Services Business Strategy for Development and Demand Creation Peter F. DiGiammarino Copyright 2017 IntelliVen, LLC and Peter F. DiGiammarino.  All rights reserved. Quotation, reproduction or transmission is prohibited without written permission from IntelliVen, LLC and Peter F. DiGiammarino

The Problem: How to build and accelerate the growth of service businesses The key success factor for a service business is developing and communicating to the market compelling, customer-focused offerings. Successfully scaling a service business requires the institutionalization of processes that develop market plays and support manager’s efforts to get these plays in front of prospects. We help our clients build and expand service businesses. Our approach focuses primarily on creating demand for a firm’s services through strategic marketing and business development. Often, we are also asked to assist with organization design, operations, finance, and governance process improvement to further build these businesses.

Target Audience: Established product companies and emerging service firms seeking to build, or dramatically expand, their services businesses Established product companies: See the benefits of adding related services to their revenue stream, but Lack the experience and service-oriented culture to successfully develop a new business with different organizational structures, market strategies, and key success factors Emerging service firms: Typically have been successful building capability in delivering solutions in one or two verticals and would like to expand into new verticals and competency areas, but Are young firms and do not have established processes in place to quickly develop new offerings and enable mid-level managers to “own” these market plays and drive them into the marketplace Both of these groups need to improve market messaging, business development processes, and management support systems designed to increase revenues

Four service areas directly impact near-term demand creation needs Market Positioning Market Demand Creation (Re)Positioning Plan Market Themes Best Practice Research White papers Press / Analyst Briefings Speaker Development Marketing Machine Design Marketing Plan Program Design Program Execution Coaching Market-Driven Strategy Formulation Competency and Vertical Development Strategic Plan Development Service Offering and Market Play Development Target Account Profiling and Key Messaging Sales Materials Customer Value Proposition Services / Product Architecture Channel Strategy Corporate Business Plan Executive Alignment Business Development Process Improvement Strategic Partner Relationship Management Account Categorization Review Process Design and Facilitation Lead Management Process and Tools Development Strategic Partner Selection Partner Relationship-Building Programs Joint Account Planning

Approach: Build scaleable demand creation systems by working with managers to create and execute market “plays” Traditional Approach to Demand Creation Solutions Approach to Demand Creation Traditionally, marketing strategy focused on giving advice to senior executives or training salespeople… Key managers define market plays, link them to current sales opportunities, and drive improvements in business development processes… Business Strategy Consulting Senior Executives Corporate Marketing Strategy Senior Executives Market-Driven Strategy Formulation Competency and Vertical Development Managers Managers Business Development Process Improvement Strategic Partner Management Sales Training Sales People Sales People …This approach often results in executive driven strategies that are never implemented by the organization or sales training spending that fails to increase revenues …This approach links marketing strategy to sales management and creates a scaleable demand creation system that emphasizes near and long term revenue gains

Service Offering Development and Demand Creation Client Needs and Best Practices

Improving demand creation to drive near term revenue is central to success for service firms An increasingly competitive market has elevated customer expectations: Service firms must have a proven, clearly-documented track record in a prospect’s industry Service firms not only need to understand technologies, but also provide offerings that solve an important, pervasive, and persistent specific problem for a customer. Consultants must have proven experience in these offerings -- customers are unwilling to “train” new consulting teams. New technology investments must have a strong ROI business case that is compelling to business leadership. Creating new accounts requires a proactive business development effort that aggressively generates leads, validates opportunities, and closes sales. Firms across all industries are positioning themselves as serious providers of ROI- focused business solutions and evaluating and improving their demand creation processes (marketing, business development, sales). For small and mid-size players, this process must be done in a way that respects their current size and capabilities while positioning them for future growth.

Service firms typically struggle to achieve four demand creation objectives Create Market-Focused Service Offerings What services should we offer to our customers? What solutions are worth investing in? How can we package these offerings and get them in front of prospects? Develop New Business in Current and Prospective Accounts How can we identify and cultivate revenue opportunities in existing and prospective accounts? How can we generate accounts in new verticals and competency areas? Track and Manage Key Leads How can we proactively drive business development activities across the organization and at all levels? How can we ensure that our sales force is prioritizing business development activities based on revenue potential and strategic importance? Leverage Relationships with Strategic Partners What role can strategic partners play in driving demand creation? What activities are worth investing in and how can we measure ROI?

