ITSMA E-ZINE	October 2006

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Editor's Note: Marketing's Advancing Role: Five Points to Consider

In preparation for ITSMA's annual conference next month, we recently surveyed our members on "the value of marketing." We'll share the full results at the conference, but here are a few data points to get you thinking:

• Collectively speaking, our members say that they put about 60% of their focus on short-term lead generation and sales support vs. about 40% longer-term brand building and positioning for the future.
• Interestingly, though, when members were asked to rate the areas in which marketing has the greatest impact on the business, neither lead generation nor sales support made the top four, which all centered around brand building and positioning.
• Meanwhile, a majority of our members report increased responsibilities in such business-critical areas as charting business strategy, deepening customer insight, and developing new offers.
• On the internal perception front, only 25% of our members believe that the senior-most sales executive in their organization would say that marketing has a "significant impact" on the ultimate success of the business.
• The numbers are higher for chief executives, with 46% of our members believing that CEOs would say that marketing has a significant impact, but they're much lower for CFOs, with only 8% saying that CFOs see marketing having a significant impact on the business.

Perhaps not surprisingly, more funding and more staff top the list of suggestions for what marketing needs most to increase its impact on the business. Given the increasingly heavy load marketing is carrying, more resources certainly couldn't hurt. But I think something larger is going on here, too.

Business leaders in IT services and solutions are grappling with a more fundamental shift in the way their companies are run. Marketing, so long a junior partner in the business, is beginning to step up to a more senior role. As Peter Fisk notes in this month's interview, the mega trends shaping marketing make this an enormous challenge. The perceived lack of support from internal colleagues, as our survey suggests, doesn't make things any easier. Meeting the challenge very likely will require new thinking, new skills, and even new organizational models, as well as additional resources. The good news, as Peter Fisk also notes, is that the opportunities for marketers to take on a more advanced role are also enormous. And, if you're looking for a silver lining to our survey, consider that 83% of our members think their senior colleagues' perceptions of marketing's impact has improved over the past two years.

Check out my new blog, Marketing on the Verge, for continuing coverage of what's working, what's not, and what's next for marketing technology services and solutions.

And congratulations to David Allen, Director of International Marketing at 3Com Europe, for winning an iPod from our drawing among survey participants.

—Rob Leavitt

What's Hot: Rethinking Marketing Skills and Organization

ITSMA members worry a great deal about the skills of their sales forces, especially if their salespeople are up to the challenge of consultative, solutions selling. It's a legitimate concern, and a number of member companies are investing in new training and support programs to improve sales performance for solutions.

Looking closer to home, it's also evident that marketing organizations could use some retooling as well. Digital marketing is one obvious area. As participants at a recent ITSMA workshop on "blogs and beyond" noted, the skills required to take advantage of new online opportunities and channels such as blogs, RSS, podcasting, social networking, and so on are sorely lacking in their organizations.

As important, it's not often clear which part of the marketing organization should be responsible for the new online initiatives. Should it be PR, interactive marketing, brand management ... or perhaps some new team?

The reality is that the new wave of digital marketing cuts across many traditional marketing functions. Companies are beginning to blog and podcast to build awareness, reach market influencers (analysts, media, etc.) in new ways, demonstrate thought leadership, and generate leads, among other objectives. They're setting up microsites for the same reasons, but also to support bids and strengthen relationships with existing clients. Does this mean that everyone in the organization needs the skills to work with all the new tools? Should the interactive marketing folks, typically focused on the Web site and demand generation programs, take on PR and corporate communications as well?

Meanwhile, it's not just digital marketing at issue. According to ITSMA's new Services Marketing Report Card, self-assessments by more than 800 services marketers at 20 top firms suggest several other concerns for companies attempting to be market leaders. Skills in such critical areas as relationship marketing and alliance management fall well short of the high marks that companies need to stand out from the pack. Here, too, there are organizational questions as well. Is it even marketing's job to manage customer and/or alliance relationships?

The rise of account-based marketing (ABM) brings some of these skill and organizational questions to the fore. If companies are going to put marketing people directly onto their key accounts, are they up to the task? Designing and executing ABM programs requires a sophisticated combination of research, strategic planning, custom offer development (sometimes with partners), and relationship management (with sales as well as the customer), as well as traditional marketing communication skills. It's almost a microcosm of the whole marketing function. As companies begin to apply ABM to more than a few accounts, they are starting to bump into some real limits in terms of the number of marketers capable of leading the charge.

