Chris Cottam, [formerly European Marketing Manager, HP], will be speaking next week at our S&M Forum, Peepshow: Your Marketing from the Buyer’s Point of View where he’ll be discussing how buyers select suppliers for consideration and what you can do to influence them. I spoke to him prior to the event to get his views on the IT buyer, how to reach them, and how the downturn is changing their behaviour.

What do you think of the general level of understanding IT marketers have of buyers, both in terms of their general priorities and their buying habits?

There’s a general separation, I think, between the marketing activities that go into IT product organisations and IT service organisations.

On the product side, marketing has a good understanding of the buying criteria, buying processes and buying needs.  We’ve been at this game in IT for close to 50 years now, and in the transactional space I think people understand how that works.  It’s easier than in the  relationship or value part of the market, just because everything you use to differentiate tends be hard, verifiable facts and figures. The points of differentiation tend to be much softer and therefore harder to substantiate in the value-based side.

Also on the product side, there is an absolute mass of market- and client-related data available.  People understand how you get that information and what you do with it. They’re very comfortable with doing user trials – certainly at my old organisation, HP, in the printer space for example. There was extensive blind consumer trialling and testing before they ever brought a product to market, so when they did bring it to market they already knew that it was something that absolutely hit a sweet spot with customers.

On the services side it is much more difficult.  Many organisations on the services side have grown out of a products business.  They grew from, ‘let’s add some services to help to sell our products’, and as this new business accelerates it becomes almost an independent business.  But there’s still an element of trying to think about how to engage the buyer with a product mentality, and I think that’s still an issue that many service marketing organisations face. They still try to apply the good old four Ps or seven Ps or however many Ps we’ve got these days to bring the ‘product’ to market.  There’s nothing wrong with this and it needs to be done for relationship selling, but success requires more.

This service element, or the value part of the business, is about risk and the mitigation of risk is trust.  Everything, in my view, that marketing in a service organisation needs to be doing, should be focused on how to establish trust.  What can you do as a marketing organisation to help the sales people demonstrate a trustful relationship with the client?  That’s really hard.  There are no, as far as I know, textbooks written on how you do this stuff from a marketing perspective (there are many for sales), unlike the consumer or product end of the business where you can pull textbook after textbook off the shelf. In the value end of the business there’s really not a lot out there to help people, so organisations are doing this by trial and error.  I think we’re beginning to get a framework together about what are the elements that go into successful relationship marketing, but the buyer-specific part, I think, is a weakness right now.

In your delineation between product companies and service companies, are the natures of the marketing departments different, or is it that the way marketing has more involvement in the requirements-gathering for the products side means that they inevitably have a better understanding of the buyer than their counterparts in service organisations?

I think that the market and client research side of the business actually is something that could be a common platform to support both business activities, because the way in which you go about getting the data is pretty similar.  You might go to different organisations for different views, but the actual ‘what are we doing and how do we analyse it to guide our business decisions?’ is pretty much the same.  But there’s no substitute for personal contact in the relationship space.  You may be able to use market intelligence to segment potential clients; you may be able to use client-based research to help identify particular opportunities in particular clients or even which individuals are key.  But at the end of the day, the success of value-based selling or relationship selling is in the relationship.  And that’s where I think that the real issue lies, which is why I am happy to be involved in your next event.  How do you set up and manage that relationship with people who are senior in the organisation, given that they are so extremely busy? And yet, if you don’t have a relationship there, you won’t be successful.

Are you noticing any trends around different methods of marketing communications that are more successful than others?  For example, we’re noticing a lot of continued and sustained interest in account-based marketing, not just from a strategic level but from an operations and delivery level. We’re also seeing a lot of people talking to us about how to create marketing that doesn’t ‘feel’ like marketing, which I think goes to the heart of your point about how you gain influence without it looking like you’re trying to gain influence.  Is there anything that you’re seeing that is similar or different to the things we’re seeing?

No, I don’t think so. I think people are really wrestling with the concept of account-based marketing.  I think it has been a little theoretical.  People put down all the elements of an account-based marketing programme without really understanding why they’re doing it. So you’ve got a lot of execution because there is a list of things you can do, without that depth of understanding or experience because this is relatively new as a way of engaging clients.  I think what people are finding now is that, just like every other element of marketing, if you don’t fully understand why you’re doing it the results you get are likely to be disappointing.

