Technology Marketing Blog

Marketing Automation Roundtable

2012-01-24T13:25:00.001-08:00

I participated in a great round table discussion at the Mass Technology Leadership Council this morning. The group discussion touched on a wide range of issues related to deploying marketing automation systems. Some of the key success factors are summarized below by stage:

Planning

Executive buy-in and expectation management: To be successful, marketing automation projects require integration with other enterprise systems and repositories. Getting top level support for cross departmental cooperation is critical to long term success. However, project leaders must also be very concerned about executive expectations in terms of how quickly they will see measurable improvements in revenue. This is a function of your sales cycle and executives must have a clear vision of the time it will take to get hard numbers to report on.

Data management: MA systems are only as good as the fuel you put in them. Data quality measured by consistency, accuracy, and freshness will determine the fate of your MA project. Typical challenges include: de-duping contacts and accounts, harmonizing account hierarchies (who owns whom), enterprise standards for customer data, ongoing resources for data governance.

Cross departmental support: In the long run, MA systems, unlike other enterprise systems such as CRM, billing, support, etc. are wholly dependent on how well they are integrated with other systems. Specifically, the extent and efficiency of the closed loop reporting process from response to revenue. This requires cross functional support in terms of:

Data standards

SLAs between groups regarding issues such as:

Definitions for lead advancement

Engagement commitments (how long and how many touches to accept, reject, claw back, etc.)

Transparency and visibility of customer touch points from marketing to sales, finance, service, and support.

Scoping and Roadmap: Defining your marketing automation project vis-à-vis business objectives is critical for success. The project leader, business users, executives, as well as your implementation partner and vendor all need to have a very clear vision of where you will start and how you will build over time. At each stage of the roadmap It is important to scope, define, and communicate:

What processes are being automated

What metrics will be used to measure the success of the project and the performance of the system

What resources are necessary to implement, support and use the system

What output is expected from the system

Staffing and skills: MA systems require new skill sets and approaches to marketing. Technical skills with MA tools and analytics, as well as good process mapping are in high demand. They are difficult to hire, and once trained will raise the market value of your staff so be prepared.

Deployment

Campaign workflows: The key is not to get too far into the weeds in terms of nurturing workflow models. MA tools are capable of designing incredibly complex routing - marketers should err on the side of simplicity when getting started and build based on business drivers not just technical capabilities.

Integration: System level integration with the CRM is a must out of the gate. If not available from the start, integration with other systems should be planned on the roadmap for the MA implementation.

Training: MA requires new skills in terms of campaign design, execution, and analytics. This is a lot to ramp up on for the novice MA user. Training programs should be designed specifically for each type of user as they will have very different use cases with respect to system functionality.

Post Implementation

Measurement and reporting: This remains a commonly cited weakness of most MA implementations. All leading providers have decent reporting capabilities built into their solutions. But it can be confusing about what to report to whom. This gets more complicated the higher you go on the marketing org chart. The needs of a campaign managers can be met with data that is germane to the system , but marketing executives need a perspective that goes beyond the marketing department. They need metrics that show influence on the sales pipeline, into deal size and velocity, and customer lifetime value. Marketing has a key role to play in all stages of the customer experience.

Social/inbound marketing activity is another common point of disaggregation. IDC expects that to see new tools to better assimilate unstructured social data into the formal lead management process so that, at least retroactively, marketers can measure the outcomes related to social engagement.

Overall, the marketing automation landscape continues to be highly fragmented with new media, channels, and tools cropping up daily. While there has been some consolidation over the past three years, IDC expects to see much greater M&A activity over the next three as major tech players look to build infrastructure offerings that integrate all customer facing functions.

Channel Marketing from a Sales and Marketing Perspective

2012-01-19T13:09:00.000-08:00

Complexity and Diversity at Scale

Channel marketing in large high tech companies is one of the most complex and diverse operational activities in all of marketing. Complexity and diversity are pervasive across: market, product, program, even organizational structure. Channel Management groups typically report to either marketing or sales. The trend today favors the sales reporting approach, especially for regions outside of the US. The in-country channel manager will either be or report to the regional head of Sales. Channel Marketing typically sits within channel management or corporate marketing. In many companies the main function of the channel marketing team is to act as a conduit between business units/product management and worldwide channels. This creates an inherently complex organizational structure from which a wide range of additional sources of complexity and diversity must be managed.

The Sales Perspective

From a sales perspective, channel management is all about recruiting and performance – identifying key opportunities and the partners best suited to capitalize on them, and investing in their success. This typically involves working with key partners to develop business plans, including staffing, investment planning, and performance goals. However, it is rare that these business development plans include specific marketing plans developed in conjunction with the vendor's channel marketing team.

This is a critical point of failure for many channel programs. Most partners do not have the marketing expertise needed to manage full scale, long term strategic branding and lead generation campaigns. Many do not even have marketing staff. As a result, much of the marketing effort focuses on discrete expenditures such as events – it is not managed as a coordinated set of campaigns optimized for a multi-channel, multi-touch, long sales cycle lead generation process.

The Marketing Perspective

From a marketing perspective, channel management is all about programs. Programs for recruitment, training, and of course, performance. Given the immense diversity in the channel it is impossible to offer a one-size-fits-all approach to channel marketing programs. But it is equally impossible to individually serve the needs of every partner.

The Partner Perspective

From a partner perspective, channel management is about of all things, consistency. It takes on average about a year for new partner programs to be fully adopted and implemented so changes must be highly rationalized and carefully rolled out by vendors.

Standardization and Specialization

Thus the need to find a balance between standardization and specialization. To find the right balance, specialization decisions have to be made first and the first specialization decisions that have to be made are about standards. The question is: what can we offer to every partner in each category and what opportunities/requirements are there for custom programs? This should be asked across a defined set of categories:

y Partner class: (Platinum, Gold, Silver, etc.): this one is obvious and universally addressed.

y Partner type: (Dev, VAR, ISV, SI, etc.) This one is also obvious but there is a lot of room for creativity. For example, do VARs get a special "turnkey" product offering that is not available to others?

y Region: This is an especially challenging area for channel marketers as there are real market differences in terms of culture, technology adoption/maturation, regulation, as well as language that make regional marketing more decentralized.

y Technical/Product focus: The need for specialization here is largely determined by the breadth of your offering portfolio. But companies with hundreds of solutions need to be especially careful not to overwhelm the partner community.

y Strategic alignment: Making changes to your market direction or product mix requires a huge commitment from the channel and they will require not only special programs but also special monitoring and guidance to ensure effective changes are made. Data is particularly important and additional incentives for feedback may be necessary.

y Partner potential: This is a two-fold problem - identifying the high potential partners and understanding the specific drivers of their business with your brand. Getting these research issues right is critical to moving the most valuable growth opportunities up the performance curve.

Standard marketing programs, campaign models, events, collateral and other go to market assets can be designed for each of these categories. Then specialized programs can be overlaid to facilitate coverage of partner capabilities relative to market opportunities.

It is important to understand that marketing programs for high tech sales must be highly leveraged over a wide range of media and market segments. They must be managed with a long term perspective. Most MDF, JDF, co-marketing approval processes focus on short term, discrete activities such as an event and are measured on 30 day or 60 day timelines. However, this is not an effective way to market complex solutions that require great education and deliberation on the part of the buyer.

IDC Recommends

To address this, IDC recommends that companies better coordinate their sales and marketing teams with respect to channels. Channel marketing should develop marketing plans as a normal part of the business planning and market development process. In addition, the partner community should be researched and assessed with the same depth and regularity applied to the markets they serve so any changes in business drivers can be quickly identified and incorporated into channel programs in the most appropriate way.

Three Ways to Update Your Funnel for the New B2B Buyer

2011-12-16T14:47:00.000-08:00

B2B Buyer behavior is undergoing an extraordinary sea change triggered by Internet technology. Tech marketing and sales teams haven't caught up. They still rely on a 112-year-old sales funnel model. IDC introduces a new Customer Creation Framework better suited for the way customers really buy.

The Internet tsunami has radically changed B2B Buyer behavior. Before the Internet, the B2B buyer making a complex decision had few sources of information. Vendors leveraged that knowledge gap. The vendor sales person was the primary gateway to information the buyer needed to decide – a tremendously powerful position. Fast forward to today. The Internet and social media have triggered a turbulent change – the rich dialog has shifted on-line and away from the sales person.

As a result, the B2B Buyer in a complex sale is now an expert buyer with very different behavior and expectations.

Buyers are constantly on-line. IDC research shows that IT buyers find online search and the vendor website more valuable sources of buying information than face-to-face conversations.

Many times, buyers know more than sales people. 55% of buyers think sales people are only somewhat prepared or not prepared for initial meetings.

B2B buyers, who are life-long consumers, bring that expertise to work, expecting concierge service.

The Internet tsunami has massively changed Buyer behavior. Yet, we’ve seen surprising little change in the traditional funnel.

The Empowered Buyer is Killing the Traditional Sales Funnel

The traditional sales funnel is 112 years-old and bears the unmistakable marks of the industrial-era. Buyers are treated like widgets that sellers manufacture into a product called a customer. But today's empowered Buyer is far from a widget. The industrial-era funnel is horribly out-of-touch with reality. Symptoms of a sick funnel are showing up in poor conversion rates, lengthening sales cycles, and marketing and sales management challenges.

A New Customer Creation Framework

To ensure that prospective buyers want to become customers, tech companies need a new framework that better aligns with the way buyers buy today. This framework should maintain what is valuable about the industrial-era funnel. For example, the graduated stages of the traditional funnel are a useful, practical tool for measuring progress.

In order to meet the needs of the 21st century tech buyer, this new framework, which IDC calls the Customer Creation Framework (Figure 2), must advance from tradition in three important ways:

Buyer-centric: Act like a Concierge
Replace the manufacturing mind-set with a service orientation. Act like a concierge who delights guests with information and support services that guide them through their "Buyer's Journey". The "Buyer's Journey" describes the cognitive process that a buyer goes through as he makes a decision. The industrial-era funnel was almost exclusively concerned with internal tasks – vendors must create awareness, stimulate interest, close deals, etc. These tasks will still exist. However, they are conducted in a spirit that put the buyer's needs front and center.

Integrate Marketing and Sales
Instead of the assembly-line-like hand-off between marketing and sales silos, the IDC Customer Creation Framework calls for an orchestrated collaboration between the two functions. The fact that today's Buyer desires high-quality digital buying support and never, ever, goes off-line has HUGE implications. The digital dialog is most intense in the early stages of the Buyer's Journey. However, Marketing, as the owner of the company’s digital dialog, can never disengage, can never hand-off. The sales team cannot simply wait for the “good leads”. They may meet a prospective Buyer at any stage – at an event, for example, or in the hallway of a current account. Sales people must be prepared to serve the Buyer at whatever stage he happens to be at. Marketing must be more active enabling this entire sales conversation.

Smart: Data-driven
Finally, IDC’s Customer Creation Framework is smarter than the traditional funnel. The entire customer creation process contains data that can be harvested to use as a feedback system. By analyzing this data, barriers and opportunities will be revealed. Companies can then use marketing and sales tactics like knobs and levers to tweak the behavior and outcomes of the pipeline. Tested marketing campaigns can be strategically applied to build advantage. Digital technology in the form of the Internet is killing yesterday's funnel. However, digital technology is also giving us amazing tools to manage in the new one.

Symptoms of a Sick Sales Funnel

2011-11-17T14:13:00.000-08:00

Can you believe that the sales funnel is 112 years old? Hmmm. Seems like a lot has happened since then. No wonder the ole’ funnel is showing signs of wear. IDC research shows that the time it takes for tech companies to create a B2B customer has increased by 15% in the past year. Is it time for a fresh approach?

The sales funnel first appears in a 1925 book by Edward K. Strong called The Psychology of Selling and Advertising. Strong attributes the funnel’s invention in 1898 to Elias St. Elmo Lewis, a sales manager for National Cash Register (NCR). St. Elmo Lewis, who later helped found the Association of National Advertisers, called his sales funnel AIDA for the four stages of “awareness, interest, desire, and action”.

The traditional funnel uses an industrial era paradigm that treats a buyer like a widget. With the right machine, a vendor can manufacture that widget into a product called a customer. In the industrial model, the marketing team works awareness at the upper funnel when buyers aren’t too interested. As soon as there is serious interest, marketing sends the “lead” down the assembly line, handing off to a sales rep whose must fabricate an opportunity and produce revenue.

The problem is…the traditional funnel doesn’t work that well anymore.

Alarming evidence of sick sales funnels show up in the data. Tech vendors now take an average of 19 months to create a large account customer, an increase of 15% in just the last year. Some of this lengthening is certainly due to uncertain economic times. Greater risk aversion has increased the size of the average buying team from 5 people to 6. But we can’t blame everything on the economy. Buyers, IDC finds, don’t like this slowness. They want vendors help to shorten the cycle. According to the IDC Buyer Experience study conducted earlier this year, buyers want to push for a 40% reduction in the time to buy.

Poor funnel health also shows up in unsustainable conversion rates. Research from IDC’s 2011 Tech Marketing Benchmark and 2011 Sales Productivity Benchmark reveals that it now takes over 1000 marketing awareness targets to get one sale.

Symptoms of a sick funnel. Beyond the data, tech vendors are experiencing the effects of their sick, out-dated, funnel approach. Here are some common symptoms companies complain about. Does your company experience any of these symptoms?

Bickering: Sales and marketing teams bicker over the number & quality of leads.

Bad Data: You don’t have the right data to judge performance, predict the pipeline, and refine strategy

Wrong Tools: Sales people don’t have the tools needed to sell, in spite of the fact that they have access to a tonnage of content.

Failed sales: Sales people fail to convert most leads. Marketing has no idea what sales plans to do with leads.

Funnel Gaps: Prospects fall out of the pipeline, but you’re not sure when or why

Silos: Sales team thinks it’s a waste of time to provide feedback to marketing and your marketing team rarely seeks input from sales.

Missing Messages: You can’t nurture buyers because you lack the right content

We need a new funnel framework. Much has changed since the sales funnel’s 19th century invention. Business is far more sophisticated. The Internet and social media have dramatically changed the way buyers buy. IDC CMO Advisory has guidance for a funnel makeover in the form of a new Customer Creation Framework.

Here’s an introduction to that framework in an IDC webcast called, “Transforming Lead Management: How the new buyer is killing your funnel (and what to do about it).” (The webcast is recorded. Register and you can get the replay.)

Building the Big Tech Brand: Dell and Xerox

2011-11-07T06:10:00.000-08:00

The last two years have been hard times for tech marketers: there has been major pressure to transform execution, coupled with a significant reduction in the rate of budget growth. This is truly the "We are being asked to do more, with less" situation that marketers casually complain about. But this time, it is reality.

Despite the headwinds, I have been very impressed with the major brand campaigns that Dell and Xerox have been able to execute.

Both Dell and Xerox have spent billions for a major make-over of their product portfolios: acquiring and developing significant Services and Software capabilities. So much has changed at these companies that the brand perception no longer matches the product reality.

Brand perception simplified is: "What do you think of, when you think of Dell?" And, "What do you think of, when you think of Xerox?". When I think "Dell", I think of several cardboard boxes of new PC gear lying in my driveway, fresh off the UPS truck. When I think "Xerox", I of course think "copiers".

Changing a company's brand perception is extremely difficult if not impossible. For how many years has our US auto industry been trying to change the negative brand perception for a now vastly improved product line? It has been, arguably, two decades. And still today, the brand perception does not yet square with the product reality.

If it doesn't square up, you have to make a big move. The CMO's of Dell and Xerox really had no choice but to undertake a major brand re-fresh and re-vamp. They needed to have brand perception start to match the product reality.

I am impressed by several factors in their execution:

1) The Dell and Xerox CMO's were successful because they presented their case as not a marketing issue, but a company issue.

2) These marketers created the budgets necessary to start the Big job. Major shifts require major monies. Having studied marketing budgets for so long I am convinced there is just no way to do this by shifting around the marketing mix of the run-rate budget envelope.

3) They were able to do this during the time of a recession. With 20/20 hindsight: they get extra points for having a lot more marketplace "voice", during a time when so many other vendors were hunkered down, scared and quiet.

The era of the Big Tech Brand is coming.

Going forward, our IT Industry will be one of consolidation and scale. It will be a slower growth industry and so the marketing challenge will be one of competitive share gains in addition to new market growth. And perhaps most importantly, the merging or our Business IT with our Personal IT will favor the biggest and best brands -- as the power of consumer "pull" will become a major factor in the IT decision equation.

Think deeply about your brand!

Does it square with product reality?

CMO's report universal lack of preparedness for key challenges

2011-10-12T07:29:00.000-07:00

IBM released the findings of their Global CMO study yesterday and one of the primary conclusions is that CMOs feel unprepared to address key challenges. The most surprising thing is how consistent the feeling is across regions and vertical industries. CMOs generally face the same issues and report very similar levels of "unpreparedness" in the face of them. Top challenges include: data explosion, social media, growth of channel and device choices, and shifting consumer demographics, among others.

The findings are based on 1,734 structured in-person interviews with CMOs in large organizations conducted between February and June of 2011.Regional and vertical representation was reasonably well balanced. The sheer scale of the effort and the willingness of so many CMOs to participate indicate a role under siege.

In our research, IDC has learned that marketing is undergoing fundamental and painful transformations on several levels: new and expanding datasets, new channels and forms of communication, new tools and infrastructure requirements, new dynamic in customer acquisition, new pressure to prove business impact, new skills required for success. It is a multi-dimensional change that has many marketing leaders struggling to keep up.

The IBM study provides a strong basis for CMOs to educate their C-level peers on the challenges they face. However, by design, it does not offer practical models for addressing the issues. IDC has strong evidence that the customer data record is the fundamental design principle around which all customer facing activities and systems should be (re-)built. The customer record is increasingly the source for strategic insight, tactical planning, and performance metrics. Any marketer working in an organization without an enterprise customer creation process (with the requisite standards for customer records, data governance, and the infrastructure to support it) is set up for failure.

Unfortunately hardly any companies today manage customer creation as an enterprise process. We believe that this is the root of the universal "unpreparedness" revealed in the IBM Global CMO study. Having a practical model for implementing an enterprise customer creation process is the first step toward mastering all the key challenges CMOs and their marketing organizations are facing today.

ENTERPRISE customer creation is not something that only happens in marketing and/or sales. It encompasses every customer touch point over the lifetime of the relationship. It goes beyond the jurisdiction of any departmental leader and therefore must have C-level (CEO) endorsement and active support. It is the demand side equivalent of supply chain automation and we all know how WalMart conquered the world by mastering that side of the economic coin. On the demand side, the challenge is finding and forming relationships with prospective customers much earlier using channels and resources not traditionally thought of as marketing (or sales.) In addition the relationship needs to be tracked consistently from marketing to sales to finance, provisioning/fulfillment, support, etc - i.e. the customer data record must be uniformly defined and managed across departments. All the information associated with a customer record must be available to everyone involved in the process. It is a massive undertaking on par with the supply chain automation effort, but the reward is being months ahead of your competitors in terms of customer contact and relationship building – a key competitive advantage that will be very hard to displace.

Spark by Marketo

2011-10-11T06:51:00.000-07:00

Marketo announced a new sub-brand called Spark targeted at the SMB market. It's a testament to how successfully Marketo has transitioned from SMB to the enterprise space that it has to go back and offer a new brand for what used to be its primary market. The demand for marketing automation at large enterprises is driving rapid growth for all marketing automation companies, and Marketo is no exception. So much so that smaller prospects are starting to perceive the company and its target market as having outgrown them. Not so.

SMB is intrinsic to Marketo's heritage and the company has no intention of walking away. The Spark offering is more than just a "lite" version of its flagship product. The idea behind Spark is that it is a bundle of software and services to help small companies quickly adopt and become expert in the use of modern marketing automation technology. Marketo is dedicating expert staff to offer training, support, and mentoring for its Spark customers. The importance of this cannot be overstated as marketing automation requires a higher level of sophistication, analytical ability, and business process expertise than most small companies have in their marketing departments.

The challenge for Marketo will be managing Spark as a sustainable business model. Typically the enterprise segment is much more profitable for software companies (SaaS or not). Large companies have more money, bigger projects, and greater potential for expansion into other business units. However, Marketo knows the SMB business well and has a subscription model revenue stream that's ramping up to the point where it can afford to support the launch of a down market offering until it starts to pay for itself. It is the rare company that can serve both segments well, but Marketo has clearly separated the two teams internally which IDC believes is absolutely critical for success.

Key Findings From IDC's 2011 Tech Marketing Benchmarks Study

2011-09-21T10:56:00.000-07:00

Between May 15th and July 31st, 2011, IDC's CMO Advisory Group fielded its 9th annual Tech Marketing Benchmarks Study. More than 100 tech companies representing about $850B in revenue responded, making this the CMO Advisory Group's most successful benchmarking study to date. The average revenue for companies in this data set is $9.5B, and these data include companies ranging from less than $500M to about $100B. Technology hardware, software, and services companies with both direct and indirect channel strategies are represented in the database. The following are some key findings from IDC's 2011 Tech Marketing Benchmarks Study.

Marketing investment growth in 2011 is lagging revenue growth at 3.5% and 6.5% respectively. Moreover, the 3.5% marketing investment change figure is significantly lower than tech marketer's sentiments in January of 2011, when they reported expectations of an 8% increase to marketing budgets. In past years, IDC's CMO Advisory Group has observed that marketing investment growth generally tracks revenue growth, but that trend has not re-emerged since the recession. Larger companies in particular are experiencing weak marketing investment growth. Companies with revenues between $3B and $9.9B are reporting marketing investment changes of only 2.1%, and companies with revenues greater than $10B are even less at 1.7%. Smaller companies are investing more heavily; companies with less than $500M, between $500M and $999M, and $3B to $2.9B in revenues have average marketing investment changes of 10%, 8.1%, and 7%. Services companies have the weakest marketing investment growth in 2011, however, with an average of -1%.

IDC's CMO Advisory Service tracks a series of key performance indicators that marketing executives should monitor closely in their own organizations. The following are some key observations on changes to top-line key performance indicators in 2011:

Marketing Budget Ratios, which are calculated by dividing total marketing spend by revenue, are decreasing in 2011 because revenue growth is outpacing revenue growth.
IDC's Awareness-Demand Ratio, which calculates the total amount of marketing spend dedicated to awareness building activities versus demand generating activities is at 52%, which means that the focus this year has shifted to Awareness. Last year, marketers were favoring Demand.
Program-to-People Ratios, which show the percentage of total marketing spend that is directed towards programs, have increased year over year to 60%. The main contributor to the increase in this ratio in 2011 is the increase in Awareness generating activities such as Advertising, which are more program-spend heavy.

