At ITSMA, the start of spring not only means warmer weather and more
sunshine, it also means that we've officially entered Marketing Excellence
Awards season, one of our favorite times of the year. You see, for
an organization that is focused on helping our members excel with their
services and solutions marketing, it is incredibly gratifying to learn
about all the new and exciting marketing programs you've executed over
the past 12 months.
This year we're especially happy to let you know that we've added
two completely new categories to the mix—Improving Sales and
Marketing Collaboration and Leveraging Digital Demand. We're looking
forward to learning more about what you're doing in these areas.
For reference, the complete list of categories for 2007 is:
Building the Solutions Business
Sharpening Brand and Competitive Differentiation
Generating Demand Through Targeted Campaigns
Improving Sales and Marketing Collaboration
Strengthening Customer Relationships
Leveraging Digital Marketing Channels
The deadline for award submissions is June 15, 2007, and we'll unveil
the winners at our annual marketing conference in Cambridge, MA, on
November 14, 2007. You can find detailed submission guidelines on our
Website at http://www.itsma.com/News/mea.
Best of luck!
P.S. For those of you who might have noticed that this column no longer
contains Rob Leavitt's byline, I'm sad to let you know that Rob is
leaving ITSMA but happy to announce that I've taken over as the editor
of the E-ZINE. For more on what's next for Rob, please be sure
to read his "What's Hot" article below.
What's
Hot
Moving Marketing Forward: Rob's Look Back
By Rob Leavitt
What a difference a millennium makes! When I first started working for
ITSMA in 1999, the tech industry and its marketing departments were awash
in money, high hopes, and great expectations. We all know what happened
after that, and it was a rocky road getting the industry and its marketing
groups back on solid footing. Eight years later, as I take my leave from
ITSMA, things are looking up again, but with a rather more mature and
measured view.
Most important, marketing for services and solutions has taken giant
steps toward the kind of strategic leadership role that ITSMA has always
promoted. Even with the industry upheavals, the ups and downs of marketing
budgets, the dizzying introduction of new tools and channels, and the
clear emergence of customers in control, marketers have by and large kept
their eyes on the overarching goal of maximizing their impact on the business.
Looking back, I think it’s worth noting five critical changes in the
nature of services and solutions marketing since I began with ITSMA.
Business strategy. In the late 1990s, few services marketers
had significant impact on business strategy. For one thing, if you worked
at a product-based company, services themselves were rarely seen as
core to the business. But even in pure services or services-led companies,
marketing was still largely a support function, churning out collateral,
organizing events, and building brand awareness. Today, a good many
marketing organizations play an essential role in developing corporate
strategy, identifying growth opportunities, and segmenting the market
in more sophisticated ways than before.
Offer development and portfolio management. In the late 1990s,
most services marketing organizations had to wait and see what other
groups wanted to sell, and then figure out the most effective ways to
bring them to market. Today, more and more services marketing groups
have taken a strong hand in developing new offerings and managing the
portfolio. Rather than just reacting, marketers are now working directly
to ensure that their companies are indeed trying to sell the right solutions
to the right customers at the right time. Instead of watching the R&D
folks crank out new products and services based mostly on internal capabilities
and desires, the marketing folks have injected a more customer-centric
approach that starts with business issues first and then looks to develop
(or sustain) offerings that can provide real business value.
Customer conversation. Even with the rise of email and the
Web, too much services marketing in the late 1990s remained captive
to the one-way mindset of pronouncement and proclamation: Craft the
message, "target" the right audiences, and broadcast (or narrowcast)
as aggressively as the budget could stand. As customers tuned out the
hype and built their own peer networks, however, marketers have had
to switch gears to a more conversational approach—and many have begun
successfully to do just that. Making that shift has required often difficult
changes in tools, tactics, and overall mindset, but we're seeing great
initiatives from ITSMA members in building genuine conversation by investing
in new thought leadership content, interactive channels like blogs,
more intimate peer-driven events and councils, and online communities.