The phrase you used about trying to do ‘marketing that doesn’t feel like marketing’ might be a reaction to that a little bit.  In really building relationships, the terms ‘marketing’ and ’sales’ are so blurred that yes, you need some element of demarcation to say who’s job is what, but from the client’s perspective, they don’t want to perceive a difference.

I couldn’t agree more, and I think that’s where this push towards the less theoretical ABM and this ‘marketing that doesn’t feel like marketing’ is coming from, because finally people are looking at the buyer and saying, ‘what we should be doing is mimicking the actions of the very best salesperson as a marketing team’.

Exactly, and how do you do that? For me, sales engagement is not only equipping the sales guys with some collateral.  We under-invest in one of the key obstacles to building a trust relationship which is, ‘have you done this before?’. We talk fairly easily about references – but what people mean by that tends to be something very short.  It almost feels like the more client names that you can put on the table, the better.  The more names I add, the better the impression, but in my experience that’s not the case.  What people want is relevance; and that means detailed business case studies that talk about both what was done and the overall experience.

This is especially true with senior people, who are essentially doing a risk assessment of you as a person and your organisation.  ‘If I go with you down this inevitably grey path, do I believe you’re doing to deliver for me?’ is the question they are asking.  And that’s about track record and having done it before, but ultimately it’s about the buyer being able to look  the supplier in the eye and feel confident when they hear ‘we won’t let you down’.  And they’ll believe some people more than others.  That’s the magic that marketing has to try and bottle and inject into everybody in your sales organisation.

I’m delighted to be able to give readers of this blog first sight of the topic and speakers for our next Sales & Marketing Forum event.

Peep Show: Your Marketing from the Buyer’s Point of View will feature real, live IT buyers speaking about what it’s like being targeted by technology and services companies.

Our panel for this S&M Forum includes Claire Myerson, Information Technology Solutions Director from Wyeth Pharmaceuticals and Keith Mitchell, former Global Head of Shared Infrastructure, Reuters. Both will be discussing the following…

If you would like to receive a formal invitation to the event, please go to the S&M Forum website and register your interest. The event is free but only open to qualifying individuals: senior marketers and salespeople in major IT, Consulting and Outsourcing organisations.

In one of this week’s TechMarketView updates, IT analyst Richard Holway predicted that we have hit the low-point in a ‘U’-shaped economy – but that we’re in for a long bottom and that when we return to growth (sometime in 2010), the market will be very different.  According to Holway, “Just surviving through to the 2010 up-tick is not enough.”  Holway has stressed the importance of preparing for the upswing and not crippling the business by adopting cost-cutting strategies that might weaken the IT department.

A recent research note from the Hackett Group underscores the importance of making long-term strategic investments during the downturn, while balancing them with short-term cost-efficiencies:

Given that most companies have sharply cut costs, there is an immediate need to realign the IT investment portfolio, understand how to define IT investment categories… and set goals for allocation by investment category.  Achieving these goals will require the development of an IT portfolio management capability comprising the processes, skill and supporting tools.

Hackett recommends allocating 60% of IT budgets to innovation and improvement, but Michael Krigsman of IT Project Failures, thinks organisations should not adopt a “cookie cutter” approach – instead, portfolios should be optimised on a company-by-company basis as a function of business strategy, technical requirements, investment capability and the features of the competitive landscape.

So, what can IT suppliers be doing now?  As the downturn has become a recession over the past 18 months, CIO.com has posted more and more articles to help CIOs demonstrate their value to the business, culminating in their article last August, ‘7 Tips to Make Your Business More Competitive’, which highlights streamlining costs without sacrificing long-term capability.

As CIOs begin to plan for the impending upturn, you can position yourself as an advisor and guide through the economic bottom and eventual upturn.  In my post, “CIO SOS: Help me influence the business“, I point out the benefits of working with a CIO, rather than just selling to them – for every IT supplier bypassing IT and trying to build a case with the business, there’s an IT department that wants to do exactly the same thing.

Another thing to try is provocation selling – identify a high-impact issue, develop an original point of view, lodge your provocation, prove your point.  CIOs are focusing on defending their value to the business, so take the time to understand what’s getting under your prospect’s skin.  (You can read what one CIO looks for in marketing direct at him in my interview with Tom Ilube.)

Research carried out by The Marketing Practice shows that IT companies are overlooking, and in some cases wasting, sales opportunities with the very companies they are closest to – their existing customers.

The 110 UK IT decision-makers we interviewed said that “information from existing suppliers” was their preferred way of finding out about new IT products and services. They rated this information source as highly as they rated their own networks (and above analysts and consultants). 