Digital Marketing Program spend--defined as display ads, search ads, email marketing, digital events, company web sites, search engine optimization, and social networks--continues to increase rapidly. In 2010 digital marketing accounted for 19.3% of total program spend, but in 2011 this number has risen to 26.4%. Advertising program spend, which includes display ads and search ads in addition to traditional advertising mediums, has also increased year over year. This finding is consistent with the overall increase in Awareness activities. Marketing organizations are also allocating more spend to web site content and development this year, which is now 8.2% of the total marketing program spend mix.

IDC's CMO Advisory Service has also observed changes to marketing staff allocations in 2011, see below for some highlights:

· Web site content and development is not only a key area of program spend investment--marketing departments have also increased their staff allocations in this area to 5.6%. IDC believes that this is a positive change, since IDC's 2011 Buyer Experience Study revealed that the first place prospects turn to for information is a company's web site.

· Marketing operations has experienced growth for a number of years, but this trend seems to be leveling off as the position matures. Marketing operations currently accounts for 5.3% of total marketing staff which is a decrease from last year's allocation. IDC does not believe that companies are actually reducing marketing operations staff; the cause of the year over year decrease is a combination of other staffing categories increasing more rapidly and an IDC taxonomy change to include a new category called marketing IT.

· The CMO Advisory Group has been championing sales enablement for the past few years. In 2010 sales enablement accounted for 3.1% of the total staff mix, but since then this allocation has risen to 3.7%.

These are only a few of the findings uncovered by IDC's 2011 Tech Marketing Benchmarks Study. For more information, or to participate in upcoming IDC studies please contact Joseph Ferrantino at jferrantino@idc.com.

The Customer Cloud: The Killer App for the Social Enterprise

2011-09-20T11:20:00.000-07:00

The old two-step marketing and sales model for customer creation is dead. Today we have a three part model: Socializing, Marketing, and Sales – with socializing taking on increasing importance and marketing being redefined in the process. That’s a good thing for customers but it makes the market more competitive for sellers. Companies have to seek out and engage with both existing and potential customers in radically new ways outside of explicit business contexts with resources previously not thought of as customer facing.

This activity is going on today at a furious pace, but it is highly fragmented. With the introduction by Salesforce.com of Data.com and the social ready rebuild of Database.com at Dreamforce, as well their Chatter and CRM capabilities, customer interactions will come together in what is emerging as the Customer Cloud – the first killer app for the social enterprise.

The Customer Cloud will evolve into the source of record for all account and contact data because it can provide the Holy Grail of the customer creation process – the unified customer record. As a result, it will be the centering point for all customer interactions. It is definitive because:

It is self-regulating – contacts update their own data via social tools such as LinkedIn, Facebook, etc. greatly improving data accuracy and timeliness
It is real time – individuals have a vested interest in updating their social profiles asap
It has practically infinite scalability and reach.
It is equally available to all customer facing functions from marketing to sales, as well as fulfillment, finance, service and support, etc.
It provides insight into relationships – account contacts can be sustained and expanded even in the face of departures, and corporate hierarchies can be better understood and tracked.

A unified customer record provides the basis for breaking down the discrepancies, decay, and dysfunction that currently plague (or prevent the implementation of) enterprise customer creation processes, especially in B2B. It offers companies the potential to coordinate all of their customer facing activities around a single source of information – the lack of which has been the Achilles Heel in all previous efforts in CRM, data warehousing, and other valiant attempts to unify customer facing functions.

Thus at Dreamforce, the announcements of Data.com and the social data readiness of Database.com are major strategic milestones for Salesforce.com. With the addition of the Radian 6 social monitoring last year, this neatly rounds out a very strong play for leadership in the battle to deliver the Customer Cloud and provide the customer facing infrastructure of the future that will be build upon it.

The Four Stages of Data Driven Marketing

2011-08-18T07:58:00.000-07:00

Who is your customer? It is a deceptively complex question that a surprising number of B2B companies cannot answer. The difficulty stems from several causes:

Inconsistent definitions for customer attributes (account name, industry, segment, organizational hierarchy, contact name/email, etc.)
Fragmentation of the data across multiple databases and applications
Departmental perspectives on customer relationships
Lack of an enterprise customer data management approach

The impact of all this is a severe slow down in decision making and an inability to optimize critical processes in customer facing functions, most poignantly in marketing and sales. The solution is to define customer creation as an enterprise process – not something that happens only in marketing and/or sales – and the implementation of data standards and governance to support it. This enables marketing to be data driven, but there are four distinct stages of data driven marketing and not all of them lead to success:

1. Stage One – Fast Failure. This stage is characterized by response-based decision making. Marketing decisions are based on response data from marketing systems – web hits, landing page registrations, and myriads of other campaign performance data. All of this is important, but leaves marketing unable to tie any of its activities to key business metrics such as revenue performance.

2. Stage Two – Slow Failure. This stage is introduces conversion-based decision making. Marketing and sales systems are integrated along with customer data definitions and structures. This provides a quantum leap forward for both sales and marketing. However, marketing is still one degree of separation from linking its activities to business performance. Sales pipeline is a good proxy but it is no substitute for the critical business data that comes from the next two stages.

3. Stage Three – Measurable Success. At this stage marketing finally is able to measure contribution to revenue. However, it is not enough to rely on initial contract data alone. Account A that closed for $1 million and account B that also closed for $1 million may be very different in terms of margin and lifetime value. Account A may have cost $250,000 to sell, install, and support where account B cost $500,000. If that's the end of the data set, then of course marketing should bring on more account A profiles.

4. Stage Four – Market Mastery. At this stage marketing understands the long term profitability of customer relationships. If over time account A buys nothing more and account B upgrades and expands its investment by millions of dollars at improving margins, marketing can refine its activities accordingly and begin to drive overall business performance.

The key lesson is that marketing is greatly influenced by the depth of data available to it. At each stage in IDC's data driven marketing model, new data can completely change all facets of marketing activity from strategic targeting and messaging to tactical campaign investment and roll out plans. As a result, it is crucial for companies to get to Stage Three as quickly as possible and remain ahead of competitors on the journey to Stage Four.

Making the Most of Channel Marketing

2011-07-28T13:25:00.000-07:00

A recent IDC study of large IT companies found that, on average, channel revenue was $3.7 billion. The average internal channel marketing staff of 53 managed nearly 22,000 partners, equating to $12 million of revenue per internal staff but only half a million dollar per partner.

Most shocking from the study -- these organizations have an average of approximately 15,000 inactive partners. Active partners only constitute 31% of the channel mix, with the remaining 69% being inactive. Given the expense involved in recruiting channel partners and on-boarding their first sales, it is in the vendor’s best interest to identify the best partners across the entire partner population and enable them to step-up to higher levels of sales performance.

Channel Marketing Service and Automation Solutions

The traditional method of assigning business development managers to the top 5% of partners, and others to groups of the second 15% of partners, is not scalable. The business development manager assignment is a fixed cost that requires 35%+ growth rates – and it is hard to predict the winners. As shown in the figure below, in a recent IDC study channel managers rated the effectiveness of BDMs and customized channel marketing programs statistically identical in terms of their effectiveness at producing ROI. Providing access to customized channel marketing to all partners – including the bottom 80% - amortizes costs over a larger revenue base Customized channel marketing enables the winners to self-select and payback is driven by collective success.

Most Effective Resources

Source: IDC, The Importance of Customized Channel Marketing, 2011. n=22

Customized channel marketing programs can reduce the complexity of marketing through partners by streamlining channel marketing processes and increasing vendor ability to reach more partners simultaneously. Redundancy can be eliminated, as distribution of messages, campaigns, programs and promotions become part of a menu of interchangeable, additive activities.

Using social network best practices, feedback from partners can be used to determine which activities work best from a partner perspective, and which activities need to be developed. This feedback is equally valuable for vendors and partners to see which customizable channel marketing activities are most effective. For the majority of channel partners, customized channel marketing programs offer much needed help in building their marketing plan.

The full report can be downloaded here.

2011-06-08T12:29:00.000-07:00

Market Intelligence on the Move

Transformation continues to sweep its way through the marketing function and no "department" within the function is exempt from change. For this month's CMO Advisor newsletter, we are now focused on the market intelligence area.

Compared to its peer departments, Market Intelligence (MI) enjoys relative stability, as measured by the steadiness of the job description, job security and tenure, and budgets. But there is a groundswell of change -- or at least an expressed desire for change. In a recent survey of MI professionals, IDC observes that MI executives are seeking to increase the value they deliver to the organizations they support, and to deliver that value with greater efficiency.

Indeed, it is the sentiment of executives that IDC interviewed that "The market intelligence organization will change more in the next 3 years than it has changed in the past 10 years". That is a bold statement. To peel it back, here are the top areas of change that the MI profession is seeking to transform.

MI executives want to transform their client engagement model and become more "proactive". In IDC's opinion, this sentiment stems from MI's traditional challenge of being a demand-driven organization that is constantly working in "response mode" to numerous requests from their internal customers.
The MI area seeks to increase its contributions to corporate strategy and sales enablement.
From a process and technology standpoint, MI would like to improve the information "value chain", from data sourcing to information delivery.
MI seeks to provide greater support for long-range business planning.
MI seeks to demonstrate more visible / tangible business value for its work output.

Our sense is that MI professionals have a good future vision of their role; one where they are highly efficient, driving strategic as well as tactical business value, and are highly valued by their internal clients across the organization for information and "insights" that positively influence business outcomes.

There are two areas that I believe are the best place for MI Transformation steps to begin. These are echoed by my colleagues at IDC and also validated by our surveys with MI executives. I will describe these and also take a bit of "analyst license" and provide some operational suggestions.

1. Improving support for corporate strategy and long term business decisions. I think that MI professionals would love to get out of the heavy load of short-time, fast response calls for bits and bites of data. What they would like to do is be involved in longer term, meatier analysis that is served at higher levels in the organization and that support important business outcomes. But MI is constrained by their people and processes.
The process changes I would suggest would be first; provide more technology and training for self-service for the run-rate of short and tactical requests. Second, consider greater off-shoring or right-shoring of the "back office" analysis roles within MI, and thereby create more roles for higher level "management – consulting" type MI personnel who can interface with executives for the longer-cycle, more complex projects.

By the way, on the right-shoring of MI tasks (moving the non-client facing anayltical tasks to lower cost countries), many of the largest tech vendors are on this march right now.

2. Sales Enablement. In IDC's many surveys of Selling Productivity, we see that very high salaried sales executives spend a large amount of their time searching for or re-creating information that will support their preparation. OK, so what function in the organization that is NOT the sales function is good at finding and organizing and delivering information? Market Intelligence! I think it would be a natural for the MI area to provide greater and more cost effective support for many sales-preparation activities. As an example, almost every MI function has a portal for serving and managing information assets. Why couldn't those same portals – or a version thereof – be used for sales assets? The time spent on searching for information assets is one of the most wasted and most common activities of salespeople.

Recently, I have been writing on similar transformations in related business units such as marketing operations, and we are also seeing some related changes taking place within sales operations. For every part of the marketing organization, the pressure is on to be efficient and drive positive business outcomes. IDC believes that there is a bright future ahead for MI leaders (and their teams) that understand the transformation that is under way and can begin that journey with concrete and bold new steps.

Rich Vancil

The Marketing Operations Role: Where To, From Here?

2011-04-15T08:05:00.000-07:00

Looking Back, Briefly:

Marketing Operations has been the fastest growing job role in tech marketing over the past few years. When IDC first started its surveys of marketing spend and staffing back in 2003, Marketing Operations wasn't even on the job roster at most organizations. Today, the "MO" role represents about 6.5% of the total staff and it is the fourth largest job "category" for a large marketing department. So, what happened? The rise of this role was the response of the CMO to the general condemnation that marketing was not acting like a business. The Marketing area was perceived as offering up no accounting, and no accountability... but also offering no end to the pleas for more budget. And so Marketing Operations as the "staff accountant" role started to turn up at the larger and more complex marketing organizations. As the MO role really took off, the general job description would include four areas: budgeting and planning; measurement and reporting; technology deployment (marketing automation technology); and process improvement.

Looking at Today:

Of the four job areas described above, the most problematic, right now, is technology. There is a vast new set of IT tools available for marketing organizations: Marketing Resource Management; Content Management; Performance measurement; Analytics; Social Media Platforms and Monitoring; and the list goes on. The problem is that in general, marketing organizations do not have the staff skill sets to effectively evaluate, deploy and use these tools. In our 2011 Role Survey of Marketing Operations professionals, respondents said that their number one problem today is the sorry state of the "Automation Infrastructure" and that their number one goal is "Finding the People that know how to fix this". There is an equally large and underlying issue "below" the technology level, and this is the database and data management issue. With so much marketing automation now in place, the first output that this new technology is producing is crystal-clear visibility to the fact that: "Wow, we have REALLY POOR customer records". And so a very major issue for the Marketing Operations role is finding the database-savvy personnel who can help with this challenge.

Looking Forward:

Given how fast the MO role has grown and given the significant challenges of today, I want to offer three areas of "Essential Guidance" for CMO's and their MO "lieutenants". The first step is to re-visit the job description. In a series of executive interviews that I recently completed, many MO professionals complained that "Our Marketing Operations area has become the dumping-ground for all the unwanted marketing tasks that no one else wants to do!". Now, whose fault is that?

Job number one, therefore, is for the CMO with the MO team to define and then re-articulate its role to other parts of marketing; so that it does NOT become the dumping-ground! Job number two is to then conduct an "Activity assessment" of what the MO personnel are actually doing, as held against that job description This may all sound like a junior league management exercise but my strong suspicion is that because the role has grown SO fast over the past four years that it MAY be the case that role clarity and scope are due for a closer look. This assessment should also include the organizational placement of the MO role. Why are so many of our MO staff at corporate headquarters? Why are these staff not within our product lines and in the field? These are questions worth asking. Job number three is then to ask "Where do we go from here?" regarding the role and staffing. I believe that the "future" of MO role effectiveness and impact is not in more staff as measured by headcount. In fact, the MO role as a percentage of staff is likely reaching an upper limit at this point. My hunch is that it may "cap out" at perhaps 8 to 10% of staff. However, the MO roles of tomorrow will be more strategic than they are today. The nature of the role will evolve. While today's MO staff are largely involved with individual execution (within the job description mentioned previously), the MO role of the future will be more about educating and infusing other parts of the marketing organization with a marketing process-excellence mentality, skills, and tools. In this way, the MO staff will become a more "leveraged" function. This leverage will include improving the influence and impact of MO across the entire marketing organization, not just at the corporate marketing location(s). As you further deploy the MO role, think about not hiring more Marketing Operations staff....think about driving the existing "smarts" and influence of MO down and through your entire marketing organization.

-- Rich Vancil

Essential Guidance for 2011

2011-03-21T09:14:00.000-07:00

Building the Intelligent Sales & Marketing Organization.

IDC's best and brightest analyst teams were assembled in Boston and San Jose during the past two weeks to present their latest insight and guidance for creating the global intelligent economy; focusing specifically on the impact of social, mobile and virtual technologies on this vision. Morning speakers discussed how to position for the third wave of IT industry growth driven by mobility, clouds, big data and intelligent industries. In the afternoon, one of the many tracks included presentations by IDC's Sales and Marketing Advisory team about the vision of the intelligent sales and marketing organization and they key success factors required to achieve this vision. A few key take-aways from each of the presentations in this track are provided below.

Executing for Marketing Excellence in 2011 by Rich Vancil:

Start – or accelerate – your social business transformation
 With communication cycle-times dropping and the purchase decision influence continue to shift to buyers, a shift to "social business" is imperative for your success;
 41% of businesses have already implemented an enterprise social software solution
 Focus on building "peer-to-peer" connections, not "vendor-to-customer"
Make a deeper investment in intelligence and operations
 Drive marketing operations and market intelligence initiatives and investment down through the organization, across the business units and into the regions
 Better establish and govern the processes for sales enablement and data quality to improve sales intelligence and their ability to leverage insight and resources.
Build a better budget (IDC CMO and Sales Advisory clients should refer to IDC's combined marketing and sales investment benchmarks data)
 As marketing budgets recover, allocate new investments with the needs of a new reality – digital marketing is here to stay, and is only increasing in its ability to drive awareness building and demand generation; and greater alignment with sales will require continued investment in campaign management, sales enablement and lead management extending into what has traditionally been considered sales' domain.

Building the Intelligence Sales Organization by Michael Gerard:

Listen to your buyers:
 Technology buyers indicated a desire to reduce their buying cycle time by 40%.
 Two-thirds of the delay between desire vs. actual buying cycle time is the result of buyers' internal funding and decision-making processes; however, vendors' sales teams can impact this part of the delay!

Drive sales to be more strategic by investing in a next generation sales operations team which focuses on – sales strategy, productivity and automation. Team with marketing, your learning and development organization and IT to gaps in sales intelligence – customer intelligence for sales and sales enablement.

Push the limits on sales performance measurement
 Establish a sales analyst function to better measure sales productivity
 Improve data quality with the aid of other parts of the organization
 Analyze the sales pipeline, rep performance and the impact of sales productivity improvement initiatives to help impact strategic and tactical decision-making

The Sales & Marketing Automation Imperative by Gerry Murray:

o Investment in sales and marketing automation continues to increase as companies recognize the value of technology in adapting to new market realities
o However, sales and marketing need to better align across their own teams as well with other parts of the organization to create a more holistic experience for customers (e.g., marketing, sales, finance, services, support)
o Your company should establish a customer data czar, with team members in sales and marketing, to execute and govern data quality processes.
o Evolve to a more comprehensive sales enablement platform (i.e., beyond a content portal) centered on integrated customer experience management

Clients of IDC's Sales Advisory Service [http://www.idc.com/eagroup/sales.jsp] and CMO Advisory Service [http://www.idc.com/eagroup/cmo.jsp] should contact us for a full overview of any of these areas as well as access to our latest research schedule and listing of published research.

Please do provide any comments on this topic below or reach out to us to participate in upcoming sales and marketing research.

Update on Social Business Transformation

2011-02-08T15:22:00.000-08:00

Social Media in the B2B world has got a bit of a bad rap right now. Let’s frame the problem. The obstacles might be spoken (or whispered) as:

• "These new communication platforms, and this social media movement within our company…is …who knows? Well, let’s just keep an eye on it. Let’s see what develops. But for the time being these are…
• NOT the valid business-communications media we should be using to communicate with the serious audience we wish to reach. "

These obstacles may be over-observed.

Let’s broaden the definition and talk not about Social Media, but about "Social Business Transformation". The real Transformation lies not in what you see: with Twitter or LinkedIn or FaceBook. For personal networking, these tools may be the whole game: you are involved in connections that are one or two links deep. But at the enterprise level these tools are merely the surface layer. Social Business Transformation is about deep communications adaptation; changes in culture; new rules of engagement; shifts in organizational centers-of-influence; and then (lastly) the associated tools and technologies that enable communications on the surface.

IDC is digging deeper to uncover this major trend and transformation in business communications. "Social" will continue to press its way into the enterprise - into our lives as business professionals.

With my research partner and IDC’s Social Business expert Erin Traudt, IDC has just completed a series of interviews with IBM about their own Social Business Transformation We are impressed with IBM’s accomplishments.

To boil it down, here are three observations for Social Business Transformation success:

1. Tap in to the Professional Ego.

You say that you enter into a web community because you want to "connect". But I would suggest that most of the energy behind any personal or business Social Media activity has a strong element of: "Here I am!" None of us would enter a single Social keystroke unless we wanted to satisfy an ego need. The need to feel important. And, (fingers-crossed), the desire to be recognized! By extension, would not the math argue that if we spend nine or ten hours each day at the workplace, that this dynamic should be a more powerful force in the business world ("Look at my great new technical workaround!") than in the personal world ("Look at my cool new postcard collection!")

The IBM developerWorks website is a technical resource for the IBM developer community. Established in 2000, it is now one of the largest IBM sites, with over 4 million unique visitors per month. It is a resource where developers in the IBM ecosystem offer their knowledge and skills. About one-half of the content on this vast site is posted from outside of IBM: developers, partners, and customers. Why does it work? Professional ego! But it takes time and investment. developerWorks has been an eleven-year work-in-progress for IBM.

2. You can’t force interaction.

The viable and vibrant IBM communities we have studied are years in the making. It takes significant time and investment to devlop a community to the point where it is somewhat self-sustaining. One IBM executive noted that Community development is like planting a tree where the first year of nurturing, watering and pruning requires almost constant attention. And more than one IBM community that we examined was several years underway and still under active investment mode. It is also notable that each Community only becomes self-sustaining because of the external contributions (see above). Our estimate would be that for every one community that is self sustaining, that there are hundreds in "push" mode (hoping that our voices will be heard and enjoined).

"If the people don’t want to come, all the marketing in the world won’t stop them".

3. Construct and Adhere to Policy.

This is interesting. I think we all are a bit attracted to the Social Media because we can express ourselves in a way that allows us to put our corporate toes across the corporate line, if even for an instant! However, the successful sites that are viable today are here in part to some basic and sensible policing. We have to. We all need to protect our customers, to do the best by them.

Our sense is that sustained and successful Social Business Transformation efforts are going to be more powerful than we have ever imagined. Good examples (such as with IBM) are already in place. Of course there are challenges; but these obstacles will over time be trumped by the benefits (see Figures).

How is your company coming along on its own Social Business Transformation?

- Rich Vancil

Marketing Automation: Keys to Success

2010-12-22T11:23:00.000-08:00

Of the 235 respondents in a November IDC survey, nearly 40% had not implemented a marketing automation solution (yet). Not implementing a marketing automation solution may be the ultimate career limiting move for today's marketers. Digital marketing has exploded in scope and complexity making it practically impossible to efficiently and effectively reach your target audience without a fully realized marketing automation infrastructure. If you haven't gotten started you are already way behind the ball.

40% have not yet implemented marketing automation

Source: Marketing Automation: the Rise of Revenue, IDC #255860, Dec 2010. n = 234

Marketing automation is a must have for today's marketing and sales organizations. There is a wide array of online sources readily available to buyers that can significantly influence purchasing behavior. As a result, marketers must maintain a pervasive and continuously refreshing digital presence. Frequency is emerging as the most critical capability for sales and marketing organizations – frequency of outreach, analysis, and reporting. The cycle time for everything in marketing is under enormous pressure and companies that deliver more often, respond faster, and sustain their digital presence more successfully will be the winners.

Keys to success:

Standardize your customer data
Deploy marketing automation
Review KPIs for marketing and sales to ensure alignment, visibility, and data integrity
Integrate data, workflows, and governance across the whole "response to revenue" cycle

Top 3 places small companies (less than $1B) start:

Lead management
Campaign management
Content management

Top 3 places large enterprise ($1B or more) start:

Campaign management
Lead management
Financial reporting

Marketers must solve a stack of process, operational, and technical issues. It is a very complex and large scale problem spanning not only marketing and sales, but every other piece of the "response to revenue cycle, including: configuration, pricing, order processing, accounting, as well as service and support functions as well. The full scope of the customer relationship must be visible and measurable. Point solutions focused on particular marketing processes are great catalysts, but, IDC recommends companies take a holistic approach that ensures consistent data, workflows, and governance throughout the customer lifecycle.

