Leadership Forum to discuss the reasons that positioning your company as a trusted advisor may not be the best marketing strategy and what you can do to build true credibility with CIOs. Mark Hall, general manager of the CIO Executive Council, moderated the panel, which featured:
Hall: When a vendor talks to you and uses the phrase “strategic partner” or “trusted advisor,” what does that mean to you? Aghevli: To me, showing up in my office on Day One and telling me you want to be my trusted advisor means nothing. Being a trusted advisor is something you have to gain over time, respect you have to earn. I need partners that will move me forward, so I’m not interested in strategic partnerships with commodity vendors. Most importantly, I need to be able to depend on what you’re telling me. Don’t overstate it. Let’s work together to get where we want to go. O’Hare: The trust needs to be earned. It can’t just be there out of the gate. One thing you need to understand is that if a vendor fails, we’re the ones who are accountable. The CEO doesn’t take excuses. That’s why it’s paramount to us to ensure that we’re really comfortable with and ready to trust a vendor; we’re putting our heads on a chopping block. Aghevli: In order to be a partner, you can’t just do one implementation and leave and then come back at the end of the quarter asking if I want to buy your stuff. You have to stay with me. Hall: Telling a CIO you want to be his strategic advisor during your first meeting is a bit like showing up on a first date and telling your date that you want to marry them. It doesn’t usually work. So let’s talk about some examples of strategic partnerships that work. O’Hare: We found a great strategic business partner with a company that did some work for us around business continuity services. It was an eight-figure contract, and we sat down right at the beginning to discuss what we needed to do and set expectations. We created a seven-figure financial holdback for the first year. If they completed the back-end implementation on time, they got the money. If they didn’t, we’d get to keep it. They put real skin in the game. And I’ve got to tell you, that team executed flawlessly. They did what they said they were going to do. I engaged that team again and again. Frazier: The key to successful strategic partnerships often lies with the account manager. When you have a sense that an account manager is looking out for your interests, that she has a real interest in how your business is performing, that’s when you want to do business with the vendor. If a partner like that comes to see me and needs me to buy something on the last day of the quarter so that she can meet her revenue target, I’ll do it. Not because there’s an expectation of payback, but simply because she’s a partner and an advocate for us and we want to see her do well. O’Hare: Account managers are especially important when it comes to complex solutions. I don’t want to have to know to call five different people within the vendor organization for five different things. I want to call one person, tell that person what the problem is, and have them go fix it behind the scenes. Make my job easier. If you make it easy for me to do business with you, I’ll probably do more business with you. For more insight on CIOs, check out the ITSMA Viewpoint with Gartner’s Ellen Kitzis. On the Job: Talking BMC with Mike Smith“Think back to the mid-nineties,” says Mike Smith, director of e-business at BMC. “Ten years ago, there were plenty of companies that didn’t have corporate Websites; it wasn’t yet essential. Today, if you’re not on the Web, you’re putting yourself at a serious competitive disadvantage. In three to five years, the companies that haven’t created digital communities where they can converse in an open way with customers are going to find themselves in a similar position.” Smith knows whereof he speaks. A veteran marketer who’s been in the business for more than 30 years, he was brought into BMC about a year and a half ago to publish third-party communities that BMC sponsors. Once he got there, however, he wasn’t content to run third-party communities; he wanted BMC to have one of its own. And so a pilot project called TalkBMC was born.