Similarly, ABM raises marketing organization questions once it moves beyond the small pilot phase. If ABM managers are going to control access to a large number of key accounts (25 or 50 or even more), what happens to other marketing programs? Are those accounts off-limits to the people running executive seminars or direct e-mail? Or do they just need to coordinate all contacts? Who gets to decide?

These are just a few of the organization and skill issues facing our members these days. As such, it's not surprising that marketing (and other) reorganizations continue to pervade the industry, and marketing leaders are wondering increasingly about which functions can and should be outsourced to specialists.

In a time of such rapid change and constantly growing pressure on marketers to perform, however, one thing does seem clear: There's a need for greater investment in professional and organizational development. It's never easy to find the time and money for development amid the daily crush of priorities and deadlines, but it is difficult to imagine that marketers can adequately step up to the full array of challenges without it.

—Rob Leavitt

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The Interview: Peter Fisk on the Three Trends Shaping Marketing

Peter Fisk, a strategy and marketing consultant based in London, has worked with a number of the world's leading companies, including Coca-Cola, Microsoft, American Express, and Shell. His recent book, Marketing Genius, describes how to combine deep analysis and radical creativity to deliver extraordinary business results. ITSMA recently asked Fisk to share his perspective on the major trends affecting marketing for technology services and solutions.

ITSMA: You have talked about three major trends shaping marketing today. Can you describe them?

Fisk: The big three are individuality, connectivity, and sustainability.

Individuality is all about treating customers as separate individuals. In the consumer world, this is why we see so much emphasis on personalization and 1to1 marketing. Customers are demanding this and marketers have to respond.

In the B2B world, including technology and professional services, we're seeing a massive shift toward account-based marketing. This is not just traditional sales account management, but taking a multiyear perspective toward building relationships and tailoring solutions. We're starting to see companies using this approach to create more individualized solutions not only with big accounts, but with midsize and even smaller accounts as well.

The second trend is connectivity. Obviously, there is a technology underpinning, with everyone now online, but it's also the interdependence of the world and the instant impact of one action in the ecosystem on many others. Think about how weather events affect supply chains that are now so tightly coordinated, for example.

On the Web, we're seeing a new wave of connectivity with the rise of social networking with MySpace, YouTube, Flickr, and so on. Clearly, this is big in the consumer space, but in the B2B world we're also seeing more formal and informal networking taking hold across the supply chain, the distribution chain, and with workers sharing ideas across the organization.

We're seeing IT firms, among others, relying much more on partners to create integrated solutions. Companies like IBM, Fujitsu, Capgemini, and others realize that they need more creative thought and insight from partners than just relying on the technology or expertise inside.

Sustainability is the third trend, and Europe is actually well ahead of North America in consciousness of the social and physical environment. This means that companies have great opportunities to look at more ethical and socially responsible activity. It's not just about having a separate corporate social responsibility initiative, but really putting this at the core of their proposition.

Focusing on sustainability can be a source of differentiation, especially in a world where so many products and services are so easy to copy. When the "hard" things are easier to copy, the "soft" things become more important. General Electric sees this with their whole ecomagination initiative, with [CEO] Jeff Immelt driving investment and creativity in cleaner technologies and reducing greenhouse emissions. Along with doing the right thing, it's a way to be more emotionally engaging which is important in B2B as well as B2C. The old ways are running out of steam, and if we get to the new ways first, we can create strong competitive advantage. IT companies like Sun see this with their focus on environmental impact, but it's about social impact, too.

ITSMA: You've talked about account-based marketing as one of the ways marketers can respond to these trends. What are some of the other new directions?

Fisk: Think about marketing's Four Ps. With connectivity, we need to rethink "place." Traditional thinking is that place is about channels to market, and there is this arrogant sense of pushing our products and services to customers through different pipes. The reality now is that customers want things where and when they want them, so marketers need to plug into the Web, especially, and create more of a pull approach based on where people are connecting anyway.

Marketers also need to be innovators, thinking about new offers and new business models that serve customers in more collaborative ways. This is a real opportunity for a bigger role for marketing.

Finally, marketers can make a big contribution with a sustainability focus. This includes more ethical and transparent behavior with customers, linking more into communities, and looking at what contributions you can make to society and not just shareholders. CEOs are looking more at this idea; HR people are talking about it as well. Marketing today is not so well equipped for this, but there is a huge opportunity for marketers to put sustainability issues at the center of their offerings.

