Why Business Executives are the New IT Buying Center

Several times a week the IDC CMO Advisory Service gets inquiries from tech company clients about how to shift their company mindset to a new and different buyer.  IDC’s IT Buyer Experience Study shows that business buyers have 53% of buying influence in the earliest part of buyer’s journey and their influence stays high throughout the entire process.  The tech buyer’s influence, while still important, is comparatively waning.

A successful shift to a business-buyer approach will accelerate if you understand what’s behind it.

Front office automation has more business risk than back office automation.  The 2nd Wave (as IDC calls the client-server era) was mainly about automating things inside your company.  The 3rd Wave (as IDC calls the current era of cloud, mobile, social, and big data) is about automating your connections to the outside world (I call it the company “skin”).  When tech problems happened deep in inside your company, it was frustrating but not devastating.  The worst business tech problem of the 2nd Wave was being too slow to adopt new technology leaving competitors or upstarts to sail past you with business process advances.  That problem is still a concern today.  However, add the horror of screwing up in front of customers, investors, influencers, indeed, the whole world!  Just ask the CEO of Target.  Business executives are forced to pay attention to technology today – whether they want to or not. IDC forecasts that business executive budgets for technology will outstrip IT budgets.

Technology is easier and prettier now. Back in the day it took a real expert to understand the ins and outs of information technology products.  The products were intimidatingly gray and beige and filled with exposed wires and chips.  They hummed, got hot, and sparked out with regularity.  No wonder the finance and marketing execs wanted to leave those suckers alone.  Now most of those wires and chips are moving to the “cloud”.  Doesn’t that sound nicer?  Devices you touch are smooth and have pictures. Better design makes technology 99% invisible (to quote the title of one of my favorite podcasts).

Business executives are smarter and more confident about technology.  Back in the day, technology was a startling thing that business people in the prime of their careers had never seen, much less used.  I remember one intelligent, capable, and admired, C-suite executive who used to have his administrative assistant print out his email because he wasn’t quite sure how to use it.  Now, anyone younger than 60 came of age with PCs and programmable everything.  Information about technology is available at everyone’s fingertips and accessing opinions from your professional network is incredibly easy. While a portion of the population will always be skeptical or frightened about the next new thing – it’s not likely to be IT that they are scared of (drones, anyone?).

Here are some steps you can take to accelerate the shift to a business-buyer focus:

  • Bring focus on the business decision-maker up to par with the technology decision-maker.  This is the Goldilocks strategy – not too much but not too little. For most new tech installations, IT will no longer instigate nor approve nor pay.  However, at some point the business executives will want to bring in their IT partner to take over some aspects of the decision.  Keeping adjusting your investments in content, campaigns, training, etc. until you’ve reached a balance in results.  Because this is a change you will have to overinvest in activity to achieve new results.
  • Take clues from the shifts described above. Focus value propositions on front office business problems.  Build in cloud, mobile, social, and big data messages and capabilities (IDC says 90% of IT growth is coming from these areas). Make the “ugly” of tech 99% invisible – in your customer engagement, your sales discussions, and in the products themselves.  But that doesn’t mean be fluffy. Much of what is called “thought leadership” is astonishingly useless.  People are trying to solve real business problems.
The worm has turned as the saying goes. We are never going back to the old way.  Tech companies who succeed will be the ones to step up to investments they need to make to serve the empowered business buyer.

Sales process – the missing ingredient for marketing ROI

Most marketers in B2B enterprises have never been trained on sales process. If I were running your marketing or sales organization this would be the first thing on my agenda. Why? Because without understanding sales process, marketing is essentially set up to fail. How can anyone improve or contribute effectively to something if they don’t know how it works. It’s like setting up your manufacturing to produce blue widgets but not telling your suppliers what parts you need for your particular widgets. So they ship you tons of blue stuff and hope that somehow it all works out. That’s the position, to one degree or another that most enterprise marketing organizations are in even at some of the most advanced process-centric companies in the world. Largely because they have chopped up the customer creation process into a collection of departmentally independent activities. 

