I’d highly recommend reading this superb FT article which analyses the year to come from a CIO perspective. In particular, this quote from Ian Campbell, of British Energy and chairman of the UK-based Corporate IT Forum, is really enlightening.

He says his priorities are: “first, year-on-year savings on business-as-usual expenditure – “The more companies just ask for a ‘flat’ 10 per cent across all areas, you know there is a general squeeze,” he says.

“Second, he says, are service efficiencies which demonstrate IT is providing exceptional value for money, and third, continued outsourcing and “managed service” activity.

“He argues for the need to ensure there is no wasted investment or poor cost control: these will be far more noticeable in a downturn and quickly show up poor management.

“He says there is already a greater focus on return on investment, with payback expected even more quickly. Interest in “technology” projects such as Vista or Services Oriented Architecture has also dwindled. Software as a Service (SaaS) has its supporters but he adds: “There is little in the way of proper commercial offerings, so we have not seen many massive deals or a shift in the market.”

Tomorrow night sees the November gathering of the ever-slinky S&M Forum.

Our topic couldn’t be more timely – the need to justify the business value of marketing is perhaps more pressing than ever. Why, so the boardroom argument may go, should we invest in marketing when propping up our sales team would surely get more money in? When such a claim is levelled, marketing needs the numbers at its fingertips to respond. Why then, are they often so far from reach?

How can the marketer quantify what he or she does in terms of boardroom-friendly raw numbers? How can ‘marketing success’ be measured? What activities are generating a good return on marketing investment? Is answering any of these questions actually possible? In researching tomorrow’s event, we dug up a number of useful articles and interesting commentators on the B2B marketing measurement debate…

Starting with the basics, Jim Lenskold’s recent study (2008 Marketing ROI and Measurements Study) showed that many marketers are struggling with the fundamental measurements required to manage and improve marketing’s contribution to an organisation’s business plan.

Thus those who do measure are already ahead – the study showed that simply the act of measuring marketing in the first place has a direct effect on performance.

Respondents who described their marketing as highly effective all showed better measurement and ROI practices than those lower down the table, and they are using business information that ranges from sales reports, financial data, lead gen data, marketing spend and sales pipeline details to furnish their measurements. Perhaps most revealingly, these ‘highly effective’ companies comprised only 9% of study respondents.

Arguably, the main reason for this paucity of highly effective marketing measurement lies in collecting this data and presenting it in an actionable way to those in the marketing department, and an understandable way to those outside it. There are certainly tools that can be deployed to assist in this process, for example marketing dashboards, but the key is to have not just the short-term, but also the long-term view driving all analysis.

This long-term view was touched upon in a recent series on B2B marketing measurement in which Forrester’s Laura Ramos urged for customer-centric metrics to be employed to measure the impact of marketing over the entirety of the customer life-cycle. Ramos recommended that marketing measurement should move away from focusing on the basic lead-gen approach and towards building and maintaining brand loyalty by measuring how prospects buy, using demand management to build further customer dialogue and align marketing and sales around common objectives.

This latter point, the disconnect between marketing and sales, is often the shadowy figure lurking at the back of this measurement debate.  So much so, in fact, that one article in the Harvard Business Review from a couple of years ago, set about ending the war between sales and marketing once and for all by tackling the economic and cultural differences that usually cause the tension. But what relevance would such a sales and marketing peace treaty have to effective marketing measurement?

Unsurprisingly, it is value. With an aligned sales and marketing team communicating with the market in a consistent and timely fashion, the ROMI is not muddied by conflicting sales activity – the marketing effort put in at the beginning of the sales cycle will have a direct effect right through to the end.

Indeed, Laura Patterson develops this point when she states that marketing isn’t an island. Pulling the lens out so the focus is on sales, product, customer service and finance as well as marketing can really add value to the measurement process by placing all campaign activity into its real-world business context.