Dreamforce '10 - the don't Miss Event of the Year … for CIOs

2010-12-16T12:28:00.000-08:00

Salesforce.com held its annual user conference December 6th to 9th in San Francisco. It was unusual in that very little of the messaging from Salesforce.com itself was aimed at sales people. The company has clearly and emphatically hammered its stake in the ground as the cloud platform provider for the enterprise. Marc Benioff and other top SFDC execs spent all of the general session keynotes on four key ideas:

Platform
Cloud
Social
Mobile

If that were a word cloud of the transcripts of the keynotes "platform" would be the biggest and boldest of the four. The company made several significant announcements about how it is enhancing and building out the enterprise cloud computing platform of the future – much of it aimed at CIOs and developers. First however, there were a couple of items that will be of interest to sales and marketing people:

Full integration of Jigsaw. Jigsaw, the "crowdsourced" contact database will now provide dynamic updates to records, greatly reducing blank or incomplete record status and making it easier for sales and marketing people to contact the right individuals within their target accounts – to the extent that Jigsaw can provide clean data.

Chatter Free. Announced earlier this year, Chatter is the SFDC collaboration app. SFDC cited user numbers in the 10,000s at NBC, Qualcomm, and Nikon, and 100,000s at Dell. With Chatter Free, limited Chatter functionality will now be available to people that don't have SFDC licenses. Users can add SFDC features for $15/user/month w/o the need for a SFDC license. Salesforce.com clearly expects Chatter to make SFDC adoption a viral phenomenon. What Chatter adds to the picture beyond being "Facebook for the enterprise" is the ability to follow not only people, but groups, accounts, and contacts – potentially any record in the SFDC.com database. Chatter will help companies share tribal knowledge as well as better coordinate the outreach multiple business units may have with key contacts and accounts – both very good things that go way beyond being Facebook Friends with all of your customers and employees. Regardless of whether it drives more licenses, it sets the stage for the platform sell that's coming next.

Platform as a Service (the CIO part)

Database.com. Significantly, SFDC claims database.com is open to any environment, any programming language, and any device. It provides relational data services, full text search, user management, row level security, triggered and stored procedures, authentication, support for APIs (db to db calls), as well as a myriad of other features such as the ability for each record to have a profile that supports followers and feeds (see http://wiki.database.com/page/FAQ for more info.) Touting the power of the cloud, SFDC presented statistics showing that in the last year the number of transactions grew 50%, the number of records doubled from 10 billion to 20 billion, and average response time decreased.

Open Apex. Salesforce.com has launched an open programming language for the cloud that supports multi-tenancy. Now developers can work in the cloud to customize and enhance Salesforce.com apps as well as develop a host of other independent enterprise applications for any function - marketing, accounting, services, provisioning, HR, etc. This should fundamentally change the perspective of the IT department about cloud computing – it's open, has its own IDE and database, supports web and mobile development. You no longer have to have code on premises to manage and customize your enterprise functionality.

Ruby on Rails. Web development is native to the salesforce.com cloud platform. Java support is provided by vmForce and acquisition of Heroku provides both a hosting platform and an IDE for native Ruby on Rails development in the cloud. This greatly eases the process of making enterprise apps web and mobile ready.

"Now we're finally a real platform company"

SFDC now comprises: salesforce, serviceforce, chatter, jigsaw, database.com, appforce, siteforce, vmforce, Ruby, Apex, Eclipse IDE, ISV force, and more. The mantra heard repeatedly from senior SFDC execs was that Salesforce.com is now a real platfom company.

The big picture for Salesforce.com is to provide all the layers of the IT computing environment as a shared service that is managed, tuned, updated, and upgraded automatically. This greatly reduces the administrative overhead for IT while providing all the application and data control they need to rapidly respond to business requirements (and not having hundreds of rogue DIY projects all over the place.) All good things, but the risk is whether the platform can be trusted to provide all that without failure or outage or providing a conveniently centralized target for cyber attack.

While SFDC sets its sights on becoming all things to all people in the cloud, it is not intending to be the single source for automating the response to revenue process. Recent IDC research shows that 75% of SFDC customers also use up to five other sales and marketing automation solutions (see Marketing Automation: The Rise of Revenue, IDC #225860, Dec 2010.) The Expo floor featured representatives from the entire sales and marketing ecosystem – marketing automation, customer intelligence, list and database management, sales enablement, forecasting tools, proposal tools, and many others. As a result, customers will continue to be in the position of cobbling together "best of breed" solutions, and having to integrate the data, systems, and workflows required to manage and measure the performance of the customer creation process.

The Complexity of Multi-Path Marketing

2010-11-05T09:56:00.000-07:00

In our most recent survey of CMO's, we asked: "What is your primary Voice by which you go to market? Is your Voice that of: product line; industry; solution; campaign (or theme); customer segment; or job role?" The responses were evenly spread across these six voices. Which basically translates to: "As an industry, we go to market with all those voices at once".

I see so many executives struggling with this complex messaging ambition. Mar-Comm executives like to refer to this ambition as their "messaging architecture" but frankly I don't see many of these architectures that would pass the building inspection: it's just too complex.

Now, add to this a second dimension: the media in which your voice is carried into the market. Today's marketer has dozens of choices of media to choose from: from traditional advertising to social media tools. Obviously.

Finally, add a third dimension of time. New IDC research shows that the average cycle time of creating a new tech B2B customer -- from initial marketing all the way through to a closed deal -- is over 17 months.

And so now you have six voices, perhaps 35 different mediums of choice; and 17 months of engagement time. What do you get? In the first place - you get overwhelmed with choice! In the second place, what you do get is about one closed deal for every 2000 contacts that you started with at the very beginning of your campaign.

I once had a job as an assistant product marketer and my boss gave me a direct task: "Fax those new product fact sheets to our top 100 clients, today". One medium, one voice, and one dimension of time. No decisions on my part. I was a skilled faxer, and quite poorly paid.

But now you are the boss and "they're paying you the big bucks"… So, how are you going to figure this out?

This is the challenge of multi-path marketing and I believe that it is a bellwether issue for senior marketers. Over the past several weeks I have been interviewing some of our industry's top marketers about this issue, seeking their approaches. Here is what I am hearing, and some guidance on process approach:

1) The objective of all of this is greater "Personalization". Get the right message and content to the right person in the right time, place, sequence, format and voice. Now, to accomplish this, you might think to install the marketing content and execution tools in the part of your marketing apparatus that is closest to the customer: the channel partner or field seller. Counter intuitively, the opposite is happening.

2) Personalization begins with centralization. To make personalization happen, the best marketers are moving content production, tools, and process "Upstream" -- that is, away from the field and deeper inside the central machinery of the marketing operations areas. Content and asset management tools and sales enablement portals are helping this process.

3) Yes, there still needs to be local execution decisions: translation and choice of media are the two primary areas. But the field marketers who are most successful in these decisions are supported by those robust content management tools way up-stream at headquarters.

4) An additional element that adds to the complexity of multi-path (and multi-geography) marketing execution is the contribution of agency partners. Agencies will add their own flavor of voice and media choices - which may cause a global campaign to become very "un-unified" quite quickly. Several large tech vendors are moving towards agency consolidation to help alleviate this.

In a recent head-to-head with a CMO I asked: "From a marketing perspective, what is your single biggest challenge for your $20b company?" His reply: "We need to ensure that the marketing messaging that we create here at the top is effectively threaded into our execution all across and down through the organization".

In a nutshell, that is the challenge of multi-path marketing.

An Ice Cold Bucket of Reality - The Challenge of Selling to Today's Harried Buyer

2010-11-02T08:13:00.000-07:00

Savo held their annual user group meeting in Chicago on October 26th and 27th. Two hundred people working on Sales Enablement (SE) attended and a number of very interesting keynotes and customer presentations were given.

Jill Konrath provided a very entertaining and sobering take on the challenge of marketing and selling to today's harried (understatement of the year) buyers. The centerpiece of her talk was an improvised role playing exercise in which Jill played a sales executive that was a key target for a fictitious company. The point was to show what everyday life is like for our prospects before we ever try to contact them. It was the start of her day and she had to get a presentation ready for the quarterly board meeting that afternoon.

The CMO is the first to walk into her office to complain about sales not following up on marketing leads and they have the "marketing leads are crap" argument. "You were in our lead scoring meeting you have no excuse." "You didn't listen or take any of my ideas so the leads are still crap." "Sounds like we need to go over the lead scoring again, do you have time today or tomorrow?" "No, I'm totally booked - wait a minute. OK, let's do something late tomorrow." "Fine, I'll send an invite."

Thirty seconds to restart on the board presentation.

In comes the CEO. "Hi Jill, do you have a few minutes?" "What? Sure." "Congratulations it looks like the eastern region is doing well and the west is coming back nicely, great job." "Thanks." "But what's going on in the Midwest, we're really underperforming there." "Yes, I know, we have some weak reps out there and I have a plan for addressing that." "Oh great, let's discuss it after the board meeting." "Umm…" "Once you get the board presentation done, just write up your plan for the Midwest and we'll get that situation fixed." "OK, when is this?" "Right after the board meeting, in my office."

Twenty seconds to restart on the board presentation.

The HR person comes in. "We have to get the first round interviews done this week if we want your new reps in the field for next quarter." "I don't have any time on my calendar for this." "Well, you won't be fully staffed next quarter if we don't get these positions filled." "OK, OK, I'll see if I can juggle some stuff around." "Great! Oh, did you see what the new girl in accounting was wearing today?" "Come on, I don't have time for that." "It's a funny story…" "Honestly, here let me walk you out."

Ten seconds to restart on the board presentation.

A phone call from her sister. "Hi Jill, I'm at the supermarket and I'm looking at turkeys for Thanksgiving. Do you remember if Mom likes the free range ones or was it something else last year?"

Harried. Distracted. Under-resourced. Over-pressured. Completely frazzled. And she hasn't even checked email or voice mail. Work and life are constantly bombarding our key prospects, and we're part of that bombardment. The chilling fact of the matter is that we have absolutely no chance of getting this person's attention unless we have intimate and immediate insight into what's going on around her. Is she going to respond to a generic email or phone pitch? No, never.

This is a crucial point for today's marketing and sales professionals. IDC has seen this message come through in our surveys of CIOs. And we heard a less dramatic but equally poignant version from the CIO panel at our CMO and Sales Advisory board meetings a few weeks ago. The gist of which is summarized in the following figure.

Marketing and Sales Models Not Aligned
with Buyer's Purchasing Models

Source: IDC, 2010

The message IDC is hearing from customers is loud and clear: Solve the business problem that's killing me right now even if it doesn't involve your solution and you'll transform the nature of my relationship with you from sales rep to trusted adviser and your company from a seller to a strategic partner. If I have that relationship with you, I just might call you for help with my problem in the Midwest. But if your competitor is in that position, you are a snowball in a very hot place.

The Buyer's world has changed dramatically with the economy. Approaches that proved themselves when times were good cannot be relied upon when such a radical shift has taken place. It takes managerial courage and organizational fortitude not only to admit we have a problem but to do something radically different to address the new set of challenges. As a result, IDC strongly recommends you consider the following fundamental questions as you embark on enabling your sales force.

How are you going to get your Sales People to become "Trusted Advisors" when they are being trained and compensated to sell?
Is that the difference between your top performers and rest that struggle to make quota?
Have you properly defined the act of "selling"?
Do you understand the full scope of the "buying" process?

How you answer these questions will profoundly affect your customer relationships and your approach to sales enablement. Customers are calling for radical change and your Sales Enablement implementation may be just the catalyst you need to get started down a new path.

Planning Season for 2011: Trickier than Usual

2010-09-20T15:37:00.000-07:00

This is my 8th year of analyzing and guiding on tech marketing budgets and allocations and it will be the most dynamic that I have witnessed.

Here are the facts and factors, and some guidance thoughts.

First, the Macro-Economics of revenues and marketing budgets:

Based on IDC's annual Tech Marketing Benchmarks Survey (completed 9/10), marketing budgets for the very largest tech vendors will increase by 3.7% in 2010. (I estimated that it would be 3.5% back in 3/10; and so our forecast was very good.)

For the first half of 2010, revenues for tech vendors grew faster than IDC had expected when we began the year. Today, our current forecast is for 5.8% WW IT revenue growth. My sense is that this better-than-expected sales volume in the first half of 2010 took the marketing-planners and budgeters a bit by surprise; and so the marketing investment level for the year will be somewhat behind the revenue growth. Unless of course revenue growth slows in the last quarter. These types of changes are what keeps us analysts in business :--)

Bear in mind that this "snap-back" in budgets for 2010 follows on the 8.3% decline in budgets during 2009. This means that the average large tech vendor is operating with a budget that is still below the 2008 level.

Guidance thoughts on these macro numbers: I don't see that marketers are investing fast enough into this recovery. Marketing leaders tend to keep investment at or higher than revenue growth and so many are behind the curve. Yes, I am seeing some big new campaigns and launches but where is the pent-up spend from 2008 and 2009?

Second, the Micro-Economics of marketing budgets and mix allocations:

What's happening within the whole cost envelope of Marketing in 2010? This envelope that has increased in size by a whopping 3.7%?? Here, we are looking at all discretionary spend (programs) and all fixed spend (marketing staff + overhead).

Advertising spending for traditional (print and broadcast) media has declined by 43% in 2010.
Digital program execution has grown by 53% in 2010.
Can we pause for just a moment and think about those numbers? These are very large changes. The 2008-2010 recession just threw huge quantities of fuel on the fire of the on-going marketing media shift.

On the "People" side of the ledger: not much change in 2010 with one exception. Marketing Operations staff grew by 35% from its 2009 basis. This is great news in our opinion: the "M.O." function that we have called for since 2004 continues to gather great momentum and it is now the fourth largest job-role category in tech marketing.

Guidance thoughts on these Micro-numbers. Are the "within-mix" shifts that we are observing finally impacting the macro view? Or in other words, is the "less expensive" digital and social media finally putting a dent in the top line marketing budget number? I think the answer is YES and this is a big shift in trend.

We have seen it coming... but the 2010 numbers have, in my opinion, made a permanent dent in the shape of the marketing mix.

What's the plan now for tech marketers? How do you execute within this accelerating transformation ? More on that in my next post.

Rich Vancil
IDC

Channel Marketing Automation – When CRM is not Enough

2010-07-28T08:04:00.000-07:00

Whether you pursue a lead through direct sales or a partner it doesn't really matter how you get the lead. But what happens next? With your direct sales, you track the nurturing process as the lead develops into an opportunity. You measure your sales reps by the number of meetings they get, the deals they close. You may even have a closed loop reporting process that shows the efficiency of your marketing and sales funnel.

With your partners, your lead gets passed off and … then what? Does the partner accept the lead? Do they follow up? Do their marketing outreach programs conform to your policies and expectations? How much time and how many touches does it take them to close? How do you decide which partner is qualified for which leads? How do you efficiently identify the productive partners, those that need encouragement and those that should be dropped?

Multi-Billion Dollar Channel Management Questions

These are critical questions that have a tremendous impact on businesses with significant indirect revenue. A recent IDC study of large IT companies found that on average channel revenue was $2.4B. It was generated by 34 channel marketing staff managing 8,500 active partners. That equates to $45 million of revenue per channel marketing staff member but only $1.2 million per partner. The dirty little secret – there are also on average approximately 19,000 inactive partners!

Source: IDC’s 2010 Best Practices Study in Channel Marketing (n=13)

A Better Way

Your CRM and SFA are not going to answer any of the critical channel management questions – although many companies think their CRM system is where they should be "managing partners". In fact, a partner management system fulfills a role more like an SFA – it tracks all the activity that occurs after the lead is generated. It should also facilitate the process of lead distribution – managing all the partner credentials and accreditations need to qualify for a particular lead. Then there's deal registration where the partners accept the lead so that it is not poached by another partner or … ahem … the direct sales force. And when you consider some of the other requirements of partner management, the CRM fallacy becomes clear:

Recruitment and on-boarding
Training and development
Business Planning and Reporting
Compensation and Incentive program management
Marketing and Sales support

Are these capabilities that your CRM can provide? Your SFA? Would you even want them to? The answers should be no, no, and no. Don't be thrown off by that last bullet – the marketing and sales outreach your partners require is very different than the corporate outreach that marketing operations is doing. They rebrand, reschedule, embed, and otherwise repurpose marketing content, making a direct translation from corporate marketing to partner marketing wholly inappropriate.

If you have (or want to have) a significant amount of revenue going through the channel, you need a dedicated partner relationship management (PRM) system to automate more than just marketing and sales activities. Don't look to your CRM, SFA, or even the newer marketing automation vendors to provide you with the full set of capabilities necessary to effectively manage channels. Those solutions are focused on a very different set of requirements. They may have slideware and inch deep functionality, but that's typically it. Do ask about integrating a PRM with these systems as reporting should roll up easily across direct and indirect sales.

A number of key capabilities to consider when implementing a platform channel marketing automation:

Manage partner profiles and contacts
Deliver and track training, certifications, etc.
Set business rules for lead distribution
Handle deal registration
Provide a single system of record for partner and channel management
Provide detailed performance reporting (12-month rolling review)
Track partner outreach campaigns
Manage market development funds (MDF) and co-op spend

With these issues on the table, it should be clear that automating channel marketing requires a dedicated, purpose-built solution. It will be costly and painful and meet substantially lower expectations otherwise.

2010-07-23T06:15:00.000-07:00

The IDC Sales and Marketing Automation Framework

Sales and marketing organizations are seeing a rapid evolution of solutions for automating their core business processes. While we are years away from anything like an integrated ERP-class solution that can manage the full range of sales and marketing activities, the building blocks are available today. CRM vendors have established that a single system of record is within reach for the sales team, and an emerging group of companies are is starting to prove that this goal is attainable for the marketing side of the house as well.

However, automating these two organizations will be a major undertaking for large companies. There will be significant process, cultural, and technical challenges. But the benefits are self-evident: lower cost, higher efficiency and productivity, greater accountability, better performance, improved customer experience, and potentially shorter sales cycles.

The Need for Alignment
The 80/20 Rule and the 50/50 Rule: IDC research shows that up to 80% of the content marketing generates is not used by Sales, even though a lot of it is specifically created for Sales and Channel enablement. Additionally, customers say that Sales reps are insufficiently prepared for their initial meeting 50% of the time. Clearly a massive disconnect is at work.
IDC's Framework for Sales and Marketing automation is, therefore, focused on the tight alignment of key Sales and Marketing processes. This framework represents only those processes that must be coordinated (potentially integrated) between the two organizations. It is not meant to be a comprehensive map of all the processes in which each organization must engage to be successful – there are many activities on each side of the dynamic that do not have a corollary on the other.
Each high level process in Sales that has a counterpart in Marketing must share:

A common set of definitions for inputs and outputs
Proportional allocation of budget and resources based on overall business objectives
Phase-appropriate performance metrics
An integrated IT ecosystem

Source: IDC, 2010

Implementation
IDC recommends that sales and marketing automation efforts be tightly coordinated across both organizations so that the customer experience and lead management processes are handled seamlessly by all parts of the infrastructure. Even if a marketing implementation will have no sales users and vice versa, the data definitions and flow will be critical for both organizations. IDC recommends that:

Senior marketing and sales leaders meet regularly to plan, review, and asses automation projects
Marketing operations and sales enablement teams are especially critical, they should have representatives from both organizations with senior level sponsorship.
Marketing needs to be very cognizant of how leads and lead details will flow into the SFA/CRM environment.
Sales needs to be diligent in making sure marketing is capturing the high priority prospects and the high priority details so that lead acceptance criteria is routinely fulfilled.

Next Steps
One of the key issues for automating sales and marketing is establishing a shared automation road map. Upcoming research from IDC will help you: prioritize your plans based on business impact and implement best practices to be most successful.

Many Ways to be Agile

2010-06-24T12:57:00.000-07:00

We all greatly enjoyed our time together at the CMO Advisory meeting in Santa Clara last month. The level of participation and feedback was all very positive and we would like to thank everyone who attended for bringing their "A" game with them.

One of the topics we talked about was Agile marketing. We keep coming back the Agile project management concept as we triangulate the issues of career path development, sales and marketing integration, and automating sales and marketing processes. Agile has something to offer on all three fronts, and may prove to be an essential catalyst for success.

First, a Word About Agile

Very briefly, Agile is a method for managing projects that is based on small teams delivering discretely defined outputs in very short time frames. It is characterized by frequent fifteen-minute status meetings (called "scrums") in which 3 to 7 team members answer three questions: What did I do yesterday? What am I doing today? What is in my way? The project manager (called a "scrum master") is in charge of managing all the obstacles so the rest of the team can proceed on schedule. The schedule is based on 2 to 4 week workloads (called "sprints"). Progress is tracked in a "burn down chart" that shows how many hours the team has put in and how many it has left to do.

Agile is ideal for managing high frequency activities such as digital marketing, as well as portions of larger projects such as a trade show that can be broken into smaller steps. Elements of the Agile method can also be borrowed and combined with more traditional waterfall approaches to manage the fire drills that inevitably happen in just about every other kind of marketing activity.

We recommend that managers of organizations new to Agile use careful judgment when introducing it. Activities that are good candidates include: email campaigns, collateral development, building microsites, and creating social media assets. You can then move on to more complex issues like product launch planning, events, field marketing, etc. The extent to which Agile is adopted should be determined by marketing staff themselves, if the culture does not embrace it, don't force it.

Career Development

Agile can be an effective way to offer new skills and leadership opportunities to marketing staff. With its quick cycle times, small teams, and discrete deliverables, Agile offers marketing staff the ability to play different roles on different teams, including leadership, at almost no incremental cost.

We recommend that the career dev aspect of Agile be emphasized only after your organization is successful with Agile, it should not be an explicit objective when getting started.

Sales and Marketing Integration

Agile offers a very interesting way to get marketing and sales personnel together to quickly address issues of common interest such as: defining lead qualification criteria, setting up processes for lead transfers and clawbacks, coordinating last touch in marketing and first touch in sales, facilitating sales enablement, etc.

We recommend that marketing and sales managers work together to get their teams to cycle in and out of Agile based projects so that each side can better understand the other - particularly In terms of providing a seamless customer experience at the point of lead transfer.

Process Automation

Automating large scale marketing departments Is going to be an enormous undertaking, and for many companies one of the key issues will be cultural. Marketing is notoriously not process oriented, nor are marketing personnel typically comfortable with the billable resource model. But this is the world they are going to be thrust into post-automation. Processes will be formalized, optimized and measured. Individuals will be expected to track their time against specific activities – and/or it will be automatically tracked within the system.