TalkBMC is a digital gathering place where customers and other interested parties can engage with the company via blogs and podcasts. Today, TalkBMC comprises a library of approximately 40 podcasts and 13 blogs, all featuring or authored by employees who talk about core technology issues such as business service management, ITIL, and compliance issues—in other words, the major issues around which BMC is establishing itself as a thought leader. Getting Started TalkBMC went live in July 2005, after about a month of discussion within the company about the value of entering this new arena where conversations are more important than control. “The most important question a company needs to answer before embarking on an initiative like this,” explains Smith, “is whether it—and its senior management—wants to participate in the digital conversation. Some companies aren’t ready for that yet, and that’s fine. If you jump in too quickly, the negative consequences will be swift and painful. But at BMC, we recognized that the conversation was going to happen anyway, and we decided we wanted to play a part.” TalkBMC was not, according to Smith, an expensive initiative to get off the ground. His initial team consisted of an editor, a journalist, and a handful of Web developers who’d been around podcasting and blogging and who understood the importance of community. Once the team was in place, they set out to find trustworthy bloggers who “enjoy talking and have interesting things to say.” Trust, Smith stresses, is key. “We don’t choose high-risk people to participate,” he reveals. “The legal department, the leadership of the company, and the TalkBMC team all need to be comfortable with the people that are selected.” (While the legal department doesn’t monitor the TalkBMC blogs, there is a fairly detailed set of blog rules in place. Before visitors can comment on the blogs, they need to agree to the rules.) After selecting a blogger, someone on the core TalkBMC team acts as a mentor until the newcomer has found his sea legs. Mentors don’t prepare or influence content, but they do encourage the bloggers to get active, stay active, and respond to any comments that readers post. The TalkBMC team is not there to dictate the terms of engagement, but to make sure that the digital conversation continues. If a blogger starts shirking his TalkBMC responsibilities, Smith says that he will issue warnings first, but he is prepared to remove that person from the site to ensure that the audience doesn’t waste time with bloggers who aren’t fully engaged. “This Is Not About Marketing” One of the characteristics that Smith looks for in a “trustworthy” blogger is authenticity. And he doesn’t think that marketers are always the best people for this job. “Think about it,” he says. “From Day One, marketers focus on how to tell the company’s story in the marketplace. That’s their job. In contrast, engineers and technical people aren’t usually looking to ‘spin things’; they can be more authentic by nature.” He points to a recent billboard campaign put out by a large telecommunications company as an example of inauthentic marketing and how it can backfire. Lo and behold, a Google search highlights several negative blog postings about the inauthentic campaign, including one that reads: “The [campaign] is a classic example of a big corporation glomming onto something hot, but not being mobile or agile enough to back up what they’re selling.” Swift and painful indeed. Smith sits back and smiles reflectively. “This move to create digital communities around digital content isn’t about marketing or selling—this is about BMC, as a company, providing content, knowledge, and expertise that our enterprise customers need. Remember the old days of marketing, when an entire television show was brought to you by one company because there was alignment between that brand and the entertainment program? That’s the model that we’re striving for, but instead of entertainment we’re providing expertise.” Back when TalkBMC was just getting off the ground, Smith ran the program in an “R&D incubator environment,” keeping it separate from the busy marketing people who were focused on generating leads. By ensuring that the site contains only substantive content, Smith believes that he is laying the groundwork for a model that could, one day, “monetize marketing.” In fact, some BMC content, a 95-page book, is already being sold on Amazon.com. Results Today, not even a year after its launch, tens of thousands of pages of content, podcasts, and other community content have been shared and consumed by customers and prospects on a global basis. TalkBMC now has more “link popularity” than the core BMC.com Website—clear evidence of the power of community and carefully applied Web 2.0 practices. Other metrics that the team tracks include audience size, podcast downloads, RSS feed traffic, site metrics, and page metrics. To capture these numbers, Smith emphasizes that it is very important to brand the content, and not just to brand it with the company brand. “Before we created TalkBMC, there were essentially no hits on the search engines for that term,” he says. “If you brand your content and community with the same company brand messaging, it will be more difficult to separate it from the company brand when it comes time for measurement. You can do it,” he explains, “but it’s much harder to create metrics around the communications.” Looking Forward For Smith and