Update on Tech Market Intelligence: The Role; Budgets; and Trends

As with almost all functions within a large and complex marketing organization, the Market Intelligence (MI) organization is under pressure to transform. In our recent discussions with top MI executives, three transformational trends stand out as "guidance" for this profession.

1. Transform the MI organizational model and team to be more proactive. MI staffs tend to be spread thin and rarely have the bandwidth to move out of "response" mode. IDC believes that the MI function needs to increase the self-service capability for the majority of its internal clients. Better information portals, and the tools and training to access these resources are key to this effort. In doing so, MI should then be able to place more active attention to the second guidance area which is:

2. Increase executive support. This implies higher level insights and better "packaging" of externally-sourced MI content, so that it looks and feels palatable to an executive audience.

3. Be more efficient and visible in the delivery of measurable value. Establishing the ROI of MI is not a hard science; but MI execs should not give up the pursuit of tying their contribution to revenue.

What about the total resource committed to MI? We do know from our latest budget research that thirteen percent of ICT vendors will decrease MI spend in 2012; twenty-five percent will increase spend, and the rest will keep spending flat. But more importantly, revenue growth will likely outpace MI budget growth and this would mean a declining "MI Budget Ratio": the percentage of revenue spent on MI. This could be a caution light that indicates that the organization's need for MI outstrips its resources. Viewed another way, the percentage of the marketing programs budget that is spent on market intelligence programs ranges from an average of 5.8% (companies with a strong proportion of direct sales) to an average of 3.7% (companies with a strong proportion of indirect sales). These data point are for ICT vendors billion-dollar plus revenue ranges.

MI staff accounts for 3.8% of marketing positions and this allocation tends to be fairly stable. Regarding organizational changes: IDC sees that the majority of MI teams continue to sit within marketing, while others are being moved into corporate strategy or sales … or from these organizations back into marketing! Some organizations maintain independent market intelligence, competitive intelligence, and analyst relationship teams, while others blend either CI or AR with MI.

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Technology Buyers Tell Us How to Speed Up the Buying Cycle

IT leaders making enterprise-level technology purchases report that their buying cycle has increased by more than 20% in the last three years, according to IDC's 2012 Buyer Experience study. They are not happy about this fact and were not shy about telling IDC about how vendors can speed things up.

IDC's 2012 Buyer Experience Study reveals that CIO's making enterprise-level technology purchases report that their buying cycle is now longer than five months when multiple vendors are competing for their business.

I find several things interesting about this fact.

1. The length of the B2B tech buying cycle continues to increase.  In 2009, the buying cycle was about 4.5 months and is now 5.4 months. It has increased more than 20% in three years.

2. IT executives have consistently told IDC that they would like their buying cycle to be shorter. Three months seems to feel about right to them – which is 40% less than what they currently experience. The CIO's readily admit that their own companies are to blame for most of the delays – 60.8% of the delay they attribute to their own buying process complexity.  More people are now involved in each decision, for example. However, 35.6% of the delay, IT leaders say is caused by poor marketing and sales processes on the part of the vendors.

Clare Gillan, IDC Senior Vice President of Executive and Go-to-Market Programs, told the audience at the recent IDC CMO Advisory client meeting that survey participants were very clear on how vendors could help them speed up the buying cycle. Here is advice from the IT leaders along with just a few quotes:

• Listen: "Listen to what we are asking and what we want before presenting a cookie-cutter one-size-fits-all solution."
• Justify: "Help us write the business case."
• Honesty: "Put everything about your product on the table, including the short-comings."
• Pricing: "Provide all available options with associated pricing up-front."

 Respect, service, and transparency – these are the communication attributes I perceive when I read the survey results. Are these attributes in your persona descriptions?

3. One more thing I find interesting about the reported length of the buying cycle:  Does five-plus months seem short to you? In contrast, marketing and sales leaders reported that 19 months is their average sales cycle for enterprise-type deals according to IDC's 2011 Tech Marketing and Sales Productivity Benchmark studies.  I don't think I have ever heard a B2B tech marketer or sales leader report a sales cycle of just a couple months - except for small ticket items, repeat purchases (which would not be included in this survey question's category) or the occasional purveyor of some super-hot-can't-wait solution.