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On the Job: Cerner "Demos" the Strength of Its Customer Relationships at HIMSS

In Fall 2005, the marketing team at Cerner, a leading supplier of healthcare information technology (HIT), turned its attention to the 2006 HIMSS conference—the largest HIT trade show in the United States. The team faced two big challenges:

• Generating excitement among trade show attendees, a notoriously difficult audience to impress
• Demonstrating to the market that Cerner is dedicated to forming long-term, collaborative partnerships with clients

To meet these challenges, Cerner decided to do something it knew its competitors couldn't: allow its clients, not its salespeople, to man its tradeshow booth.

According to Vicki Carlew, the marketing executive who oversaw Cerner's HIMSS presence, "Convincing our clients to participate wasn't difficult. We simply explained that we wanted them, our strategic partners and cutting-edge technology leaders, to show the industry the fabulous things they're doing at their organizations."

Cerner quickly blew past its goal of having 25 clients sign up to help them at HIMSS; in the end, 83 individuals from 37 client organizations came to the show to demonstrate to their colleagues what they had accomplished using Cerner's technology. "It was very gratifying to see that our clients are so happy with our solutions and client service that they were willing to leave their jobs and families to come represent our solutions in our booth," said Carlew.

The Booth

Each day, four client teams occupied the four "featured" areas at the very front of the booth, demonstrating how they use Cerner solutions across their organizations. The rest of the clients manned individual demo stations and focused on single solutions or roles (radiology, physician, nurse, laboratory, and so on). Clients "dialed in" to demo software code running at their home hospital or clinic. Carlew said that once visitors understood that there was a client in the booth who mirrored their own role (e.g., physician to physician) they were much more interested in entering the booth and talking.

In keeping with the client-based strategy, Cerner diminished its own role and steered away from the typical flash of tradeshow booths. It used simple materials, graphics, and finishes as it constructed its booth. Other than the large Cerner sign (which was actually made up of client logos), the rest of the signs were of the names and logos of client organizations participating in the booth. The underlying message was that Cerner's focus was on the clients.

The Buzz

Mindful of the impact of airfare on clients' HIMSS budgets, Cerner looked for creative ways to stimulate interest and excitement for the booth. The company employed two main strategies:

1. Guerilla marketing. Cerner hired teams of local workers and put each team member in a T-shirt with one large letter on each shirt. When they stood next to each other, they spelled out "All Together." Without indicating they were with Cerner, they told passersby at hotels and outside the convention floor that they should go see what was happening "at booth 2813."
2. "Reveal" advertising. Cerner placed intriguing ads in the convention daily newsletter. The first day the ad said only "Who is Running Booth 2813?" The second day it added the phrase "All Together," but did not yet reveal Cerner's role. On days three and four, the company unveiled an ad that featured the Cerner logo built from client logos.

The Business Results

Cerner realized many benefits as a result of its tradeshow strategy. HIMSS attendees had the opportunity to interact with people who'd gone through the experience of purchasing and installing a new HIT system. Industry influencers such as Piper Jaffrey were impressed with the company's "enormous confidence… in its customer base." Cerner's sales and marketing teams learned new ways to talk about and demo the company's solutions as a result of seeing Cerner clients in action. And clients who initially declined to participate wanted to make sure they were "on the list" for 2007, opening the door for Cerner to get closer to even more of its existing clients.

"We were amazed at how much our clients enjoyed and valued staffing our booth at HIMSS," said Carlew. "It's inspiring to see your clients passionately advocate for your solutions. It validates everything we do."

—Meghann Grandy, info@itsma.com

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EuroNotes: Learning from Other Industries

While the technology sector has developed and changed significantly over the recent past compared with more established industries such as finance and construction, technology marketing is still pretty much the new kid on the block. Even industries that have emerged more recently, such as airlines, have grown up differently from the technology sector, and with different dynamics. As is evident from discussions at a recent ITSMA Inner Circle meeting, however, experience and lessons from such industries can be quite useful for technology marketers.

Speakers and topics at the September 13 meeting, hosted by British Telecom (BT) in central London, included:

• Managing the Brand (Insurance): Geoff Dodds, Head, Brand Strategy, Worldwide Markets, Lloyds of London
• Delivering a Different Experience (Airlines): Peter Fisk, Managing Partner, The Foundation
• Working Effectively with Partners (Construction): David Benson, Director, Carillion

The following summarizes key points from the meeting.