Marketing and sales collaboration. Marketers may always be
from Mars and sales people from Venus, but just in the last several
years I've seen some exciting initiatives to break down the barriers
that have so long inhibited a true partnership. Integrated programs
like account-based marketing, collaborative efforts to create a more
consultative selling model, an increase in shared metrics, and even
joint training have begun to make a real difference in how the two organizations
work together. We may not all be ready to link arms, sing campfire songs,
and share full credit for corporate success, but the signs are certainly
pointing in the right direction.
Customer satisfaction and loyalty. The combination of the rise
of the Web, the early 2000s downturn, and the next wave of industry
globalization put tremendous stress on customer loyalty. Expectations,
scrutiny, and choices went up while patience plummeted. In response,
services and solutions marketers have put great energy into mapping
and tracking the customer experience, strengthening service and support,
offering customized solutions, and building stronger relationships.
Integrating the various customer touch points and programs across marketing,
sales, delivery, and support is still in relatively early days, but
marketers in many cases have not only recognized the challenge but made
good initial strides in creating a stronger foundation for loyalty.
Of course there are other important signs of marketing progress as well.
The increased focus on reference management is critical for services success,
as is the growing emphasis on specialized programs to connect with senior
executives. And the slow but steady progress to put more discipline and
accountability into marketing has lent important support to the quest
for greater credibility and influence within the organization.
All in all, it’s been a great ride with ITSMA these last eight years,
working with many of the best marketers and companies in the world. I've
had a ringside seat as you all made such tremendous progress in making
marketing matter more than ever. I can't wait to see what's next.
New
Thinking
Please, Sir, Can I Have Some More? How to Strengthen Your Relationship with the CFO
Laura Patterson, president and cofounder of VisionEdge Marketing,
a metrics-based strategic marketing firm, recently sat down with ITSMA
to discuss what marketers need to do to gain credibility with the CFO,
the types of metrics they need to pay more attention to, and why being
able to build better business cases can be a big boon for the marketing
department.
ITSMA: Recent ITSMA research shows that only 8% of CFOs
believe marketing has a significant impact on the business. What do marketers
need to do to gain more credibility with the CFO?
Patterson: Marketing is all about understanding your audience,
so first you've got to get inside the CFO's head. What does the CFO care
about? Four things: revenue, expenses, profit, and shareholder value.
The CFO's job is all about tracking those numbers and managing risk, so
learn how to communicate and demonstrate the return on marketing investment
(ROMI) in those terms.
Learn how to speak the language of business, and tie everything marketing
does back to cash flow. This really isn't that difficult, because if you
think about marketing's job, it comes down to three important efforts:
Helping the organization acquire profitable customers
Helping the organization keep profitable customers
Helping the organization grow the value of these customers
Whenever marketing increases customer lifetime value, improves the rate
of product/service adoption, reduces customer churn, and lowers acquisition
costs, it positively impacts the company's cash flow. But to connect the
dots for the CFO, be sure that you know your numbers inside and out. For
example, if the CFO expects you to know the revenue target for the quarter,
the cost per revenue dollar, and the upgrade/cross-sell conversion ratio,
you'd better make sure you can recite those numbers at will!
ITSMA: Tell us a bit more about the types of metrics
marketing needs to—but frequently doesn't—measure.
Patterson: While it's important to measure activities such as
the number of press clips, click-through rates, or leads generated from
a certain campaign, marketing must be able to measure the impact of its
activities on the company's business goals and outcomes.
Most companies have goals around such things as market share, customer
penetration, and customer value that marketing is expected to help them
achieve. For marketing, this means thinking beyond the sales funnel by
setting measurable performance targets around share of preference and
consideration, share of wallet, the rate of new-product acceptance, and
so on. It's very important to CFOs that marketers are able to track and
measure these kinds of operational and outcome-based metrics.
