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Bill Malchisky


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  • IBM Marketing Claims Another Victim

    Bill Malchisky  July 27 2011 02:57:59 PM
    Disclaimer: although accurate, the title is meant to provide a concise summation of this post's content. Despite the presence of ASWs in society, I choose instead to provide a factual experience with a polite opinionated perspective (wrapper) rather than actively creating a rift in the community. Thank you for understanding the difference.

    Well today I received the news that a client of one year, who loved my services and stated as such in writing multiple times, informed me that they are moving to a hosted Microsoft solution. This surprised me as the reasons they provided for moving were all 100% false. Although at this time I can only infer conjecture, some of their words must have been provided by the competing non-IBM IT vendor. The talking points provided were not something I have ever seen in any Microsoft advertisement and hardly in the lexicon of the technology impaired customer. Although I am less concerned about losing a client --- it does happen and sometimes it can be welcomed --- it is the reason behind the decision which irks me. The overall message was that, "Lotus Notes is old news and we need something that can grow with our business." (Again false.) After several previous conversations with the owner, she went from loving her solution, to providing excitement with the Lotus Knows ad, to deep concern due to her "not seeing or hearing anything about Lotus. Should we still be on it?" in six months. Quite a turn-around, but then things tend to move fast in Gotham City. I did recharge her support and interest for an ND8.5 upgrade, then a month later she switched--dramatically. Facets of the note that are more concrete to me indicate that it was really my word against theirs on market success across the IBM software portfolio, and if what I was saying was true, why wasn't IBM supporting that position? Good point. Can't argue with that...there is little to none non-social business IBM marketing support for SMB opportunities.

    Back to Basics: The Purpose Of Marketing

    I attended a party this past weekend. While enjoying a wonderful conversation with two friends, I overheard this remark from the person sitting next to me. It resonated quite clearly with me. "Look, it's very simple. The purpose of marketing is to increase revenue. Got it?" If only a few IBM marketing executives would have heard that. Wishful thinking, but I know it may not do much in the end. The problem with the marketing approach we have seen is that IBM provides what they think we need, rather than what their customers need or expect. Yes, part of being innovative is to provide items that nobody has seen and move the market into that direction. That is quite cogent.

    IBM stated on a recent community call that they are more focused on marketing overall solutions. Although useful, it obscures the underlying brands and is best served for larger enterprises. The same clients where IBM deals directly. For the smaller opportunities --- those where IBM does not interface directly themselves --- those sites care about the underlying technologies and if they will fit in with their existing products. If not, they need to know to address compatibility or migration costs beyond the initial solution. Smaller firms in this set of clients are completely focused on brands, despite what they owners claim they want. Sure the minutia is lost on business owners, just like enterprise executives, but these owners talk products with their clients. What they ask, "What are you using for e-mail?" What they do not hear, "An awesome collaboration solution that extends my business in new directions we didn't know we needed, but is completely useful." They will provide the product, if they know it. Sad, but true. So concentrating marketing on solutions for opportunity in the thousands of dollars versus millions of dollars or larger, will provide a complete disconnect with that customer base. Yes, that word is quite apropos here as well.

    Marketing 101

    Ironically, I attended a marketing class for small businesses this evening. One advantage of living in Fairfield County, CT is that there are plenty of retired Madison Avenue and Wall Street executives present that thoroughly enjoy providing knowledge voluntarily. The class was held by a gentleman who co-lead the Pepsi Challenge marketing campaign, plus a lady who lead the Laughing Cow Light campaign, doubling their profits overnight. The point here, is that they know how to market for large companies and get results.
    The points they provided were quite useful to me. Three examples that are relevant to this post follow:
    • "It's not about you or what you want, it's about what your customer wants"
    • "It is easier to keep existing customers and difficult to get new business"
    • "You never want to sell against your distributors"

    In looking at what the business partner community has experienced over the past several years and what we have been asking of IBM, it seems to me that IBM marketing is doing the exact opposite in all three cases. Of course, in the technology space, you need to grow, but not at the expense of your existing base. I personally have seen many major players in the technology arena vanish or become has-beens because they grew their business while burning bridges. Many strong executives will tell you, "The only business is new business." While true to a point, as you can saturate your future revenue potential from a static customer pool, you never want to open the door for your competitor and help them into your customer site. IBM is great at achieving revenue growth on the software side, but they --- in my humble opinion --- do so without regard for the existing customers with whom they just assume will always be there and just keep renewing. One's perception is one's reality and this statement is perceived from years of watching my customers complain to me, listening to other competent partners provide their perspectives at networking events, and casual conversations at Lotusphere. I completely understand that such a direct statement may not be indicative of everyone or their personal experience and thus, I can only speak to mine--with all due respect to IBM and any of their employees reading this post.

    Social Business Marketing Versus Tried and True Mediums

    Another interesting anecdote provided during the class was the recent story of the decision of the then VP of Marketing at Pepsi who chose to move the entire Pepsi brand campaign to social marketing and abandon broadcast networks (television) during the 2010 Super Bowl. The resulting effort was a loss of market share for them against their chief competitor, with a dramatic 9.8% share slide in the first half of 2010 alone. Ultimately, the VP of Marketing was terminated and broadcast advertising restored, despite early reports by Pepsi's CEO that the campaign was a success.