Upping the game requires improvement in four distinct functional areas. Core Services Market-Driven Services Strategy Development Service Offering and Market Play Development Business Development Process Improvement Thought Leadership Development and Market Communications What services should we offer and to who? Who internally will do it and what is their plan? How can leadership guide and support the effort? What should we tell the marketplace and how should we deliver it? Account Prioritization Account Planning Account Reviews Lead Management Process and Tools Development Value Proposition Definition Core Competencies Channel Strategy Executive Alignment Market Play Development Target Account Identification Key Messaging Sales Materials (Re)Positioning Plan Market Themes and Messages Thought Leadership Research Speaker Development Marketing Machine Design

Market-Driven Services Strategy Development identifies and structures a firm’s corporate message about the unmatched value they offer to clients Market-Driven Services Strategy Development Service Offering and Market Play Development Business Development Process Improvement Thought Leadership Development and Market Communications Client Needs Due to changes in the marketplace or growth, there is a need to clarify the firm’s forward looking value proposition, primary verticals, and service lines A firm seeks to shift from a technology project-oriented firm to one that offers clients solution-based services that solve a major problem shared by many companies in a specific industry Baseline the firm’s current market position. Review and categorize previous project work, assess current staff and their capabilities, gather competitor data Identify the firm’s key differentiators and unmatched value proposition. Interview key leadership and management, review relationships with strategic partners, determine the firm’s position in the industry Develop a Service Architecture that blends the firm’s current capabilities, vision, and key differentiators into a framework that can be used to consistently and powerfully present the firm to the marketplace Communicate the Service Architecture to employees, prospects, and strategic partners through marketing communications and sales efforts Best Practice Approach

An explicit value proposition is best distilled into a Services Architecture that can be shared with employees and prospects EXAMPLE Overarching Value Message “We help businesses leverage their IT organization and technologies to reduce costs and provide more value” Business Solutions Channel Management Business Problems We Solves Supplier Collaboration Employee Effectiveness Competency Areas IT Effectiveness SERVICE OFFERINGS Oracle Technologies Supply Chain Infrastructure Services Knowledge Management E-Commerce Capabilities We Uses to Solve These Problems Capabilities and Partnerships Oracle Financials Oracle West Region Partnership Supplier Review IT System Design Knowledge Assessment Web Site Assessment

Service Offering and Market Play Development focuses on building actionable plans for growing verticals and competencies Market-Driven Services Strategy Development Service Offering and Market Play Development Business Development Process Improvement Thought Leadership Development and Market Communications Client Needs A firm seeks to more effectively penetrate existing verticals or move into new ones A firm seeks to expand and institutionalize business development work to a larger group of employees to drive growth A firm needs to identify its most promising service offerings and develop a process for rapidly creating marketing materials, educating the field sales force, and getting these offerings in front of prospective clients Prioritize the market plays that senior leadership will actively drive toward growth through working sessions and analysis. Review business strategy, past successes, partner relationships, competitive position, and market demand Develop Strategic Plan templates that include the overall value proposition to clients, target account profiles, prospect lists, and implementation plans Select and work with focus area leads to develop Strategic Plans for each market play Develop marketing and internal communications materials to support the strategic plans (sell decks, white papers, sample workplans, case studies, etc.) Best Practice Approach

The process centers on choosing a few key market “plays” and driving their development through clearly accountable leads Each CEO then develops Service Offerings and Strategic Plans to grow revenues in their area Market Demand Create Positioning and Key Market Messages Business Strategy / Solution Architecture Prioritize Market Plays Assign Market Play Leads Develop Strategic Plan and Target Accounts Past Successes and Current Capabilities Build Delivery Team and Scale Based on Market Demand Market Play Partner Strategies Market Play Market Play

Business Development Process Improvement supports vertical and competency leads and manages prospecting activities Market-Driven Services Strategy Development Service Offering and Market Play Development Business Development Process Improvement Thought Leadership Development and Market Communications Client Needs Firm needs to grow the skills of leads in competency and vertical areas and make them more accountable for business development Firm needs to implement a strategic account review process that drives sales in current and prospective accounts, and promotes service offerings Firm needs to move from ad-hoc lead tracking to a shared system that provides sales people with the data required to aggressively drive leads and permits senior leadership to take a more proactive role in driving the sales process Baseline sales planning processes and tools in the field (assess ability to: deliver key messages, manage leads, deliver on service offerings) Categorize current and prospective accounts and determine review priority Develop current and prospective strategic account review templates through senior management workshops Create and pilot an ongoing process for quarterly reviews of strategic plans Expand the review process to key verticals, competencies, and partners Design and implement lead management process and select a tracking tool Best Practice Approach

Strategic Account Plans are developed for the most promising accounts, and reviewed with senior leadership EXAMPLE Annual Strategic Account Planning Process Ongoing Business Development Activities Account Categorization National Competency and Vertical CEO Management and Support Annual Account Plan Development Annual Account Review Periodic Review (As Needed) Periodic Review (As Needed) Platinum Gold Salespeople and Partner Relationship Managers pursue ongoing business development work Silver Strategic Partner Follow-up Review Strategic Partner Follow-up Review Strategic Partner Follow-up Review Bronze As existing accounts are developed and opportunities pursued, accounts are classified based on revenue potential and strategic importance “Platinum” Accounts are focused on through development of annual plans, periodic reviews with senior leadership, and follow-up reviews with Strategic Partners (e.g., Microsoft, Compaq)