Managers should not underestimate the magnitude of this transition and the fact that it will impact everyone in marketing personally. Some, hopefully most, high potential employees will embrace the change, others will find it threatening and disruptive.
Agile marketing is an effective way to get marketing teams comfortable with – and to see the benefit of – working in structured, measured work conditions. Agile requires everyone to not only estimate the time they expect to spend completing specific activities, but to track and measure the actual time in "burn down" charts. This is a safe and democratic way to get your marketing staff prepared for the world of the "marketing ERP" that is just around the corner – and this cultural priming may be the best way to ensure the adoption and sustainable success of future automation efforts.

So we feel that Agile marketing is worthy of careful consideration. We hope you give it a try and let us know what your experience was like.

Cheers,

Gerry Murray

My Next Marketing Career

2010-05-06T10:55:00.000-07:00

The future belongs to marketing specialists, not generalists.

If I were starting my B2B marketing career today I would think about becoming a specialist in one of two areas. These are areas of marketing execution and measurement that may seem narrow, but will be deep enough to be the foundation for a specialized career. Narrow and deep is the key to success. Be the one person at your company that really knows how to provide:

1) "Forensics". Be the specialist in how to data-mine the activity inside a B2B sales force automation system. Become your company's expert in turning those data into analysis, and then turn the analysis into actions on how to change the marketing activity that impacts all phases of that sales pipleine.

OR (not AND !)

2) "Measurement Agility". The traditional execution of a marketing program or campaign follows a long arc of time from concept to content to production to media execution to response and to results. Digital and social media are dramatically shortening that arc and this brings a world of opportunity for more agile measurement and response. Become your company's specialist on rapid-time, real-time measurement and adaptation.

Watch that Org Chart in 2010

2010-03-17T05:24:00.000-07:00

Twenty percent of tech vendors $1b or greater in revenue are now reporting that they have experienced some form of organizational "mash-up" between marketing and sales over the last 12 months. This is the C-level effort to adddress the long-standing mis-alignments and costly points-of-friction between sales and marketing.

Lots of thoughts on this...but the most important is a "heads-up" to expect more organizational pressure and change in 2010. IDC forecasts marketing expenses (investment) to rise by 3.5% this year. We expect sales expenses (investment) to rise by 4.7%. Finally, we expect average revenue to to rise by 3.2 %. So, the math is not hard: operating margins will be under continued pressure. My sense is that the C-Level will respond with more brute force re-drawing of organization charts.

Social Media is Not Marketing...Yet

2010-03-15T11:17:00.000-07:00

I have just returned from the Bay Area where last week I moderated a panel of senior marketers on the topic of Social Media within the complex B2B marketing mix.

The more I think through the potential for this area, the more excited I become about the contributions that Social Media will eventually make to marketing.

What is most promising is that "Social” will help to transform marketing communications into what it should be: a two-way interaction between buyer and seller. Presently, much of our marketing communications is just the opposite: a one-way push of the vendor’s voice.

But Social Media is not Marketing…Yet. Mostly, it’s a jumbled mass of dialogue with a lot of static to sort through.

Social Media will become marketing when two things happen. First it needs to contribute to the "inbound" side of marketing. Web 2.0 conversations about your company’s product and services need to be mined and gleaned so that they become valuable components of your product management decisions. The litmus test here is that your product managers start to depend on those contributions.

The second thing that needs to happen is on the "Outbound" side of marketing. The litmus test here is that Social Media needs to become a primary preference for how buyers inform their decisions. IDC research shows that buyers almost always prefer to receive information from independent third parties and from their peers. So, Social Media should really shine in this application.

There is important work ahead to make it this happen. It’s all about how to operationalize your marketing organization to reap the benefits of Social Media. "Operationalize” doesn’t make it through your spell-checker… but it is on the lips of the best marketers in tech, today. Only with operational depth will Social earn its way into the marketing mix. In our latest survey of CMO’s less than one-half said that they were making "significant" progress on this task - and that’s from an audience who tend to self-rank pretty high.

Here are three operational Best Practices that I see marketing leaders taking, right now. These leaders, by the way, are moving quickly on these. My sense is that they know that these basic operational tasks need to be completed well before the inbound and outbound marketing benefits can be realized.

1. Centralize. If you have followed the IDC CMO area research, you know that we are not great fans of heavy-handed corporate marketing. But in this case we are pressing hard for this. The issue is that (Congratulations, by the way) everyone in your company is now in marketing! Well-meaning engineers are merrily blogging about a new technical advance. Your sales reps are tweeting about a local seminar that they are setting up. The problem is that we are creating the perfect environment for a major breach of data. A privacy issue will be violated; an important confidentiality will be disclosed. When this happens, the blame I think is going to wind its way back to the marketing department, regardless of marketing’s role in the breach. So, corporate marketing needs to have the basics of governance and policy in place.

The second opportunity for centralization is for shared service creation. One of my clients has five major development groups and the lead developer in each group took a separate initiative to construct a community site for the development community and their most engaged customers. Couldn’t the deployment of a master community site with five sub-divisions have saved money? Yes. And wouldn’t it be easier to then deploy a single mining tool across those sub-divisions? Yes.

2. Train. I don’t think that there is a lot of good external "courseware" for how to conduct Social Media Marketing. But wait! Remember that everyone in your company is now in marketing?? I would bet that for every 100 people who are involved in Social conversations, that you have two or three real sharp-shooters. Find those two or three, and have them train the rest.

3. Measure. Poor metrics can give good marketing activities a bad name. One of the basic faults in metrics development is measuring activities and not results. Measuring the number of Tweets or enumerating the cast of your Followers are stark examples of these errors. Measure how many buying decisions you influenced. Measure how many customer service issues you identified and passed on to the right area for resolution. It seems basic but I am surprised at how many marketers still measure just the volume, the activities. Why? Because it’s easy. You have to be willing and able to do the harder work.

"Operationalize" for Social Media. An important initiative for 2010.

The IDC Marketing Operations Holiday Gift List

2009-12-15T10:38:00.000-08:00

This month I was delighted to join the Advisory Board of MOCCA: The Marketing Operations Cross-Company Alliance. In this new role I am looking forward to working with a number of current IDC CMO Advisory clients and also many new colleagues as we help to expand the professional capabilities of the important Marketing Operations (MO) role.

At the initial Advisory Board meeting, the basic theme of the discussion centered around the complexity and expansion of the MO role. “Our typical member needs so much and the role is evolving so quickly” …we concurred… “That we have a world of opportunity to serve and support them. And so, where to start?”

And so, where do we start, to start 2010? First, let’s finish 2009 end enjoy the Holidays.

It has been a difficult 2009 for all of us in marketing. But especially so for our MO staff! Marketing’s selfless few who have ignored the hunger-pangs of process improvement so that demand generation might eat ! Our tireless servants-of-spreadsheets who have had to bear the ceaseless administration of budget reviews, even as their own chart of accounts were flayed to the bone by corporate finance!

Who more deserving than your favorite MO professional to be remembered at this important time of year?

To make things easier for all, I have prepared a simplified Marketing Operations Holiday Gift List, so that you may save time in shopping for your favorite MO professional. With this list completed, you may rest well over the holiday break, secure with IDC’s assurance that your MO staff will achieve professional success in 2010:

1) Her choice of a Shiny New MPM dashboard; an MRM system; or a Sales Enablement portal. Okay: you could argue that this is an extravagant gift to have to purchase during a recession. But IDC’s most recent survey of marketing automation investment trends and our on-going conversations with MO professionals would indicate that evaluation and investment in marketing automation is at its fastest pace of the past seven years. So, why should your MO staff not receive what all the others are?

2) A Brand-New Colleague (to help out with the increasing work-load).

Here is my observation: a few years ago, helpful or break-through contributions from the newly-hired MO staffer was viewed as an un-expected pleasant surprise for the CMO. Today, that same CMO sees the MO role as legitimate and necessary and established. As such, the CMO is now ratcheting-up the expectations that they have of MO-area output: better controls and budgets; crisper processes; and greater alignment with other functions. However, the percentage of total marketing staff in place to satisfy those rising expectations has leveled off in the range of 4-5%, over the past two years.

So: what to look for in our new colleague? Impeccable grooming, but willing to roll up sleeves and get hands dirty. The ability to data-cleanse an aging lead file with the best of them. Full of energy and capability. A respected background in sales and marketing. A holder of political equity, and a willingness to expend it .

3) How about giving your most important MO professional the gift of Six Months of Peace, Love and Understanding with Sales? Can’t seem to find that on Amazon or E-bay? How about a copy of the bestselling book “Difficult Conversations”?

4) A reasonable Marketing Budget Increase for 2010. This is also a difficult gift to ask for during a recession. But IDC is known for being conservative and objective in its outlook and forecasts, yes? And so our current sentiment that the average tech vendor should receive an increase of 3% to marketing budgets in 2010 should not break the bank. So, make sure that your marketing department gets its fair share (plus twenty percent).

5) An all expense paid, ten-day trip to Hawaii. This has absolutely, positively nothing to do with Marketing Operations but it sure sounds nice, doesn’t it?

From the IDC Executive Advisory Group – Happy Holidays and prosperous New Year!

IDC's 7th Annual Tech Mktg. Benchmarks Study

2009-10-01T05:25:00.000-07:00

Key CMO Priorities and Investment Strategies for 2010

2009 will be a year that all marketers would probably like to forget. As a community, tech marketers have had to withstand significant recession-led budget cuts, staff reductions, and organizational disruption. For the full year 2009, the average large ($1b+) IT vendor will have reduced overall marketing budgets by 8.3%. The average vendor has reduced the number of marketing staff by about 10% in 2009. In total, IDC estimates that over 6,000 marketing jobs will be lost in the IT vendor community (worldwide) during 2009.

It may seem simplistic to say that "times of great change bring times of great opportunity". But IDC's surveys, interviews, and personal interactions with the best and brightest of tech marketers, validate that many CMO's and marketing leaders are indeed creating opportunity out of the 2009 chaos in preparation for 2010. So how are the best-in-class marketing organizations reacting? First of all, they have spent the past couple of years improving their organizational structure, working on key marketing processes (e.g., strategy planning, performance measurement) and streamlining their demand generation activities in collaboration with sales - putting them in a better position than other companies. This year, they are finding new budget monies via re-direction and re-deployment of existing budgets. They are moving monies from product-line marketing to streamlined thematic campaigns. They are creating more shared services that remove redundancy in complex marketing organizations. And they are leading an evolution of sales enablement to reduce expenses while boosting marketing and sales productivity.

CMOs should follow these steps as essential guidance during 2009-2010 planning and budgeting:

CMO's and senior marketers need to withstand potential organization changes by making sure that they maintain reporting control and/or budget control over the entire marketing organization: the full scope of corporate marketing, product marketing, and field marketing.

Even as the recovery "emerges"...be prepared for further organizational changes in the marketing department. The most prevalent trend is change that will help in the unification of marketing and sales. There is opportunity in this change: marketer's can introduce and lead significant Sales Enablement practices, for example. have in place for the up-turn to come? Are you prepared to answer this question when your boss asks you?

Be prepared for an economic recovery. What marketing plans and initiatives do you have in place for the up-turn to come? Are you prepared to answer this question when the CEO or CFO asks you?

For marketing staff positions that need to be filled or that may be the first candidates to fill when hiring freezes are lifted: there is some great marketing talent "on the street" right now and the best ones will not be there forever.

Every new marketing initiative that you propose should be "bundled" within a cost-savings idea. Think about re-deploying and re-directing existing budgets, versus asking for new-new monies. The IDC CMO Advisory area has many case studies for budget re-directs and re-deploys. Clients should refer to IDC Best Practice Studies on Sales Enablement, Shared Services, and Campaign Management.

Expand your operational proficiency for Digital Marketing. This would include a look at the sophistication of processes, infrastructure, and people. (e.g., refer to IDC's recent telebriefing on key success factors for BtoB social media strategies)

For additional information and guidance, join the IDC Executive Telebriefing today(10-1-09), "Tech Marketing 2009-2010: Move from Budget Bust... to Budget Build!" at 12:00pm EDT.

IDC will be publishing the full results of its 7th annual Tech Marketing Benchmarks study in the next couple of weeks for clients of IDC's CMO Advisory Service (i.e., Marketing Investment Planner 2010: Benchmarks, Key Performance Indicators and CMO Priorities)

The Product Marketing Reporting Structure Dilemma

2009-09-14T12:44:00.000-07:00

Where should product marketing report into within a technology organization? Marketing? Business Units? Product Management? The CEO? IDC's 2008 Tech Marketing Benchmarks study indicated that product marketing reports directly into marketing at approximately 45% of technology companies. This is by no means a clear trend to be replicated by every company. In fact, based upon years of research at IDC in this area as well as my own experience in the product marketing function, I continue to believe that the correct answer for product marketing's reporting structure is. . . . it depends. Yes, this may seem like a cop-out initially, but there really is some support for my opinion here.

The first question to consider is what is your definition of product marketing? IDC's official definition is as follows:

Marketing professionals accountable for developing and executing the strategy to increase market share for specific products. Activities include market sizing and opportunity assessment, proposing future product development, developing market requirements documents (MRDs), crafting key product messages, conducting competitive analyses, and determining pricing, packaging and program offerings. (this category does not include product management, industry marketing or solution marketing) - refer to IDC's Sales and Marketing Taxonomy

Regardless of your reporting structure, your first step needs to be the definition of this role within the organization including how this role will interact with other parts of the company. (i.e., roles, responsibilities, performance measurement strategy) Many companies have overlapping responsibilities between product management and product marketing depending upon the business unit or individuals' skill-sets. Combining these two roles is also quite common.

So back to the reporting structure dilemma. Not only have I seen product marketing report into different parts of an organization, but I've seen it oscillate within the same company between marketing and the business units every couple of years. Regardless of what has happened historically in your company, product marketing should report into the part of the organization where the greatest misalignment exists today as well as where the greatest opportunities for improvement exist. (assuming these areas of misalignment cannot be fixed more easily from a process or tactics perspective)

For example, Citrix, a company recently cited in the Leadership Quadrant of IDC's 2009 Marketing Performance Matrix, shifted product marketing's reporting structure from the CMO (Wes Wasson) to the business units in early 2009. Wes described it as follows: "we occasionally shift the hard line reporting of field and product groups, depending upon where we most need to optimize". Another factor to consider is who owns the budget. Wes and his team decided to keep the budget within his control. The result is a strong sense of balance between control of staff and related processes (by the business units) and control of the budget (by the CMO/marketing).

What is your product marketing reporting structure and who owns your product marketing budget? Please share your thoughts below or feel free to contact me directly at mgerard@idc.com.

IDC's Sales Enablement Framework

2009-09-03T12:46:00.000-07:00

Sales enablement continues to be an area of opportunity for marketers to improve their credibility in the organization and their impact on the bottom line. IDC defines Sales enablement (SE) as: "The delivery of the right information to the right person at the right time in the right format and in the right place. . . to assist in moving a specific sales opportunity forward."

I'd like to invite Rich Vancil, VP of IDC's Executive Advisory Group, to share with you the sales enablement framework that our team (Rich Vancil, Lee Levitt, Seth Fishbein and me) has developed:

"Thanks Michael.

Sales people are knowledge workers and their preparation time is all about building their knowledge so that they can have the most effective interactions with their customers. We like to refer to these interactions as 'conversations'. A sales-person's conversations can be actual or virtual; written or oral; one-way or interactive; one-dimensional or multi-media. IDC's definition of SE centers on making these sales conversations more intelligent and engaging.

For early-stage management initiatives and emerging job roles, frameworks are helpful. Here is the IDC Sales Enablement Framework:

Starting on the left side of this Framework: IDC suggests that managers think about SE as starting in the marketing area (including Marketing Operations); and then moving to the Sales Operations area; and then into the actual selling functions.

Within the sphere of marketing activities, IDC research has found that over 40% of all marketing assets are not in use today, with some sales organizations reporting that as much as 90% of the assets created by their marketing peers are never used by sales teams. This includes assets that have been developed for sales, channels, prospects, and current customers. The top reason that assets are not used or that they are under-used, is that end-users are unable to access or locate these assets. Based upon anecdotal feedback from recent survey participants, the key root causes include: "too much material," old content and assets, and poor processes and technologies. The lack of relevance of content and assets is also cited as a reason for lack of asset utilization.

Sales enablement - from marketing's perspective - is more than simply using a content management system to get collateral and PowerPoint presentations to sales. It is the complete life-cycle management of content and marketing assets, including: content development; leveraging that content across the organization in a one-to-many fashion; collaboration with Sales Operations and the selling entities for the subsequent distribution and delivery of that content to sales (internal and external sales/partners); and the feedback loop from sales as part of continuous improvement.

Moving to the center of the Framework: this is Sales Operations' involvement in SE. An effective sales operations team should be ensuring that process excellence for SE is institutionalized for the entire selling organization. Sales Operations should seek SE best practices from all selling entities and share those practices company-wide. The sales operations team should take the lead on defining goals and objectives for SE; create and manage the processes and systems to meet those goals; provide overall execution over-sight and process governance; and then provide the measurement systems and reporting to track how SE progress is being achieved. As mentioned earlier, a key success factor for sales enablement is for strong collaboration between sales operations and marketing.

The final part of the SE Framework (right side) is the consumption and deployment of the content assets by Sales. The sellers should receive the benefits of the process and infrastructure groundwork that been built by marketing and sales operations. The first part of this is probably the most critical process-area of the entire Framework: How easy is it for the sales person to find the right content (in the right format), at the time that they need it, to help with a given sales conversation? The answer to this is one of the key levers in the Sales Productivity equation. More time in searching and seeking means less time in actual selling. As part of the reporting and metrics that Sales Operations is tracking to understand SE improvement, monitoring of this "searching" time should be an active metric - to reduce!

Effective SE also means that the content that Sales now has in hand, exists in the format or media that is appropriate for the conversation they wish to have. Does a PowerPoint presentation have all the content that the sales-person seeks, but the task of converting that into a Word proposal falls on the shoulders of the sales rep? Again, the definition of SE excellence has to include: "right time, right place, and right format".

Finally, the last step in this Framework is the sharing of SE best practices among the peer sales-people. This is perhaps the key litmus test of SE success. Sales people are smart and resourceful and seek expediency. If the marketing and sales operations elements of this Framework have been successfully deployed, the sales people will likely grasp and exploit it very quickly. Usage will become "viral" as SE best practices become quickly shared across the ranks."

Thanks Rich. Please feel free to email Rich directly at rvancil@idc.com or provide your comments below.

Social Media Guidelines

2009-08-20T11:21:00.000-07:00

I've posted a couple of blogs recently about the rise of the social media function and how BtoB companies can best leverage social media. A common theme has been the need for marketing to provide guidance, guidelines and infrastructure without stifling the power of this new channel to reach customers, prospects and influencers. To help with your journey, I've included below a list of social media guidelines that several companies have published:

Adobe Acrobat Users: http://www.acrobatusers.com/blog_guidelines

Cisco: http://blogs.cisco.com/news/comments/ciscos_internet_postings_policy/

Dell: http://www.dell.com/content/topics/global.aspx/policy/en/policy?c=us&1=en&s+corp&~section=019

Mayo Clinic: http://sharing.mayoclinic.org/guidelines/for-mayo-clinic-employees/

BT: http://richarddennison.files.wordpress.com/2009/04/bt-social-media-guidelines-mar09.pdf

eBay: http://ebayinkblog.com/2009/03/06/new-social-media-guidelines-for-reporting-company-information/

HP: http://www.hp.com/hpinfo/blogs/codeofconduct.html

IBM: http://www.ibm.com/blogs/zz/en/guidelines.html

Intel: http://www.intel.com/sites/sitewide/en_US/social-media.htm

Have any others to share?. . . Please comment below.

How Social Media Helps Enterprises During Hard Times and Layoffs

2009-07-31T08:10:00.000-07:00

In my last blog, Rise of the Social Media Function, I focused on how companies need to best organize their marketing team(s) to leverage social media to connect with prospects, customers and their markets. I'd like to add another dimension to this discussion: social media within your own corporate community. I've invited Caroline Dangson, IDC's Social Media Research Analyst, to provide her insight and perspective on this important area.

"Thanks Michael.

Hardly a day goes by without a company announcing layoffs. The U.S. jobless rate in February marked a 25-year high of 8.1%. Organizations are scrambling to hold on to business under incredibly limited resources. The workloads of 651,000 jobs lost last month are now being picked up by the workers who remain. This means an incredible shifting of roles and responsibilities within American businesses. And with that, a shift that is disrupting information flow within the enterprise. Information is money, and the loss of information that occurs with the loss of employees is doubling the economic impact on businesses. IDC estimates that even before this recession businesses were losing an average of $3,300 per year per employee due to ineffective information searches, poor and inconsistent access to tools, recreation of content that already exists, reformatting/versioning and multipublishing/multiformatting (source: The Hidden Costs of Information Work, IDC #217936). Furthermore, an IDC knowledge worker survey showed that employees typically spend the equivalent of one work day (6–10 hours) each week searching for information (source: IDC #212580). Businesses can hardly afford to lose more time, money and productivity these days, not to mention employee morale. IDC believes internal social networks to connect employees can help with all of the above.

Social networks make it easy for participants to share unstructured and ad hoc information that can decrease the time it takes to find information to solve problems. Social networks also encourage employees to help each other. This will foster improved morale among employees and help take the strain off of overwhelmed and understaffed IT departments. Member profiles containing a record of recent activities and publications on social networks aid in locating colleagues who can help with specific issues. Once members are connected via the social network, their conversations persist and are searchable. The digital trail of message exchanges will create a repository of useful information employees need. Because the conversation is persistent (as text), it is possible to read or query the log instead of soliciting information from each participating member. Quite often workers operate in their own silos trying to solve the same problem. A social network can help connect these people to the answer in its one-to-few and one-to-many function. Things learned from one conversation can be shared with everyone. You may also discover some unknown talents or expertise from the most unexpected people in your company that are now being leveraged.

A few MIT studies of workplace productivity link worker productivity to information flow. What they refer to as ‘digital networks’ enhance information flow among employees according to these studies. In the most recent study, MIT researchers discovered that workers who participate in a digital network were 7% more productive than workers who did not participate in a digital network (MIT study as quoted in Harvard Business Review, February 2009). While at first glance this may seem small, every percentage counts these days.

More importantly, perhaps, social networks connect people. There could not be a more important time than now to help reduce the doom and gloom of the work environment after layoffs. Feeling connected to coworkers creates a more comfortable work environment where individuals support one another and become more vested in the company. Some companies are even extending internal social networks to employees that are laid off as a way to keep in touch and possibly rehire them when the market improves. According to Anne Berkowitch, CEO of SelectMinds, rehiring former employees through an alumni network has reduced the money and other resources her clients typically spend on recruiting, interviews, and training. In fact, Berkowitch says the money saved from five to 10 rehires can pay for the cost of licensing social networking software for one year. Of course, there are also free tools such as Ning, LinkedIn Groups and Yammer that employees can start using today."

