The IT budget decline in first quarter of 2009 returned IT budgets to near 2007 levels, said Gartner earlier today. Their recent survey of 900 CIOs showed 42% of respondents reduced their budgets in the first quarter of 2009.

“CIOs reported that renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions,” said Mark McDonald, group vice president and head of research for Gartner EXP. “CIOs report shifting more work to in-house resources and delaying capital expenditures more than reducing IT project investments.”

The survey found that CIOs expect the economy to recover between the first and third quarter of 2010. CIOs plan to increase IT investment projects and workforce levels as their first investments in such a recovery. Software, hardware and infrastructure investments are also high on the CIO’s agenda on the path to economic recovery.

CIO Magazine’s CIO 100 for 2009 has just been released and makes interesting reading. The CIO 100 lists the one hundred companies that are creating business value by innovating with technology. Featuring high profile firms such as BP and Wyeth, through to smaller innovators such as Vail resorts and Midland Memorial Hospital, the survey goes into good detail about the BPM, SOA, CRM, Marketing, BI and ERP (and other) IT projects perceived to be truly innovative.

Useful detail is available on each project – for example Pfizer’s recent implementation: “Pfizer launched a voice-directed order picking solution within a regulated and validated pharmaceutical environment. Warehouse workers wear a lightweight, battery-powered device that connects to a Wi-Fi network, through which they can hear verbal commands that direct them to the location of a product. Pfizer says the system has reduced pick errors by 57 percent, which reduces the quantity of orders being returned. It has also saved 10 percent of costs due to overtime and reduced training time by 50 percent. Workers achieve maximum speed and productivity in four weeks rather than two months.”

A recent eBook by Nigel Edelshein called “Don’t Cold Call. Social Call” covers the thorny subject of using social networking to prospect for leads.

Despite the title of the eBook, the central argument is that telemarketers need to do their homework before they begin ringing their contacts – as we learned at the S&M Forum earlier this week, senior IT buyers still find telemarketing to be an effective method, but unprepared cold calling is an ineffective use of telemarketers’ talents. 

Edelshein outlines six factors that he believes determine what gets salespeople through the door:

1. Product – you need a good product that offers value to your target market; if you can’t offer value, your buyers will not be interested in meeting with you.

One thing that might work best to underscore the value of your product in these economic times is provocation marketing.  As I discussed in “Lead gen in a downturn: is provocation the answer?”, provocation is most effective when it anticipates a problem that the customer is experiencing but has not yet put a name to – the aim is to identify a high-impact issue, develop an original point of view, lodge your provocation and prove your point.

2. Message- Edelshein believes salespeople have no more than 15 seconds to effectively communicate an introduction.  The elevator pitch needs to be concise and “all about the prospect” – not about you or your company, just about the value that your product can deliver for your prospect right now.

Chris Cottam of HP advocated this when I spoke to him recently (see “How do you get onto a senior buyer’s consideration list?”).  He told me, “If you stop many sales people and ask them about an elevator pitch they understand the principal, but can they actually deliver it?.  No… It’s crucial that you know exactly what you’re going to say to them in that 30 seconds or one minute.”

3. Repetition of message- the message has to be repeated across different mediums; as Edelshein puts it, “different people react differently to different media… we need to try reaching people in a variety of ways – not just keep pounding away on one ‘frequency’.” 

 Edelshein points to research that says that we may need to see a message as many as seven times before we remember seeing it – as I pointed out in my post “The case for multi-touch campaign marketing”, prospects often need to receive multiple “touches” before they are ready for a sales meeting.

 4. Talking to the right people – don’t just sell to the CEO/CXO; the aim is to get through to anyone in your target company that is involved in buying your product.  MarketingSherpahas recently reported that for a product that costs more than $25,000 being sold to a company with 1,000+, there are 21 people involved in the buying process.  Edelshein recommends being in contact with all of them.

Claire Myerson, speaking at the S&M Forum earlier this wee, relayed an anecdote about telemarketing – she took a phone call from a salesperson who explained that he had been researching her company and didn’t want to waste her time, and would like to know what he could do to get a meeting with her – his approach was honest and humble, and Claire agreed to find time to meet him.

