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The Services Marketing Mix

Introduction

Services marketing is often a poorly resourced and woefully under-funded function. If resourced at all, the focus is usually limited to collateral describing service offerings. With such meager resources and attention from the marketing department, service organizations are grateful when they get such basic collateral as datasheets and customer presentations. Instead of being thankful, PS executives need to have discussions with their marketing counterparts to think in terms of a balanced marketing mix to ensure their limited budgets are being spent wisely. A mix that is different from a product approach to marketing. For a PS organization, an effective marketing mix will address four key marketing activities:

1. Core content creation
2. Market analysis
3. Awareness
4. Demand generation

In Part 1 of this article, we will begin defining these marketing activities. In Part 2, we will provide an example of a services marketing budget that achieves a balance between tactical content creation and strategic demand generation.

Services Marketing: A State of Affairs

Services marketing is the poor stepchild in many technology companies. With the company’s product being the main revenue generator, the professional services organization itself can be an afterthought. Marketing services is many times not a consideration. This is justified by three main reasons:

• Our company is a product company, not a services company. We cannot market services separately, as that detracts from our overall message to the market.
• With the company objective to drive product revenues, our marketing resources must align with that focus.
• It’s the sales person’s responsibility to sell services with the product – not marketing’s job.

Review the structure of a technology professional service organization and you might not see any marketing resources dedicated to marketing services. By default, services marketing becomes the responsibility of corporate marketing. However, the corporate marketing department has responsibility for all of these general marketing efforts:

• Branding / Marketing Communications
• Public and Analyst Relations
• Competitive Analysis
• Go-to-Marketing Strategy / Messaging
• Customer References

This leaves little time or energy for the day-to-day activities of effectively marketing the services portfolio.

More than Datasheets

For Professional Services executives, when they ask for marketing resources, they fall into the trap of simply asking for tangible marketing materials. They think of marketing in terms of marketing communications. They think of the basic things they need: a datasheet and a customer presentation. If that is all marketing provides, your PS organization will never get the strategic marketing work it needs to become successful. Providing standard product marketing collateral is useless for a services sales cycle. Don’t settle for that. Datasheets don’t sell services.

Two Biggest Mistakes

The biggest mistakes we have seen technology organizations make regarding services marketing are two-fold:

• As previously mentioned, no dedicated services marketing personnel. In particular, no product or product marketing managers for services.
• Working from a go-to-market strategy that relies heavily on how the company has typically taken products to market. This approach is often event driven and collateral based.

Not having dedicated service marketing managers will hamper the services marketing effort. However, let’s save that challenge for another article. The focus of this article is on moving the mix of service marketing activities away from simply creating collateral. Effective services marketing must execute a suite of activities that make a prospective customer receptive to starting a services relationship with your company.

Marketing Mix

So where do you start as a PS executive wanting to ensure your limited marketing dollars are spent wisely? Executives should consider the mix of service marketing activities the company plans to fund. These marketing activities can be broken into four distinct categories:

1. Core content creation
2. Market analysis
3. Awareness
4. Demand generation

Without a structure for knowing how to spend marketing dollars, too much may be allocated to an insignificant area, or too little to an area of importance. This framework begins the process of providing structure to the marketing conversation. Table 1 provides a high level summary of each category. Now, let’s review each category in more detail.

	Category		Description		Example Activities
	Content Creation		Creation of tangible content used to support the selling of service offerings		Services Snapshot Web Page Content
	Market Analysis		Activities designed to provide better information regarding customer needs and competition		Customer Interviews Pricing Analysis
	Demand Generation		Activities targeted at specific prospects designed to initiate the buying process		Direct Mail Campaigns Email Campaigns
	Market Awareness		Activities designed to increase the general awareness of service capabilities		Speeches Trade Press Industry Analyst Briefings

Core Content Creation

With services marketing, content is king. Without content for your internal or external audiences, services will go nowhere. It’s marketing’s job to educate both audiences on the value that your services bring.

Unlike products, service marketing is required for internal audiences. Persuading your own colleagues that services are a viable option and that your organization can deliver value to the sale may require that 25-50% of your marketing dollars go to internal promotion.

