In scanning the list of the Harvard Business Review’s “HBR Voices” bloggers recently, I discovered that Gary Hamel was on the list. His most recent, 25 Stretch Goals for Management is worth a read as I think it offers up an interesting model for a relationship campaign that could generate great thought leadership.

Under the banner of a “Management Innovation Lab” Hamel brought together management experts, social commentators and “progressive” CEOs with the goal of laying out the agenda for management in the 21st century. Hamel writes “What drew the participants together was a set of broadly shared beliefs about the importance of management, and a sense of urgency about reinventing management for a new age.” The output of the 2 day session, called “Moon Shots for Management” was a series of interviews and content, as well as a 25 point action plan for innovation around the future of management.

It strikes me that this approach would work well to support a relationship marketing initiative and/or thought leadership campaigns. By identifying the most progressive CIOs, CTOs, CFOs or other relevant group in your client and prospect base, and bringing them together with matching futurologists and management gurus, it would be possible to design and direct a campaign that developed a closer relationship with these people, helped them deliver strategic value within their own businesses, offered real account and market intelligence and output fantastic content with which to further engage your audience.

Whilst the content, approach and tone of any campaign would need to be focused on the market and audience, the model itself is a really interesting one – playing as it does on current appetite for community and the “age of reference“.

BtoB Magazine has named its top 25 marketers of 2009 in a supplement you can download here.

It’s fascinating to note just how many of the top 25 to have made the grade are technology brands, or brands from closely-related industries. More than half (15 of the 25) fit into this category. CMOs from Oracle, Avaya, Cisco, AMD, Siemens, SAP, IBM, Intel, Microsoft, HP, Accenture, AT&T, Verizon, Motorola and Sybase are all named in the list.

I’d highly recommend downloading the supplement and looking at how these different CMOs are tackling their marketing challenges. It reveals why AMD have reduced 900 global campaigns down to 4 core ones, why FedEx chose to drop its spots at the Superbowl in the face of the economic downturn, through to how an ex-Disney marketer is using the web at HP and will soon be leading a repositioning of the brand. From IBM’s focus on smarter planet technology, the Sybase CMO’s provocation-based marketing strategy and Oracle’s organisational focus on delivering opportunities to the sales force, there’s a lot to ponder. There’s also interesting insight from companies such as UPS, General Electric and Aon for a bit of non-IT inspiration.

A couple of choice quotes from the piece:

• Judith Sim, Oracle’s CMO saying, “There is no doubt, at the end of the day, that with Oracle marketing – and this is direct from Charles Phillips – we win when the cash register rings. We know what our end goal is, and that’s to support the sales organization. It’s not as much about winning those brand awards.”
• Mich Mathews, Microsoft’s VP Central Marketing “In the case of our business campaign, it was working; but we thought it could work harder,” she said. So Mathews and her team talked to customers and got feedback from Microsoft’s global subsidiaries and, ultimately, decided to retool the campaign, which targets business and IT decision-makers. In just 21 days, the company update various campaign assets—focusing messaging on how Microsoft technology can help people run their businesses successfully, particularly in a down economy.”
• Jeff Hayzlett, CMO, Eastman Kodak “In tough times you have to focus on the value proposition. The fluff, the funny campaigns, go out the window.”
• Mark Wilson, VP Sybase “We had a very compelling value proposition around risk management and risk analytics. If you looked at capital markets at the time, they were going through huge turmoil. Instead of asking companies what keeps them up at night, we would tell them what should keep them up at night. It was a very different way of selling.”

Marketing after the watershed: part 1

The world has changed in the last two years, and the one thing everyone agrees on is that it’s not going back to how it was anytime soon. McKinsey has called it “The New Normal” – a fundamentally different business environment.

A combination of economic factors and social phenomena have collided rapidly to reshape the marketing landscape. Where strategies were previously predicated on historical norms and certainty, marketers now need to make change the constant in their planning.

 As Lowell Bryan, a Director of McKinsey has said “…the flaw is trying to think that you can predict the weather—as opposed to designing a boat that is capable of withstanding all sorts of different weather. The objective is not to control things you can’t control but to enable you to be relatively better at delivering results and performance over time, no matter what the weather is. I think that what has been the big wake-up call for people…is because they can’t see the future. And they haven’t got a business model and a strategy designed for an uncertain, unpredictable environment. They’ve got a strategy and business model for smooth sailing.”

