LOW-HANGING FRUIT... HIGH-POTENTIAL PROSPECTS: How To Harvest Technology Customer Relationships Into New Sales Revenue

This American Marketing Association (AMA) and Information Technology Association of Canada (ITAC) roundtable event was held on November 25, 2004.

The Panel

  • Vito Mabrucco, Vice President of Marketing, Cisco Systems Canada Company
  • Bruce Parker, Partner, Deloitte
  • Deb McKenzie, Marketing Manager, IBM Software Group, Worldwide Marketing Programs, IBM Canada Ltd.
  • Dave Walsh, Vice President of Marketing, Ingram Micro, Inc. ( Canada )
  • Cameron Dow, Vice-President, Marketing, SAS Institute ( Canada ) Inc.

The discussion was moderated by Bob Becker, Principal, SMA.

What is your balance of marketing expenditures between customer and prospect marketing, and what factors do you use to establish that balance?

  • Most of our marketing efforts are focused on cross-selling and up-selling to existing customers with programs via the Web, channel partners, advertising and events. About 25 per cent of our efforts are focused on white space (prospects).
  • We focus mostly on the existing customer. Our vendor partners focus about 50 per cent of their efforts on prospect marketing.
  • Our focus is growth and we look at all of our customers as prospects. Growth will depend on entering new markets. We need to match our marketing and sales models to achieve that growth.
  • We focus 80 per cent of our efforts on the existing customer.
  • We look at three categories: 1) existing customers, 2) new prospects, 3) alliance partners - which are an extension of our sales capabilities.
In an environment where it is costly to obtain new customers, should we be investing more or less to gain new business? And does sales compensation affect the focus on customer versus prospect marketing?
  • It comes down to frontline sales. As you look at ROI, the sales person's time investment is much greater to sell new solutions; it takes them longer to complete the sale. Could split the sales force into revenue and acquisition teams, but don't know if that is sustainable long term.
  • Need to incent the sale of new technologies. Look at the little "c" customer - the sales team. How can I support them and help them to get to the big "C" customer with their message?
  • Need to look at the sales compensation plan - it dictates how you want the sales people to behave.
  • We compensate some reps (inside market research specialists reps) for being opportunity identifiers.
  • Need to understand how sales team is organized, compensated, and motivated. Then try to align sales with the marketing plan. There's a lot of time pressure to deliver results to the market.
Sales asks, "What is Marketing doing for me?" What is Marketing's role?
  • Marketing doesn't own the customer, but has the responsibility to deliver.
  • Marketing needs to connect and collaborate with the sales team. There are so many nuances in marketing. We took our sales model and mapped the marketing program to it.
When it comes to share of wallet, do we really know what's going on with the customer?
  • We do data cleansing and buyer behaviour studies to analyze where the customer is spending money.
  • We measure marketing by share of wallet. If you can build a share of wallet approach, you can build a marketing program. Resource allocation decisions become easier.
  • Share of wallet is very difficult to measure. You need to determine the depth and breadth of the wallet first. Then measure not only how much they have spent, but how much more they can spend.
  • It's good to have visibility of the next 12 months of IT spend. Keep in mind that customers are competing at the board of directors level with various other projects for funding approval.
How do you gather and analyze data about customers - what techniques do you use?
  • We use telemarketing, e-newsletters, ask customers to complete a survey - then they can compare themselves with other customers. We have an extensive lead measurement system. We know when a lead was started, who it was handed off to, and how long it was in the pipeline. If sales aren't closing, we analyze the pipeline and determine what programs need to be executed to close business.
  • We leverage our relationships with CFOs, who tell us what they will spend. We use IDC research then conduct research with our own customers to validate.
  • We use IDC to look at market segments, but we need to understand at the customer level. We use statistics and historical data to predict where the customer will spend money. It would be amazing to conduct surveys with the top 100 customers. If you don't understand what's going on at the customer level, you're missing a lot of opportunities.
  • This is the least exact science there is. It should be viewed as an investment, not an expense.
  • Those measurements are useful in a transaction type sale. But a solution sale, which can be very complex, can go on for years. It's difficult to say what activities are related to the sale.
Can you get senior management support for customer versus prospect marketing?
  • We need commitment to marketing from the very top - commitment starts at the top then there is pressure all the way down to measure results.
  • What happens if we stop doing it (marketing) for a while? Then you'll really find out how valuable it is.
What are the most effective marketing methods - at both strategic and tactical levels?
  • Get names on a database. Incent people - the decision-makers - to register with us so we can understand who the potential buyers. Then we can target them with campaigns.
  • Look at where the product exists in the maturation lifecycle. Is it in the introductory or maturity phase? If it's at the phase where there is some awareness and knowledge, you have to be able to cut through the clutter - how do you get an opportunity for a moment of truth, a one-on-one?
  • Prospect side - look at other brands that are already visible to that market. Partner with other organizations that have a brand. Existing customer side - educate in new technology, user group activities at customer site. It's selling, but with a more subtle approach.
  • Our best marketing activity for existing customers is our people and how they deliver services - reference selling.

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