Internal content falls into three categories:

1. Articulating Value

a. Clearly articulates to the sales and delivery team how to sell / position the service, business benefit, value proposition, etc.


2. Competitive Analysis

a. How to position services in regard to the competition


3. Promotional

a. Programs to motivate sales to sell services, keeping awareness of the services organization at a level comparable to the product

External Content falls into sequential categories. External content is developed with the goal of systematically moving the prospect through the sales cycle. Developing content that is relevant to each phase of the sales cycle is critical.

1. Building Awareness:

a. Independent research is the only content a prospect will accept to establish credibility that there is a legitimate problem and potential solutions. It should provide an exploration of the issues and trends by respected industry experts. This is not company material.


2. Developing Interest:

a. Business case: a business perspective of topic-specific trends and the challenges and opportunities they present.


3. Consideration:

a. Planners: hands-on tools that put information into action. It’s a strategy development template to help a prospect assess, plan or measure their problem and possible solution. Wouldn’t it be preferable to have your prospect referring to a list of the top ten criteria for assessing x, y or z service that was generated by your company and not your competitor?

b. Problem/Solution scenarios: high-level problem-focused look at the specific problem and the effects of the solution.


4. Trial/Purchase:

a. Customer references. Required in almost all service sales.

Your marketing department needs to work in concert with your subject matter experts to create quality content that IT professionals value. If content creation is not an integral part of your marketing mix, then when it comes to demand generation for services, there will be nothing to promote. Without a doubt, information is the most valuable asset you can offer a prospect. The more relevant the information is to the prospect, the more likely you are to engage them and begin to position your organization as a source of value.

Market Analysis

The second category in the marketing mix is market analysis. This is an area where some monies may be allocated from a corporate marketing budget mix. Marketing analysis consists of:

• Competitive analysis / analyst interviews
• Overall services positioning document
• Practices positioning document
• Actual service positioning document
• Market segmentation
• Customer interviews

Competitive Analysts/Analyst Interviews

Competitive Analysis and Analyst Interviews are an area where utilizing the current marketing structure is the most sensible approach. The competitive analysis team should dedicate a portion of their time to competitive analysis of the service offerings. However, without constant vigilance, the competitive team will slowly lose a services focus and concentrate on the area they know and understand best... products.

Positioning Documents

Positioning documents must be created for the overall PS organization, each practice and each service. It forces the organization to state concisely the value of the service and state in terms of:

1. Definition - what you do
2. Difference – your uniqueness
3. Relevance - why it matters
4. Capabilities - your advantages
5. Benefits - your proof points

If that can’t be done, then the service needs to be reconsidered whether it is ready for the market or if there is a market for that service. This is an exercise done for every product. The service organization needs the same discipline. The discipline required to do this for each service will pay dividends to your organization when you go-to-market, as this document is the blueprint to create valuable marketing materials. It spells out clearly and concisely the value message.

Market Segmentation

Who is going to be interested in your service? What companies or industries are good fits for your service? What criteria will you use to decide which are the target companies to focus on? How will you prioritize these sites? Is it company size, employee size, potential spend, etc?

Spend an inordinate amount of time finding out the titles, roles and functions for every influencer and decision maker involved in the services sale decision. The buyers for your products may not be the buyers for your services. And service sales usually have long sales cycle. Understand the process and the people involved so you can manage the sales cycle appropriately.

Not having a laser focus on the target customer profiles at the beginning of a service organization’s market efforts can have a devastating effect. Chasing any opportunity will spread your organization too thin and learning from key win/loss analysis may be too vague or information insufficient to truly understand what went right and what went wrong.

Customer Interviews

Most likely, the first customers for your services will be current product customers. Spend time with customers and find out their thoughts on your service organization, your value and how they view your capabilities. With this insight, you can start to craft your value proposition to the market. Too often, the message is ‘we have good people,’ and that’s not enough to differentiate. Only customers can tell you why they selected your organization and if your organization has delivered. Customers can give you realistic input on truly what your value is – or can be.