Brian Carroll’s call for a marketing funnel is another case in point. Carroll takes the view that most companies use only sales funnels to collect all their leads, qualified or not. The result is less a funnel and more a bucket riddled with holes out of which the less-qualified leads leak. By creating a marketing funnel, leads can accurately be filtered through to sales only when they are sales-ready. And Carroll agrees with Patterson when he says that measuring the effectiveness of this sales-marketing interaction is central to its success.

Generating actionable leads rather than just leads is important here too, and certainly something that should be the focus of any measurement. Lead quality is vital in the context of marketing value. For example, if a lead is measured purely as a cost-per-click (CPC), does this mean that each resulting sales opportunity is treated as equally valuable? CPC certainly has its place – if the average sales opportunity return isn’t expected to be high compared to the number of click-throughs, a decision would be made about using such a model. But if a relatively few click-throughs (with a higher-than-normal CPC) results in one or two significant sales opportunities, the value of this kind of marketing must be properly measured.

The damn lies inherent in such measurement statistics are ably demonstrated by email marketing. As Stephanie Miller points out, a study conducted by the DMA for marketing activity throughout 2007 showed that email marketing had 150% more ROI than non-email online marketing. Great, but behind these bare figures lurks the spectre of spam and the Gatling gun approach to some email marketing. Because there is simply so much of it out there, hitting thousands of potential targets with a broad email sweep usually has a negative effect of alienating potential sales leads. With a smaller but more targeted email campaign approach, the opposite can be true. Miller urges us not to be blinded by the glittering promise of gold with email marketing but to measure emails in exactly the same way, using customer take-up across different styles and sizes of email campaign to guide future success.

So, is there a danger of measuring too much? Perhaps not, if the right activities are measured in the right context. And, no matter how difficult the economic climate is, marketing value will always come down to money: the sales that are generated directly from a campaign.

As Paul Dunay suggests, in the grand scheme of things, sales is the only metric that really counts. This is, he argues is the ‘right context’ for measuring marketing value, based on three tiers of marketing metrics, with the first two tiers feeding into the most important third tier:

1. Reach metrics: the straightforward campaign hits – e.g. webpage click-throughs

2. Efficiency metrics: how cost-effective each form of reach activity was and whether it achieved the desired result – e.g. cost-per-clicks and the number of downloads of a whitepaper

3. Value: the contribution to the sales pipeline – e.g. the ROI for the number of attendees at an event

Of course, saying that marketing reach and campaign efficiency impact on and drive the overall value of the campaign is nothing new, nor is it astounding. But this is a very tidy way if thinking about it.

Measure what you’re doing to make sure you’re doing enough of it. Measure how you’re doing it, to make sure you are learning and getting better. Finally, measure if it’s working for the business. So, in the end, it’s all very simple.

(Although setting up the lean, mean marketing operation that can get hold of those figures and track them is a whole new blog post!)

What makes a successful account-based marketing (ABM) programme? Great execution is essential (as is a planning framework like this one), but here we wanted to highlight three elements of programme management that we think mark out ABM that really delivers results.

Having run account-based marketing (ABM) programmes for our clients over the last 2 years (treating their key individual customers as markets of one or, at least, a few), we’ve identified these areas as essential to keep in mind.

They’re important to ensure an ABM programme stays within its original budget and doesn’t demand more management than originally expected; keeps the faith and interest of the sales or account team; and delivers the promised results.

1. Turn theory into practice: we’ve seen a few situations where ABM becomes all about the planning, and ignores the detail in execution that can make or break the programme. For example, marketing might take on the role of profiling a target account, understanding its current priorities, and handing this analysis back to the sales team with a list of propositions to target the account with. For an effective programme, this should only be the first phase (and should be done with sales, not in isolation). For marketing’s involvement to stop there means that the most effective potential actions are never taken (whether it’s creating sessions to run for new contacts in the target account, or putting more effort into engaging them with corporate materials and events, or even targeted lead generation to help the stretched account team break into a new area of the business). Equally, there will always be some personalisation – or even unique material – needed at the account level. If it was as simple as just targeting the right existing activities at an account, then everyone would be doing it.