To do this well, marketers need to define and implement the right systems
and tools to track key metrics, but they must also possess the quantitative
skills to understand where the data comes from, what it means, and how
to connect it to business objectives. Companies that have performance-driven,
customer-centric marketing cultures usually come out ahead in this area.
ITSMA: How can marketers get a bigger budget?
Patterson: First, you have to remember that the company isn't
"giving" money to marketing, it's investing its money in marketing, and
it wants to see a high rate of return on its investment. So, if marketing
wants a bigger budget, it needs to be able to build a business case by
addressing such questions as:
What is the opportunity?
What is the target market?
What is the strategic value of the opportunity to the company?
What is the potential return and profit?
What is the time to revenue?
What is the impact on revenue and sales capacity?
What other opportunities will this impact?
What are the risks?
What are the implications of passing on the opportunity?
The CFO needs marketing to demonstrate why increasing the marketing budget
is the right thing to do—not by saying it's strategic, but by being able
to communicate the investment's impact on the business, how much money
will come back, and when the company will see the return.
Of course, there's always the possibility that, after marketing presents
the business case for a bigger budget, the CFO will decide that the company
will see a bigger return if it invests the money somewhere else, but that
doesn't mean building the business case was a waste of time. The business
case allowed the CFO to analyze the tradeoffs between an investment in
marketing with, say, an investment in R&D, and—at that particular point
in time—investing the money in marketing seemed riskier than investing
it in R&D. It may very well be a different story next quarter.
If you don't come to the CFO with a business case, the CFO can't properly
consider your request. Think about it: Would you decide where to invest
your personal savings based solely on the charm and charisma of your financial
advisor? That's what marketing is asking the CFO to do every time it comes
to him or her without a legitimate business case.
On
the Job
Cisco "ARMs" Channel Partners to Sell More Services
In 2005, Cisco Systems made a decision: Marketing was going to enable
the company to more effectively sell services to the SMB market by creating
a program that would motivate its channel partners to more consistently:
Attach services at the point of sale
Renew service contracts
Execute multiyear service agreements
To do this, Cisco created the Attach, Renew, Multiyear (ARM) Service
Incentive Program.
Understanding the Channel
Before reaching out to its channel partners, Cisco needed to gain a better
understanding of their challenges in selling to SMBs. By evaluating its
network of partners, Cisco discovered that although two-thirds of a partner's
revenue and profit comes from services, less than one-third of Cisco's
channel partners were selling services as a component of their standard
business.
"We knew that it wasn't that our channel partners didn't want
to sell our services," said Lauren Robinette, senior manager of marketing
at Cisco. "They knew that they were leaving money on the table just as
clearly as we did. But many of our partners believed that Cisco services
competed directly with other partner offerings, and because of this, a
number of them chose not to position services. Training partners and their
sales staff to understand why Cisco services are different and how to
sell them is the ultimate goal of the ARM Service Incentive Program."
The ARM Service Incentive Program
Managed by Cisco's Customer Advocacy Field Marketing group in the U.S.,
the program is designed to provide channel partners with quarterly, self-paced
learning opportunities around topics that include:
Making the first service sale
Selling service for uncovered equipment
Selling service contract renewals
Selling multiyear service agreements
The value of selling technical services
Lifecycle services
Leading with consulting services
For each topic, the ARM team develops sales guides, quick reference tools,
and training modules that include a market overview, sales best practices,
and strategies for objection handling.
Channel partner owners/managers who rally at least five of their sales
reps to participate in the program have the opportunity to receive joint
marketing funds from Cisco. The funds help partner organizations create
demand-generation campaigns for the SMB market. Additionally, recipients
of the funds are given access to an online resource that enables them
to create customizable email blasts, postcards, ads, and flyers to reach
SMB customers while reducing time-to-market and overall costs.
Cisco also provides incentive for individual sales reps to participate
in the program by offering them a chance to win prizes such as iPods and
XM radio receivers. To encourage continued participation in the program,
each quarter Cisco provides new prizes for new tests passed.