The marketing department’s being buffeted by the weather on two fronts – zero budgeting and headcount freezes prompted by the recession are making it harder to put in place teams who can spend time designing the boat (orchestrating major new programmes internally), whilst the sea keeps on getting rougher ( the growing role of participatory media and a decline in trust of traditional media means that when those programmes are executed, they struggle to make an impact in a fast-changing environment.)

Commentators are calling it the “age of reference” as opposed to the previous era of deference. “[We] are now entering the “age of emotional proximity”, says Marketing Week, where peer recommendations surpass all other marketing.” Bell Pottinger echoes this, saying “people prefer to trust people like themselves rather than traditional authority sources.”

Add to that the fact that corporate reputations are in tatters after the events of the last few years, (according to the 2009 Edelman Trust Barometer 62 percent of respondents, across 20 countries, say that they trust corporations less now than they did a year ago) and it adds up to a maelstrom for marketers, who are struggling to respond.

And what impact has this watershed had on B2B marketing? For many, it feels like crisis point. Response rates are stagnant at best, plummeting at worst. Budgets are under threat, and the demand for measurable results is here to stay. You only have to look at marketing’s place in the corporation to see the impact all of this is having. CMOs typically last fewer than two years in their role. Senior marketers hardly ever make it to the board, much less Chief Executive and marketing departments frequently struggle to gain a good reputation for their product understanding and customer intimacy.

Calls for a newly customer-centred CMO are coming thick and fast. In a prescient McKinsey Quarterly 2007 article entitled  “The Evolving Role of the CMO” David Court argues that “Few senior-executive positions will be subject to as much change over the next few years as that of the chief marketing officer…” and suggests that the CMO must assume a larger role as the “voice of the customer” across the company as it responds to significant changes in the marketplace.” This is backed up by Forrester’s research, showing that half of business executives believe customer experience will play a very important role over the next three years. According to the same study, 73 percent of respondents cite a lack of clear experience strategy as a key challenge. In B2B organisations, where the customer relationship traditionally resides with the sales force, this challenge becomes magnified.

The watershed events of the last two years are shining a bigger and bigger spotlight. Companies learned in the last downturn that cutting marketing spend entirely leaves them uncompetitive as the upturn happens. And as boards look to their marketing teams for recessionary marketing strategies, strong leadership, innovative routes to the customer and particularly lead generation… many are left wanting.

Ultimately, in a challenging environment, the corporation focuses on shorter-term returns. Thus lead generation and nurturing requirements are boosted up the ‘ to do’ list. Lead generation programmes  are currently the top priority of 70% of B2B marketers according to recent research by AMR.

Historically, it was seen as the sole preserve of the sales team to bring in the “now” revenue – whilst marketing focused on the future through its research and brand programmes. Over time, this has lead to a belief from many sales teams that marketing are too intellectually focused, and are not interested in revenue generation, and marketers’ belief that sales are selling the wrong thing.

This legacy, however, has meant that up until extremely recently, lead generation was only seen as a tactical and ad hoc activity. As a result, demand generation often follows the cycle of feast or famine, with no continuous marketing campaign process supporting the revenue forecast. ‘Lead generation’ programs are frequently short term initiatives, driven by the need to fill quickly a dwindling sales pipeline. They often have no long-term strategy and no follow-up plan. This results in knee-jerk campaigns, which deliver an oversupply of low quality leads.

The poor quality of the intelligence provided to the sales force leads to low sales productivity and often frustration. What the sales team want and need is a steady stream of high-quality account intelligence; which enables them to focus their prospecting activity on the accounts where potential projects have been identified or they have the greatest chance of success. The delivery of high quality leads is dependent on gathering detailed and sometimes sensitive information from prospective clients (who are bombarded with requests for such information, often from competing marketing departments within the same company). It is increasingly recognised that such information can only be systematically and reliably gathered from an ongoing value exchange, via thoughtful and focused marketing communications.

So we can sum up the four main areas of B2B marketing challenge that present themselves as a result of the watershed: building and maintaining a great reputation, driving a fantastic customer experience, building solid relationships across multiple channels and generating leads that satisfy the business plan. 

