Cisco and EMC launched a joint venture called “Acadia” last week, which will “bundle EMC storage gear, VMware management tools and Cisco networking and computing products with dedicated services” according to the Financial Times. In an interview, Cisco’s chief executive, John Chambers, told the FT that the deal could be the most significant technology alliance in a decade.

Acadia’s offer is aimed at competitors Hewlett-Packard and IBM , said the paper, and the new venture is chasing a slice of the $350bn annual market for core computing products, consulting and maintenance.

FT’s Techwatch blog has, this week, been suggesting there’s another tech bubble at play, focusing on the successes of Intel and Apple. Commenting on the results, the blog suggested tech was leading the charge for the recovery… ”most of the big tech companies have turned in pretty solid earnings in the past few weeks. Investors have been most interested, though, in their outlook for the coming year. By and large, they have been getting what they need, if little more–signs that tech customers are buying, and that they the recovery is gaining traction, with tech once again leading the way.”

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.

Recent research by ITSMA (the IT Services Marketing Assoc.) has looked into the C-suite’s use of social media and been surprised by the findings.

Writing on his blog, ITSMA spokesman Chris Koch said that ITSMA’s annual survey of buyers of complex IT solutions (entitled How Customers Choose Solution Providers, 2009: The Importance of Personalization, Epiphanies, and Social Media), “shows that the door to the C-suite is opening up”. You can download a free summary of the research here but the full piece costs.

The research Chris quotes found that usage of social media among IT and business buyers of technology rose 50% over last year. Now 55% of respondents said they use social media as part of the technology buying process in 2009 versus just 37% in 2008.

The research also found that C-suite executives used social media more than their lower-level buying peers. Just 15% of CEOs and directors said they did not use any form of social media at all, while 34% of manager/directors and 26% of VPs/Assistant vice presidents said they do not use it.

Commenting on these findings, Chris says “This has big implications for marketers. It means that social media is taking hold within your biggest, most valuable accounts at the highest levels. Sounds like a business case for investment to me.”

My stance on this would be that any social media strategy has to be woven into a wider business case for C-level contact.

Are C-suite execs using LinkedIn or Facebook to keep in touch with peers and ask for advice – yes, they are. Are they making decisions solely on the basis of this information? Our experience suggests that’s simply not the case. Designing a business case for social media investment on a standalone basis is pretty risky – you are in danger of embarking on a non-integrated programme that very likely cannot survive without supporting communications. Think instead, what do you want to say to these execs, and how can social media be used to best effect in the series of communications you’re going create over the long-term.

I’d recommend a look at the deck Pete Jakob (IBM’s Marketing Transformation Leader) has recently put onto SlideShare entitled “The Organic Gardener’s Guide to Lead Nurturing“. 

Major highlights from his slides include advice from his experiences of running successful lead nurturing programmes at IBM. His main points resonate closely with those at The Marketing Practice’s heart:

-run fewer, longer-running programmes (see this post on the case for multi-touch campaigning)

-be accountable (see this post on working with sales by joint working on the business development process)

-think about the next step, not “are you ready to buy now?” (see this post on how to develop “next step” propositions)

-plan for frequent change (and expect it) in your programme, add innovation as you go (by effectively “scheduling in” change, you could have moved quickly to integrate messages like these into your programmes)

As an aside, it’s an interesting job title Pete’s got. As the post-watershed world rolls on, I wouldn’t mind betting we’ll see quite a few more of these.

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.

Research from Computer Economics in North America has shown that mid- and smaller sized companies are embracing IT outsourcing. Report Author Frank Scavo says “These findings suggest the outsourcers are doing a much better job of communicating their value proposition into the small and mid-market. That’s interesting because while traditionally we tend to think smaller companies are willing to try new things, in this market at least, they are surprisingly conservative.”

Irregular Enterprise has produced a useful summary of the key findings of the report:

• Outsourcing services gaining the most strength among customers include help desk, desktop support, data center operations, and website/e-commerce systems outsourcing. Large organizations, in particular, are making greater use of help desk outsourcing.

• Outsourcing services making the smallest gains are application maintenance, application development, and data network operations service providers. Application development, while still the single most frequently outsourced function, is losing ground in the current economic environment as organizations cut back on project-based work.

• The three most popular IT functions to outsource include data center operations, disaster recovery, and website/e-commerce systems. These IT functions are both frequently outsourced and outsourced at relatively high levels compared to other functions in this study.

• The typical IT organization spends about 5% to 6% of its total IT budget on outsourcing services. This is true regardless of the organization’s size.

• IT organizations are experiencing the most cost overruns with application development, website/e-commerce systems, and data network operations outsourcing contracts. They have the easiest time predicting costs for IT security, voice network operations, and data center operations outsourcing contracts.

• Application development and application maintenance are most-frequently offshore outsourced IT functions, while disaster recovery services and IT security are the two functions least likely to be sent to offshore service providers.

If the angles on using new media blended alongside traditional channels in yesterday’s post interested you, this article from eMarketer is worth a scan. It’s an interview with Melissa Katrincic, the head of interactive digital marketing and ecommerce at cult skincare provider Burt’s Bees.