But at the same time, nearly half of all those surveyed said, “Current suppliers are quite poor in their account marketing and management”  and a similar percentage agreed that, “IT suppliers do not really understand how to communicate information about their products and services to me”, highlighting a huge missed opportunity.

So, your existing customers don’t just highly rate you as a source of information, they expect you to market to them. But as these verbatim quotes from the research show, there are a number of considerations in getting it right…

1. A joined up approach to sales and marketing communications (that finishes what it starts)… “Too often we are contacted several times by different people in different divisions of the same supplier who don’t seem to talk to each other and there is usually no follow up process. There are no solutions, only proposals.” Senior IT Manager in a Financial Services Organisation

2. And end to the “one hit wonder” marketing communications campaigning approach (by promoting once, and moving on, you’re mising a number of opportunities)… “Sometimes you get an Account Manager who starts to wine and dine you as they think they may get new orders out of you. When they realize there are no more orders the communication stops again.” Head of Application Development in a Media Company.

And…“If [a supplier] phones me today, it  might not be relevant to me at the moment but if they phone me in three months time, I might be interested in that topic.” Head of IT in a Financial Services Organisation

3. A clear account plan that’s shared with the customer (with a marketing plan that sits alongside it)… “They have to approach us at the right time with the right solutions; existing  suppliers have a better opportunity of interacting with us compared to new ones.” Head of Engineering and Infrastructure in a Finance Company.

And… “Existing suppliers are in a very privileged position in that, if they are communicating with their customers as well as they should be, they will know what solutions customers are looking for at any time.  What good marketing looks like from existing suppliers is a call, e-mail or letter offering a solution just when you are looking for it.” Head of IT in a Government Department

Whilst it’s understandable to focus on lead generation in the current climate, don’t let it blindside your strategy. Paradoxically, it’s the very campaigns that take the long view and look to build relationships that uncover the sales opportunities that others don’t even make the shortlist for.

You can download a free copy of the research findings here.

For the second quarter in a row, McKinsey’s economic snapshot survey shows senior execs saying that things haven’t got worse, but they don’t expect an improvement any time soon. This chimes with what you hear out and about; business isn’t brilliant, but it isn’t bad either - a lot of people are waiting it out, to “see what happens”. McKinsey’s report calls it “a gloomy economic stasis”.

But short of gagging Robert Peston to increase the country’s optimism levels, how to beat the economic stasis, and keep the leads coming in and converting?

It’s interesting to note that whilst the McKinsey report points to continued cost reduction, it also highlights a heavy focus on operational efficiency and improving productivity. Plus, when executives were asked whether they were seeking external funding, most said they were not, but that the bulk of those who were, were using it for investment, geographic expansion and innovation. Additonally, half of all companies surveyed expected to shed staff in 2009.

So the drivers are there for spend on IT, outsourcing and services. But how to get those leads and convert them? Here are some points to consider:

-How about offering access to great content and ready-made, industry specific business cases? (doing more with less, how to maintain customer service levels after cutting staff, building remote workforces…) Go further than traditional marketing content and sales support tools – get in touch with project teams and ask for their solution-based content to give real war stories and meat to campaigning materials.

-Perhaps provocation marketing would bear fruit with some targets. (see the earlier article “Lead gen in a downturn: is provocation the answer?”) This involves going beyond solution selling and provoking the customer to buy through a series of highly-researched and targeted joint sales and marketing campaigns.

-Gather like-minded people together from different target industries to learn from each other. Develop the content of the workshop from new, fascinating and fast research and get a facilitator who’s been through the mill to ensure that a genuine and honest exchange of issues and ideas happens. Feed this content back to delegates with a detailed description of how you can help, with tools and documents downloadable/available to help them sell it within their own businesses.

-It follows from the above that supporting sales teams through account-based and narrow-cast marketing activity will bear fruit. By researching specific account needs in detail and building a plan of attack with sales (from lead to win) you stand a much better chance of shaping leads before they get to RFI stage. You can download our free ABM planner here.

The McKinsey survey results are available here, but please note it is premium content.

IT analyst TechMarketView’s bulletin this morning reporting on Ernst & Young’s ASAPTech event was fascinating. It reports comments made by John Suffolk, Her Majesty’s Government’s Chief Information Officer for Transformational Government, giving his views on how IT vendors should work with Government.

Amongst the varied comments from the Government’s most senior IT man (covering his views on Cloud through to offshoring), the major line that stood out for me was the comment that “the average tender process takes 76 weeks and vendors can spend up to £10m on their bids.”