Not much new in the challenges themselves then – but the way in which you tackle them has changed for good. Our strong belief is that marketers should start with the end in mind. Lead generation programmes can drive all four of these if designed and executed effectively and with a long-term commitment at heart.) Can deliver leads in the short term, but ultimately work to enhance reputation and relationship as well.

And yet, even when faced with today’s brave new world, B2B marketers seem unable to break out of the rather nostalgic view that lead generation is a “one-off” activity in response to short term need. This is why the watershed moment has been so important – from this point on, lead generation cannot be seen as an emergency programme or non-core activity any more; it’s a central plank to any B2B marketing strategy, and it’s core to the entire business development process. 

Lead generation is no longer the knee-jerk campaign that you give to a telemarketing agency – it’s the ultimate goal of everything you are doing. It’s time for marketing to realise that if you can’t plot the journey of how something contributes to sales then it isn’t worth doing. And if you do plot the journey, then everything becomes more effective.

So how to get started building post-watershed marketing programmes? Our next articles in this Watershed series will cover what’s working now and how to build a framework at the heart of your marketing department that delivers these four watershed priorities, what will work in the future and how to start looking at it now, how to develop the best relationship with sales (you’re going to need it), and how to structure your team to achieve all this.

The world has changed in the last two years, and the one thing everyone agrees on is that it’s not going back to how it was anytime soon. In a paper only just published, McKinsey has called it “The New Normal” – a fundamentally different business environment.

This watershed moment has left many B2B marketers high and dry, so we’ve decided to take an in-depth look at what has really happened, what the new world order means for marketers, and what you should be doing about it. Over the coming months, this blog will feature 5 major articles, with accompanying downloads, to help you to adapt to this brave new world:

1. What happened? What’s wrong with what we used to do? Why isn’t it working any more? There’s a growing call for a new style of marketing, and the impetus to make a change for good, but where’s this coming from?
2. What’s still working in this post-watershed marketing environment? Which marketing models and techniques are bearing fruit? From provocation propositions to adaptive campaigning models, we separate the babies from the bathwater.
3. What’s new? A look at the trends that will shape our industry over the coming year. We’ll be looking at the best B2B examples out there and taking inspiration from some unexpected places.
4. Working with sales. In the post-watershed world, a closer relationship with sales is imperative. How can you integrate with them, solve the data challenges and work out lead targets? We investigate the rise and rise of account-based marketing and bid marketing techniques.
5. Structuring to deliver it. Finally we take a look at how B2B marketing departments can gear up to deliver in a post-watershed world. What will the B2B marketing department of the future look like and what can you do now to get a head start?

Sign up now via RSS or email (top right hand side of this blog) to receive these articles as soon as they are published. If there’s anything you’d like to see covered in this Watershed Series then let me know by adding a comment underneath this post.

This month the CIM unveiled a survey to help marketers in the boardroom. Entitled “Marketing’s Decline: A Wild Exaggeration?” it is reportedly designed to help marketers strengthen their influence and value in the firm.

Reporting on the release of the study in Marketing Week, the CIM released  few statistics:

• 74% of CFOs agree marketing has its place in an organisation they also say that the marketing department’s primary responsibility is marketing decisions and nothing else
• Both CFOs and CMOs also agree that marketers rarely show how their customer needs can be taken into account in strategy (79%). They also agree that marketers “are failing to engage both the analytical and creative side of their brain” while many feel their marketing lacks “novelty” and promotional strategies are routine
• Interestingly, CFOs have a higher regard for the quality of information processed by the marketing department than marketers themselves (65% versus 51%)
• The paper suggests that the marketing department must make sure that it is viewed as a facilitator that helps the whole organisation realise “that their business survives and thrives by serving customers.”
• The marketing team needs to stress customer proximity and the ability to convert this to commercial opportunities. It also needs “to get out of its silo and to champion customer needs across the firm and insure that customer needs are a foundation of corporate strategy.”

Finextra reported a new Forrester study today, which concludes that “Oracle and Temenos are set to continue their dominance of the core banking technology market as smaller rivals fall by the wayside and banks take a cautious approach to vendor selection in a consolidating market.”