2. Keep focus: there are instances where we’re asked to support 9 or 10 different propositions being taken into 5 or 6 areas of a customer account. While this is achievable over a year, it can’t all be done at once. The key is to pick the most important 3 propositions and find where in the account they are most suited, craft the specific story and work with the sales team to take them in (supporting by building data, or creating campaigns, doing research or preparing sales materials). This way, the sales or account team will really feel the benefit and stay engaged, without the danger that your work will either be watered down or you will be asking for more time than the sales team has to give.

3. Avoid overcomplicating: in some cases, an ABM programme is really no different from any other marketing programme, just targeted at existing customers. Yes, it needs more intelligence upfront to avoid stepping on toes or saying the wrong thing – as well as more consistent interaction with sales or account teams. But that shouldn’t stop us being able to quickly and effectively get returns from existing customers: now more than ever, they are the best sources of potential new business.

Bearing all this in mind, we can deliver the three or four key activities that will make a real difference in a single quarter.

Just in the last month, we’ve seen examples of the results: two instances where our clients have uncovered workshops in their customers that they wouldn’t have known were happening – and which they can now use to start scoping a new project. All this aside from many other meetings with fresh contacts to discuss new propositions, opportunities entered into the pipeline, bid support on major deals, and the intelligence on customer plans that we have built.

All of which ties in to our ABM planning diagram (available to view here) – a useful tool for outlining the stages and scope of any ABM programme.

Spending on IT security will continue to grow next year, according to new data unveiled by Forrester Research. 21 percent of respondents expect to increase their IT security budgets in 2009, while nearly three-quarters of those surveyed expect no cutbacks in their security spending.

Only 6 percent of respondents anticipate having to cut their security budget next year despite the current economic uncertainty.
http://www.tradingmarkets.com/.site/news/Stock%20News/1863297/

The research also says security makes up 10 percent of overall IT operating budgets in 2008, up from 8 percent last year.  Nearly 50 percent of respondents report to a board/CEO or an executive committee – security is clearly no longer embedded within IT.

Next week I’ll be interviewing the Tom Ilube, ex-CIO of Egg, for this blog about what it was like to be marketed to by IT companies.

If you’ve always wanted to ask a tame CIO something, here’s your chance. Post any questions you have in the comments field.

Useful 2009 IT marketing spend statistics released this week by IDC research – there’s a free webinar here covering the research. Some of the main benchmarking highlights, as described by Jon Miller:

-Marketing Budget Ratio (marketing spend/revenue): 2.8% average (2.6% for hardware, 5.1% for software, 0.8% for services)

- Program-to-People Ratio (program spend as a % of total mktg. spend): 61%

- Marketing Staff Throughput Ratio (program spend per staff): $293,000

- Slide 23 describes how companies allocate their program budgets across events, advertising, direct marketing, marketing support and sales tools, digital marketing

- Slide 24 shows how staff is allocated across functions

- Slide 25 shows how companies are allocating their digital marketing budgets across advertising, search, email, etc.

Note that these benchmarks are for large IT companies with average revenue of $6 billion a year.

Many B2B marketing campaigns are not fundamentally flawed. They are good ideas that suffer from lacklustre execution. Or a great idea, and great plan – targeted at entirely the wrong people.

We see a number of these issues happening again and again in the B2B marketing industry. Sometimes the devil really is in the detail. Here are 10 common mistakes and how to avoid them. 

1. Not engaging the sales force at the outset – ultimately, the sales force will define whether all your work has been a success. Did your campaigns increase sales opportunities or not? Were they the right kind of opportunity? Talk to them in person before you start to ensure you know what’s expected of you. A lot can get lost in translation.

2. Not listening hard enough – in creating a campaign, as the marketer, you’ll have a lot to add, and you can bring great experience to bear. Don’t forget that the sales and product experts have as much to add too. Ask a lot of questions before you make any broad statements, and don’t assume anything until you’ve checked it. A small misunderstanding can result in a campaign going very wonky later on.