Thanks Caroline. Please feel free to comment below, or you can contact Caroline directly at cdangson@idc.com.

Rise of the Social Media Function

2009-07-16T13:20:00.000-07:00

Many opportunities exist for B-to-B marketing organizations in the social media space. . . .and they're not all limited to what you can do with Twitter, Linked-In and YouTube. Just a few of these opportunities include:

Establish a direct, relevant connection with your customers as a source of voice of the customer for new product development (e.g., through an on-line community)
Improve customer satisfaction (e.g., enable customers to share experiences on-line by creating a self-running community where customers can interact with and learn from their peers)
Increase the speed for troubleshooting and R&D by reducing the distance between customers and engineering
Join the on-line technical conversations about your products that your customers are already having, by either leveraging your own community or listening to and participating in other companies' communities

Best-in-class organizations are adding a new social media role to their organization to capture these opportunities. The social media manager may report to the digital, interactive or web marketing team; integrated marketing communications; directly to the CMO if it's a new and/or especially important area; or even within product teams within more decentralized organizations. Potential responsibilities include:

Establish the social media strategy in collaboration with the digital marketing team, PR, events, product management as well as other parts of the organization. (Refer to a prior post: BtoB Marketing's Response to Social Media: Have we Lost all Control and Impact?)
Provide the training and infrastructure to empower your organization to interact with customers and prospects on-line (e.g., ambassador training program by Logitech, Intel's digital marketing training program)
Develop community sites within the company web site (e.g., Citrix's community site offers a clean, comprehensive community site design with many unique features)
Collaborate with product management, engineering and customer service to monitor and contribute to on-line communities. (internal and external) In some cases the social media team may act as direct contributors to on-line content or they'll provide the infrastructure and guidelines to facilitate contribution by other internal teams.

This role is only in the early stages across the technology industry; however, those companies that best leverage this new area to connect with prospects, customers and their markets will increase their differentiation in this increasingly mature technology industry.

Contact me at mgerard@idc.com for a copy of our recent telebriefing on "Key Success Factors for Your B-to-B Social Media Strategy". Do you have a social media role within your company?. . . please share your insight in the comments section below.

A Preview of IDC's 2009 Tech Mktg. Benchmarks: A Focus on Marketing Automation

2009-07-07T11:27:00.000-07:00

As discussed in my last blog entry, Are you Ready for Marketing's 2010 Annual Planning Process? , the IDC CMO Advisory Practice is “in the thick” of collecting surveys for our 2009 Tech Marketing Benchmarks study. We expect to collect detailed marketing investment data from nearly 100 hardware, software, and services vendors. With this is hand, we will be well prepared to provide our insight and guidance to tech marketers for their annual planning process.

I'd like to invite Seth Fishbein, a senior IDC analyst on our team, to provide a preview of some of this research, focusing on CMOs’ marketing automation priorities for the coming year. A more comprehensive analysis of this topic will be included in IDC’s 2010 Marketing Investment Planner, due out in late September/early October.

"Thanks Michael. Based upon interviews with leading tech marketing executives over the past month, the following three areas represent some “low-hanging fruit” in the marketing automation space for 2009/2010:

Development of a formal marketing automation roadmap: Tech marketers should take a fresh look at their marketing IT tools and applications to look for redundancies and cost savings. Not only has IDC observed that most marketing organizations under-invest in automation tools, but most have not developed a roadmap or formal taxonomy to align their systems to strategic goals and related processes. A couple of verbatim comments from our study:

- “We are reviewing all of our marketing systems, from owners to costs to measurements, to see what is truly being used and what is needed…”
- “We are hoping that an audit of our marketing automation systems will help us integrate our lead management system with SF.com in order to automate and measure the flow of marketing opportunities to sales…”

Simplification of marketing processes and systems: A common thread among tech marketers is the lack of data quality and consistency in their lead management/CRM systems. In particular, a frequent challenge is field marketing’s adherence to data-entry standards. IDC is observing that more marketing organizations appear to be moving in the direction of simplifying their marketing automation strategies and taxonomies in order to make processes easier for global users.

- “More [investment in] automation is not a priority, [but] process improvement is…and we will then automate more where it makes it easier.”
- “We are trying to streamline our campaign management systems so all users, from North America to Japan, can select from a list of 10 campaigns as opposed to 30-40.”

Improvement to sales enablement and marketing asset management technologies: IDC research shows that over 40% of all marketing assets handed over to sales are not in use today (IDC’s Best Practices in Sales Enablement – Content and Marketing (to be published end of July)). This includes assets that have been developed for sales, channels, prospects and current customers. IDC estimates that at least 30% of companies' marketing investment, including program and people spend, is dedicated to creating content and marketing assets. Clearly, marketers can leverage cost reduction opportunities if they take the time to improve their content management process and technologies.

- “Our content is all over the place…a more formalized content portal is being created to get our sales team the most relevant materials when they need them.”
- “…marketing is funding an improved marketing asset management system and we are hoping to achieve 3% - 5% reduction/reallocation of spend on annual asset development and improved production efficiencies.” (improvements in production efficiency, reduced program time-to-market, and reduced re-work).

In the next several weeks, IDC will be publishing a sales enablement report highlighting best practices in marketing content management from a lifecycle management, technology, and measurement perspective. Detailed company case studies will be also be included.

Please keep in mind that we are currently in the process of collecting surveys for our 2009 Tech Marketing Benchmarks study. If you are interested in participating in this study and have not received a survey, please let us know as soon as possible. Thanks!"
Seth Fishbein, Senior Analyst, CMO Advisory Service (sfishbein@idc.com)

Are you Ready for Marketing's 2010 Annual Planning Process?

2009-06-25T12:26:00.000-07:00

Have you started planning for your 2010 fiscal year yet? Our best practices study in planning – people, process and technology indicates that the average marketing planning cycle begins about 6 months before the fiscal year end. (for CMO Advisory Service clients, refer to "Marketing’s Planning – People, Process and Technology, IDC Doc. #216134) If you're one of the more mature organizations, planning will be part of the fabric of your weekly, monthly and quarterly team meetings.

Regardless, a significant part of this annual process is assessment of your current "operational" metrics and development of next year's projected investment strategy. I define "operational" metrics as those metrics that track your marketing investment strategy, including:

1. Key Performance Indicators (KPIs) – such as Marketing Budget Ratio (marketing spend as a % of revenue), Program to People KPI, Revenue per Staff, Staff Throughput (program spend per marketing staff), Centralization KPI (% of marketing investment that is centralized vs. decentralized), Awareness-Demand KPI, etc.
2. Staff Mix (fixed spend) – such as advertising, product marketing, marketing operations, etc.
3. Program Mix (discretionary spend) – such as advertising (print, broadcast, corporate sponsorship), digital marketing, event marketing, etc.

IDC has published a complete taxonomy of these KPIs and staff and program mix areas to help marketing operations and marketing finance executives best manage their investment. (for CMO Advisory Service clients, refer to IDC’s Worldwide Sales and Marketing Taxonomy, 2008: A Blueprint for Cost Control, IDC Doc. #211900)

Tracking and evaluating these KPIs, program and staff mix levels across the organization, over time and versus other companies will best prepare you for your upcoming planning sessions; for management of your resources as well as for increasing marketing's credibility with other parts of the organization.
IDC's CMO Advisory Practice is in its 7th year of its Tech Marketing Benchmarks study. If you would like to participate in this research, including receiving a copy of the above Taxonomy, an overview of the results of the study and an invite to our annual marketing benchmarks telebriefing in August, please contact Seth Fishbein at sfishbein@idc.com. You will be joining the 100+ global companies that work with us year after year as part of this industry study.

Sales Enablement and The Year of the Sales Rep

2009-06-17T10:32:00.000-07:00

I've spoken about sales enablement quite a bit in this blog, and I'll continue to do so as marketers improve their ability to better enable the sales process from an internal as well as an external perspective. With this in mind, Clare Gillan, IDC's SVP of Executive and Go To Market Programs, will share some of her insights in the sales enablement area. . .

Thanks Michael. At IDC's recent annual Directions event, I gave a presentation titled "The Year of the Sales Rep." In response to The Year of the Sales Rep notion, an SVP of sales asked me, "Why does this year have to be my year?" "Precisely," I responded. Let me explain. . . . never have we more needed our sales reps to be successful and never have they needed us more — those of us in sales, marketing, and executive management.

The crisis in sales is driven not by the economy alone but by an evolution in how buyers buy. Sales organizations, in general, have not kept up. The economy heightens a need for change in how the IT industry "sells" — better mapping to how buyers buy.

For nearly 10 years, sales organizations have emphasized the desire to become "trusted partners" with their B2B customers. Nearly every sales organization has been through "solution selling" programs of one form or another. However, only one in five buyers will tell you that he/she is generally approached by sales reps prepared to discuss solutions. Too often, the sales engagement continues to be product led. Further, buyers will tell you that the pre-purchase experience is becoming a more important indicator of post purchase value. Buyers increasingly consider "relationship ROI" as well as product ROI. And, buyers will tell you that, in this economy, they no longer have tolerance for uninformed vendor representatives who come through their doors. The sales rep must come to a meeting prepared to discuss the buyer's specific business — yet 31% of sales reps are not prepared with even a basic level of Web available information before taking a buyer's valuable time. Only 16% are extremely prepared — these are the reps positioned to take share for the companies they represent.

The technology purchase decision is rapidly moving from a product decision to a relationship decision. Buyers can generally find a number of products that can do the job and within the same price range. They will select the vendor that will make them successful over time even if the vendor does not offer the very best up-front price. The shift from product-led selling to relationship-led selling calls for a significant transformation of sales — enabled by a transformation of marketing.

This transformation requires marketing to gather intelligence and create assets that better map to what buyers value and then make the intelligence and assets "accessible" at key points along the go-to-market chain for use by sales and partners. This requires researching buyers (and I stress--from the buyer's point of view), auditing program investments against what buyers value and other related investments your company is making, creating strong content assets (and then making these consumable in a variety of formats), and, finally contributing to a sales enablement process developed in partnership with your sales "partner".

Thanks Clare! Contact me at mgerard@idc.com for a free copy of a recently published report by Clare entitled "Sales Enablement 3.0: A Transformation of Sales Enabled by a Transformation of Marketing".

More to come from IDC's CMO Advisory Practice on the emerging practices in this area of Sales Enablement.

BtoB Marketing's Response to Social Media: Have we Lost all Control and Impact?

2009-06-08T08:32:00.000-07:00

For decades marketing has been desperately trying to connect with their customers in a controlled, one-way fashion. We had control of the brand, all marketing content as well as the traditional channels that were used to communicate with the market. And even on occasion, we cautiously exposed our executives and engineers to our customers while all the time holding our breath that they didn't say the "wrong thing" that would hurt our image, costing us millions of dollars in marketing investment and countless hours including nights and weekends executing our marketing strategy.

It reminds me of a time when I was a product marketer in the semiconductor industry. I would visit customers quite frequently with our lead engineer. In one meeting this engineer exposed our greatest product flaw to one of our key customers. As I cringed in my seat, I expected the ROI from millions of dollars of investment into the brand value of this product to be instantly destroyed not to mention the lifetime value of this customer as they quickly switched to our competitors' products. To my surprise, the candor expressed by this sincere engineer did not doom our company's success at all. In fact, it was a key factor in gaining credibility with our customer, including serving as the basis for a joint discussion and future research to solve these problems in a collaborative fashion. This new problem-solving process served as a key differentiator for our products in a very commoditized market.

What's the connection? Imagine 100s or even 1,000s of your engineers, developers and/or product managers interacting directly with your customers through their own blogs, contribution to other blogs, interaction through Twitter or countless other social media applications. Sound familiar to anyone?. . . How do we stop this PR nightmare?. . . How do we control them?. . . How do we ensure that they stay on-message with our brand?. . . How can we review every bit of content that they put on the Internet? The simple answer is that we "don't" try to control them.

Not to say that we should hang up our marketing hat and make wine in Napa Valley. In this new social media model we need to devise new ways of helping our organization to best represent the company while keeping the needs of the customer at the forefront of our communications; and even better leveraging this new found connection to the customer. Some ideas include:

Increase your resources dedicated to internal communication. We've always said that everyone needs to be a salesperson. With the new social media model, we all have to be marketers as well, more than ever before. [CMO Advisory Service clients should refer to a recent publication entitled Intel Launches a Comprehensive Digital Marketing Training Program for its Global Marketing and Sales Staff, IDC doc. #218416]
Ensure that specific marketing staff are accountable for your company's social media strategy.
Don’t “control” the social media strategy, “guide” it (e.g., evangelize, train, share best practices)
Provide the infrastructure for your social media "ambassadors" to communicate and interact with your markets (e.g., social media applications/platforms, basic guidelines for communications)
Integrate social media across the organization’s existing efforts
- Develop private communities for customers to provide a self-serving environment for peer-to-peer interaction, as well as providing a great source of voice of the customer for product improvement and new product development
- Establish public communities on your web site to share insight into new solutions for customers' challenges; and contribute to other communities (no one will go to your party if you don't go to theirs)
- Integrate on-line and in-person social networking strategies (e.g., facilitate collaboration for an in-person event amongst prospects and clients before (on-line), during (in-person) and after (on-line) the event
- Include social media as part of the overall marketing mix [CMO Advisory Service clients should refer to a recent marketing mix study entitled 2009 CMO Tech Marketing Barometer, IDC Doc. #217640]
Ensure that your social media strategy aligns with your customers' needs. For example, relevant content from independent sources continues to be the greatest magnet for attracting our customers' attention. Ensure that your communities remain on target to your customers' needs.
Don't forget performance measurement. Sample metrics for measuring the impact of social media include: customer satisfaction and retention, marketing reach and engagement (e.g., click-thrus, time spent on-site, more qualitative insight such as types of conversations)

Taking a more strategic perspective to leverage the power of new social media channels without stifling their potential will enable marketing to significantly increase its impact on the organization.

Intel's Digital Marketing Training Program

2009-05-27T05:50:00.000-07:00

In many marketing departments, the technical competency required for marketing execution is often consolidated in the hands of a few experts on the marketing staff. A marketer might be the direct mail guru, an "adman," a PR specialist, or the trade show expert. In general, the execution of these marketing mix elements, while technical and complex, has not changed too much over time. The fundamentals of public relations, copywriting, event management, and so forth, are tried and true. Digital marketing is transforming this in two important ways:

First, there is a crush of new marketing techniques and program elements that need to be mastered. The digital marketing mix has quickly added 10 or so (and counting) new elements of execution to the standard mix palette of about 12–15 classic program types. (e.g., email, webcasts, virtual events, SEO, display ads, social networking)
Second — and even more important — digital marketing by definition does not rest in the hands of just a few experts. The portability, interactivity, and cost effectiveness of digital marketing are placing the execution benefits and pitfalls into the hands of marketing and nonmarketing staff throughout your company.

Today, all marketers need to become digital marketers. Marketing management needs to make sure that all staff are trained and skilled.

The IDC CMO Advisory team is impressed with the Digital Marketing Training program rolled out over the past 10 months by Intel. The Intel Digital Marketing Training program has been rolled out to the entire global sales and marketing staff. Job functions required to take the training include end-user marketing, channel marketing, market development managers, field sales engineers, field application engineers, and retail marketing managers. In total, about 80% of Intel's thousands of global sales and marketing staff are engaged in the training. Intel has developed role-based training levels and digital IQ certifications. Additional details about Intel's program are available for clients of IDC's CMO Advisory Service. (IDC document #218416, http://www.idc.com/getdoc.jsp?containerId=218416)

What steps are you taking in your organization to help your employees become "digital marketing certified"?

A Few Gold Nuggets from BtoB's NetMarketing Breakfast(5/14) – Interactive Marketing

2009-05-14T09:16:00.001-07:00

How do you get busy marketers in a room for 2 hours to discuss some of their interactive marketing practices? One way is to offer them breakfast, exposure to several leading marketing organizations and industry experts, and introduction to a couple of digital marketing vendors. BtoB did just that this morning in Waltham, MA. Panelists included John Smits, Global Dir. Dbse. Mktg. and Segmentation, EMC; Leigh Day, Sr. Dir. Corp. Comm, Red Hat; and Paul Gillin of Paul Gillin Communications. Vendors included Brightcove and ZoomInfo.

Here are a couple of key takeaways from the meeting:

How do you avoid "campaign collisions" [EMC insight]

Problem: multiple BUs and regions were sending communications to the same individuals (e.g., CIOs) about different EMC events on the same day
Solution: "Deliver the most appropriate information, to the most relevant audience via the user's medium of choice" [sounds easy, no?]
- "Centralized Demand Center" created a couple of years ago --> a single global database
- Segmentation strategy used to profile individuals and their needs, leveraging intrinsic and extrinsic information from disparate sources to best understand who should be targeted for which go-to-market(GTM) activities
- "Plan, calendar and govern". . . only give folks access to prospects/customers that meet specific criteria, thereby improving the quality of interaction of EMC with specific individuals as part of GTM activities
Results: For a specific launch activity (email) for one of their platforms, they achieved a >20% open rate and <0.05%>
Ongoing challenges. . ."How do you "control" prospect interactions across all BUs and regions?": Less about control, more about leveraging common interests; Involve users in decision-marketing processes; Offer value for use of corporate database (e.g., access to valuable infrastructure, higher quality contact information) [leverage Mktg. Shared Services as another part of this execution strategy]

Some key success factors for your digital marketing strategy

Red Hat
- news blog with an RSS feed, headlines on Twitter
- offer high quality content and value for customers: Red Hat KnowledgeBase to provide relevant and valuable info. to customers; "Carve Out Costs with Red Hat" campaign- an online resource site to help customers deal with the downturn
- Leverage multiple types of technology to reach different audiences (e.g., video, podcast, whitepapers); yet content must be written differently for each medium ("don't just webify a white paper") [earlier Blog on video]
Paul Gillen
- "must lead with your business objective, not the latest social media tool"
- To optimize participation in a community you need to identify and leverage peoples' interests and passion for participation and collaboration
- The real action now is branded and special interest communities. For example, "Opinion Panelists" by Hilton (private panel): direct feedback from their best (~300) customers. . . virtually replaced focus groups for Hilton. . .save $, immediate feedback, etc. . . get loyalty points for participation
EMC: Leverage social media to broaden the impact and value of other marketing activities: EMC World. . "we've started marketing this in-person event months before its start date– e.g., getting people online to engage and discuss key topics and then gather these folks together when in-person at the event

Leveraging Video for B2B Digital Marketing

2009-05-08T08:14:00.000-07:00

B2B marketers have not been well known for their advertising creativity and innovation in the past 10-15 years. Yes, there are a few great examples; especially from the multi-billion dollar companies that have large advertising budgets and can afford those large agencies. However, this is certainly one area that we lag behind our consumer marketing counterparts. After all, we're marketing to engineers, software developers, CIOs, CTOs and other "left brain" people. Think "logical", "sequential", "rational" and "analytical". They won't be fooled by our flashy marketing tactics and colorful images. Right?

Well, maybe this is another area that we need to rethink as we shift into the age of digital marketing. What are some key drivers of this shift?

The cost to create video and more advanced graphics has dropped considerably.
We've learned that video and other graphical communication methods can be powerful in communicating complex products and solutions as well as their application to our customers' business needs. (sounds like a B2B tech environment to me)
New technologies enable us to increase the interactivity of video, such as allowing video to respond to users' specific needs.
In some cases use of a less professional look is actually deemed more valuable since it simplifies the messaging, increases your credibility and differentiates you from other companies.
We can better measure the performance of digital marketing, thereby enabling us to improve our activities and assets "on the fly" as well as tracking ROI.

In fact anything that involves picture/video/animations vs. an avalanche of text is usually more valued as it’s easier to communicate. We can provide more bite-sized information enabling our cusotmers to absorb information “on the go”, it simplifies the message and it improves communication and comprehension. (e.g., doesn’t depend on pure text which quite often results in use of unfamiliar acronyms) But, don't forget all that you've learned in business school and in your years of marketing; and just as important, ensure that your digital marketing experts are privy to these learnings. (e.g., identify and understand your target segments, provide relevant and valuable content, identify key success factors, metrics and targets, etc.)

Here are a few examples that you may find of interest.

Eloqua's interactive video: Some quick stats: “Starters”(those who answer the first question) spend an average of 3 min. 45 seconds interacting with the conversation; those who become leads reach up to 6 min.; 23% of “starters” reach the longest path. (Produced by Jellyvision)
American Airlines: Capture the FlagshipSM Experience. Yes, it's more of a B-to-C example, but a great example of leveraging graphics to communicate an experience. Check out the First Class section.
Google Docs in Plain English: A simple presentation of how to use Google Docs to create and share online documents, spreadsheets and presentations. Over 1.6 million views on YouTube.
CRM Online Workbook created by IDC's Go-to-Market Services team for SAP: Designed to help companies evaluate and improve effectiveness of customer life cycle processes across sales, marketing and services (demand generation) Use of independent parties, such as industry analysts and end user interviews helped build credibility.

Have you seen some examples either by your company or others? Feel free to provide links in the comments area below.

Marketing's Role in Sales Enablement

2009-04-30T14:27:00.000-07:00

The Sales Enablement (SE) role is fast taking root at many of our client companies. But it is interesting to see that its position on the organization chart is somewhat fluid. Does the role take root in sales? In marketing? Does it have to make an effective straddle across both functions , or is it bound to get hung up on the fence between the two?

Our IDC marketing and sales research teams are surfacing many good techniques for improved sales enablement. Here are some practices specifically for marketing's side of the sales enablement challenge as presented by Rich Vancil, VP IDC Executive Advisory Group.

"Thanks Michael. Depending on your resources and ambitions, these SE practices are noted as: easiest, harder, and hardest.