The ongoing economic crisis is likely to accelerate an emergent trend towards consolidation among core banking tech vendors says Forrester. As the stragglers are picked off by the dominant players, the big are likely to get bigger and a smaller number of banking platform vendors will start to dominate the market even more than the top ones do today.

As such, it will be more important than ever before for banks to scrutinise the viability of banking platform vendors and their product lines in terms of regional and global success as well as product road maps, says Forrester.

In part two of our interview with Chris Cottam, the former European Marketing Manager of HP, he speaks about how buyers select suppliers for the consideration list, and offers a rare insight into what marketers should be doing to make sure they build a lasting relationship. Chris is speaking on this topic at tomorrow evening’s S&M Forum event.

A lot of our clients are talking to us now about how they are under pressure and feel the need to get much closer to customers. What should marketers be doing now to get closer to the customer?

If you look at it across the whole spectrum of marketing activity there is undoubtedly value that marketing can bring to relationship selling, starting with the ‘go-to-market’ strategy. It’s all so easy to say ‘we’re going to sell to the FTSE 100′ because they’re all big, blue-chip household names.  I’ve seen organisations try and do that without really thinking about why those accounts would be interested in what we’ve got.  There, discipline around ‘which customers’ and ‘what portfolio’ has to be undertaken exactly as you would in a more product or transactional-based sales environment.  It’s just the criteria are different.

Thereafter, I think where we are all collectively weak these days is in delivering some of the marketing basics in a relationship environment.  For years and years, people have banged on about how the sales force needs to be armed with a really good elevator pitch, and yet I’m staggered that if you stop many sales people and ask them about an elevator pitch they understand the principal, but can they actually deliver it?.  No.

Why is that?  I think it’s because in a product environment, the product pitch to the senior buyer or board member you happen to meet, is seen as a ‘nice to have’ – a ‘what would you do if?’.  In a relationship-based situation, though, it’s much more important than that.  You may struggle to get hard appointments with people, so metaphorically hanging around in elevators may not be a bad thing to do to get yourself known.  And then it’s crucial that you know exactly what you’re going to say to them in that 30 seconds or one minute.

Ditto if do get the opportunity to meet them in a more formal environment – that first minute or two of the conversation is the most important one or two minutes that you’re going to have, because that’s going to decide, in the buyer’s mind, whether it’s worth having the relationship with you or not.

We as a marketing crew tend to send the sales people out with words of encouragement…… ‘ooh, guys, this is really important’. What we don’t do is actively give them something very concrete that we can train them on.  We train the hell out of them about the product – how fast is it, what colour is it, how fast does it go – but the basics covering the equivalent things in a relationship environment, I don’t think we do.

I don’t think we invest anything like enough time in supporting the salespeople.  I’m being very black and white here, just for brevity – not everybody is quite this bad, but when we talk to people in a relationship environment about sales enablement, the first thing people will typically respond with is ‘oh yeah, we give them lots of collateral’.

Well, great, and you need to have it, but actually in terms of the level of importance of a relationship-building exercise, collateral is fairly low down the list.  It’s on the must-have list, because eventually somebody might say, ‘have you got a brochure?’ or whatever, but fundamentally that’s not going to get you through the first five minutes.

Understanding the individuals in a client organisations – what do they like, what do they not like – is key.  A real key question in terms of what I’ll talk about at the S&M Forum tomorrow is, ‘how do you get onto a senior buyer’s consideration list?’.  This is not the decision list, this is just the ‘I’ve got a problem, who might I talk to about that?’ list.

The first person is the people they always talk to.  If you’ve got an existing relationship, it’s absolutely fantastic and it’s so hard for anybody to take that away from you.  From my experience with HP several years ago, we all charged off on the ‘we need to be more relationship-based’ angle and we didn’t have any understanding about how difficult it is to break into a senior-level relationship where they have established suppliers who they trust. It’s very, very hard to get into that space. 

Nevertheless, that’s the top level thing. And it makes sense – if you’re a top level executive, having a regular chat with someone from a consulting or a solution-provider organisation, and you say to them, ‘I’ve got this issue, could you help?’ and the answer’s ‘yes’, you probably go ahead on that basis.  You don’t want to be expanding it out to any kind of formal procurement exercise – you just want to get the job done.