Managing the Brand

In the insurance markets, trust and reputation are essential. In managing its brand, according to Geoff Dodds, Lloyds of London stresses firstly that the brand must be well defined internally, particularly in terms of the existing business culture. People in the organisation need a common understanding of what the word brand means and how its development is the responsibility of all employees, not just those in the marketing department. Keeping the message clear at the top of the business is therefore critical.

In this context, evolving the brand takes time and patience. But brands do change, and they need to change. Providing data to demonstrate the effect of the brand on stakeholders is necessary to make the case for change; it is similarly important to show the impact of change already underway.

Delivering Differentiation

Looking back to the 1980s and 1990s, Peter Fisk noted that new stakeholders, new entrants, and the opening of new markets in the airline industry required new approaches to the customer experience. "Thinking like the customer" was at the heart of many of the changes in the travel process that we now take for granted, such as Club World and First Class. By connecting different parts of the service processes, airlines were able to make brands more relevant and compelling to different customer segments by delivering new customer experiences.

Mapping customer touch points and working horizontally across the organisation, the way customers do, enabled companies to take new approaches to all elements of the process, including buying, parking, check-in, waiting, entertainment, arrival, and hiring cars. The key was to stop thinking just about moving passengers from A to B and to think instead about helping people have the holiday of a lifetime, see their friends again, or grow their business internationally. This new thinking was embedded through new cross-organisation roles, outside-in planning processes, needs-based marketing programmes, more empowered service styles, and more customer-oriented performance incentives.

Working Effectively with Partners

The success of any major construction programme, as David Benson reminded participants, depends on the activity of multiple providers and contractors. As such, the effective selection and management of partners is of primary importance, especially given the significant risk and costs in high-profile projects. Most important, according to Benson, is complete openness. Being clear with your potential partners about both your and their objectives right at the start is essential, along with openness about other factors such as appetite for risk and clarity on expertise and margin.

Being customer focused is equally high on the priority list. Partner managers must ensure that each partner maintains full commitment to customer success, and project leaders must focus first and foremost on ensuring that all parties are working together to deliver to the end customer rather than playing to each partner's own management structure.

Although the insurance, airline, and construction industries differ in many ways from the technology industry, the three examples discussed at the ITSMA meeting suggest important parallels to the challenges of marketing technology services and solutions. Certainly the issues of brand, customer experience, and partner collaboration are central to our industry as well, and the examination of lessons from other industries provides much food for thought.

—Celia Gaffney, cgaffney@itsma.com

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Research Desk

Services Marketers Strong in Communications, Weak in Alliance Management

Over the past two years, more than 800 services marketers from 20 companies have completed ITSMA’s Services Marketing Competency Assessment, a Web-based self-assessment survey designed to measure competency in the skills most essential to services marketing success. The data we have collected provides valuable insight into the areas in which services marketers collectively are performing well and falling short.

According to ITSMA's assessment, competency levels are uneven across the seven services marketing categories:

• Strategy and market planning
• Portfolio management
• Marketing communications
• Relationship management
• Marketing operations
• Sales channel enablement
• Alliance management

Predictably, services marketers rate themselves as most proficient in marketing communications activities—the most “traditional” job of marketing. Marketing operations is a close second. Strategy and market planning, sales channel enablement, portfolio management, and relationship management fall in the middle ground; alliance management is the laggard.

The mixed results should not suggest that most services marketers are not capable. Talented business-to-business technology services marketers are usually "grown," not born or hired out of school. By mapping professional development opportunities to the ITSMA services marketing competency model, services providers can proactively remedy the competency shortfalls and build on current strengths.

—Julie Schwartz, jschwartz@itsma.com

For more on how to build successful alliances and partnerships, tune in for ITSMA's October 17 Web Briefing, Win-Win Strategies for Marketing with Partners.

For a more detailed look at current performance in the services marketing profession, see our newly published Update, Services Marketing Report Card: Critical Skills Needed in Select Areas.

Upcoming Events

Win-Win Strategies for Marketing with Partners
October 17 Web Briefing
http://www.itsma.com/Events/event_desc/06OB10G30.htm

101 Ways to Say No! Prioritising Marketing Activities
November 9 Marketing Roundtable (London)
http://www.itsma.com/events/event_desc/06RT11E32.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.