My guess is that buyers have a different definition of when the buying cycle starts than do marketers and sales people.  What does this mean to marketers who are engaged with buyers in very early stage conversations? Something to think about.

 

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Six Key Table Stakes for B2B Sales and Marketing Alignment

The IDC CMO and Sales advisory services held their most recent client leadership meeting in Santa Clara on June 5th. One of the key topics of the day was sales enablement. The ensuing dialog between the sales and marketing execs in the room was as impassioned as it was ineffective. Many of the usual themes were expressed (in the nicest possible way): "marketing leads are crap", "sales doesn't follow up", etc. etc.

Whenever I hear this conversation it always sounds like the two sides are talking past one another. Neither really understands how to express their frustration in a way that has any meaning to the other. What's missing are some basic table stakes:

Sales 

1. Train marketing on sales process. It is impossible to effectively contribute to, much less consistently improve, an unknown process. No marketing team should be expected to deliver effective collateral or leads to a sales organization until they have been fully trained on sales process and methodology. In a large organization with multiple business units and product lines there will be many sales processes and the marketing teams charged with supported them must receive the same depth and cadence of training that the sales reps get.

Marketing 

2. Treat the sales force like a market segment. There are great variations in the needs of different kinds of reps in your organization and you must understand them on a rep by rep basis no less urgently than you do for your external marketing targets. The needs of an enterprise rep with two accounts are radically different than an SMB rep with 400 accounts or a territory where they may not know all the potential customers. Don't throw 10,000 leads a month at both of them. You get the idea. Nurture your sales reps like any other targets and tune the metrics accordingly.

3. Market sales collateral like solutions. Marketing tends to market its wares to the sales force like products whose benefits are self evident. Assets are often "published" or "distributed" generically with tags to help reps "find" them. Imagine what would happen to the funnel if that was the extent of external marketing efforts! Sales support assets should be marketed through targeted nurture campaigns. Once you get going on #2 above, you can start to address the needs of each rep and market your leads, collateral and other assets as solutions to the right sales problem at the right time!

4. Take an account centric approach to lead generation. Marketing is generally great at understanding the world in terms of segments and contacts. These are fundamental concepts for planning, budgeting, and executing marketing activity. However, sales reps think of the world in terms of accounts. Marketing needs to make leads more relevant to reps by delivering them in an account context.

Sales and Marketing

5. Define customer creation as an enterprise process. This is the most effective way to change the corporate culture and gain executive support for addressing the many alignment issues across all customer facing functions in the enterprise. The analogy here is supply chain. Before it was defined as an enterprise process the people, processes, technology, data, and budgets within it were managed on a purely departmental basis. Defining it as an enterprise process made it possible to optimize and continually improve the supply chain based on overall business performance. The customer creation process - from prospecting to closing to upselling - needs to be owned and measured in the same way.

6. Implement customer data as an enterprise service. Once customer creation is established as an enterprise process, it requires an enterprise approach to customer data management in order for the optimization and continuous improvement to take place based on core business metrics and not on a collection of disassociated departmental KPIs.

These six table stakes should be treated as urgent action items for all high tech Sales Operations and Marketing Operations personnel. Some organizations are doing some of these things, but no one has implemented all of them as organizational norms.

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CMO Turnover at Nokia, and in General...

Nokia's CMO Jerri DeVard is out of a job today, hitting the screen at 18 months.

(See: http://tiny.cc/crz3fw).

We have seen this many, many times in this role. Why is CMO job tenure often so short?

CMO's come in three basic flavors. There is the Mar-Comm CMO, who has skills in branding and messaging and corporate communications. There is the Product CMO, who has come up through the product line or LOB ranks, with a successful background in Product Management and Product Marketing. Finally there is the Selling CMO, who has come up through sales and has run revenue centers for major geographical units.

So if you are the CEO and you need a new CMO, which flavor do you choose? You are not likely to find this three-fold capability in one person. The best you can do is to optimize your hiring spec for the strengths that are most currently needed. And then make sure that the CMO surrounds herself with strong colleagues who bring complementary skills.