Whilst Burt’s Bees is a B2C brand, Katrincic still struggles with the same challenges as B2B marketers: creating a consistent online/offline experience whilst maintaining control of offer and image:

“If we’re doing something online, how can we deliver an experience that is similar to retail, where you still feel an identification with the brand?”

“Facebook is a great new foray for us. The fact that it’s global has, at times, proved challenging because we run online promotions in the US that sometimes are unavailable to our Canadian or UK consumers. They let us know that they’re not very happy about that, but we’re working on it.”

The article’s available in full on eMarketer here.

The 2009 B2B Barometer report, from the IDM, ABBA and Circle Research has just been released. It’s been designed to give an insight into the goals, trends, channel preferences, areas of budget allocation and investment priorities of B2B marketers.

A specific section of the report focuses on what the 100 B2B marketers interviewed for the study are working on right now, and has uncovered 5 major areas, based on an entirely open questions. I’ll go on to cover these 5 in detail at the end of the post – but first some thoughts on the study’s broad findings. 

My major conclusion is that marketers appear to be attempting to demonstrate ever-more rapid and cheaper results (especially around lead generation) without claiming the time and investment they need up front to support the delivery of those results in the first place. For example, the study shows that long term programmes such as research, marketing strategy and brand identity are losing favour in the face of competition for budget from social media, email campaigns and website development.

Whilst it’s true that online is cheaper, faster and one of the first places that prospects will go to look for something, B2B marketers must be cautious to keep the baby in its bathwater. In this digital rush, we mustn’t forget that we still need to say something compelling over these channels (that’s where market research comes in, even if we need to use new channels to conduct that research)… and that we need to be saying it to the right people (clean and accurate database with agreed sales interaction processes). Without the right platforms in place – data, propositions, mechanisms – marketing programmes are doomed to failure, be they online, offline or a blend.

As I said in the intro to this post, the ”Key marketing priorities” section of the report is one of the most interesting – focusing as it does on the 5 big things your B2B peers are struggling with right now.

These 5 biggest priorities cited by the study are reproduced in bold below, grouped into 3 major areas (data, online and ROI). I’ve interwoven these with suggestions on how to get tackle each priority:

 -Strengthening online presence through improved website content, visibility and interaction and enhancing the effectiveness of email marketing

-Obtaining a better understanding of new media and how best to integrate this with more traditional forms of communication

Enough of the new/social media black magic! Surely the most useful understanding of new media any of us can possibly gain comes from truly getting under the skin of how our clients and potential clients are using it now and will use it in the future. Your time to engage new prospects is short enough without demanding that they use an unfamiliar site or technology to boot. We need to think through the lifecycle of interaction during the go-to-market process and build online and offline tools to support that.

Speak to customers and prospects face to face about the way they’re really using the web. Whilst they are unlikely to blog or contribute to websites, but that doesn’t mean they aren’t reading them. They are still highly likely to be searching for articles and downloads to help them create a presentation or research a new tool or service. Ask what is meaningful and useful to the prospect, what will support the campaign’s goals and what makes the prospect’s life easier.

Don’t get hung up on generating an online debate or getting oodles of feedback – Jakob Nielsen highlights that only 1% of any online community actively contribute and the rest effectively “lurk”. The goal with online is ultimately the same as online - position the offer and attract people to it in the first instance, then support the building of a relationship, the sale, and the growth of that relationship going forward. Do this through the provision of great content and fantastic service.  Also, what about the prospects and customers of the future? Having grown up in the web generation, you need to keep an eye on what they’ll want in the future too.

-Cleansing and maintaining accurate and up-to-date customer and prospect details

Data is the foundation of any great marketing programme, and an essential nut to crack for both customer and prospect programmes. Most programmes fall down when they say “we must sort the data issue” and then acse investment immediately once it’s been cleansed. It’s something you should budget to make a never-ending investment in. Brian Carroll makes the point that “the quality the marketing database can influence your lead generation or nurturing program’s success by a factor of 50 percent.” Keep it current through continuous campaigning and a good information sharing process. Data is also one of the ultimate crossover points between Sales and Marketing, so it’s critical to put good people on data projects and commit to them in the longest term.

 -Deriving the maximum value from marketing budgets – making them work to the fullest extent- at a time of budget cuts. 

-Measuring the return on marketing investment – but in reality often the return on sales investment – at a time when budgets are tight and marketers are being asked to justify and substantiate marketing spend.

Consider allocating budget by priority rather than channel or activity (I saw data from AMR Research recently that showed “lead generation” as the primary marketing objective of 70% of B2B marketers, but it was rated third in the list of activities by spend allocation). Also, ensure that you’re budgeting from scratch for this quarter’s or year’s programmes and ask hard questions about everything on there (the old adage, do what you’ve always done, get the same results).

Don’t fight against programmes measured by sales-driven metrics, in a recession they’re here to stay. Instead be sure that you don’t sign up to a lead target in the absence of solid knowledge. Look at the sales cycle, the buying patterns, the previous history of the prospect or customer group the programme is targeted at before committing.

We are pleased to be able to offer clients of The Marketing Practice a free copy of the B2B Barometer report, normally £100. Please speak to Paul Everett on +44 (0) 1235 833233 to obtain your copy.