Wednesday, May 30, 2012

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. 

Tuesday, May 29, 2012

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).

Thursday, May 17, 2012

Social Marketing: Beyond the Hype or Behind the Curve?




What is the reality of Social Marketing adoption? Does usage match up to the hype and high expectations? Or is this already an over-blown marketing fad, even in these early days?

IDC is beginning to see excellent examples of use, where Social Marketing is moving beyond  experimentation and is beginning to put down roots as a "value-adding" contributor within the marketing-mix. Our latest research from shows that 84% of IT buyers are accessing social media to keep up with trends and stay connected.


However, of that same 84%, only 19% believe that social media has influenced how they interact with vendors and make purchase decisions. It would seem that tech vendors and tech buyers are inhabiting many of the same Social media spaces, but Social Marketing as a more intentional effort to influence buyers still needs work. Tech marketers are learning that they must give before they expect to receive, and focus on creating social media interactions that are highly relevant and provide value to buyers.

IDC is closely watching levels of investment and attention to the deployment of Social Marketing. How much is actually being spent in this area? What is the marketing-mix allocation of scarce monies and human resources to work on these initiatives? IDC starts by looking at investment and activity in Social Marketing. When one examines the actual allocations. the results are surprising. Investment in Social Marketing tools and programs is just 1.3% of the discretionary budget for a large IT vendor. As for the human resource: dedicated Social marketing talent is just .7% of total staff – or in other words – a part of one person's time.

The infrastructure and tools to support Social Marketing must come in to place. Our research also shows that Social Marketing tools are at the top of the CMO’s shopping list for 2012. Only 34% of marketers surveyed currently agree that they have access to the right information at the right time to support decision making, analysis, planning, or forecasting.


We are still in the early days of this. I cast my vote on the side of optimism, and believe that Social Marketing execution will, in-time, be a core element of the B2B marketers tool kit.

In the mean-time, assess where are you on your progression towards delivering value, and earning the rewards of Social Marketing. Here are three tips for Social Marketers:


1) Don't rush the listening process: Our parents taught us to "listen before you speak" and here is a great place to remember their words. IDC is seeing good usage of Social Marketing for the key activity of "Listening and Monitoring". In fact, "just listening" to the conversations about your company–without even "saying" anything–is an excellent way to step into this new media. Many companies are rushing this step, which has limited their ability to meaningfully engage with their targets. Data from IDC's 2012 Buyer Experience Study shows that buyers are most commonly found in communities and blogs, making them an excellent source of relevant conversations.


2) It's not only about presence, it's about influence. Always prioritize the value that you can bring to your audience. Help educate them. Help connect them with their peers. These are attributes that they dearly seek, versus being "sold to" by their tech vendors.


3) Invest and evolve: Continue to invest in Social Marketing and increase proficiency. The relatively low level of dollar and staff outlay will grow quickly in the coming years. At the same time, there should be a relatively sizable gain in cost per impact vs. traditional media. Social Marketing is capable of providing high impact at a relatively low cost. Invest and increase proficiency to achieve higher levels of impact.

Friday, May 11, 2012

Big Data Comes to Marketing?



What's the most commonly heard word in marketing organizations today? It is “Transformation.”

Dramatic transformational change is sweeping through marketing functions in most industries. And the main "change agent" is the customer. Or what we at the IDC Executive Advisory like to call the "New Buyer" . Our customers and prospects today are crafting their own routes to learning about products and services. They are motivated and skilled at educating themselves and learning from peers. They travel through numerous digital pathways in their exploration process. And by the time they come to a meeting with the vendor sales person, they are smart and savvy. They are empowered.

Marketers need to ask and answer these questions: Where did our Buyers come from? What do they know already? And above all: How do we  add new value to where they are in the process of discovery about our product or service? The New Buyer dynamic creates volumes of new data and customer intelligence analysis opportunities for vendors.

In turn, Those in the marketing job function must be able to bring better data into any planning meeting, including discussions on budgets and investments; programs and campaigns; or performance measurement. Hard data needs to complement the “softer side,” or the “art,” of marketing.

The tools for accessing and mining data, and turning data into insights, are now plentiful for today’s marketers. And, The marketing job function might be the last of all an organization’s major functions to become automated.

The marketing winners of tomorrow will be masters of rapid data management — able to turn data into intelligence, intelligence into analysis, and analysis into decision support and execution. Achieving this will be the first step in the rudiments of sales-to-marketing cost control.

For the CMO, there are three critical, inter-departmental, data-driven intersections that need to be created and nurtured. Marketing is now too important to run in isolation, so here are the three key intersections:

1. The Marketing and CIO intersection. New IDC research shows that the investment in marketing automation technologies in 2012 will be at three to four times the rate of 2011 levels. Automation technology development is going to sweep through sales and marketing over the next 10 years.

2. The Marketing and Sales (CSO, or Chief Sales Officer)  intersection. Today, the CMO needs to be able to connect sales technologies, such as CRM, with new marketing automation technologies.

3. The Marketing and CFO intersection. The CMO needs to deliver a return on investment in measurable terms in order to have meaningful budgeting and planning discussions with the CFO. Measuring impact of push programs in terms of conversion to leads, opportunities, and revenue is the game today.

I like to say that there will be more change in Marketing in the next five years, than we have seen in the past 25 years combined. These Marketing data and IT automation issues will be at the forefront for the next generation of successful CMOs.