Second level, if you don’t have a regular supplier, you start asking colleagues.  ‘I’ve got this issue, does anybody else have this issue? Do you know anybody who could help?’.

Third level is actually going to professional associations. Relevant to us as marketers, people are coming to The Marketing Practice event with their own issues, and over a drink they’ll say, ‘I’m having an issue with this or a challenge with that, is this something you’ve seen, is there anybody who can help me?’.  These professional bodies have or should have a far more important role to marketing in building relationship-type sales because this is where people ask the question, ‘who could sell to me? Who could help me with this problem?’.

And then fourth on the list is the independent analysts.  I know in the IT arena people are very quick to jump on the phone to IDC and Gartner and others, or at least that’s what we think they do, but in fact if somebody’s done that they’ve already exhausted all the other options, so you’re putting yourself into a very competitive space.

The point of all that is that people invest time and effort into things that are as concrete as possible.  Briefing analysts about how good you are and all the wonderful things you’ve done is a very tangible thing to do, and something you can, as a marketing organisation, reflect back into the business to say ‘look what a good job we’ve done of this and all the analysts think we’re great and they’re writing nice things about us’. 

It is important to do that, but it isn’t as important as some of the harder things about getting knowledge about individuals in the business.

Ultimately the concern should be about effectiveness, which by its very nature is hard to put metrics against. But there is also, especially in today’s climate where budgets are being squeezed, this need to justify activity to the rest of the organisation.  And I think that tends to push marketing organisations down the ‘I need to do something very tangible so that I can demonstrate how busy we’ve been’ route. 

So they tend to select those as higher priorities items than they should be if you were looking purely at how to effectively develop business.

How do you think the downturn is affecting all of this, both from the buyer’s psychology point of view and from a buying habits point of view?

At tomorrow’s event I’m going to touch on this split between the transactional- or product-business and the more value-based end or relationship or solution end.  I think it’s generally accepted, from an economic perspective, that when things are tough, the focus moves more to only delivering essential transactional procurements, and that major board-driven programmes tend to go on the back burner.  The world becomes much more short term-focused, much more operationally-focused and much more margin-focused. Anything which is not going to have a short term positive impact on improving margin, tends to go on the back burner.  Not shelved, because it’s probably still a good idea but it’s of lower importance.

The one exception in my experience is significant merger and acquisition activity.  And the reason given by some of the senior folks I’ve worked with is that you know if you’re about to make a serious acquisition – and serious probably means it’s going to add 20% either to your workforce or to your revenue line – it’s going to be a big change and it’s going to have a significant impact.  And that impact will likely be negative for a period of time.  So if you know you’re going to be putting out results which are probably not as positive as people have become used to, there is no better time to do that than in the middle of an economic downturn where everybody is expecting reduced or unpredictable results anyway.  The general rule about things becoming more transactional-focused, more short term-focused is true, with the exception of any significant M&A activity.

In terms of how does that work with the buyers, clearly the buyers in the transactional space are going to be under even more pressure than normal to justify things.  It’s foolish, I think, for a marketing organisation to try and pretend that that’s not the world the buyer is in.  We need to, just like you shadow people and mirror them in the sales process, from the buying side you need to be doing exactly the same things, and put more emphasis on the cost validation of whatever it is you’re proposing, because that is going to help the buyer side justify this back inside their own organisation.  That, I think, should be a bigger percentage of the proposal or proposition, than it would be in the normal times or the good times.

I think on the relationship side, and this is really difficult, if the capital budget gets put on hold and the big projects and the big programmes that you were hoping to do with the clients are no longer available, then the selling part of the business has an issue.  How can you invest time in a client who isn’t going to buy anything?

When times are hard I would argue strongly that this is the time that you need to really double down on building those relationships and the marketing organisation should be looking at things that can be done almost in the absence of regular and intense sales contact, that’s going to help build that relationship and elements of trust for two reasons really: one is that the competition might have stopped calling on the basis that there’s no business in the short term, and the second thing is that all of these capital-based programmes will go forward as soon as things turn around.