According to Robinette, this two-pronged approach has been key to the
program's success. "By targeting both owners/managers and individual sales
reps, we're providing two very strong reasons to participate: to benefit
the business by increasing the sale of highly profitable services and
to benefit the individuals who sell those services by giving them a chance
to win cool prizes."
Cisco enrolls participants in the ARM program through targeted email
marketing. Owners/managers and individual sales reps receive tailored
email campaigns around each quarterly learning opportunity. Each time
an email goes out, the ARM program Website receives approximately 40,000
hits. The opt-out rate for the emails has been less than 0.02%. Robinette
attributes these results to the quality of Cisco's reseller database and
the value of the educational content Cisco has created.
Results
In its first year and a half, the ARM program provided training to more
than 8,026 sales reps at 1,456 companies on how to sell services in a new,
exciting way. Service sales in the SMB market have grown by more than
$312 million as a result.
The program continues to gain momentum, and Cisco plans to offer updated
content and new topics to help channel partners build robust services
practices through 2007 and beyond.
Research Desk
Ask ITSMA: How Can We More Effectively Leverage Environmental Branding?
Each month, ITSMA receives a number of queries through Ask
ITSMA, a resource designed to give members a quick and easy
way to get insight on important services and solutions marketing
questions they face. In this column, we will publish some of our
favorite questions along with excerpts from our replies.
Question: What are some examples of good environmental branding
(using physical spaces to promote the brand), and how can we do it
better?
Answer: One of the world’s best companies at environmental
branding is Accenture. It has gone so far as to have an "aural" signature.
Years ago Accenture released CDs with the only music allowed to be
played in conjunction with the Accenture brand. The company used that
music exclusively on elevators, for on-hold phone messages, and so
forth. Another good example is Avenue A | Razorfish, which designed
its office to be cool and edgy—almost like a nightclub—so
that clients sense that the company aims to deliver edgy work.
According to branding expert and long-time ITSMA business partner
Allan Steinmetz of Inward Consulting, there are two main components
to environmental branding. First is the creative strategy/message.
What is the idea you want to communicate?
Second, you'll want to figure out the best venues for conveying your
message. Identify all the places a message can be communicated. For
example, if your goal is to communicate a certain message to employees
through environmental branding, you might consider company entranceways,
lunchrooms, doorways, hallways, elevators, and so on. After identifying
all the places you can reach your target audience, you'll want to evaluate
each of them based on how many people would be reached and how frequently.
If, for example, you want to get a high-impact message out to your
employees in a week, you could recommend a combination of high-reach/frequency
media such as:
Signage at elevators and entryways
A CD placed on every car in the parking lot
A balloon in every office
Of course, environmental branding is even more effective if you combine
it with other communication initiatives. Thus you might also consider
reaching out to your employees through a companywide event, podcasts
on the intranet, a letter from the CEO, and so on.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
We'd like to extend a warm welcome to the newest member of ITSMA: Patni
Computer Systems, a global provider of IT services and business
solutions.
We're also happy to report that we've confirmed a fabulous keynote
speaker for ITSMA's European Marketing Forum on May 2 and 3:
Simon Thompson, Motorola's European Marketing Director, will take
the floor to discuss how he plans to use innovative marketing to
create a truly emotional brand in a sector that has largely traded
on new technology and aggressive pricing.
And finally, we're very sad to be saying farewell to Rob Leavitt,
who will be departing ITSMA on March 16 to start a new job. Rob, who
has been with the company since 1999, has made an indelible impression
on ITSMA. Just a few of his efforts include launching this very E-ZINE,
reshaping the member experience to include Insight Sessions and Competency
Assessments, and helping to define ITSMA's thought leadership agenda.
Please join us in wishing Rob health, happiness, and continued success
as he starts off on his new adventure.
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News & Notes