3. Not finding out what current customers think – despite point 2, the best point of reference for any campaign is the people who will eventually be receiving it. Beg, borrow and steal to get the chance to speak to a few tame customers or prospects! For some help in framing up your client interview, see my post on B2B marketing client interviews.

4. Assuming leads can be “generated” for all propositions – it’s a huge and expensive challenge to “make” market opportunity. There is an ongoing debate in the industry about whether “making” demand is possible. Our view is that it can be uncovered, found, prompted, but probably not “made” – certainly not without mammoth budgets. The best way to proceed is to map the market size and build relationships in the long term – so that as opportunity arises you can get to it quickly.

5. Never reaching the real decision maker – many marketing campaigns are simply targeted at the wrong people. Completely understandable, given that the companies we are marketing into may have a hundred thousand employees or more. Being a “data junkie” is the key here – make sure you’re obsessed by the data the campaign will be sent out to. Its relevancy and its quality. Also, it stands to reason that your DM or email will hardly ever hit exactly the right person first time – it’s a process of repetition and refinement.

6. Misqualifying or overblowing new prospects – all campaigns are under pressure to generate leads. As a result, marketing departments can pass “leads” back to a client that don’t live up to expectations. Understand in detail what the sales team’s definition of a lead is – and don’t take it at face value – question them hard on it. Passing back non-leads will only lead to dissatisfaction, but opening the door to a key account (even if it doesn’t strictly meet BANT qualification) can be just what is needed. Sometimes sales don’t always mean exactly what they say.

7. Not following up on leads or nurturing slow burners – sometimes the sales team will commit to follow up on your campaigns themselves. As they get busy, or as other leads turn into bids, the salespeople can become distracted and drop the lead follow up. Make sure you have a plan if this starts happening. Also, have a strategy for “slow burners” – these are people who have expressed an interest but are not ready to move forward yet. How will the campaign keep them warm until they are ready to buy?

8. Not understanding the product or service – the IT world and the marketing world both become more complex by the minute. For us marketers, it’s a big job just to keep up to speed with the day job, never mind what the latest solutions do and how they work. The best campaigns are a perfect unity of customer need and product understanding. To develop the perfect campaign proposition, see a demo for every release, visit a site where it’s in use every day, speak to customers regularly and directly.

9. Assuming the buyer understands the market – it would be very easy to imagine a campaign being designed that proved in concrete terms why your software was palpably, demonstrably better than your competitor’s… and then finding out that the targets of the campaign didn’t understand the nature of the market at all and didn’t respond to the campaign as a result. At the same time, an experienced and savvy IT Director might well know the market backwards and dismiss a campaign as underestimating his/her knowledge. Understanding what the typical buyer does know about the market before getting started on your campaign is key.

10. Measuring activity rather than outcomes - marketers strive to measure the impact of their activity and rightly so. Marketing needs to demonstrate its value to the business. But a lot of metrics measured by marketing are fairly meaningless without knowing how much revenue they’ve generated. Whilst it’s easy to measure hits on a website, clicks from an email, number of mailers sent, number of event delegates (and these should still be measured) unless we know the ultimate impact that these activities had on business through the door, we can’t know how much of a return on its investment we are getting for our marketing spend.

What a week it was last week. The world is changing before our eyes.

What interested financial services companies a week ago may well now hit a brick wall. Our business intelligence team, calling into banks this week on behalf of various clients, have been met with everything from “I’ve just been made redundant” to “I don’t know what’s going on, I simply can’t talk to you – it’s all up in the air.”

So what action can you take, right now, to keep on generating leads? To make sure your marketing messages will continue to strike home?

1. Talk to your customers, more on this below

2. Find out where there is still opportunity to sell. (we’re tracking several of these areas – get in touch if you want to sign up for our email newsletters on this)

3. Find cost-effective ways of getting your message in front of people – and prove why you are worth their time

Our own experience, only last week, was showing that what mattered a month ago is seen as frivolous now. The unusual market conditions are definitely creating opportunities but they are not always immediately obvious.