Easiest: IDC defines Sales Enablement as "Delivering to the sales representative (direct or channel) the right material at the right place, at the right time, and in the right format, to move a specific opportunity forward." Yes, there are a lot of moving pieces in that equation. But the place to start is with all the material that is clearly and blatantly in the wrong place/time/format. Sales executives consistently tell us that only a fraction of marketing content and collateral is used by them. Marketing's first move in SE starts with marketing content audits and asset management strategies that clean out all the lowest underbrush of what is not used. The easy pickings might happen quickly. An incoming CMO at one of our client companies ordered an immediate marketing-asset inventory which identified 550 separate items of marketing assets that were in constant need of updates and re-touches and re-prints and all sorts of expensive maintenance procedures for materials that were found to be marginally distributed.
Harder: "People, process and technology" is a guideline of places to look for operational change. But managers often jump to the technology first and this is often a mis-step in emerging automation areas (such as marketing and sales) because there are so many alluring new applications one might try and buy. Bear in mind the old adage "all software is merely someone's else's idea of how you should run your business" to be mindful that you need to examine and re-work your own processes first - with your own thinking - and then find or develop the technology to assist and automate. The critical Sales Enablement process between the marketing and sales functions is the lead hand-off and lead-nurturing activities. Executives really need to understand this process before buying and applying technology towards it . A marketing professor of mine wrote a famous case called "Staple yourself to an Order" which suggested a process audit approach that one could use to understand a customer's experience with one's company. Could we suggest that you "Staple yourself to a Lead" and observe the process path that you travel, in and around marketing and sales, at your company?
Hardest: Even more challenging is advanced marketing re-engineering enabled by comprehensive sales forensics. More complex "upstream" engineering of marketing cannot de done without a great deal of "downstream" sales intelligence. This was hammered home in an excellent briefing that we took this week from Drew Clarke and Brendan Grady who are senior marketers in IBM's Cognos division . I have known Drew for years and he is one of the industry's most diligent practitioners of the science of marketing. At IBM/Cognos his team is making a deep examination of the sales processes and prospect-communications sequencing that leads to pipeline acceleration and productivity. All sales and marketing "touches" to active leads in the pipeline are monitored by and analyzed in laborious detail. With these data in hand, the team can make important decisions about changes to marketing programs. It turns out that event attendance for certain prospects can be achieved with fewer email touches versus previous practice. This and reduces expenses and annoying re-touches. It also turns out that the direct mailing of the highly produced and expensive glossy corporate brochure has less than desired lead-velocity impact. There will be other cost savings and process changes that the Cognos team will achieve through analysis of the sales data.

The key point is that after the "easy" pickings are taken, the harder and hardest upstream decisions can only be made if you have excellent downstream intelligence. This is the crux of the B2B marketing paradigm: long sales cycles , multiple touch points and significant marketing-to-sales interplay makes the ultimate attainment of marketing ROI accessible only to those who can master the sales forensics. Please feel free to comment below or contact me at rvancil@idc.com."

(Interested in a taking a 3 minute survey on sales enablement? Click here: tinyurl.com/ctc6gs)

Tracking Marketing Budgets - Use it or Lose It?

2009-04-28T10:28:00.000-07:00

There are many ways to track the success of marketing's planning process. One metric that is often mentioned by marketing operations teams is the percent variance of actual vs. budgeted marketing investment. One of a few good metrics to track if your processes and systems have matured to the point of being able to do this. . . even if you use Excel today. What variance is acceptable? I've seen targets range from 2 to 10% variance. 2-3% variance of actual expense vs. budget would be considered "very good" for a 1B+ revenue company.

Assuming that marketing budget allocation is optimized throughout the year, it makes sense that managers should motivate their staff to spend all monies that they are allocated; including ensuring that certain percentages of budget are targeted to specific segments, campaigns, etc. This leads to a "use it or lose it" mentality if not an official guideline. The problem with this strategy (or culture) is that market shifts requiring budget changes may occur at a faster pace than the company's ability to react to these changes by reallocating budgets. The result is that market opportunities may be missed as a result of insufficient distribution of funds to where they're needed most.

Today, few companies encourage different business units, countries or functions to reallocate budgets amongst each other based upon changes in demand, priorities, etc. In fact many companies penalize marketers for not being "on budget" regardless of the circumstances. Will we or should we ever encourage our marketing teams to increase the transparency of their budgets or to even share budgets amongst each other based upon the needs of the market? And who will provide the objective market insight to help these teams best optimize budgets from a more macro perspective? One thing is for sure -- the increased optimization of marketing planning processes coupled with greater adoption of marketing automation will improve marketers' ability to react appropriately to these challenges and reduce reaction times to changes in the company and/or the market.

The Fruits of our MRM Investment

2009-04-20T13:16:00.000-07:00

Five or six years ago I was frequently asked the question "What is the one key metric to track the impact of our marketing investment?" Without even breaching the open-ended topic of what is ROI, I typically responded with my own question of "Do you even know how much you're spending on marketing, let alone what the return is?" In most cases the response would be a simple "no". After working with 100s of companies on analyzing their investment as well as seeing the progress that marketing operations and marketing finance people have made, I can comfortably say that as an industry we have matured significantly in our ability to track marketing investment . . . at least at a high level. (e.g., Marketing Budget Ratio (mktg. spend/revenue), Program-to-People KPI, etc.) I consider these to be operational metrics as opposed to execution metrics. (refer to past posts for more details re: execution metrics)

Greater sophistication in investment management, which is enabled by better processes and greater availability of MRM applications, may include tracking marketing investment along one or more of the following criteria: (to name a few)

Customer size (e.g., named accounts, enterprise, large, medium, small, consumer);
Product and/or solution;
Campaign;
Existing, more mature business areas or product lines vs. newer, higher growth business areas or product lines; and/or
Low growth vs. high growth regions and/or countries.

About 60% to 70% of technology companies manage their marketing investment along one or more of these areas. [IDC CMO Advisory Practice Tech Mktg. Benchmarks Database] For example:

tech companies invest on average 60% of their marketing budget on existing, more mature business areas or product lines with the remaining budget allocated to newer, higher growth business areas or product lines; and
tech companies invest on average 52% of their marketing budget to low growth regions and/or countries with the remainder to high growth areas.

Yes, we've made some progress in tracking our marketing investment. This has certainly put us in a better position to manage our investment and improve our credibility with the CEO, CFO and sales peers. But we still have quite a distance to go; especially in making the connection between this investment and the subsequent return. (e.g., increased awareness, greater engagement, increased number of leads, high velocity through the pipeline)

Insight from IDC's Annual Sales & Mktg. Effectiveness Summit

2009-04-13T06:12:00.000-07:00

We recently finished our 6th annual IDC Sales & Marketing Effectiveness Summit. You would think after years of us working towards greater alignment between marketing & sales that we would have figured it out by now! However, as recent IDC research indicates, both marketers and sales still remain unsatisfied to say the least with their current working relationship. (Marketing and sales give marketing a score of 64 and 45 respectively for marketing's effectiveness at supporting sales) That said, we spent 8 hours with over 80 of the industry's top marketing and sales folks during this summit discussing marketing and sales alignment; moving beyond the traditional platitudes that you'd expect at your typical conference to actually discuss solutions to our challenges. Here are just a couple of the key insights that I took away from the event:

One of the root causes of marketing and sales misalignment?. . we need to better collaborate on shared metrics, including agreeing on which metrics to track and what objectives to set. A few metrics examples?. . . . . Lead aging (e.g., average time that it takes marketing to qualify [or reject] a lead; average time for sales to follow up a marketing-qualified lead in aggregate or by each salesperson); % of marketing qualified leads accepted by sales; % of sales' pipeline that should be marketing-generated vs. marketing-enhanced; new customer revenue; sales enablement metrics such as time to onboard a new salesperson or an indicator of value of marketing assets to sales.
"10% to 20% of sales teams are the 'A' players that can close deals no matter how bad the economic environment is. The real challenge is to get the other 80% to 90% of the sales teams to the same level as these 'A' players; or at least close to that level. Sales enablement provides the opportunity to leverage this knowledge across the company. Yes we need to improve the formal content, however, the more difficult resources to tap into include the subject matter experts and the best practices of the 'A' players."[Jeff Summers, COO, SAVO]
"We found key sound bites, elevator pitches, value propositions and customers' stories to be extremely valuable to help enable sales; not just lengthy marketing assets and PowerPoint presentations. We established managed business objectives for our marketers that require them to get X number of customer stories and/or key success factors from our 'A' player sales folks to share with the rest of the sales team. (e.g., in the form of a 1/2 page write-up or a video tape of a top performer giving their pitch)" [Tom Miller, VP Marketing, ADP]
"90% of the time the conversation about your company, its products or solutions or services, is happening without you being present. Marketing and sales need to collaborate on how to best influence this conversation; and that includes increasing the relevancy and overall value of your interactions with the market. To do this we need to permanently change how we view our jobs, having more of a two-way, information sharing exchange with the market versus a one-way spouting of our product features." [Jocelyne Attal, President JAgency (former CMO, Avaya)]
"At a cost of $800 to $1,500 per marketing-qualified lead, we need to apply more rigor to our lead management process, from marketing through to sales; and we won't be able to accomplish this goal at a systematic level until we better align our marketing AND sales lead management processes and systems." [Jocelyne Attal, President JAgency (former CMO, Avaya)]
Sun has developed an in-house application that provides the applications and an online, interactive repository to personally create sales enablement videos (e.g., product launch training, market intelligence, solution information). Examples of unique features: anyone in Sun can create this content, either for internal and/or public use; all content can be scored and receive public comments, thereby encouraging marketers to improve value of their content; and videos and other media can be downloaded to iTunes. (http://slx.sun.com/)
Carol Carpenter, VP Trend Micro, did a nice job reminding us that we need to improve our alignment between corporate, business unit and field marketing versus simply focusing on aligning marketing and sales. You could say that we need to "get our own house in order" as a first step in improving sales and marketing alignment; including strategic planning, budget management and campaign execution. (further strategic insight on field marketing is available for CMO Advisory Service clients)

Based upon the highly interactive, problem-solving nature of the discussion throughout the day, it is evident that we are progressing as an industry in solving the marketing and sales alignment dilemma; but is improvement rapid enough? Please do feel free to comment below or send an email directly to me at mgerard@idc.com.

Marketing Shared Services - An Alternative to Centralization

2009-04-02T09:44:00.000-07:00

While the notion of shared services is prevalent across many management functions including IT, HR, and finance, it is for many marketing organizations a business technique that is in its infancy. A marketing shared services (MSS) model offers the opportunity for improved service delivery, greater economies of scale, greater concentration and leverage of expertise, and more rapid and effective program/campaign execution. IDC defines marketing shared services as:

Organizing two or more areas of repetitive and redundant marketing activities into a fewer number of activity areas that are offered to internal customers at a cost, quality and/or timeliness that is competitive with internal or external alternatives. Marketing shared services result in cost reductions and an overall increase in efficiency and effectiveness of operations.

Given the difficult economic environment that we are all navigating through in 2009, tech marketers' who are developing shared services strategy should be prepared to respond to the following challenges:

Company-wide mandates to reduce marketing costs: IDC is forecasting a 10% decrease in marketing investment for FY09 (with a 15% decrease for the first half of the calendar year). Tech marketers are and will be forced to permanently eliminate entrenches silos of program costs as well as target duplicative marketing costs.
Rigid marketing budgets in the product/lines and field: Given the current nature of marketing investment, comprised of tight marketing budgets and slimmed-down marketing staff levels, the overall flexibility of spend across corporate, BU (business unit), and field marketing is quite limited. With stringent cuts in BUs and field likely, it will be challenging to solicit these groups' buy-in for a MSS strategy. Moreover, asking the regions and product lines to "give up" some control of their marketing spend will be challenging, and a very thorough business case will need to be developed to even begin the process of obtaining buy-in.
Developing an effective worldwide structure for the MSS organization: "Where to start ?" becomes quite relevant here as marketers will be challenged to not only identify the prime functions for MSS but also how to structure their MSS strategy. Which countries and regions will most benefit from a MSS strategy? Where can you best leverage low cost countries? What functions can these countries provide? How can you best leverage your current marketing staff? What will be the impact of language/cultural barriers?

Based on a recent study conducted by IDC's CMO Advisory Practice as well as findings from IDC's recent Marketing Operations Board meeting, I'd like to provide some brief guidance and insight around shared services:

Successful MSS strategies start with a “pilot test". Marketing shared services still remains an emerging area across tech marketing, particularly for vendors <$10B in revenue, so the importance of "testing the waters" before moving forward is a critical successful factor. Marketers must first gain executive buy-in, lock down the process, demonstrate overall success and usability, and then roll-out to other areas.
MSS organizations should target marketing's most repetitive operations and also better leverage marketing automation and related infrastructure.
MSS organizations must be run like a business (not an overhead corporate function) to be successful. A company's MSS center should outperform the competition (internal and external vendors in areas such as pricing and customer service), build internal success stories, so that the "brand equity" of MSS starts to carry weight and impact within the organization.

The IDC CMO Advisory team is currently in the process of publishing a detailed study that analyzes best practices in marketing shared services with case studies from Microsoft, SAS, and IDG. Look for it in the coming weeks. However, please do feel free to comment below or email us directly.

Seth Fishbein, Senior Analyst, CMO Advisory Practice, sfishbein@idc.com

Digital Marketing and Marketing Automation Hit Critical Mass in 2009

2009-03-24T07:45:00.000-07:00

Well, our 2009 IDC Tech Marketing Barometer results are in; and if you missed the Telebriefing two weeks ago, here are some of the highlights:

Marketing Investment:

0.5% Growth for Global IT Spending in 2009, while Average Tech Marketing Investment Drops 10%.
Larger companies (>$1B in revenue) will take the greatest hit in marketing budget as they wrestle with significant revenue drops in key parts of their portfolios and continue to improve efficiency.
Growth areas still exist within: enterprise social media, security management, mobile data, SaaS, Internet advertising, business analytics and IT outsourcing & BPO to name a few. (source: John Gantz's presentation at IDC's recent Directions event)

Marketing Mix:

The pendulum of investment swings to demand generation, with sales enablement closely coupled to this priority. (awareness building takes a "back seat", yet remains a key part of healthier companies' portfolios)
We've been all talk as an industry with regards to full-scale shifts of our investment to digital marketing over the past couple of years. The economic downturn will catalyze this shift in 2009 with almost 70% of marketers indicating an increase in investment in digital marketing while 60% and 72% of marketers will decrease advertising and events spend respectively. (refer to the past couple of posts in this blog for additional details about digital marketing shifts)
Sales enablement will become a high priority for getting internal and external sales teams (and partners) the most relevant content at the right time and in the right place to assist in moving specific opportunities forward. Endless pages of collateral and white papers will be replaced by more relevant content that is better leveraged across the organization. (check out the previous blog post, "Content Squared")

Organizational Structures:

Here we go again as marketers shift their organizational structures. Some organizations will entirely abandon their relatively cohesive marketing structure to shift to an entirely decentralized organization in an effort to simply survive; while the better positioned organizations will "weather the storm" with a more centralized marketing function and/or leveraging marketing shared services to improve efficiency and effectiveness in execution.
Marketing operations and sales operations teams will continue to work together, increasing focus on the lead management process and associated nurturing and lead qualification strategies.

Marketing Automation:

Marketing automation will experience a turning-point in 2009 as adoption significantly increases in the technology sector. Drivers include the significant improvements in the transactional CRM system vendors as well as the increased availability and cost effectiveness of SaaS offerings from planning to event-triggered marketing to performance measurement.
A few questions to ask yourself: Do I have a marketing operations team in place to deploy and govern marketing automation?; Are we ensuring that process drives the technology versus the other way around? How do we ensure consistent adoption and use of these applications across functions, business units and regions on a regular basis?; Have we partnered with finance, sales and other teams as part of this strategy?; and Do we have a marketing automation road map?

These are just a few highlights of the recent study as well as food for thought as you progress through your 2009 plan. As technology marketers, I continue to believe that we are better prepared than ever to respond to the challenges posed in this difficult environment. This will not only facilitate our survival in 2009, but will enable us to rebound quicker than from prior downturns.

Does Your Go-To-Market Strategy Align with Your Customer Needs? – Insight from IDG's Recent Marketing Summit and CIO Panel

2009-03-16T06:34:00.000-07:00

IDG and IDC recently held its 4th annual Marketing Summit in San Francisco, with over 50 marketing executives in attendance. This annual, senior level event offers the opportunity to not only network with some of the technology industry's best and brightest marketing executives, but also offers the chance to hear from a panel of CIOs about "the good, the bad and the ugly" of our marketing and sales effectiveness. This year proved to be as valuable as prior years in helping to confirm some of our existing knowledge as well as offering contradictions to our preconceived notions of what works and what doesn't work.

The CIO panel, moderated by Rich Vancil of IDC's Executive Advisory Group, included executives from Chevron, Levi Strauss and Byer California (a mid-market company that manufacturers womens' clothing). Here are a couple of "gold nuggets" that I took away from this event including the actual quotes from the panelists: [my comments in brackets]

"In a recent RFP process, I had discussions with five companies' sales teams. Only one out of the five companies was able to understand our needs and reiterate our challenges and communicate a solution without making it a one-way sales pitch." [How can we as marketers improve our sales enablement strategy to better equip our sales teams for these engagements?]
"I prefer to print out white papers and read them at home, while my staff prefer web casts and other online material." [That's right, the CIO uses printed material to absorb information while more junior staff have adopted newer consumption methods. Always segment your customers. A role-based marketing strategy may highlight significant differences in how individuals consume information; including the continued need for an integrated, multi-media go-to-market approach.]
"As a mid-market company, spend more time telling me about how you've deployed your solutions at companies similar to mine. Yes, you may have a Fortune 50 company as a client, but those companies will buy one of everything and put them on a shelf! I'll be investing my entire budget into one solution." [Segmentation and understanding of your customer, an often neglected area, continues to be a key success factor for marketing and sales engagements with customers.]
"As a CIO, I may not use webcasts since every minute that I'm in the office someone is coming into my office; however, I may pass on the opportunity to my staff who I greatly depend upon to influence my decisions." [Once again speaking to the importance of a role-based marketing strategy. As B-to-B marketers, we need to not only understand the importance of selling to different members of an extended buying team, but embed this knowledge into our go-to-market and sales enablement strategies.]

As if we ever need reminding, the importance of maintaining our connection to our customers should never be underestimated. In fact, I find that the best marketers serve as a "beacon of light" for customer and market information for the entire organization. Don't let your marketing cuts inhibit your drive to serve this role in your company. Now more than ever your customers' needs are changing, if not due to rapid adoption of the Internet then most certainly due to the economic downturn.

The Changing Marketing Mix

2009-03-06T12:42:00.000-08:00

The press is filled with stories about the demise of traditional advertising and the in-person, public trade show. Sounds quite similar in fact to the predicted disappearance of the "brick-and-mortar" storefront, and the emergence of a new on-line world where we can do all of our shopping in our slippers from the comfort of our home. Well, IDC CMO Advisory's recent 2009 Barometer study does continue to indicate that our traditional marketing mix is in the process of permanently changing. In fact, almost 70% of technology marketers indicate that they'll be increasing their program investment in digital marketing in 2009, while 72% of companies will be decreasing their in-person events spend and 60% decreasing their advertising spend (print, broadcast and corporate sponsorships). What are the top digital marketing initiatives for technology companies in 2009?

Corporate web site: No longer simply a marketing billboard, the corporate web site has become the window to the customer. The most effective corporate sites offer visitors the opportunity to not only learn about your products and solutions, but to also learn about the latest technologies and business challenges as well as offering the opportunity to interact with their peers and your technology experts. (e.g., through a community portal) The best sites also track the details of visitors to enable more of a 1-to-1 experience as well as tracking detailed customer data to improve marketing's lead management and nurturing process.
Email: An often over-used vehicle for sending marketing collateral to the masses in a one size fits all mentality, this channel is being used more effectively for engaging with customers through an event-triggered marketing process. For example, providing respondents with additional, customized, relevant information based upon their responses to earlier communications.
Search engine marketing: Although display ads will continue to be part of a strong portfolio, search ads and search engine optimization(SEO) will increase in importance. Search ads offer the opportunity to more surgically target your prospects as they reach out for information, while SEO continues to yield a strong return in increasing your companies' prominence in organic search.

However, before you hand the "key to the city" over to your digital marketing team, there are some important things to consider:

First and foremost, the rest of the marketing mix will continue to be an important part of a strong portfolio of marketing's strategy; and the balance of this mix will only get harder. For example, the CIO may prefer to continue reading their magazines and printing out pdf whitepapers; their direct report(s) will attend webcasts and read interactive white papers; and third level staffers will attend virtual events and online communities as part of their everyday job. Your mix will need to address the information consumption patterns of each of these roles – hence the need for role-based marketing.
As you continue to rush into digital marketing, ensure that your team does not leave their Marketing 101 learnings behind. For example, continue to leverage market intelligence as part of a market segmentation strategy; to identify your target customers, to understand what information is most relevant to your customers along different stages of the buying cycle, and to understand how and where your customers' consume their information.
Look for opportunities to differentiate yourself in the marketplace. While everyone is shifting to email and webcasts, a portion of your investment may be best spent on direct mail or in-person proprietary events.
Yes, continue experimenting with digital marketing, however, now is the time to begin including digital marketing as part of the fabric of your go-to-market strategy. Best practitioners are establishing campaign management teams to maintain an integrated marketing strategy focused on the customer, as well as developing centers of excellence in the digital marketing space as part of a shared services strategy.

Content Squared - Leveraging Content Across Digital Marketing

2009-02-19T08:50:00.000-08:00

Working with technology marketers on a daily basis, I hear much about the need to develop more relevant content based upon a solid knowledge of your target customer segments and their needs at different stages of the buying cycle. In fact, in our 2009 Tech Marketing Barometer study (results to be announced in the next week or two) marketers identified "content development" as one of the highest priority areas for improving sales enablement. However, are we as marketers getting the "biggest bang" from our content development investment?. . . . leveraging this content across multiple delivery vehicles and channels? With this in mind, I thought it would be valuable to hear a bit more about how to best leverage content from IDC's VP of Go-to-Market services, Laura Nurzynski. Take it away Laura. . . .

My colleagues from IDC’s CMO Advisory Practice expect digital marketing investment to rapidly outpace investment in much of the more traditional marketing vehicles. (IDC includes the following in digital marketing: display ads, search ads, your company website, SEO, digital events (including virtual events, Webcasts, online forums, etc), email marketing/electronic outreach, and social networks.

How can you optimize your investment in this area and reduce your learning curve? Are there lessons you can learn from you peers about leveraging digital marketing to your advantage –especially in these challenging economic times, when you need to carefully place your marketing investments and efforts for optimal results?

A majority of the programs that I work on with my clients, involve digital marketing. Our clients use written content such as white papers, briefs, Q&A style articles, and newsletters—delivered online as PDF or web content—as offers for direct email campaigns, banner ad placements, and other PR or advertising outreach. They also utilize the same content in more than one communication channel, not only using written content as offers, but giving it to their sales force, posting it in a resource library, and handing out content at events their prospects are attending (very often in a digital format such as a link to a website or on flash drive.) Over the past 2-3 years, I have also been observing more and more use of audio, video, and interactive content on my clients’ websites and as offers for email campaigns. Alternate formats are not only attractive because they are a “flashier” and innovative communications approach, but also because they provide a choice to your audience in how they engage with you. Keep in mind, that individuals consume and comprehend information in different ways: some people are very visual; others need to hear information; and still others need to read lots of details, absorb the information, and then make sense out of it after they’ve had some time to digest and assimilate all the info they’ve gathered. This approach gives you the opportunity to package your message in varied formats to reach and appeal to a wider audience.

