IT Marketing Smarts

I recently read an annual report from the IT department of a major semiconductor manufacturer. At 30 pages long with a lot of nine-point font, it’s an impressive document—full of information about missions, values, strategies, objectives, organizations, projects, service levels, costs and impact. But what is the value of this tome in a world where the success of communication often hangs on the phrasing of an e-mail subject line?

CIOs have entered the marketing game today, with the ultimate goal of increasing customer loyalty and securing funding. In addition to annual reports, brochures and newsletters, IT marketing approaches that CIOs have used include showcasing IT awards, publicizing service level metrics, branding projects, conducting town hall user meetings, publishing a catalog of services and reviewing business unit performance (according to a May 2004 survey by CIO magazine).

Yet marketing veterans caution that these approaches can backfire—particularly in organizations where IT’s credibility is already low and these programs are regarded as another example that CIOs are out of touch and out of step. Mass marketing approaches tend to fall flat if people’s personal experience counters what is being communicated. External IT awards and service level metrics can reinforce a positive impression but not sway those who are negatively disposed toward IT. Branding projects and town hall meetings are helpful in communicating change but have little impact on the approval process or the overall perception of success. Service and product catalogs can make it easier to do business with IT, but they typically are not utilized much by decision makers in the business.

But if mass marketing methods can’t help the average CIO, then what’s the alternative? To evaluate what works and doesn’t work when it comes to marketing IT, identify your primary targets for persuasion—namely, the people who make decisions about IT and those who influence them. CEOs and their direct reports should not be the primary targets of IT marketing efforts. Successful CIOs market one or two levels farther down because they understand that senior executives are heavily influenced by key members of their own organizations. These managers have formed their own perceptions of IT, based on their own personal experiences and the urban legends recounted in the hallways.

IT marketers should learn from the lessons of business-to-business marketing. Harvard Business School professor Das Narayandas, in a Harvard Business Review article titled “Building Loyalty in Business Markets,” contrasts B2B efforts with mass marketing. Business markets consist of a relatively small number of customers—”segments of one,” Narayandas calls them—that define value in different ways and desire customized products, quality or price. The sales process is typically lengthy due to the complexity of transactions and the large number of decision makers and staff types involved.

If that sounds familiar, it’s because each IT customer is a segment of one. In contrast, mass marketing approaches for consumer markets (where there are many buyers with similar needs who purchase low-priced, mass-produced items on a frequent and efficient basis) don’t fit the IT challenge.

Narayandas emphasizes that, although managing individual customers is difficult, it’s imperative in today’s business markets. It may distress some and please others to reaffirm what we all know: IT is a relationship business. The most effective marketing tool CIOs have are the people who interact with second- and third-level leaders in the business—the IT account managers, planners, function heads, and project and service managers.

What Really Leads to Loyalty

It’s the CIO’s job to ensure that IT products and services are cost-competitive and differentiated from competitors—those external service providers doing end runs around your department. You can do this by incorporating feel-good, intangible benefits such as:

• fast startup pilot programs
• pay-for-performance contracts
• easy integration and guaranteed compliance with regulations and business continuity plans
• service delivery above and beyond SLAs
• free services that lower customers’ operating costs (for example, process and cost benchmarks, access to training)

While delivering against financial expectations will keep IT in the game, it’s these non-tangible services that foster long-term relationships and loyalty. Effective IT marketing consists of face-to-face communications with each segment of one to understand how that customer defines value and to ensure that IT is both delivering against their tangible expectations and over-delivering on the intangibles. By the end of every interaction with your department, it should be clear to customers why they are doing business with their internal technology provider.

All the pretty IT marketing collateral should make CIOs a little squeamish. Mass-market communications that contain inferior product and service positioning set IT apart from the rest of the organization and can make CIOs look like a socially inept kid trying to get attention in inappropriate ways.

Susan Cramm, former CIO and vice president of IT at Taco Bell and CFO and executive vice president at Chevys, a Taco Bell subsidiary, is president of Valuedance, an executive coaching firm based in San Clemente, Calif. You can contact Susan at susan@valuedance.com and learn more about Valuedance at www.valuedance.com.