 5. Using changes in the buyer’s environment- buyers who are comfortably in their status quo don’t buy because there is no pain causing a need for your product.  Make the most of trigger events such as new executives, mergers and acquisitions, new products (theirs or their competitors’) or external factors such as the economy.  Edelshein recommends keeping tabs on your prospects by reading their press releases – “you can set up Google Alerts to monitor press releases that contain the name of your target companies… and have news items emailed to you.”

Google News can be a great starting place for information, as can analyst blogs such as TechMarketView.  Knowing the forces that are affecting your target companies is a great way to begin to engage with your prospects, but press releases need to be balanced by independent news reports.  I’d also recommend trying to find any blogs written by employees that could give you an ‘inside scoop’ on what’s going on that isn’t being reported on.

6. Use your relationships – if you don’t have a relationship with a senior buyer in your target company, you can begin establishing a relationship by using social networks to connect to them.  However, it’s important to remember that relationships established online need to be “realised” by contacting or meeting the person offline.

One method to try is getting introduced to and connecting with prospects on LinkedIn and seeing what events they’re listed as going to.  Once you’ve put a “face to the name”, getting in contact with your prospect becomes much easier and the conversations you have more likely to deliver value to you (by allowing you to be more successful in your sale) and your prospect (by allowing you to more effectively solve their problems).

The McKinsey Quarterly has recently released an article called Memo to the CEO: Why we need an annual report for technology. It is premium content, but its broad premis is that to get the IT organisation and the business units more in tune, CIOs could suggest to the CEO that they jointly issue a technology annual report to the business.

McKinsey writes the memo from the CIO to the CIO, suggesting ”The idea is quite simple: you and I would jointly issue an annual report for technology—something analogous to the annual report for investors and the broader market. This document would not only provide a candid overview of our ability to extract business value from technology but also substantiate that analysis with hard metrics. We would share perspectives on the challenges of technology, convey our ideas about its role in our company, celebrate achievements, and articulate our plans and visions for the future.”

Whether this takes off within organisations remains to be seen – but I would suggest that IT companies could use this approach themselves – creating an “annual report” for the client based on the account plan they have, and the way they see their technology and services being taken forward within the account. They could map the annual report against the key goals laid out by the Chief Exec and Chairman in the organisation’s real annual report. It’s a great way to show early commitment and understanding.

CIO magazine’s interview with John Connolly, Tube Lines’ director of information, highlights a growing trend for IT to sit outside its more traditional remit and to encompass the wider information needs of the business.

“He is the first person in his position at Tube Lines to sit on the executive committee and with a head of information management, Liz Scott-Wilson, having recently been appointed, and a head of IT, Adrian Davey, already in situ, he feels he has the team to address both opportunities and problems.

“Before, you either worked for the FD or the chief executive and IT reported to the FD,” Connolly says. “That’s OK if you’re trying to run IT as a back-office transactional service but if the dilemma is how you manage information, it’s not such a good place.”

That level of executive intimacy and freedom to focus gives Connolly the opportunity to drive the information agenda at Tube Lines, a key aspect of which is organising the reams of content implicit in upgrading track, stations, signals, and trains and maintaining infrastructure.”

There’s great insight by HBR’s John Quelch once again this month, in an article entitled “How Financial Brands Should Market in a Recession.” Featuring his thoughts on just how damaged financial services brands like Citi, RBS, AIG and Merrill Lynch have been by this recession, Quelch argues that certain financial brands have completely lost the trust of the public (Merill Lynch and RBS specifically) should be phased out (and replaced by the less tarnished Bank of America and NetWest brands).

If you’re marketing into FS, there’s a lot of useful psychological and market insight in Quelch’s article about how this sector might go forward, and what it needs to offer product-and-service wise to get there.

He ends by speculating that the FS brands of the future may lie outside FS. He thinks brands like Tesco, WalMart and Google, those in whom the public have much trust for “doing no evil”, are well placed to clean up in the FS space now. Why not start talking to them now about this, especially if they’re already your customers?

