Monday, December 10, 2001

Rethinking your marketing strategies

By Jeffrey M. Kaplan

While it's hard to argue with today's no-nonsense approach to business that rejects the outlandish marketing ploys of the past few years, many companies have gone too far by shutting down their marketing departments in favor of more tactical sales support activities.

Smart companies are redirecting their marketing efforts rather than reducing them entirely. These companies believe that a focused, solutions-oriented campaign is the best way to differentiate themselves in the market and build corporate value.

So what went wrong with high-tech marketing? It was in trouble when corporate executives and venture capitalists were convinced that 60-second commercials on the Super Bowl were worth more than traditional brand equity campaigns that take a minimum of six months to build. The rush for instant gratification also set an unrealistic expectation about how many qualified leads marketing could generate.

What disappeared along with a realistic sense of perspective was a fundamental understanding of the value chain that underlies a comprehensive, integrated marketing program.

Marketing organizations also spent wildly without accountability. Quantifiable measurement systems were not implemented to track leads. Without this scorecard, costs couldn't be justified and marketing departments couldn't defend themselves from criticism.

When the economy tightened a year ago, many companies raised the bar for marketing. They asked for a strict accounting of each sales lead generated from every marketing activity.

The truth is, many corporate marketing activities don't generate immediate sales leads but instead build market awareness for the company that indirectly helps the sales process. These initiatives are essential to a company's success but impossible to measure precisely.

Nonetheless, most companies that cut back on non-essential costs and corporate marketing became an easy target.

In the corporate world both the CEO and the chief marketing officer are easy targets when sales don't happen. Rather than spend money on brand building, companies fall back to spending as little as possible on sales support tools.

Most corporations see a quick surge in sales support activities after the corporate marketing team disappears. After that they generally fall further behind their competition because they have fewer opportunities to communicate in the forums where their customers learn about their products and services.

These forums are the trade publications and conferences that IT decision-makers read and attend, and the market research firms used to evaluate vendors. Most high-tech companies recognize the importance of these forums but fail to invest the time, energy and money necessary to fully exploit them.

A growing number of companies have decided to ignore these channels entirely. Budgetary constraints have meant canceled trips to conferences and speaking opportunities. Cutbacks have also justified dropping market research agreements, severing interaction with industry analysts.

The result of these retrenchment decisions is that it is harder for the company's sales team to sell.

Companies should have an integrated, strategic marketing program that elevates them above their competitors in the eyes of their potential customers. This program starts by clearly defining a company's core value proposition based on specific corporate differentiators. Rather than focus on unique functions or product features, high-tech companies should articulate compelling benefits they can bring their customers that justify the price for their products or services.

Given the fiscal controls in place in many organizations, high-tech companies will have to prove the value of their products and services via case examples rather than data sheets. Cultivating reference accounts is important.

In addition, the endorsement of analysts and trade publications is also valuable. These third-party endorsements carry more weight than self-serving advertisements or brochures.

High-tech companies should develop multiphase marketing programs that continuously reinforce their corporate values and key differentiators.

Such programs should be structured to produce a series of consistent messages across a variety of complementary communications channels.

This approach doesn't have to cost a lot of money for companies that bootstrap their marketing departments.

Companies that undertake this approach can give their sales team the competitive advantage to win new business and keep good customers.

Jeff Kaplan is the managing director of Thinkstrategies and can be reached at jkaplan@thinkstrategies.com.