With the recession biting, and government being the spender of last resort, IT government projects are being eyed up by even more vendors than ever before. Clearly these bids can chew up years and millions. For marketers, it’s important to have a very solid account-based and bid-winning focus.

You can read Anthony Miller’s full write up of Suffolk’s comments here on TechMarketView’s website.

More than 90 percent of UK finance directors in the B2B sector support the idea that companies should ‘market’ their way out of the recession, according to new research by WPP Lightspeed reported by B2B Marketing magazine.

When surveyed, most finance bosses said they believed undertaking such action would help their company to gain market share as the economy recovered. 84% of FDs favoured the idea of further investment in marketing and customer analysis as a way of countering the downturn.

Sectors that exceeded this national average included; banking, insurance and finance at 89 percent, travel and transport at 90 percent, utilities and telecommunications at 91 percent and, crucially, IT communications and hi-tech at 93 percent. Respondents from larger businesses were significantly more supportive of investment than their smaller business counterparts.

So it appears the potential for maintaining and even increasing marketing budget remains. But marketers will need to demonstrate prudent choices, healthy pipeline and ultimately a superb return on investment.

Computer Weekly’s excellent video interview with Corus’s CIO, Bruno Laquet, gives an up-to-date view on what it feels like to be a CIO facing a recession. It also shines a light on the debate about whether suppliers should be putting more effort into influencing decision-makers outside of IT, with Bruno’s experiences of doing exactly that.

The video is well worth a look – available here (and it gets to the best bits after about 2 minutes in) – but these are our conclusions/highlights:

Selling with the CIO, not to them

There was a move a few years ago for many IT companies to believe they should stop talking to IT and start talking to the business. It sounds very black and white, but for some companies it really was that simple.

But for every IT supplier bypassing IT and trying to build a case with the business, there’s an IT department that wants to do exactly the same thing. Perhaps if they worked together, they might both stand more of a chance?

Someone like Bruno should be a supplier’s ideal route into the business – and they would certainly appreciate the proof and angles that suppliers have to share. We’ve shared some of his tips for influencing the business at the end of this post.

But it will take quite a shift in mindset for many suppliers to get their marketing approaches ready to help a CIO like Bruno.

Real-life Corus project examples

Take Bruno’s story of a recent million-pound telepresence project. Of course, he had all the vendor benefits to hand (like reductions in travel expenses), but he knew the struggle he would have getting stakeholders to cut their budgets to fund ‘his’ IT project. Instead, he had to find a way to make telepresence fit with a key part of the corporate agenda – fortunately, CO2 reduction was a main objective of the steel company. (Of course, once telepresence was live, travel budget reductions followed swiftly…)

How many suppliers are adjusting their propositions based on the individual situations of the key accounts? And how many are sophisticated enough not to sell ‘to’ the CIO but sell with them? Every communication, every event, every meeting could be an opportunity to help the CIO engage with the business.

The example of a current Corus supply chain project shows just how strong the CIOs desire to play an integral role in the business is

“This supply chain project, without going into too much detail, the way we have been organised in the company is in business units which operate as silos, and there is a limit to how much we could optimise each silo. So we are looking at activities that could bring the business together. So this supply chain project, which IT is key to, is about breaking the barriers between business unit silos. I’m really proud of that, because it is business transformation powered by IT.”

Lessons from the CIO about selling a proposition into the business

How would Bruno suggest going about selling a proposition into the business?

Some of it is fairly obvious:

“Understand what their main agenda, business priorities, KPIs – make sure that my proposition and what I am trying to influence three months on match with this agenda. I’m looking to see if there is anything for him in that proposition.”

Although it does raise the question of how many IT/Services suppliers are really digging into these issues (think CO2 reduction rather than cutting travel expenses – and how for a different company these two could be the other way around).

But there are some important techniques, like the one Bruno describes as “trying not to finish the job”:

“What I do is try not to finish the job – I try to come with propositions that are open so they can put their own ideas into the proposition so that they feel they own it. So there are 2 areas – being prepared, but developing together the solution. Let’s make a proposal – and let them finish the job.”

There’s a fine line between crafting a proposition that has enough detail to spark interest (whether we’re communicating to IT or the business) but which the client can take on and own for themselves.

What does the recession mean for IT’s role and IT spend?