Market Awareness
The third category in the marketing mix is awareness. This is the one area where a Marcom-driven agency thrives. This can run the gamut from:

• Advertising
• Newsletters
• Tradeshows
• Press releases
• Sponsorships
• Speeches
• Trade press
• Industry analysts

Industry Analyst Briefings and Speaking Engagements are two of the most effective awareness vehicles available, allowing you to articulate your Professional Services strategy and business.

Establishing an ongoing dialogue with analysts keeps your PS organization top-of-mind and can help encourage a favorable rating in their rankings. When identifying potential service providers, IT professionals rely heavily on recommendations from industry analysts.

Speaking at conferences, trade shows, and other venues also lends credibility to your business. These speaking opportunities position you as an industry thought leader in the eyes of prospects and potential clients. Engage your marketing organization to find speaking and educational venues for your Subject Matter Experts.

Demand Generation
The final category in the marketing mix is demand generation. All marketing activities — content creation, marketing analysis, market awareness programs as mentioned above — must be used to support the ultimate goal of demand generation. Each should be used to continually promote your services and to actively engage with prospects.

The key to successful demand generation is systematic, continuous, relevant follow-up to all inquires and responses to your services marketing programs. If a prospect engages, marketing must have a plan to continue nurturing and offering valuable, relevant content to that prospect throughout the research cycle; otherwise, valuable marketing dollars were just wasted. Depending on the where the prospect is in the research cycle, this planned follow-up should not necessarily send the prospect to your sales team, because early sales intervention can discourage the prospect.

With sales cycles ranging from three to eighteen months, an effective follow-up campaign should be in place that can nurture your prospects for at least six months. Otherwise, you may spend your marketing dollars educating the prospect, but leave the door open for your competition when that prospect is ready to make a buying decision.  By continuing to nurture your prospects, you are building credibility and thought-leadership, and when they are ready to buy, your company will be top-of-mind.

Marketing Mix Example
Now that we have a framework to understand the four fundamental ways our marketing dollars can be spent — content creation, market analysis, market awareness, and demand generation — let’s get down to brass tacks. Your service organization is rolling out a new service offering. The offering has already been scoped by a team of marketing, sales, and delivery staff. They believe this offering really has legs. Of course, you have limited marketing dollars. Even though you have already spent well over $100k in staff resources defining this offering, you only have $150k allocated to market the offering over the next six months. How will you spend this money?

To create the right marketing budget for a service offering, I recommend a bottom up approach. Look at each of the four categories we have defined and determine what you need (or don’t need) for the offering. For example, in the area of content creation, your team believes the following items are required to support the offering:

• Customer Presentation
• Internally developed white paper
• Web page
• Sample ROI business case for the customer

The cost of these items (and a list of other items not required for this offering) is provided in Table 2.

			Program		Cost Per		Number		Total
	Core Content Creation
			Sales Kit		$10,000		0		$ –
			Web Content		$1,000		1		$1,000
			Customer Presentation		$2,500		1		$2,500
			Externally Developed White Paper		$25,000		0		$ –
			Internally Developed White Paper		$2,500		1		$2,500
			Business Case		$1,500		1		$1,500
			Planner		$1,500		0		$0
			Customer Reference(s)		$5,000		3		$15,000
			TOTAL $22,500

The same exercise can be conducted for the remaining three areas of the marketing mix. Figure 1 provides an example budget creating for this new offering.

	Content Creation		$22,500
	Demand Generation		$80,500
	Market Analysis		$ –
	Awareness		$45,000

			TOTAL $148,000

Reviewing Figure 1, you will notice that no dollars were allocated to market analysis. This is because the company has already committed to the offering.

This approach can be applied to practices or the entire services marketing budget. When conducting this analysis, you should avoid a “content only” budget. If only one of the four marketing buckets is covered, it is unlikely your marketing dollars will be effective.

Because breaking old habits is difficult, this "turning of the mix" can be one of the most challenging aspects of strategic services marketing. Once implemented, however, the increased effectiveness of your marketing spend will more than justify your efforts.