Here are a few best practices and innovative approaches I’ve seen in the last few months:

A smaller emerging vendor, launching new products into the marketplace, licensed content from IDC (as market and technology validation from an independent party) then distributed and leveraged this content in multiple formats online:

They referenced an IDC analyst Q&A article in their blog
They incorporated an independent analyst speaker into a Webcast program, promoted the Webcast via Facebook, on their website, and via media reach programs.
They used a multi-touch approach to offer varying levels of detail in the content assets they incorporated into the program, including Q&A style articles with an industry expert, a view of where they fit into the marketplace, as well as a workbook their sales staff could use to engage in a conversation with their prospects, and a Webcast that allowed their prospects to hear from and interact with both their subject matter experts as well as an independent analyst.
At last report, they generated 800 leads and 250 attendees to their live webast from these activities over a 3-4 month period.
Follow these links to see the use of third-party content in action:
· Marketo Vendor Spotlight
· Marketo Blog

A well-know telecommunications company leveraged an analyst video podcast and a white paper based on primary research to generate media awareness and buzz in the marketplace. They broadcast the IDC video podcast live during their launch event and in 7 days generated $500K+ in equivalent media placement from the video, white paper and PR activities.

Several companies are expanding the reach of their face-to-face events by wrapping additional outreach around pre-and post-event promotion activities:

A large software company is utilizing an online audio Webcast to generate buzz for new product announcements while also building awareness for an upcoming events series. The online webcasts will expand their potential reach to prospects, given restrictions on travel but will also start to build a pipeline of prospects. During the series of events, audience members will be polled regarding their adoption plans in the technology area. The poll results will be fodder for a follow-up Webcast post event, where the company can share peer information with targets who attended the event, attend a pre-event Webcast or are hearing about the solutions announcements for the first time.

I’m sure you’re incorporating a plethora of digital marketing activities into your current campaigns. As you do so, consider how various content elements can be leveraged in multiple ways and don’t forget to consider your target audience and ensure that you have various messages in different media for consumption by myriad target audiences who learn and consume information in different ways. [Laura Nurzynski, Group VP, IDC's Go-to-Market Services,
lnurzynski@idc.com]

Is Database Marketing on Your Marketing Operations Radar?

2009-02-06T09:30:00.000-08:00

How many times have we heard in the B-to-B marketing press the past several months about the importance of increasing content relevance to our prospects and customers, better engaging them through digital marketing vehicles and improving our ability to generate and qualify marketing leads? Yes, all extremely important priorities for us as marketers, however, if you're a $100M+ company none of this can be accomplished in an efficient and effective manner without the back-office infrastructure to support it. And we all know how difficult an infrastructure conversation is in this economic downturn. For the purposes of this conversation, let's focus on the area of database marketing.

Even the best marketing organizations struggle with consistency in database marketing processes; consolidation of prospect and customer data across the multitude of databases in use across the world; cleansing of data to prevent a "bad data in = bad data out" scenario; and overcoming the complexity of data analysis and list pulls, especially with the increased data flow from digital marketing activities. In a recent best practices study, we spoke with (12) multi-billion $, complex organizations representing in total over $250B in revenue. When asked to indicate their marketing organization's satisfaction with the components of database marketing, some of the most fundamental elements of this area were identified as being the weakest. . . . including data cleansing, digital data integration and contact management.

So enough about the problems out there: that's the easy part to identify. What are a couple concrete things that you can do to help improve marketing's "back-office", especially in these difficult economic times when "throwing money" at the problem is not even a possibility?. . .

Establish a global database marketing council or team to set standards and govern processes and technology. (yes, virtual if need be and it will take more time out of your day . . . but this will pay off in the long-term)
Leverage third party partnerships for external expertise and best practices (e.g., data cleansing). Establish an approved vendor supply list to achieve economies of scale and better govern data standards.
Develop a process to enable the average marketer to obtain a highly targeted list for their activities or campaigns. A 100% self-service model will lead to supplier proliferation, poor leverage of scare marketing resources and an inability to leverage the power of your data. Ideas include: establish a relationship marketing team, deploy a shared services model to get dbse. marketing experts closer to the field (more on shared services to come in future blogs), create an expert analytics team that can do some of the "heavy lifting" for your team's larger projects (e.g., predictive modeling).
Reduce and consolidate disparate data sources. If you're lucky enough to have or pursue a universal data mart or EDW then great. For the rest of us, another option may be deploying an application that serves as the front-end for multiple databases. This option is available through several marketing automation vendors.
Ensure your database marketing and lead management teams are working together if not part of the same group. This is particularly important for establishing a closed-loop lead management process.
And last but certainly not least, establish metrics and targets to measure the performance of your database marketing capabilities. (e.g., data quality indicators, lead generation data to track the success of list pull activities, response times and internal customer satisfaction if you're leveraging a shared services model)

If you're fortunate enough to have a marketing operations individual or team, then turn to these folks for help in deploying the process rigor needed to initiate these actions.

Marketing Budget Cuts of 15% for First Half 2009

2009-01-05T10:38:00.000-08:00

Within the technology marketing sector, I predict budget cuts of 15% or so for the first half of 2009. And within the typical marketing mix, the events budget and traditional-media advertising will bear a dis-proportionate share of those cuts. Given the trend of accelerating spending on digital advertising, it is more likely then ever before that traditional media spend lost in the downturn of 2008-2009 will not - ever - be replaced.

In the tech industry we are now, over the past couple of months, just acknowledging the impact of the recessionary cycle; even while the macroeconomists are now saying we have been in an overall recession for a year. My sense of the marketing budget cuts in tech is that at the beginning of an acknowledged recessionary cycle (i.e. now), there is an over-reaction that brings budget cuts that go too deep on the first pass. It's the nature of management which is so often short-sighted. I have believed that good marketing investment policy has elements of a large inertial flywheel: let it stop spinning and the fuel to get it going again costs a lot more than if steady increments had been consistently applied. Vendors should have the wherewithal and courage to keep their investments basically steady.

Other guidance for senior marketers:

Use the downturn to permanently eliminate or re-shape entrenched silos of program costs: 1) Example: Isolated events not part of a broader campaign or important new launch; 2) Let the downturn play the role of "bad cop"; 3) Be most rigorous/suspicious of heavily guarded budgets
Given the forecasted short duration of the downturn: 1) limit staff reductions . . . Marketing headcount turnover has already exceeded 9% annually for the past two years; 2) Use the downturn to mandate/effect more aggressive Content Audits
Identify and create shared services: 1) Target is duplicate discretionary costs (e.g. across your 3 product lines, PM’s have purchased 3 separate on-line community platforms); 2) Target is duplicate activities executed within fixed costs (e.g. you oversee 3 product lines and each group spends 4 days per month on separate dashboard performance reporting compliance, which you are unable to normalize)

By Rich Vancil, VP, IDC's Executive Advisory Group (rvancil@idc.com)

A View from the CFO's Office. . .

2008-11-24T05:07:00.000-08:00

I recently attended MIT Sloan's annual CFO Summit in Newton, Massachusetts; not just to earn the CPE credits needed to maintain my CPA certification, but more importantly, I wanted to gain an understanding of CFOs' perspectives in this difficult economic environment. This is something that every CMO should understand to help optimize their management strategy as well as their tenure.

It was no surprise that the theme of the conference was "Relentless Volatility". Jack McCullough, one of the two co-chairs of the event, put it well in his opening remarks: "My investment banker friend in London described this environment as being similar to a divorce but worse. . . 'I've lost half of my net worth, but I'm still stuck with my husband.'" I'd like to summarize several key comments from the event that may offer you some ideas for how best to not only ride out the storm in the upcoming year, but even perhaps to leverage the situation to improve your position and take share in this tough market:

As part of your annual and intra-year planning process, ensure that you leverage scenario planning to best identify what challenges you may encounter in the next quarter or year, as well as what steps you need to take to minimize the potential damage from these risks;
Communication in this volatile environment increases in importance. . . not just with your functional team, but also with senior management; (i.e., don't be intimidated to better engage your CEO and CFO, especially when you need help or need their advice)
Ensure that your executive team knows that you not only understand the current challenges you face, but that you also have a plan to address them; (and meeting with the CFO offers a great chance to ensure that your plans are grounded in reality, as well as a chance to share your vision and increase their comfort level with your management framework and strategy)
"We've spent a significant amount of time reallocating our budgets to ensure that we're focusing on investment in the high growth, high profitability areas vs. in the "harvest" areas that may not need as much investment", Norman Robertson, CFO Progress Software; (e.g., IDC CMO Advisory Practice research indicates that the average technology vendor allocates 38% of their marketing budget to newer, higher growth business areas or product lines vs. existing, more mature business areas or product lines)
The large companies will no doubt be reducing their on-campus recruiting efforts this year. Therefore, now is a great opportunity to hire the best and brightest individuals from the top schools.
And finally, continue to drive innovation within your team, motivating individuals to take chances in an effort to change how they do business today. We need to give our staff the opportunity to be leaders, stepping into the light that no one else may see.

Marketing's Planning Process: An Ongoing Activity, not an Annual "Trip to the Dentist"

2008-11-05T12:54:00.000-08:00

As your marketing organization approaches the end of its annual planning cycle, remember that it shouldn't end on January 1, 2009. As marketers we must get better at managing our annual and intra-year process as a part of our regular business processes vs. a once per year disruptive event. Doing so could be a helpful step forward in improving our ability to manage investment, shift resources in response to market conditions, and improve alignment within marketing and with the rest of the organization. Based upon interviews with marketing leaders in the technology industry and findings from IDC's recent Marketing Operations Board meeting, I'd like to offer the following "food for thought":

1. Staffing: Do you have an individual or team who's accountable for developing, executing and governing your planning process? The marketing operations function can provide the foundation and discipline for a well-orchestrated and managed planning process. Although this role has been effective in planning and orchestrating marketing's annual and intra-year planning process, marketers' view of planning as a separate activity from their daily job coupled with their lack of financial acumen continues to hinder the success of planning. (email me to receive a copy of our recent mktg. ops. study. . mgerard@idc.com)

2. Process: Marketers have made significant progress in establishing planning processes, such as global marketing leadership boards, a consistent taxonomy, financial tracking and other performance measurement processes; however, the lack of consistent adoption of these processes across the organization including a lack of alignment with finance, sales and regional marketing must be overcome to advance marketing to a higher level of operation and performance.

3. Technology: It is only in the past 3-4 years that most marketing organizations have actually achieved an understanding of how much they spend on marketing across the organization, mostly leveraging highly manual processes and Microsoft Excel. A recent IDC study revealed that 40% of IT marketers in companies >$3B in revenue continue to use Excel and other manual processes vs. a more automated MRM(marketing resource management)-type solution. It is time for us to advance to the next level of marketing, including tracking of investment at a more detailed level. (e.g., by objective, campaign, activity, brand, product, country, or segment) MRM applications offer the opportunity to do this in a more systematized and efficient manner. But remember, process first.

2009 Guidance for CMOs. . .

2008-10-01T13:47:00.000-07:00

When budgets are on the cutting board, the marketing function often has to shoulder more than its fair share of the pain. The cuts of 2008 and 2009 will be no exception. In IDC's most recent budget survey, closed in September 2008, actual 2008 spend increase will be just 3.5%, a reduction from the 4% predicted earlier this year. In addition to the short term budget cuts, the pressures of the current downturn will usher in a period of more sweeping marketing organization change. In my five years as a CMO Advisory analyst at IDC, I have never observed so much management analysis regarding potential marketing-organization change. Here are some things to think about to help you to survive and thrive in 2009:

Transformation Starts at the Top. Many tech marketing organizations have far too many silos and lack alignment. For these companies, there is too much independent resource and spending at corporate and, in some cases, in the business units; and not enough spending in the field, closer to the prospects and customers. This also contributes to the dis-connects between the sales and marketing functions – as the sales department often perceives that marketing's actions are far removed from their efforts. IDC suggests further examination of the marketing organization's structure to improve alignment between corporate marketing, business unit marketing and field marketing.
Seek to Decentralize. Continuously question yourself during the budget planning process: where is the money owned; and where is it spent? IDC guidance is for the typical large tech vendor of greater than $1b in revenue to have at least 45-50% of its total marketing execution "spent" in the geographical regions. Currently, about 36% of the total marketing budget is directly owned and spent by the regions. Add to this the 6% of the typical corporate marketing budget that is "spent" by the field. The total is about 42% of spend in the regions, and so is short of the 50% benchmark goal.
Improve Relevancy. Two areas of essential guidance to help with the relevancy effort including campaign management and sales enablement. The first is an improved Campaign Management function. This role should seek to knit together disparate product-line marketing efforts into broader and larger themes. I have observed several top CMO's making these moves in 2008. The second area is Sales Enablement. Marketing needs to improve its ability to get the right marketing assets to the right sales-people, at the right time and in the right format. This is hard to do: its needs go above and beyond product marketing's attempts to do this.

Rise of the Campaign Manager Role

2008-08-27T11:51:00.000-07:00

Even the most successful technology firms continue to struggle with consistent and effective execution of their campaigns and related go-to-market strategies, unable to improve their alignment with marketing or the organization as a whole. The campaign management function provides the opportunity to solve the foremost problem of tech marketing today: that of the declining return on marketing investment that results from executing marketing mix elements in separate and disintegrated streams. Tech marketing departments that have not structured for this role yet should do so.

Here is some key guidance and insight based upon my recent interviews with marketing leaders in the technology industry as well as findings from IDC's recent Marketing Operations Board meeting with 33 marketing professionals:

Campaign managers provide the missing link between the business units, marketing shared services and regional marketing. At Quest Software, campaign management serves as the liaison between marketing shared services groups and the business units and ensures sales' involvement in the campaign management process.
The foundation of a successful campaign is a detailed go-to-market strategy that includes, but is not limited to, target segment(s), messaging aligned by audience, marketing mix, channel strategy, objectives, and metrics and targets. IBM uses a master brief at the start of any new marketing program, product announcement, or launch to help lock in these elements.
A campaign's go-to-market strategy and execution requires tight global alignment across marketing and sales, while ensuring that specific parties remain accountable along the process with established timelines. Symantec has developed tiered campaign processes and ensures that regions are leveraged as part of this process to secure their involvement and improve efficiencies of planning and execution.
Yes, process comes first, but don't underestimate the power of technology. Differentiate with newer campaign management software to establish and leverage one-to-one relationships with your prospects and customers and continue improving lead management processes, particularly lead nurturing activities.
Common functional and cross-functional metrics continue to apply for campaign performance measurement, yet room remains for new metrics. Don't be afraid to experiment with new metrics. . . and don't underestimate the value of more qualitative metrics.

Common Attributes of Today's Leading Tech CMOs

2008-07-28T13:41:00.000-07:00

Each year IDC completes a rigorous study of technology marketers' efficiency of their marketing organization. This includes over 100 of the leading tech. firms, representing over $400 B in revenue. To help separate the "leaders" from the "laggards", I've developed a Marketing Performance Matrix (2x2 matrix) to stratify marketing leaders and laggards. Each participating company is located on the Matrix as a function of the efficiency of its organizations' operations and the effectiveness of its execution. However, the numbers are only part of the analysis. We also interview the CMOs at several companies within the leadership quadrant.

Here's a bit of what we've learned from these market leaders:

Gain the trust of your CEO and CFO. Nothing gains the C-level team’s trust of marketing more than demonstrating fiscal management responsibilities and receiving high praise from the sales organization. Nortel’s executive team was extremely impressed with the operational rigor that Lauren Flaherty, Nortel’s CMO, has brought to Nortel’s marketing organization; including her team’s progress in managing marketing investment and aligning with sales for effective execution in target markets. Her progress gained her a sizable increase in marketing budget for 2008.

Stop doing more with less. Marketers need to stop the cycle of continuing to expand their number of activities with less money and staff and aim for quality and impact from a fewer number of marketing campaigns. Sun Microsystems demonstrated this discipline in 2007. Sun’s marketing leadership team has been driving the marketing organization to develop fewer but more effective GTM campaigns and has reduced the number of worldwide campaigns from 82 in the past (pre-2007) to no more than 6.10 campaigns currently in the market. HP Technology Solutions Group’s (TSG’s) CMO, Deb Nelson, has rallied her troops around three to five integrated marketing campaigns.

Leverage a strong, senior marketing team in the regions to stay close to the customer and improve your team's agility and reaction to market and competitive shifts. More advanced marketing organizations have established processes and infrastructure across their marketing organization that enable greater decentralization without losing management insight and influence. One example is Avaya: according to Jocelyne Attal, Avaya’s CMO, "corporate marketing needs to act more as a governance function." Citrix’s CMO, Wes Wasson, hired more business-oriented marketing executives to strengthen its regional presence while also putting a global professional development program in place.

Please feel free to contact me at mgerard@idc.com for additional information on this study or add your comments below.

Stop Doing "More with Less"!

2008-07-01T11:51:00.000-07:00

For several years now I've heard the adage that marketers need to "do more with less". That is, during the "Internet boom" technology marketers enjoyed the "excesses of marketing investment", resulting in the luxury of having a sufficient number of people and significant backing for program investment; while today, as a result of significant budget cuts and reorganizations, we feel the need to maintain the same number (or more) of programs and campaigns with fewer people to support them.

Well, I think that we need to stop doing "more with less". That is, aim for quality and impact from a fewer number of marketing campaigns, programs and activities. Sun demonstrated this discipline in 2007. Sun's marketing leadership team has been driving the marketing organization to develop fewer but more effective go-to-market campaigns; reducing the number of worldwide campaigns from over 75 in the past (pre 2007), to no more than six-to-ten campaigns currently in the market. Another example of this strategy is evident at HP TSG, where CMO Deb Nelson has rallied her troops around 3-5 integrated marketing campaigns.

Challenges of stopping the cycle of doing more with less include: shifting marketing's culture to be more strategic versus tactical (not an easy feat with continued pressure from sales for short-term results); achieving marketing's buy-in and alignment with much fewer campaigns, which may result in a lack of support for some products or geographies in the interest of focus, at least in the early stages of this process; putting in place key staff and processes to improve marketing organization's efficiency and effectiveness with this new strategy (e.g., campaign management, marketing operations, sales enablement, a shared service marketing team); and collaborating with sales leads and other CMO peers for development and buy-in to this strategy.

Have we made any progress in marketing & sales alignment?

2008-06-05T06:51:00.001-07:00

Over the past five years that I've been speaking with CMOs as part of my work here at IDC, sales alignment continues as one of the top priorities on every CMO’s to-do list. The increasing maturity of the technology sector accompanied by significant consolidation will only increase the importance of marketing and sales working in unison as part of the customer creation process. In a recent study, we asked marketing and sales folks to rate marketing’s effectiveness at optimizing sales’ worldwide efficiency and effectiveness (1 = not effective, 100 = very effective). Marketing executives rated marketing’s contribution to sales higher than the ratings provided by sales executives: 62 versus 57, respectively. The key message here is not that marketing gave itself a higher grade but that, more importantly, both scores remain low relative to the importance of this alignment to the success of the organization; and with an average of 15% of revenue, or more, being invested in sales and marketing, this alignment remains a process in disrepair.

What are sales and marketing leaders intending to do about this problem?

1. Better alignment of sales and marketing IT infrastructure.
2. Better alignment and integration of (what should be) joint processes (e.g., planning, budgeting, forecasting, market segmentation, go-to-market strategy, lead management)
3. Better alignment/utilization of performance measurement or metrics

Here are some actions sales and marketing executives should take to accomplish these objectives:

1. Integrate marketing and sales operations. This can be a "soft" merge, which would involve alignment of the goals and responsibilities for the marketing operations personnel and the sales operations personnel who report separately and respectively up through the marketing and sales structures. It can also be a "hard" merge, which would have the sales and marketing operations functions incorporated into a single organizational position.
2. Leverage and dedicate field marketing to develop and deploy marketing strategies/assets in collaboration with sales. Dedicated field readiness managers (sales enablement managers) can ensure that globally based enablement "teams" understand sales’ knowledge gaps, while soliciting their strategic input around the overall sales strategy. Field marketing needs to act as the "center of gravity" for development and execution of the local marketing and sales strategy in collaboration with sales.
3. Align sales and marketing with the needs of the customer in mind. In the words of one of our clients. . . "[We have] marketing and sales define and map customer needs, customer acquisition and retention processes along with definitions of key roles, hand-offs, inputs/outputs, and organizational structure required to support such processes."

An Industry-Proven Framework for Managing Marketing's Investment

2008-05-22T12:17:00.000-07:00

Given the economic backdrop of 2008, there are more good reasons than ever for sales and marketing executives to engage in a deep scrutiny of their costs. Many organizations have made good progress on cost control, but there is much to be done; and our IDC CMO Advisory research continues to identify big pockets of wasteful spending in these functions. To help technology marketers better manage their investments, we have just completed our second edition of the sales, marketing, and market intelligence (MI) taxonomy. (email me at mgerard@idc.com for a free copy of this extensive marketing investment framework) This expanded taxonomy includes several new line items that need greater "illumination" of spending and staffing, so that executives can make decisions about their investments. These areas include:

Digital Marketing. Growth in this area continues to outpace other marketing areas, and in many cases takes funds from these other areas. (e.g., more traditional advertising) Most importantly here, the digital marketing strategy must be a component of the broader marketing and sales strategy and not a standalone effort.
Campaign Management. Marketers need to do a better job of integrating the traditional elements of the marketing mix with the newer elements, so as to achieve a unified campaign approach versus "silos" of program execution. (more to come on this topic since we just finished a Marketing Operations Board meeting on campaign management best practices)
Industry and Solutions Marketing. These staff areas have received further definition and clarification of roles.
Market Intelligence; Customer Intelligence; and Business Intelligence. These areas are under active re-assessment at many organizations as the importance of the functions continues to rise.
Sales Enablement. This is a key leverage point for increased sales productivity. Marketing and sales are increasing their sales enablement effectiveness through a combination of people, process, and technology.
Tele-sales and Inside Sales. These growth areas of the sales department receive further detail in this year’s study.

Is MPM 3.0 Even on Your Radar? (Marketing Performance Measurement)

2008-04-29T10:23:00.000-07:00

Marketers in the technology sector have made significant strides in developing and deploying their marketing performance measurement(MPM) strategies. Most have moved beyond the unrealistic quest to establish the perfect return on investment (ROI) metric, and have developed a solid marketing operations area that focuses on maintaining a set of pragmatic marketing performance objectives and metrics. Even so, many companies remain behind the MPM development curve, with the economic, marketplace, and corporate pressures continuing to grow.

Where are the best practice leaders today (i.e., MPM 2.0), and what does their next generation MPM process look like? Here's a quick look at the state of the industry today for MPM based upon a recent study by IDC's CMO Advisory Service:

Marketing Operations is "leading the charge" to improve the group's measurement process and drive analytical rigor across the organization in addition to the more familiar art of marketing. (refer to my earlier post regarding MO staffing levels and responsibilities)
A cascading dashboard strategy has been deployed, including a CMO or executive-level dashboard, and dashboards at the business unit, functional and regional levels. Nortel has done a good job of building this type of hierarchy into their MPM process.
Regions and business units are beginning to improve their data input and overall participation in the MPM process. Citrix takes this a step further and puts the responsibility of data collection and some analysis into the hands of the regions.
The importance of measurement at the activity, functional and campaign level have penetrated the organization as an established "culture of measurement", resulting in improved efficiencies and effectiveness across marketing. In Intel. . . "discussions driven by the dashboard have made the staff smarter and more cognizant about how we're contributing to Intel business success and why."