At a tangent to the main discussion, Bruno Laquet’s views on the recession’s impact on the IT department is also very interesting. The clarity of vision and clear purpose come across particularly strongly, as does the importance of showing how well aligned IT is with the 2 main business programmes (one focused on cost reduction, the other on business transformation to support growth in the future):

“We have two big programmes running at the moment [...] the first one is about eliminating costs – and we in IT do a lot to contribute to this. All my IT Supply team is focusing on moving cost out by innovative ideas – we’re not talking about reducing by 5% or 10%; we’re looking at ideas to cut spend by half. So that’s the kind of project we are doing at the moment, fully aligned with this business priority.

“The second programme is about [...] working with the business to help transform the company. We’re very active at the moment in supporting projects for business like creating shared services or the supply chain programme I mentioned.”

Once again, these focus areas give any supplier to Corus a clear idea of how to frame up their offerings for the next year.

But there is definitely a wider point here: How well do you understand your key clients? Do you work with or work around the CIO? How well do you shape propositions for them? Do you have the evidence you need to share with them? How about the initial points of interest that tell them you have something they need to know?

I was fortunate enough last week to be able to talk a senior IT exec for a large consumer goods firm.

Whilst I can’t divulge the company, the (sometimes surprising) insights into team structure, pressures and supplier relationships are useful for marketers planning campaigns in this turbulent environment.

• The IT team is split into a number of divisions, and each division has a specific responsibility – some long term planning and vision, some delivering business programmes and others looking at the day-to-day needs of hardware and software
• Each IT supplier is allocated an owner and there is an internal programme for each supplier to meet senior IT representatives. This is seen very much as being about relationships and not about purchasing or commercials
  Suppliers are ranked in importance and managed by IT as such. Importance is determined by the criticality of the programme, not necessarily the size of the spend with that supplier
• If new suppliers are needed then there will be a tender process. For development and SIs the company tends to use people already known to them. If it’s a new need then the best way in is through the specific programme manager who will promote it up to the senior IT execs
• There tends to be a specific effort to scout around for new suppliers if there’s a new project or the incumbent isn’t perceived as being up to the mark. New starters in the IT department or in procurement are also a regular source of suggestions around new suppliers.
• Even when an IT purchase is being driven by an explicit need from the business (and this is almost always the driving force in looking for something new), it’s typically IT that drives the decision about what specifically is eventually implemented
• In terms of marketing explicitly, senior IT execs attend networking and high value events and the CIO is the most heavily targeted of all. Interestingly, the next layer down, and the one below that is very lightly targeted, especially via direct mail
• An interesting point to note was that at the moment, even in this “reduced cost” environment, IT spend is continuing apace (in some cases to demonstrate projects are on track with the commitments made at the start of the year). Being behind on budgets can be seen to suggest that you are behind on the delivery of your initiatives.
• There is infinitely more demand for IT than there is supply. And resource can be a constraint as well as money.

And our conclusions on this?

• Track your advocates – times when they join a new firm are one of your biggest opportunities
• Don’t discount certain channels of communication just because of what you read
• Campaign all the time because timing is critical – and monitor/research key accounts to make sure you are aware of weaknesses in competitors’ (or your own!) positions
• Work hard at getting quality data for the business as well as IT, and at multiple levels. You’ll never know exactly who the right person to campaign to is at first touch – the word of a trusted lieutenant can carry more weight than a CIOs own views!
• Consider propositions about easing resourcing pain as much as financial pain

A recent survey of CMOs by Jupiter and Verse Group asked a group of marketers about their top priorities for 09 and found that traditional approaches to marketing are increasingly broken. Two major themes run through the findings:

First, that  “an across-the-board push for greater marketing accountability is adding increased pressure on marketers to prove the worth of their marketing dollars.”

Second, that “as media consumption shifts online, marketers must find a better way to manage brands across multiple platforms in order to create a coherent brand experience across all platforms and customer touchpoints.”

The following are the top priorities CMOs and senior marketers have for 2009, according to the study:  

1. Achieving measurable ROI on marketing efforts.
2. Developing marketing programs that integrate online and traditional media.
3. Translating brand experience across different touchpoints.
4. Cutting marketing budgets without cutting performance.
5. Optimizing portfolio of brands.

The research uncovers a big gap between marketers’ priorities and their current perceptions of existing tools. Nearly three-quarters (71%) say that managing their brand across multiple platforms is a big challenge for their organization and that there is a large gap between need and capability. This echoes many of the themes from John Quelch’s recent article in Harvard Business Review (see previous post).

We’re currently creating a presentation download which will lay out how continuous opportunity generation programmes can get more from budgets and increase marketing performance. Drop us a line if you would like to register to receive it.