This month, a marketing professor weighed in on an online debate I was following, over how aligned sales and marketing should be. He claimed that marketing should actually own sales, based on the fact that sales is simply the personal arm of the “promotion” P of the marketing mix.

To me, this debate goes right to the heart of the fact that there’s a fundamental misconception about whether lead nurturing in the high-value sales environment is something that marketing can do without sales involvement.

So many people talk about needing to align sales and marketing. Market what you’re selling. Sell what you’re marketing. Work together to define ‘leads’. Develop a proposition with sales…

Which is why it’s strange that marketing is so frightened ofhanding an ‘unready’ lead to sales. You can understand where the fear comes from: years of sales complaining (and then ignoring) as unqualified leads are tossed over the fence. So it may be a natural response that marketing shouldn’t be allowed to mention a lead to sales until the prospect has identified a budget and timescale for the decision.

What the smart companies are doing (at least, when it comes to complex high-value sales) is to realise that the answer isn’t either of these. Yes, lead nurturing is the future. But lead nurturing isn’t just about emails, webinars, phone calls, whitepapers, events. Sometimes, a meeting with a salesperson is actually the best nurturing tactic. We need to be careful to use the tactic sparingly, but once you say it, it sounds obvious: sometimes the best way to make a prospect ‘sales-ready’ is to actually have a salesperson meet them. Marketing can still own the relationship with the prospect if there’s no immediate action out of the meeting, but 9 times out of 10 an initial meeting will drive the relationship forward and the prospect further down the sales funnel.

When we use this idea of an initial meeting as a call to action in a campaign (usually as a follow-up to other campaigns we’ve contacted a prospect with), it tends to be one of the most successful things we can do. The trick is to be very careful to show the value of the meeting, explain why it won’t be a ‘sales meeting’, and even to visualise the agenda we’ll be discussing in the session. When you put this alongside a personal approach to the right prospect and a carefully thought-through ‘provocation proposition’, that’s when the magic happens…

John Quelch’s article for Harvard Business Review this month (How to Market in a Downturn) features his research into patterns of consumer and corporate behaviour in a recession; focusing strategies that either propel or undermine performance.

Quelch argues that in a recession, traditional segmentation approaches can be dangerous, and that you should segement psychologically based on consumers’ likely emotional reactions to your offer(s) in the current climate. He goes on to outline how you should consciously emphasise different aspects of your proposition depending on those reactions.

He frequently emphasises that marketers should frequently examine their core customers’ changing needs in a recession, calling on marketers to “put customer needs under a microscope”. He also stresses that your core, loyal customers are “the primary, enduring source of cashflow and organic growth” saying that marketing to these isn’t optional – it’s a “good cost”. Many B2B marketers feel the same way, and this is certainly a major factor in the increase in account-based and industry-focused marketing programmes that we are currently undertaking on behalf of our clients. 

I believe there are some very strong parallels bewteen Quelch’s 4 psychological segments for consumers and similar segments in B2B based on company, heritage and industry, (taking into account the psychology of the decision-making unit too.) He outlines 4 consumer segments which I think it’s useful for B2B marketers to consider in their own strategic planning, so have repurposed for B2B below:

-Slam-on-the-brakes: your most vulnerable and hardest-financially-hit customers

-Pained-but-Patient: customers who are resilient in the long term but are pessimistic about short-term prospects for recovery and are therefore “making do and mending” and keeping their purse strings tight (the largest group)

-Comfortably-well-off: secure about their ability to ride out the recession, now and in the future, perhaps counter-cyclical industries

-Live-for-today: carry on as usual, probably more inexperienced or younger companies with fewer responsibilities, or those challengers in conter-cyclical industries vying for market share.