Essential guidance for every marketer to either catch up to your peers, or to stay ahead of the MPM curve includes: 1) If you don’t have a MPM process yet, start now!. . . And don’t aim for perfection; 2) Use relevant metrics that drive action; 3) Include all marketing groups in your MPM process as well as sales; and 4) Include your MPM process as part of your weekly, monthly, quarterly and annual reporting and strategic planning process, with a well communicated cadence in alignment with sales and corporate.

Feel free to comment below or email me at mgerard@idc.com to continue the discussion. I'll be glad to share some additional insight regarding where I see companies headed for "MPM 3.0".

Highlights from IDC's Sales & Mktg. Effectiveness Summit

2008-04-10T07:01:00.000-07:00

IDC just completed its 4th annual Sales & Mktg. Effectiveness Summit. This was a full day event in NYC that included a great line-up of executive speakers from Careerbuilder, Akamai, Salesforce.com, ESPN, American Express and others. Although this certainly won't do the event justice, here are a couple of the "gold nuggets" that I took away from the event:

Sales may be the "top scorer" in your company, but marketing most likely has the most "assists". [Mary Delaney, Chief Sales Officer, Careerbuilder.com] Do your sales & marketing teams appreciate the contribution of each group as well as the need to work as a team?
"Candor", not "Cancer". [Delaney] That is, honest feedback can either be brought to the right person/team so that something can be done about it - Candor; or it can spread to every other individual in the organization resulting in lack of action and a reduction in efficiency and moral-Cancer. (I believe Mary sourced GE/Jack Welch for this philosophy)
SF.com's framework for optimizing "Campaign to Cash": 1) Demand generation; 2) Sales effectiveness; 3) Territory and fit; and 4) Retention/upsell. No doubt this framework requires a combined marketing and sales effort, with a strong focus on data quality and segmentation its markets and subsequent strategy. They are certainly "sipping their own champagne" at SF.com. (better than "eating their own dog food")
American Express has truly leveraged marketing asset management processes and technology(SAVO) to improve their effectiveness. For example: 1) significantly reduced the 10+ hours/week that sales spent on collateral creation and research tasks; and 2) improved usage and engagement measurement by sales of marketing's content and related assets including user and asset-specific metric reporting capabilities(e.g., 3,844 total log-ins and 12,654 document requests in the first month of their MAM roll-out).
Akamai has taken some very tactical steps to improve marketing and sales alignment, for example: developed call scripts for inside sales and improved marketing's overall lead generation process to improve prospect qualification; created templates for more rapid response to RFPs; and developed competitive and objection guidelines for sales to help them in the sales process.

2008 Outlook for Tech. Mktg. Investment

2008-03-21T08:27:00.000-07:00

Well, we've just completed our 6th annual technology marketing barometer study, and I have some good news and bad news to share with you. Let's get the bad news over with first. As marketers, we have our challenges cut out for us in 2008:

Challenging economic environment in 2008: An unsteady marketplace is introducing significant aversion to risk by tech executives.
Drive for overall marketing efficiency and effectiveness will continue with mounting budget pressure and market competitiveness.
Market and marketing channels will continue to proliferate, creating challenges and opportunities.
Tech marketing budgets will increase by 4% for the full year 2008. Although this is an increase, it is the lowest that IDC has forecast in the past four years and portends further pressure on the marketing function for cost control and productivity increases.

Now a bit of good news. For the companies that have been diligent in improving their marketing operations and effectiveness during the past five years, you are best positioned to "weather the storm", and may even have an opportunity to take share.

Here are some top level insights and guidance:

Be prepared to withstand a budget reduction while still being able to keep the core elements of the marketing business model in place and productive. The best marketing leaders are always in a position to shift marketing investment as needed in a calculated manner to reduce any potential short or long-term implications on marketing's strategy.
Don't just talk about aligning marketing and sales; but take clear steps towards improving this problem. For example, integrate marketing and sales operations either directly or indirectly and focus on improving key processes such as lead management; increase field marketing’s strategic role, moving beyond a pure support function to contribute to marketing and sales' local go to market strategy; and better enable sales, such as improving the value of marketing assets, enabling greater accessibility to those assets and improving channels of communication.
Continue transforming your marketing organization to prepare for the next 12 to 18 months, and communicate this strategy to your executive peers: reduce the silos within corporate marketing and between corporate marketing, business unit marketing and the regions; better understand and engage the customer, both internally and externally; and increase your speed of measurement and action as a team.

Feel free to contact me at mgerard@idc.com for a copy of my recent telebriefing which offers more details to help guide your strategy and execution in 2008.

An Inconvenient Truth for Marketers: The Role and Value of Information

2008-02-12T15:16:00.000-08:00

An inconvenient truth for IT vendors: The factors least considered by vendors in go-to-market programs are those most valued by technology buyers:

IT vendors focus on the ROI of their marketing programs and their sales programs. They might also talk about the ROI a buyer can expect to achieve with their product (i.e., product ROI). Few sufficiently consider the ROI a buyer expects to achieve by spending time with a vendor’s information and people -- the relationship ROI.
Technology marketers build marketing mix plans based on format (e.g., advertisement versus conference versus blog) and communications channel (e.g., TV versus Web versus print). But, in making IT purchase decisions, corporate buyers value content relevance and credibility over format and channel.
When it comes to mobilizing a sales force, most tech vendors subscribe to one sales methodology or another and institute a sequence of selling stages. Meanwhile, the buying process is far from standard.

According to a recent IDC study, buyers spend up to 4.8 hours per week, on average, with third-party information to support current or future IT purchase decisions. Of this, about three hours per week are spent on information related to new purchases or general education that can lead to new purchases.

Meanwhile, IT vendors invested over $174 billion in marketing and sales in 2007 to reach and influence technology buyers. This investment creates a lot of competition for that three hours per week per IT buyer. To engage and deepen relationships with buyers, vendors must strengthen a buyer’s return on time spent with their information, whether delivered online, at events, or through their sales teams.

I expect to see a more pronounced industrywide shift within IT sales and marketing driven by these buyer priorities. Relevance, content, and credibility will become the increasing focus of marketing mix planning and sales enablement. The catalysts of the change are rising sales and marketing costs that outpace the growth in IT spending, the commoditization of IT solutions, and the fact that savvy buyers are becoming more protective of their time. The implementers of change are many: IT marketing and sales, channel partners, content providers, content management vendors, marketing and sales consultants, media partners, and other participants
along the vendor’s go-to-market chain.

By Clare Gillan, SVP, IDC Executive and Go-To-Market Programs

B-to-B Online and Interactive Marketing - Cutting Through the Hype

2008-01-14T05:44:00.000-08:00

Online advertising, social networking, search engine marketing (SEM), Internet broadcasting, wikis, Web 2.0 … what do these terms mean for your marketing strategy? How do you harness the power of this new medium without straying from your current strategy? The new and constantly changing digital marketplace represents great opportunity for your marketing organization and your company; however, many tech marketers are off to some operational false starts in this area. I recently completed a study of the online and interactive marketing area and related processes of 15+ tech marketing leaders. This included in-depth interviews with marketers as well as spending a full day with ~20 leading tech marketers discussing these issues as part of an IDC Marketing Operations Board meeting. Here is some key insight and guidance based upon this research:

Consolidate online and interactive marketing efforts from a process, infrastructure, and governance perspective, yet continue collaborating with business units (BUs) and the field (e.g., integrated marketing councils). The resulting benefits will include greater branding and messaging consistency and improved efficiency and effectiveness across your marketing organization, enabling you to do more with less.
Incorporate online and interactive marketing efforts as part of broader awareness-building and demand-generation strategies, but think "engagement" and longer-term relationship building — not just generating a lead.
Don't hesitate to experiment; build it into your plan. Changes are happening fast in the digital marketplace, and those companies that are able to quickly identify and harness the benefits of the best technologies and applications will be first to achieve competitive differentiation. After all, shouldn't technology companies be first to demonstrate thought leadership in this space?
Marketing must partner and collaborate with IT, something that marketing hasn't historically been good at. Leverage your strong marketing operations team and other process people in the organization to develop a longer-term IT strategy for the marketing organization, and team with IT to provide the foundation for a comprehensive digital marketing strategy.
Don't abandon your more traditional marketing knowledge and experience! Just as in the real world, you can build it online, but that doesn't mean that they'll come.

Feel free to email me at mgerard@idc.com if you'd like some additional information about this study or post any questions/comments directly to this blog.

The Marketing Operations Function - Can we Maintain the Momentum?

2007-12-20T11:45:00.000-08:00

I first studied the rise of the marketing operations (MO) function early in 2005; and MO professionals and teams have made significant progress since then. However, much work still remains; and the momentum of marketing operations leaders' strategic impact is at risk of being lost at many organizations. Here are some key findings/insight from my 3rd annual study of the MO function to help ensure the continued success of this important role in the marketing organization:

1. Make the case for an MO function that reports to the CMO if you haven't already, and leverage IDC research to justify staffing levels for this function. Based upon IDC's Marketing Performance Matrix, 90% of companies in the Marketing Leadership quadrant have one; and your position and your marketing organization's success depends upon the strategic planning and process discipline that this role brings to the table. IDC's overall guidance or "rule of thumb" for staff allocation to the MO function is 2–4% of total marketing staff and one MO staff person for every $10 million to $15 million of marketing budget.

2. Know your CMO's priorities. To ensure that the marketing operations team remains highly relevant and successful at a strategic as well as a tactical level, its objectives and priorities must be in alignment with the needs of the CMO. The more advanced MO teams will help to identify these priorities for the CMO.

3. Maintain Your Team's Focus on your Top Priorities. More and more MO teams are becoming overwhelmed with the quantity of projects that they're involved with, resulting in a loss of focus; which is impacting their efficiency and effectiveness. Be realistic about your goals, and focus on the areas where you can make the greatest impact in your organization in the short-term while laying the foundation for longer term efforts.

4. Drive the MO team towards continuous improvement and innovation. This may include improving existing processes or acting as the catalyst for development and execution of new, innovative ideas.

Want more information on this role? Feel free to send me an email at mgerard@idc.com and I'll be glad to share some of the results of this study with you.

Top Ten Attributes of a World Class Tech Mktg. Org.

2007-11-28T07:55:00.000-08:00

The archetype of the world class tech marketing organization, Top Ten characteristics:

1) The senior-most marketing leader is viewed as a being a business-person by the CEO or COO or equivalent.

2) The senior-most marketer is perceived by the other peer-level direct reports to have equal weight and reporting status in the politics and influence of overall management.

3) If it is primarily a B2B tech vendor, the senior-most marketer has an especially productive and collaborative relationship with the senior-most Sales exec.

4) The marketing organization has a good grasp of its "marketing business model"; that is, what are the ingrained programs, practices, etc. that represent the foundation to the company's marketing platform. There is an annual "rhythm" to this marketing business model so that there is a good sense, across the marketing team, of a solid operating pattern. In other words, the team does not feel as if the marketing strategy changes frequently and is the "flavor of the month".

5) In addition to the foundation of this marketing business model, there is also the room, the operating space, to try new marketing initiatives. These should be one or two (at the most) major initiatives that are tested and tried during the year, lead by the CMO.

6) There is a good balance to the art plus the science of marketing. The foundational elements of the marketing business model should be ingrained enough so that there is a steady and relevant stream of performance metrics that can be driven out of the activity. To the extent that the CMO is able to produce and manage towards these metrics for the core activities, he/she will be allowed more latitude for creating and testing new activities - which by definition will be hard to apply the science to at the beginning.

7) There is good attention to the marketing operations aspects. The marketing organization is right-sized; it is balanced appropriately for the resources and activities that are at corporate vs. elsewhere. There is good attention to budgets(marketing's managerial accounting process); a strong marketing performance measurement process; marketing's short-term and long-term technology needs; and there is enough awareness and circumspection about the marketing budget and the overall company income statement that the CMO, if requested, can with-stand a budget reduction while still being able to keep the core elements of the marketing business model in place and productive.

8) There is a strong marketing staff and constant attention to improving staff caliber and building skill sets.

9) The CMO and staff have a good grasp of the marketplace wants/needs; key industry trends that impact the work; and key competitors and trends. All this is indicative of good "outside-in" marketing and will help the marketing team to be perceived as business people that can credibly represent the voice of the customer within the organization. (for marketing, sales and product development/innovation)

10) The marketing function is perceived within the organization as a good place to work; a function where careers can be built; a function that has a high bar for job entry.

I could go on, but those are the top ten.

How long could it take? Depends on what you are starting with. If rock-bottom is the basis, it could take 2-3 years.

By Rich Vancil, VP Executive Advisory Group, IDC

Channel Marketing Investment - How much did we spend and why?

2007-11-14T15:33:00.000-08:00

Do you know how much of your marketing investment is dedicated to your channels? Not just co-op and market development funds(MDF), but also the investment in other marketing activities that are intended to either directly or indirectly support the channels. This may include "ground cover" as some people would put it. If your answer is no, then you're not alone. Few companies have a more holistic understanding of their investment in the channels, let alone their return on that investment. In addition, most channel-centric companies are afraid to modify their investment in the channels since they don't quite know what will happen; taking a stance of "if it's not broken, don't fix it".

With cost pressures on marketing only increasing, this strategy will need to change, and quickly. The challenge is even greater for those companies just beginning a channel marketing program. . . trying to decide how much to invest in the channels and how to manage and track return of that investment.

Here are some key findings from recent IDC research:

-IT vendors must increase their investment in marketing to support an expansion in indirect sales. IDC has modeled the change in marketing budget ratio (MBR), or marketing investment as a percentage of revenue, based upon shifts in revenue from indirect sales. This shift will vary depending upon the size of the company, segment-specific variables, and business mix or other factors, but the trend is clear that support of indirect versus direct sales requires additional marketing investment. (feel free to contact me at mgerard@idc.com to receive a report which summarizes this relationship for software companies)
-In addition to the level of overall marketing investment, the marketing mix also changes as collaboration with reseller channels increases. For example, IDC research indicates that events and direct marketing program spend allocation as a function of total program spend decrease with increasing investment in the channels. The key take-away here should be that you need to review your marketing mix carefully as your channel strategy and investment shift.
- Initiate a channel marketing performance measurement program if you haven't done do already. This strategy should include development and tracking of operational metrics (e.g., channel marketing investment as a % of revenue, investment throughput) as well as execution-focused metrics (e.g., lead generation metrics). Collaborate with your marketing operations team to advance this agenda if you haven't done so already. (what's "marketing operations"?. . . . glad to send you a copy of my recent study in this area if you're interested mgerard@idc.com)

Also, check out a recent article in B-to-B for additional information on channel marketing.

2008 Essential Guidance for CMOs

2007-10-11T16:30:00.000-07:00

Marketing investment across the IT vendor community will increase by 6.1% for 2007. This increase in marketing investment will lag behind the growth rate of global vendor revenue, which is forecasted by IDC to be 6.7% in 2007. Tech marketers should watch this trend closely, and monitor their marketing budget ratio (MBR) and marketing investment change (MIC) data versus the industry. My research within IDC on marketing ROI has consistently shown that tech marketing leaders tend to expand their budgets at a rate equal to or greater than their revenue growth rate. Short-term budget reductions may improve short-term operating margins while sacrificing longer-term growth. This holds especially true for disinvestment in the brand and awareness-building elements of the marketing mix, which tend to return the best results when managed with a smooth and steady investment strategy. Here are some key guidelines for tech marketing executives and their operational counterparts for 2008:

- Think more about tech marketing from the "outside-in" versus the "inside-out." Tech marketers traditionally "go to market" in a one-way trumpeting of product and feature messages. As buyers get smarter and savvier, these product-centric and very expensive techniques will be less well received, and the return on traditional marketing investments will decline.
- Embrace interactive marketing. The new online and interactive marketing mix represents an excellent launching point for better "outside-in" practices and the potential for greater returns on investment. However, many vendors are off to some operational false starts in this area. IDC suggests beginning with an investment and operational review of all Web 2.0 marketing techniques.
- Start a channel marketing measurement initiative. The return on the channel marketing dollar is one of the murkier areas of the marketing investment portfolio. Now is the time to invest in establishing a set of improved processes and ongoing measures for channel marketing operations.Improve the overall "end-to-end" marketing in your company. Reduce your sales and marketing integration challenges by creating a single view of the customer from end to end; rationalize the number of customer databases if necessary. Better leverage customer and prospect data to improve the entire customer-creation process, from initial awareness through advocacy.

Source: Marketing Investment Planner 2008: Benchmarks and Key Performance Indicators, IDC #208489, September 2007

Tech Sales and Marketing Execs: Avoid Negative Attention from Your CEO!

2007-10-11T13:26:00.000-07:00

By Richard Vancil, Vice President, IDC's Executive Advisory Group

A long-standing rift exists between sales and marketing in the IT vendor community. We all recognize the tired observations: sales is more tactical and marketing is more strategic; sales is all about the short term and marketing is about the long term; sales brings in the money and marketing just spends it. And we all know that the finger-pointing from the "two sides" gets sharper from there!

Just as these misalignments and strained relationships have been long-standing, so has the tolerance of this by the C-Suite executives. The prevailing mindset: as long as the business results have been very good, a little organizational tension never hurt anyone – and some of it is actually helpful! It's a good sign that complacency hasn't set in.

IDC is now observing that C-level tolerance is reaching its limits. More CEOs and COOs are scrutinizing their total cost of creating a customer: the sales plus marketing cost envelope. They are seeing those costs continue to rise relative to the return and are suspecting that the organizational friction and lack of alignment between sales and marketing is a culprit. And they are right!

The costs are just too big a target for senior management to ignore. A typical large tech vendor might spend 3% to 12% of revenue on marketing and an additional 10% to 20% of revenue on sales. For illustration purposes, let's call it 20% in total. Some of those costs are for pure and isolatable marketing activities and some are for pure and isolatable sales activities.
But a good proportion, as much as one-third, or 7% of revenue, are costs that lie at the intersection of sales and marketing. Activities represented in those costs include customer database management (often redundant and disconnected between departments); the lead management process; and the broad category of marketing's support and enablement of field sales. Where this intersection is tangled with miscommunications and broken processes, it is then reasonable to assume that some large part of that 7% might be wasted money.

As a result, more CEOs are now actively inserting themselves in the sales and marketing process to streamline operations and to reduce costs. At many companies, we are seeing a merging of the sales and marketing operations functions. At several companies we are seeing finance teams (and their hired consultants) spending more time examining and rationalizing sales and marketing costs (by order of the CEO). And finally, at a handful of companies, we are observing tech vendor CEOs looking actively at the organizational option of a single sales and marketing executive reporting to the CEO. We expect to see more of this in 2008 and beyond.

Our guidance for the senior sales and marketing executives is this: Start addressing some of these problems on your own or your CEO will start addressing them for you!

If the coming negative attention from the CEO is not enough motivation, it might be helpful to also look at some external catalysts. New IDC research finds buyers increasingly frustrated by the approach and tactics made by the vendor's marketing and sales efforts. They are getting turned-off by messages, material, timing, and sales representation that is out-of-sync with their buying process. Much of this may have roots in the misaligned sales and marketing execution on the part of the vendor.

Sales and marketing executives need to get on the same page. Put yourself in the shoes of your CEO the next time you are preparing for a sales and marketing planning or budget review. He or she is looking for new ways to lower the overall cost to create a customer. Offer a unified solution – not a fractured problem!

Product, Solution and Industry Marketing. . . the Next Evolution

2007-10-09T08:29:00.000-07:00

Product marketing needs to undergo a significant evolution in the technology industry. It must no longer be marginalized as a content creation role or simply included as part of product management. Companies have an opportunity to lead this evolution by leveraging product, solution, and industry marketers to drive innovation in the organization and better meet the needs of their customers. Here are some key insights and guidance for tech marketers:

Companies should conduct a comprehensive audit of their product, solution, and industry marketing practices and apply a consistent definition of roles and responsibilities across the organization. This should include rules of engagement for these teams to interact within marketing, with other functions (e.g., product management and sales), and across business units where applicable. (contact me to receive a free copy of our 2007 Technology Marketing and Sales Taxonomy doc which includes definitions of these roles - mgerard@idc.com)
Innovation will be mandatory for next-generation tech leaders, from a product and solution perspective as well as a marketing and sales execution perspective — and product, solution, and industry marketers are in the best position to drive innovation across these areas. These teams must better incorporate the voice of the customer into the fabric of the organization, within product management for product and solution development and within sales and marketing for the customer creation process.
A key theme for the next 12-18 months is to get "ahead of the curve" on sales and marketing alignment and integration. In a recent study conducted by IDC, tech sales executives gave marketing a grade of 62 out of 100 for meeting sales' support needs. Product, solution, and industry marketers are in the ideal position to leverage their technology and vertical knowledge, coupled with marketing skill sets to improve sales efficiency and effectiveness.

Source: CMO Advisory Best Practices Series: Product, Solution and Industry Marketing, IDC #206551, April 2007.

Field Mktg. . .The Missing Link for M&S Alignment

2007-10-07T17:44:00.001-07:00

CMOs and their organizations continue to fall short in optimizing alignment with their sales organization, and the field marketing function offers significant opportunity to improve the linkage with sales. Based on the results of a study I completed as part of IDC's CMO Advisory Practice of the field marketing function and related processes, I'd like to offer the following key insights and guidance:

Conduct a comprehensive audit of your field marketing practices, and apply a consistent definition of roles and responsibilities across the organization. This should include rules of engagement for these teams to interact within marketing and with sales. Best practice leaders achieve greater efficiency and effectiveness through global consistency: common language, sales communication and enablement, and more rapid sharing of best practices.
Achieve a greater balance of centralization versus decentralization from a staffing as well as a program investment perspective. Regional marketing execution must leverage corporate strategy and global best practices, yet still maintain the autonomy to meet local needs and respond to business opportunities and competitive threats. IDC recommends that 60–70% of field marketing's execution and assets should originate from corporate, with the remainder driven regionally or locally by field marketing.
Leverage field marketing to improve marketing's performance as well as the perception of marketing's contribution to the organization. More specifically, field marketing needs to act as the "center of gravity" for development and execution of the local sales and marketing strategy in collaboration with sales. This includes field marketing helping to drive local sales strategies. (e.g., market sizing, identifying and helping to prioritize targets) As once participant put it, “I don’t think I ever want them totally aligned. . . I want to create tension in a positive way."

Source: CMO Advisory Best Practice Series: Field Marketing. . the Last Mile to the Customer, IDC #207984, August 2007.