If you invest in relationships when things are not good, I think that sends a very strong message to the client that actually this is someone who cares about me, they want a real relationship, they’re not only going to be here when things are good, they’re going to be here when things are not so good and they understand my current position.  It is hard to think of a better example of building trust than that.

Just released is McKinsey’s April snapshot (premium content) showing a slight recovery in confidence. 35% of respondents now think an upturn will happen by the end of the year, with even more than this expecting demand for their own products/services will recover by then.

Growth is expected to recover soonest in India and China, whilst on the issue of whether national governments should be interceeding with stimulus and packages, executives’ enthusiasm has definitely been tempered since the last snapshot.

The statistics on how long this might last echo Alchemy Partners’ John Moulton on Radio 4’s Today programme earlier this week. Moulton suggested that this downturn might be “L-shaped”. The McKinsey snapshot concludes by saying, “Overall, executives’ medium-term expectations for their companies’ profits and workforces remain depressed: 55 percent expect profits to decrease in the first half of 2009, and 52 percent expect to decrease the size of their workforces in the same span (in March 2009 the numbers were 53 percent and 50 percent, respectively). Though business isn’t good, the survey results also indicate that company finances are, for the most part, sufficient without new external funding. Most companies aren’t seeking external funding; only 29 percent have done so since September 2008. ”

 So, as Richard Holway said in my interview with him last week, we are in for the long haul and IT marketers should be looking in detail at their customer and prospect data, and creating propositions that can resonate for each of them in this climate.

The UK’s top IT analyst, Richard Holway of TechMarketView, also has a marketing background… we interviewed him to get his thoughts on the future for the software and IT services market, and what that means for IT marketers.

First a potted history…

Richard was one of the 95% of the British population who didn’t go to university in 1966 and was instead recruited by the NHS, who trained him to be a computer programmer. In 1968 he became employee number 40 at Hoskyns (now Capgemini) and worked his way up to the board, where in the late 70s/early 80s he was group marketing director, having run many of Hoskyns’ larger profit centres and divisions along the way. He sees this as having been an extremely good grounding – meaning that by age 37 he was on the board of what was at the time the UK’s largest software & services supplier.

In 1986 Richard formed his own tech analysis company, collecting and analysing data, and providing reports, on what was happening in IT software and services in the UK. In 1995 he launched the first UK technology blog – HotNews.  In 2000 Richard accepted an offer for his business from Ovum, which itself then accepted a bid from Datamonitor. Since then he has set up TechMarketView with colleague Anthony Miller – a firm which offers opinion-oriented research on the UK software and IT services scene. Its superb daily insights are already read by more than 6,000 subscribers.

Richard believes that despite having started working life as a programmer, his particular bias has always been towards sales and marketing. He is that rare animal who loves technology, but is not myopic about technology for technology’s sake. His focus is always on what technology can do and the advantages it brings.

Richard, what are your views on the major trends for the coming years that marketers and sales people should be looking out for, particularly in the enterprise space?

The fundamentals as I see them are as follows:
1. From a business point of view, the biggest factor has to be the general economic situation. This is the worst downturn I’ve ever witnessed. I’ve seen three, and this is the worst of them. My first message is that if you are involved in going out there and helping your clients to save money and be more efficient or gain competitive edge, there is no reason that you can’t not only survive this recession, but do very well. There are many companies I see that, because of their emphasis on these areas, are doing good business.

You only have to look at the Operational Efficiency programme that came out from the government last night to see the huge savings being demanded in IT by the public sector. And 33% of IT spend is in government (it’s the largest single market place, bigger than financial services, which is clearly now declining). The whole emphasis from customers is “how can I shave money off the cost of my back office/front office team etc.?”. If you are able to support those goals, now is a good time. As I’ve written in TechMarketView a number of times, Capita is a classic example of this. Their chief executive has told me that for his customers, it’s all about cost saving. He said the new project work has just disappeared. No one wants a massive new build or installation, it’s all “how can you save us 10/20%?”. So the first point I want to make is that the downturn is the biggest pressure and a huge opportunity.