Back to Nokia. If there was ever a company that needed (and still needs) a Product CMO, it is Nokia. I do not know Ms. DeVard personally, but a quick review of her biography would show that she is -- not suprisingly -- a classic Mar-Comm CMO. And she is probably a great Mar-Comm CMO! But just the wrong flavor for this struggling company, at this time.

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IBM starts the CMO + CIO Dialog

IBM's new CEO Ginni Rometty is targetting the CMO role in her first major client event. On June 6-7, Over 300 important IBM customers were invited to thie "CMO + CIO Leadership Exchange". They attended in executive pairings - the company CMO plus CIO – to explore their business relationships and objectives related to Marketing Automation.

As an opening comment, Rometty stated that "IBM wants to set the agenda on the topic", and she exhorted her customers to move fast, to capture the benefits. Over the two day session, the dialog and content was heavy on assessment of the current reality and challenges of customer data analysis.


IDC expects that IBM will drive the following (approximately) five messages / themes in to market, to reinforce the Marketing Automation imperative:

1. Technology is moving out of back office functions such as finance or operations, and into front office functions of marketing and selling.

2. Marketers and Sellers begin this journey into Marketing Automation with the problematic reality of attaining the current "Single version of the truth" regarding customer data and the customer record. They are hampered by IT legacy, management systems and processes, and company culture.

3. Capture and analysis of Big Data in Marketing is the quest. And 85% of marketing data is unstructured: the hardest form of data to analyze.

4. The future of marketing excellence will be owned by those who master predictive analytics that are extracted from customer data. With proper instrumentation and monitoring, it is easy enough to know where your customers have been or where they are at present. But where are they going, and what is their next move?

5. And, overall, this whole Marketing Automation mission is a race against time. There is a 12-36 month window to become a "Big Data Marketer". Those who do not enter and win the race will risk not just the absence of marketing excellence, but might put their whole business at risk.

The Leadership Exchange agenda did not include a deeper dive in to IBM's current or future solutions against that reality, but IDC expects that, logically, the solution-set portrayal will be IBM's follow-up move.

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As the Channel Churns: The Battle for Routes to Market

High tech channels are restructuring due to the emergence and convergence of social, mobile, big data, and cloud based solutions. These forces are expected to cause a substantial churn in the channel. IDC predicts turnover of 25,000 to 50,000 infrastructure partners in North America by the end of 2013. This is a major wake up call for high tech channel marketers. Three years from now your channel community, the solutions they sell, and the most profitable routes to market will be very different than they are today. Vendors that see a net gain in channel capacity over this time frame will be the ones who diligently accomplish the following three objectives:

1. Redefine relationships: Vendors will need to be both more strategic and more tactical in support of their channel. The business planning process must incorporate strategic issues such as helping partners acquire new skills, building partner networks, funding acquisitions, and driving multi-vendor alliances into the channel.

At the tactical level, vendors need to help partners clearly understand how to best invest in their business. This requires compelling evidence of return on investment. For some partners the highest ROI will come from hiring more technical staff or achieving certifications. For others it may be hiring sales reps or doing more marketing. Partner engagement hangs in the balance and it is up to vendors to make the case for each and every partner.

2. Reposition programs: Channel marketers need to think of their marketing programs as solutions to partner business problems. Typically channel programs are marketed like products with the benefits presumed to be self-evident. Not so. Even the most elegantly packaged program offerings are not relevant to a partner until they understand what business objectives it is designed to achieve for them – Building awareness? Lead generation? Appointment setting? Customer loyalty/upsell? Vendors must reposition programs as solutions that are:

• Tied directly to partners' business goals 
• Designed as sustainable campaigns – not short term marketing hits 
• Easily linked to funding programs such as MDF, JDF, co-marketing, etc. 
• Provide execution support through portal capabilities, concierge services, and references to approved marketing services firms

3. Reskill for analytics:Data analytics will be the differentiating factor for the winners and losers in the battle for channel capacity. This will require staffing up on business analysts and capturing better marketing and sales data from partners. Vendors whose products or business models provide end customer touch points such as SaaS or hardware provisioning have a big advantage in this regard. Competitors need to seriously think about how they can incorporate end customer touch points into their offerings. The importance of this cannot be overstated - it closes the loop on the lead qualification, distribution, nurturing and sales cycles enabling continuous improvement to be applied to all of those critical functions.

