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.

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.

Research out late last week highlighted that 25% of companies were increasing their IT investment, despite the economic volatility. The survey of US IT professionals by ISACA also found that only 16% of companies were making across the board cuts in IT, with 14% freezing them at current levels.

“Many organisations are trying to avoid making widespread cuts in IT because of growing awareness that IT, when implemented strategically, has the potential to deliver tremendous business value.” said Robert Stroud, International VP of ISACA.

The full research release is here.

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?

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.

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’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.)