To use a B2C example, The Sunday Times reported yesterday that John Lewis has seen a 247% increase in sales of hot water bottles versus this time last year. Presumably this is people trying to conserve their cash by keeping the central heating switched off. Makes thrifty sense, but not an immediately obvious market opportunity.

It goes to show that, in a time of unprecedented goings-on, no-one can know for sure what will work. For B2B, it’s back to basics marketing – the most important action you can take is to get out there and ask some questions of your clients.

Ask them how, in this new environment, they will be making decisions, ask what are the pressures they’re facing, and what is valuable to them now. Understand how their own customers are behaving. You need to really understand both of these aspects to be able to put together proposition and messages that will engage them in uncharted territory.

We’ve made available our own client insight questionnaire to speed things up for you. Download it here: customer-insight-questionnaire.Your buyers’ worries (and their urgent need for future performance) are a real opportunity – if you understand them properly.

Technorati Profile

So many of our team have found these links helpful, we wanted to make them more generally available. Both articles highlight the acute need to craft propositions very carefully around the ‘why invest in IT?’ message.

First, McKinsey’s views on how companies should be Managing IT in a downturn: Beyond cost cutting. It shows some key areas where IT suppliers can be focusing to create propositions and messages that have a sound business case in this economic climate. The report has some great ammunition for making targeted investments in IT (especially to streamline processes and make more of existing information) rather than cutting costs across the board:

“Investments in technology-enabled business processes can deliver up to ten times the impact of traditional IT cost reduction efforts.”

And here is Forrester’s view on which parts of the IT industry will be least affected according to current spending plans. It’s not that companies won’t be making IT investments in the downturn: the key point is that to access the budgets that are growing (especially services and outsourcing), marketing messages will need to major on instant ROI. There’s no doubt that marketing can really come into its own in taking this case to buyers – provided that we dig beneath the obvious headline ‘credit crunch’ messaging to the issues that really matter.

Campaigns that are grounded in an understanding of these spending trends and ROI cases are a critical component of ‘recession-toughened’ marketing – we’re already seeing the hunger that buyers have for information on how and where they could be making savings.

What are two of the top ways potential buyers find out about new software, hardware or services?

They Google for information, and they ask their colleagues and peers. Research in 2008 from ITSMA and The Marketing Practice back this up in concrete terms.

Relationship management and account-based marketing programmes are important as I’ve covered in previous posts, and are an important central platform in your lead generation. They are also extremely useful when looking to influence colleagues and peers both within and intra-organisation.

But what about Google? Technology firms, considering the market they are in, can be woeful at appearing in the search engine rankings. Research consistently shows that when people want to find out about something, they Google it.

Bear in mind this recent research from Think Eye Tracking. It would appear, if you’re not on the top page, you might as well have just fallen off the face of the earth.

Think Eye also says “when asked afterwards what they would normally do when they couldn’t find their desired search result on the first page of Google, 87% respondents replied that they would modify the search terms or refine the search by category. 97% of people tested answered that Google was the search engine they most commonly used and out of those people, 87% stated they wouldn’t bother using anything else.”

When considering go to market strategies and campaigning, B2B marketers simply must consider their organic Google page rankings. You don’t want to generate a lot of interest in what you do, only to find that your competitor comes up number one on the rankings whilst you languish on page 6. And sponsoring the keywords through Google’s advertising programme just isn’t enough.

There’s a lot of unncessary confusion around web 2.0. Online communities, wikis, blogs, podcasting…the list goes on. Most sensible marketers say to me, “but my target market doesn’t comment on blogs” and they are absolutely right. 

But there is a danger of missing the point here. Your target market may not be commenting on blogs, but your target market is very probably Googling you and search terms related to issues they are having that you can solve.

To get inbound leads from the web, you need to get as high as possible up the organic rankings for your chosen search terms. To do this, you need to contribute to the debate in your area, online. You need to get out and do this online as well as offline, to cater for different tastes. Think of it as journalism - where you control what the article says. Make your articles interesting and get out there and comment in influential places.