Thought Leadership Development and Market Communications creates a compelling Point of View and delivers this messaging through marketing programs Market-Driven Services Strategy Development Service Offering and Market Play Development Business Development Process Improvement Thought Leadership Development and Market Communications Client Needs To drive rapid growth, a firm seeks to present a highly differentiated offering to the marketplace through research to develop thought leadership A firm seeks to develop a series of leveraged marketing programs that will “capture” target buyers and hold them in a value-adding relationship in advance of the traditional sales and proposal process Baseline current and past project work and service offering strategy to assess most likely areas to develop thought leadership Perform literary searches and a on-line survey to gather statistics about a business problem and current thinking on ways to solve it Develop best practice case studies to deepen the firm’s understanding of the problem and to facilitate communications to the market Develop a “Prospect to Partner” Pipeline that involves a program of coordinated marketing activities designed to drive these messages into the marketplace Best Practice Approach

Marketing for professional service firms is best viewed as a four stage, Prospect-to-Partner Pipeline Process P ROSPECT P ARTNER Attract Capture Convert Retain Get the attention of potential customers, channel reps and strategic partners, through awareness activities that promote the firm’s capabilities and key messages Build individual relationships with key customers, channel managers, and partners through personal, value adding interactions Harvest the leads generated through the Capture stage into paying clients through the sales process Continue to build the relationship with partners throughout the project lifecycle to build credibility, develop new leads, and generate additional work View marketing activities as part of an integrated process that covers the entire client life cycle. Within the pipeline, marketing activities need to go beyond generating awareness and add value in both attracting and capturing prospective clients. The goal is to integrate the disparate activities of marketing, sales, strategic partnerships, and client management into a set of mutually reinforcing programs within one seamless process. By taking a process perspective, a consulting firm can build a customized, effective, and highly leveraged pipeline that delivers the desired outcomes.

There are several ways to start building a demand creation system for a services business Starting Point Key Activities Typical Deliverables Corporate Visioning and Service Architecture Development Interview leadership, managers and salespeople Research competitor market positioning and services Develop and facilitate workshops with leadership to create value proposition and architecture Develop marketing materials to present the vision to employees and the marketplace Develop and implement communications plan Senior management alignment around a go-forward vision Customer Value Proposition and Services Architecture Communications Plan and Marketing materials for salesforce and prospects Key Vertical or Competency Development Interview leadership and vertical and competency leads to establish baseline and select one Develop templates for strategic plans Identify and work with lead to develop plans for a promising market play Develop senior leadership review process and pilot Strategic Plan template for verticals and competencies Completed strategic plan for a key vertical or competency Senior management review process design and pilot Account Review Process Design and Pilot Baseline current sales planning processes and tools Develop current and prospective strategic account review processes and templates Facilitate a workshop to develop an ongoing process for quarterly reviews of strategic plans Develop and pilot ongoing review process Categorization and prioritization of Account reviews Account review templates and supporting materials Completed Account reviews for several key accounts Senior management review process design and completed pilots

Leaders seek different kinds of outside help along the Idea-to-Benefit Cycle. Management consultants help decide whether and how to proceed to do exactly what Strategy consultants provide ideas as to what to do Development consultants ensure work goes according to plan and that organization learns and grows Implementation consultants manage and staff projects to get the work done Specialty consultants provide staff with needed skills Outside operators run as an outsourced utility

Idea-to-Benefit Service Continuum Different skills, methods, economics, and focus are required to perform and grow well by stage. Strategy work is high priced because few do it well; but the market for it is small. Implementation and operations are large markets but rates are low because many do it well. Commodity implementation and operations services provided by those who help set intent command premium prices because, while the work is the same, they build castles rather than lay bricks. Commodity Rate Number of Hours Set Intent Design/Align/Plan Implement Operate Idea-to-Benefit Service Continuum Value-laden Rate Small Large Low High Hourly Rate Market Size Premium

Use this five-step discussion sequence to educate prospects about how the best do what they are trying to do and then how you can help.

Summary of ways to drive sales in a service business Summary of Ways to Drive Revenue in a Services Practice Summary of ways to drive sales in a service business Page 12 is the full picture with the key work processes shown in the blue circles. The question is how to staff these processes.

About IntelliVen A management consulting firm that helps leaders of technology-related product and services firms get their organizations on track to long-term growth and performance. We provide marketing, finance, operations, and governance strategy and support services that meet the unique needs of small, high-growth organizations. Our services are led by seasoned operators with deep industry experience in the ventures that they work with. We are compensated through monthly retainers, fees, and/or equity. Founded in 1999 with offices in San Francisco, Boston, and Virginia.

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