Once your customers have been segmented, you can take a look at your offers. Quelch suggests (despite which segment customers fall into) all of them mentally sort products into 4 main categories: essentials, treats, postponables and expendables. Again, it’s my belief that B2B marketers could get a great deal of strategic value from examining their own products in this way, and then adjusting the propositions to target each segment in the most appropriate way. i.e. a company exhibiting “slam on the brakes” behaviour will not respond well to an “expendable” offer. However, a “pained-but-patient” company may well buy certain products or services as a more affordable alternative to replacing something more expensive.

A final few points to emphasise – Quelch maintains throughout the piece that it’s a focus on existing customers that will see companies through the downturn. He stresses frequently that you need to research them, speak to them, understand their future needs, and how the downturn will ultimately change their behaviour, in order to maintain good cashflow, market share and ultimately organic growth. Before reaching for the marketing cost sledgehammer, instead consider a scalpel. In this environment, marketers must spend to reach their client base, bolster trust, reinforce core values and influence choices. Get it right, and you’ll protect the business through the downturn, and have great market intelligence and client relationships to be ahead of the crowd in the recovery.

I wanted to share some interesting stats from a set of campaigns we are running for an IT company. This is a very focused industry campaign, and as such was targeted at the same data set over a period of months. The campaign had a very clear journey along which it drove the recipient, (a mixture of offering value and sales messages) and whilst each had different creative treatments, the messages built into a cohesive picture and were followed up by our in-house inside sales team.

Of 100% of leads we handed over to our client:

• 40% required two campaigns to develop into a lead
• 35% required three campaigns to develop into a lead
• 22% required four campaigns to develop into a lead

This just goes to show that a longer-term, nurturing approach bears a good deal of lead generation fruit. This is especially true when you are taking complex propositions into complex organisations. It can take time to introduce yourself, educate people, and get them to take the next step.

By running one campaign and moving on you’re certainly missing out on further opportunities. Instead, focus on working the data, and building a longer-term set of campaigns that have the ability to learn from telemarketing input about what resonates and develop the recipients’ perception as they are delivered. This method of campaigning also has the added benefit of allowing you to add contacts you are passed onto during the first phase of calling into the wider campaign approach.

As I’ve argued in previous posts, when one of the first places people look for information these days is the web you simply can’t ignore it. There are innumerable articles on SEO, but for me it all boils down to this – if someone is out there, Googling for a product or service, or even just some advice, in an area you can help in, they should be able to find you and want to click to read more.

Advice from author and consultant Verne Harnish got me thinking about this again. He was recently quoted as saying ”control the ink in your industry… own a word or two in your industry and then get about controlling the ink around that word – books, articles, blogs, wikis, etc. And how do you know if you’re making progress? Google your word(s) and see where you rank.”

In his email update this week, Verne shares an email from Adam Robinson, President of Illuma LLC, ”I wanted to share with you a major impact you’ve made to my business. I listened as you told us, ‘if you’re not blogging about your business or your industry, you’re losing out on an amazing opportunity. Try it for 6 months, and see what happens.’ So, I did. My company is in the business of helping companies find and select talent and since August of 2008 I’ve been blogging at http://BetterHiringToday.com. What started off as a ‘let’s see if I can do this’ side project has turned into a catalyst for a whole new way of looking at the world.
A few key results:
• the VP of Sales at a Fortune 50 company read my 4-part series on “How to Hire Salespeople” and sent me an email hiring us on the spot.
• Publishers have republished my articles, and paid me to license content that I was happy to post for free. Unbelievable!
• Web traffic to my business website is up over 300%, with inbound web leads up over 600%. Several of my posts are on Page 1 on Google for organic results (i.e. “recruiting templates”, “30 60 90 Day Plans”)
• Since I’m always looking for new things to write about, I’m out talking with more customers, and in more meaningful ways, about things that they care about. I then write about what we discussed, and send them a note telling them so. Loyalty has skyrocketed.”

Need I say more? Clearly for large firms with strong SEO programmes some of these issues are in hand, but how often do they get applied to campaign-based content? (often the very content your customers are mst interested in reading). I’m not advoating everyone should emulate Mr Robinson and start a blog, but if you can support your campaigns with compelling online content that brings the interested market to your door, then it simply has to be an essential part of today’s campaigning approach.