    What they learned is that not all of your customers will be online. Despite that fact that the broadcast network viewership has been in steady decline, the ability to reach an audience is currently still unsurpassed from a marketing stand point. Now, I am not saying that IBM needs to be on TV all the time, but that moving too quickly to an all online environment in search of new business can cause you to lose existing customers. IBM's social business adoption is great for partners and innovative for larger firms that are starting to get it. For smaller firms that are not dealt with directly by IBM, well, not so much. None of my customers spend any reasonable time online for business other than web surfing. Who actually wants to visit a doctor that is tweeting during an examination? Change of this magnitude will take time. In IT we need to be well ahead of our customers, as that is one reason why they seek our assistance: we are experts in the field. We just need to be reminded that if you want new business, not everyone is excited about the social networking world as we might think.

    The End Result

    A customer that loved their offering on Notes decides to move to a hosted Exchange setup. Their justification premise is false, but the lack of customer needs-based marketing in their preferred medium is undeniable.

    Of course this customer moving to an alternate solution will be completely unnoticed on IBM's bottom line, but it will affect my bottom line. A partnership entails shared risks and profits between the two companies. IBM marketing should allow both entities to share in profits. I have been an IBM Business Partner since 1999 and have enjoyed the experience immensely. I do a lot of work behind the scenes to help support the Lotus brand and have been recognized for my contributions as an IBM Champion--for which I am extremely grateful. Much of the training I received through the partner program is topnotch. In my estimation, IBM provides the best technical partner program in existence currently.

    In the end though, the name of IBM carries far less weight in the SMB market than it did five and ten years ago. The desktop or non-server computer market has been sold-off, IBM halted their once lauded 24 month marketing campaign four months into the effort, after a big build-up with a special IdeaJam offering. Their entrance into the SMB space to compete against the MS SBS product proved quite popular with partners, particularly the 1200 Microsoft Solution Providers that signed-up to sell the Lotus solution...and then IBM killed it within a few years; surprising after a big presence at LS09, if I recall the year correctly. Why? Part of the reason was flawed advertising from my perspective. A side note: at LS11, you could not find the booth in the IBM Pavilion and although all of the IBMers in the product showcase pavilion knew Foundations was there and operating a manned booth, no one knew where it was (I asked six people). Part of the confusion was the obscure name change and no one in the IBM Pavilion knew what the displayed name equated. Then the product was all but terminated two months later.

    So the presence aggregate equates that IBM is basically completely out of the SMB space, excepting Express offerings for servers (great idea) and software (great as well in many cases). Where does this leave the partners now? What software licenses partners do sell are renewed via IBM--as many partners are quite vocal (will not publish their names without checking first...professional courtesy and ethics prevail for me). Direction-wise, I am uncertain and I think IBM marketing is uncertain as well. An IBM executive states "A" at a conference or blog post, then another executive states "B" at another event, contradicting "A", or then "B" is revised later to better align with "A". Perception is reality and sans a lucid marketing message from IBM combined with omitting of input to our customers, or the partners themselves, we really have little idea of where the direction is headed and we must make strategic decisions without all the facts. Suboptimal in nature, but necessary as time moves onward along with the needs of the business. Our livelihood is at stake and I am finding that just using the expression "I'm an IBM Business Partner" matters less now in the software space, but has merit on the hardware side, where I am a reseller. Of course your experience may be different.

    Concluding Thoughts

    Interesting though, and am uncertain as to the underlying nature, there does seem to be an increased amount of IBM tapping the partner pool for assistance gratis to make their offerings better... Most of the people in the community are more than happy to help the brand we love so much and the products succeed. In the end, we do need something from IBM--beyond taking our feedback: they need to actually execute. Yes, yes, not all feedback is relevant, but IBM can at least say, what worked and what didn't when they ask again for another round of input. That shows the IBM contacts receiving the input actually valued the contributions provided and are doing something with it--rather than perpetually seeking feedback that never really fixes anything.

    Hardly bitter, just concerned. I care and am passionate about the brand where I have made a major investment in time and knowledge over the past 18 years. Now things are changing in ways that introduce a lot of uncertainty, perhaps where it can be removed quite easily with some quality trusted communication. Overall, the marketing message is focused on only one market segment--albeit an import one from IBM's perspective. The support the smaller partners are getting is degrading--despite what IBM may realize or accept. Where it will land, I do not know. In the end, I have to seek out new opportunities like anyone in business. It is just a bit more challenging than it used to be, as it is really my word against what the customer hears and what IBM says to support my message. The past few years, the IBM message has been lacking and it is putting my rhetoric into question as IBM does not substantiate what I say. Therein lies a big part of the problem.

    Again I am not writing this post to irritate anyone at IBM. Just provide a reminder that business decisions have consequences and those you entrust/enlist to assist you may be impacted, even if you are not. Thanks for reading this post. If you have any comments, please feel free to share them.

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    © 2010 William Malchisky.