Not all go to market models in high tech support end customer touch points for vendors. With this in mind, some of the new ways vendors are attempting to get closer to the data include:

• App level connectors between vendor partner relationship management (PRM) portals and partner CRM systems
• Requiring campaign and lead performance reporting as part of funding approval processes
• Enticing customer contact through SaaS, communities, incentive programs, etc.

Customers want their applications, infrastructure, platforms, and communications to work seamlessly with legacy solutions as well as with customers' multi-screen environments. They expect rapid deployment, mobile readiness, low cost, high availability, flexibility, and return on investment. These requirements can only be met if vendors restructure their offerings and their channels to bring a widening set of specialized technology and expertise together into standardized offerings customers can trust. For more on the future of high tech channel marketing, see: Best Practices in Channel Marketing, IDC #234367, April 2012. 

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Keep the Language of Marketing a Secret?

Tech marketing leaders constantly search for better ways to align with sales and IT as well as gain greater influence at the executive table. To improve this capability, Marketo's newest board member, Sue Bostrom, offers an intriguing suggestion – keep the language of marketing a secret.

Sue Bostrom is one of the Silicon Valley's most accomplished marketers. A former executive vice president and CMO at Cisco, she serves on the boards of Marketo, Varian Medical Systems, Cadence Design Systems, Stanford Hospital & Clinics, and Georgetown University in Washington, D.C.; and advises several prestigious organizations.  At the recent Marketo User Summit, Sue shared with the enthusiastic fan-base practices that contributed to her success.

One piece of advice - consider the language of marketing a "secret language", one that we use when only when we talk to other practitioners.  When we talk to others, use ordinary language.

Since I speak the language of marketing every day, it had not occurred to me that what seems like normal conversation to us may seem like gibberish to colleagues.  Then I thought about the terms we throw around so easily. How about brand DNA, fan ratios, A/B testing, creating customer value, psychographics, listening platforms, CPM, leave behinds, personas, net promoter scores, positioning, referral premiums, authenticity, or network analysis? Maybe the language of marketing has become too technical, too insider.

As the audience left the packed ballroom following the keynote, I heard a few attendees complaining. They interpreted Sue's suggestion as a directive to make marketing a second-class profession in the corporate world. I disagree with this interpretation. All sophisticated professions develop specific terminology. Spoken inside the community, it achieves precision and clarity. But to those outside the profession, it sounds confusing, irritating, and possibly elitist. Think how annoyed people get when attorneys use legal jargon. Here's an example I pulled from a website appropriately called the Plain English Campaign:

"Any reference to a specific statute include any statutory extension or modification amendment or re-enactment of such statute and any regulations or orders made under such statute and any general reference to "statute" or "statutes" include any regulations or orders made under such statute or statutes"

Huh?

Using plain language when we speak to non-marketers is not "dumbing things down".  It does not diminish our worth to use ordinary language.  It increases the chances that we will be understood. It shows respect for our colleagues' experience in other areas.

What are some ways we can communicate more clearly with colleagues in other business functions?

• Substitute ordinary language and analogies for buzzwords: when eCommerce was just beginning, Sue told her fellow executives that the website would "sell while they slept"
• Explain with data: for many business concepts, numbers can be more objective and clear than wordy explanations (but avoid mind-numbing, execution-level detail!)
• Use visuals: the old maxim that "a picture is worth a thousand words" is true because pictures allow someone to grasp many aspects of a situation simultaneously -  especially good for communicating complex concepts

Sue Bostrom is a marketer who earned a seat at the highest leadership table. And let's face it, not many technology marketers have. I think we should heed her advice.

(P.S. Congratulations to Marketo on the launch of their new social marketing release and to CEO Phil Fernandez on the publication of his new book, Revenue Disruption).

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