In a large enterprise with many products lines, business units and segments, there are likely to be a number of different sales processes. Marketing and sales resources should be aligned against these processes horizontally. This is the key to making the shift from a siloed command and control organization to a responsive, integrated customer focused one. Not only is it important to design around sales process, which should be designed around the buyer’s journey, but it is important to design for change. Markets are dynamic and sales processes change.
Marketing automation systems, especially those that are integrated with the sales force automation or customer relationship management system, have begun to provide marketing with some clues to sales process. At least they can see what happens or does not happen when they deliver something to sales. But the data does not always explain why, and that’s the critical part. Marketing needs to understand very specifically how Sales operates in order to optimize around customer outcomes. The alternative is for marketing to optimize around departmentally focused KPIs like the number of MQLs (ugh), or SALs, or worse vanity metrics like hits, sentiment, likes, etc. These metrics are useful indicators for some marketing activities, but not as business drivers for marketing investment.
Aligning marketing and sales around sales process is the first step to formulating an enterprise customer creation process that extends across all customer touch points, including: billing, fulfillment, service and support. At each stage of maturity, marketing, as well as all the other customer facing departments, gain much greater visibility and accountability to the whole process and its connection to corporate objectives for growth, market share, and margin. This is all necessary for a true picture of marketing ROI.
Your action items:
  • Marketers: lobby your top executives to make regular sales process training for marketing a priority. 
  • Sales executives: demand that marketing know how the different parts of your sales force work so they can more effectively develop prospects and serve customers. 
  • CEOs: get smart about your customer supply chain by applying the same level of due diligence and process discipline to it that you have to your product and services units. As a result, you will make much more effective use of marketing investment and be able to hold your whole customer facing team accountable for its contribution to your strategic objectives.

IDC Tech Marketing Benchmark: Behind the Scenes

This week the IDC CMO Advisory Service will start revealing results from the 2012 Tech Marketing Benchmark. In this 10th annual study we found some surprises – as you might expect in this era of marketing transformation. In anticipation of the results, I thought I would share a bit of what goes on behind the scenes in the benchmark.

First – what is a benchmark? The term was first used by early land surveyors to describe the fixed point against which all others were compared. Today, benchmarking means the systematic practice of comparing your business processes to what others are doing in order to achieve superior performance. Companies benchmark against peers to learn how they compare with similar companies and best-in-class to compare with those that achieve optimal results.

Why do companies benchmark? A benchmark provides context for decision-making. You spend a million dollars a year on social marketing. So what? If your CEO asks you this question, what will you say? Tech marketers tell us that they like to benchmark for the following reasons:

  • Improve the quality of annual planning: Last year’s program budget and gut feelings are no longer sufficient input
  • Gain insight into critical trends: Learn what industry leaders and competitors are doing – and how you stack up
  • Reallocate costs: Identify areas of overspending and opportunities for better value
  • Transform with confidence: Answer questions such as how much to invest in new areas like social marketing or how should I re-organize my department?
  • Drive with data: C-level executives increasingly expect marketing leaders to manage their business with the same level of operational excellence as other corporate functions.
  • Get an independent view: Benchmark data provides IDC analysts with a wealth of information that make guidance to clients personalized and accurate guidance

How does benchmarking work? At IDC, we use a six-step method.

  1. Participants are given a standard taxonomy. This is SUPER important.  IDC requires that participants bucket responses in accordance with rigorous activity-based costing methods and a marketing taxonomy based on 10 years of experience so that we’re truly comparing apples to apples. We start agonizing over the taxonomy early in the year. It must evolve with changing times but maintain enough consistency for trending.  This year, we carved out marketing automation as a new category and adjusted definitions to accommodate new media and practices.
  2. Participants bucket their marketing investments into categories.  We start participant recruitment in the spring. Fortunately, IDC has a large constituency of companies that participate annually, but we always conduct outreach to get new blood. 
  3. IDC collects the data. For IDC’s benchmark, the tech company participants are primarily mid-sized and large companies and we have a 95% B2B focus.
  4. IDC creates a database of normalized data. This is our secret sauce and takes a ton of work.  Every survey gets scrutiny. Anomalies get investigated. We use statistical methods, sophisticated tools, and marketing experience to work the data so that it really means something.
  5. IDC analyzes the database for benchmarks and trends. We conduct analysis of various kinds – comparing years, industry sectors, and program and people data. We also conduct interviews with CMO’s to lend color to what we are seeing (although we are constantly out talking to practitioners and marketing leaders during the year).
  6. IDC reports.  All participants are invited to a webcast and get a free report that includes a large amount of data and IDC insights.  Over 100 tech companies each year contribute to the database and get this free report.  For participants who desire a more personalized view, IDC offers a custom service that compares their data with a “market basket” of appropriate peers. IDC conducts an analysis of this custom benchmark and then works with companies to provide guidance decision-making and for instigating change.

Watch this space as well as the press for this year’s findings!