2. My second point is related. Product suppliers, and those focused on selling new products into new customers, are simply going through the worst time ever. You’ve only got to look at the results of suppliers like SAP and others to realise that people are not putting in new systems at the moment. That market is, to all intents and purposes, dead at present. That’s the reason why at TechMarketView, we’ve reused the old wartime slogan, “make do and mend”. Again the businesses that are flourishing are those who are helping clients to keep their old systems on the road for another couple of years. Suppliers should be looking to extend maintenance or licence contracts, or add additional functionality to existing products right now. People who have those sorts of businesses are doing well. Take Microfocus as an example. It’s been the best performing share in the whole of our sector; you could have doubled your money in the last year by investing in them. What do they do? They provide tools to help people maintain their COBOL systems. That was the first programming language I learned in 1966!

3. Every previous downturn in the IT sector has accelerated the pace of change. It’s accelerated the take-up of new ways of doing things and therefore new technologies. Large market leaders have to lay off people, cost-cut and naval-gaze – the last thing on their minds is doing something new. What happens is the younger, newer companies come in and take advantage of that. Before the last downturn in 1999/2000 for example, Google or Salesforce.com were simply not known. But when the downturn came,  their new models cleaned up against the likes of Microsoft and Siebel. I believe the same thing is happening at the moment and will happen in three major areas:

How might the way the consumer is driving this change impact IT companies’ sales and marketing strategies?

In my life I’ve been used to the IT department as being the forerunners of technological advancement. Now I see them as being almost the people that are slowing down the implementation of new techniques within their organisations. I think that users (and we are all users) are saying “why should we use a worse interface at work than what we use at home?”. IT departments are facing simply overwhelming demand for IT – first it was laptops, then Blackberries – all being demanded by the workforce. I think this will be the case for Cloud as well. Users want to be able to sit on a train, or on their iPhone, or in an internet cafe, and do their office work.

This necessitates a radical change in the way IT marketers need to look at the market. I believe most of The Marketing Practice’s clients do understand this, but getting there in their own businesses is extremely difficult. First, there’s an economic downturn taking hold – so it’s not a time to make bold and massive investments. But at the same time, Cloud and mobile means a lot of businesses need to change from an upfront licence fee to one where you pay per user, per month – and that’s such a massive change. Whole business structures need to change. It’s worth noting that Salesforce.com is 10 years old – the most successful SaaS company that has ever been, and they only just broke into profit in the last year. Traditionally, software companies have been 20, 30, even 40% profitable. The average for an IT services company is 6%. The maximum I’ve ever seen is 12%. The hit in all this comes from the last “S” in SaaS – these software companies are becoming more like services companies as they move forward. That’s a pretty difficult thing to come to terms with.

If you were back in your old job now, as Marketing Director at a company like Hoskyns/Capgemini, what would you be doing?

Well, for a start, a company such as Hoskyns/Capgemini would be well positioned in the current market because Capgemini is involved in outsourcing and saving people money. What everyone is suffering with now is in new business, new projects. What I would be doing is:

• 1. Hopefully I would have said this for years, rather than taking sudden action to do it – but I would be looking after my customers and understanding their current and future needs. I would do absolutely everything to keep customers happy. It’s so much easier to keep a customer than to get a new one. It sounds so obvious that it seems it’s not worth making the point. But I am constantly surprised by the companies who don’t have that mantra.
• 2. I would be ultra-efficient. I would look at costs and take out the inefficient programmes. You have to be cruel to be kind.
• 3. This stems from point 1. If you know what is happening to your market and what your customers want, then you just have to provide it for them. NetBooks, smartphones and the Cloud are perfect examples. Moving to these technologies is expensive and damned difficult for companies to make with established markets in laptops (e.g. Dell, HP), vanilla mobiles (e.g. SonyEricsson, Motorola) and software products (e.g. Microsoft & SAP). If you don’t make the move into the new areas then customers will go and buy Acer NetBooks, iPhones and Google. Be highly aware that if you don’t provide what your customers want, then someone else will.

In a few weeks’ time, I’ll be interviewing one of the UK’s leading ICT analysts, Richard Holway. Known by the FT as the “wise grey owl” of tech, and previously Group Marketing Director of Hoskyns (now Capgemini), I’ll be asking Richard about his views on the future of the enterprise tech industry, and what that means for how marketers should be adapting their strategies and plans.

It promises to be a fascinating set of insights. If you have a question you’d like me to put to Richard, please write it in the comments field of this post.