TalkBMC, the future looks bright. The success of TalkBMC has led to an increase in investments in the digital community concept, although these investments are still small in comparison to the cost of online advertising and other, more traditional, marketing techniques. “As more companies move to this open, authentic approach to communicating with customers, there are going to be huge implications for investor relations, PR, HR, and a whole host of other things,” Smith predicts. “There are risks involved with anything new, but our results to date could be a sign of a whole new mindset for marketing. Building community shouldn’t be treated as just another new tactic to throw in marketing’s bag of tricks; it should be the cornerstone of everything we do. Who knows? One day we may even see the formation of a conversation management department.” Smith chuckles a little before wrapping up the interview: “It’s going to be fascinating to see how this all plays out.” —Meghann Grandy, info@itsma.com Moving to Solutions: Demonstrating Value Delivered Houston, we have a problem. In a recent ITSMA survey, we asked marketing leaders to rate, on a scale of 1 to 5, their companies’ effectiveness at measuring the value of the solutions they deliver to customers. None of the respondents indicated that their companies are “extremely effective” at measuring the value delivered; meanwhile, 46% of respondents indicated that their companies are “not at all effective” or “not effective.” And only 8% of those surveyed always include in their solutions proposals an explicit commitment to measure the value the solution delivers to the customer. (In contrast, 38% of the respondents never include such a commitment in their proposals.) All in all, the results clearly illustrate that providers are struggling to get their arms around what exactly customers are getting out of the solutions they purchase. This inability to measure value delivered can make life very difficult for the marketers tasked with articulating the business benefits of implementing a company’s solutions—particularly when top management demands that marketing be more and more accountable with each passing day. It seems obvious to those of us in the industry that solutions do provide tremendous value, but without proof points to back up marketing promises, it is not surprising that customers have become a bit skeptical of providers’ claims. First Steps So what can providers do to start measuring value more effectively? Our survey revealed that only 21% of the respondents have in place a formal value measurement program for solutions; 67% measure only on an ad hoc basis, and the rest don’t measure at all. And ownership of these measurement programs and initiatives is frequently unclear. Responsibility is spread across the organization, falling anywhere from solutions marketing to pre-sales consulting, sales, customer service, operations, or nowhere at all. Thus, the first step in measuring the value of delivered solutions is to stop treating the measurement program like a hot potato. Come to consensus around who owns the program and let that person or department spearhead your efforts. Next, get the customer involved. Find out what metrics your customers are using to measure the value of your solutions; chances are, they have a way to measure the ROI of their technology investments. The more customer insight you can glean, the better off you will be as you begin to put more formal measurement programs in place. Finally, remember that you’re not measuring simply for measurement’s sake. The more clearly you can capture and articulate the value your solutions deliver to customers, the sharper your value propositions will be, the easier your PR, AR, and advertising will be, and the more likely you will be to attract new customers. —Lori Weiner, lweiner@itsma.com
Research Desk Setting Expectations for Solutions: Accurate or Overstated? In addressing the question posed by the title of this article, I’ll let the chart below—presented by Mike Swenson, the CIO Executive Council’s director of research, at ITSMA’s recent Marketing Leadership Forum—speak for itself.
As Swenson pointed out to those who attended the Forum, the fact that the vast majority of the CIOs polled for the Council’s survey believe that services and solutions providers overstate their capabilities is not something we can blame on a few bad apples. This is an industry issue, and we need to treat it as such. Julie Schwartz, chief research officer at ITSMA, believes that companies must not only invest in listening to their customers, they must also be willing to implement change based on customer feedback. “The industry is starting to make strides in really listening to customers,” she said. “Now the challenge is taking action based on what they say.” —Meghann Grandy, info@itsma.com
[TOP OF PAGE] Upcoming Events Differentiation and Reputation Management: Top Priorities for Marketing Professional Services
Collaborating For Growth: ITSMA's Annual European Marketing Forum The Innovative Marketing Conference Marketing Excellence Awards CXOs Are Different: Building Relationships through Councils and Community Strengthening Business Relationships and Results with Key Accounts Designing and Delivering Account-Based Marketing
Ask ITSMA! Do you have a services marketing question? (c) Copyright 2006, 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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