IBM finds strength in alliances

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Joan Rothman manages global marketing of IBM’s top strategic alliances—a program that involves 153 companies. As VP-IBM Global Solutions Marketing, she is responsible for internal and external marketing, serving the global sales force, IBM’s top partners and customers. Rothman joined IBM in September 2000 from Dun & Bradstreet, where she was senior VP-strategic planning and research.

Last month, Rothman sat down with BtoB to discuss IBM’s approach to alliance marketing and how its tactics have changed in response to the sluggish U.S. economy, which has hit technology vendors particularly hard.

BtoB: What’s been the most significant shift in IBM’s marketing alliances over the past few years?

Rothman: We’ve become much more methodical in our approach to alliance marketing. There’s clear objective setting right at the beginning—a mutual understanding of the targets we’re pursuing, what the joint offerings are going to be and what the value propositions will be. A few years ago, there was no textbook for what we were doing.

BtoB: Do you approach the potential partners? Or are you taking calls from them?

Rothman: Both. Alliance partners come to IBM from any number of sources. We have Web sites, and we have executives working on strategy who do due diligence on a marketplace and say, "You know, we really need this partner in this particular space in order for us to succeed."

BtoB: How many alliance marketing partners does IBM have?

Rothman: [IBM Global Solutions has] 153 strategic alliances. But let me also emphasize that there are thousands of other alliances that we work with on a local basis within certain countries or within a certain segment, and tens of thousands of other partners.

BtoB: How do you define ‘strategic alliance’?

Rothman: Where there’s joint commitment by both companies to go to market together. In return, the alliance partner will commit to certain customer targets with us. They’ll commit to porting to IBM servers and middleware. We will put sales and marketing resources behind that commitment, and both will enter the marketplace together. And there’s usually joint R&D.

BtoB: What about advertising?

Rothman: We do more direct marketing as opposed to advertising awareness than anything else now. This really is a big distinction in what we did before vs. what we do now. We placed a lot of ads, a lot of co-marketing ads. You have to decide where you’re going to place your marketing investment. We do a lot more direct marketing, a lot of event marketing—different types of events, not only big, broad events—that we find are highly effective.

BtoB: Is there any branding going on with the strategic alliance partners?

Rothman: I would say about 10% of my budget overall is spent on the branding of the alliances. You’ll soon see some ads in The Wall Street Journal with IBM partners.

BtoB: Has the technology slump caused any of your partners to pull back? How did you adjust your plans if that happened?

Rothman: Yes, it has happened. And we looked at the different alliances one at a time. It depends upon how strategic in nature they are to us in terms of the extent to which we’ll pull back our investment. Also, it led us to think about other ways to value the marketing contributions on both ends. They don’t necessarily always have to be in terms of hard dollars.

BtoB: Have you shifted your spending as a percent of budget or changed the media you use?

Rothman: Yes. At the beginning, there were more dollars behind trade advertising. Over time, I’ve reduced that percentage to about 10% of the total. I’m not saying that if the economy picked up I wouldn’t increase that. But that’s what we’ve had to do. We’ve done it based upon what drives the most leads.

BtoB: What’s working for generating leads?

Rothman: Telemarketing. It’s highly effective. We’ve been using it in the Americas as well as in the U.K., and it’s driving leads beyond our targets.

Something else that I’d like to share is the importance and increased emphasis we’ve been placing on channel enablement. My investment in channel enablement has grown exponentially.

BtoB: Can you give an example?

Rothman: It’s the training and the education and the tools that we provide for our face-to-face reps, the ISV sales team and our own consulting arm, as well as our consulting partners. That’s become extremely important in solution marketing.

I will focus more of my channel enablement toward the large enterprise space. As I go downstream, that’s where my new customer acquisition happens to be. That’s where my advertising will be. That’s where my tele-prospecting will be, my event marketing.

BtoB: Talk about measurement and ROI.

Rothman: We measure market share, which is also the biggest challenge. From a marketing perspective, we also look at leads, validated leads and the value of the validated leads. Over time, I’ve got to move the team to look at the number of customers, customer retention and customer satisfaction. And, while we’re not measuring this yet, we are focusing on [measuring] the length of the sales cycle.

BtoB: With the eye to reducing it?

Rothman: Right. What can I do to penetrate the sales cycle early and bring closure to that particular opportunity? But it never really ends there. When you’re in a solutions mode, it just keeps going. It could go for another two years, and you have the opportunity to keep selling additional components and services.

BtoB: How do you start a marketing alliance, and how do you maintain it?

Rothman: We have the process called the Alliance to Win. Once the agreement is struck—within the first couple of weeks—we bring representatives from both companies, including sales and marketing representatives, into a room for two and a half days. We go through an analysis together, where we look at the marketplace, the opportunity, the targets, revenue and profitability. At the end of this, we walk out with an action plan.

With our big alliances, those plans are monitored monthly ... quarterly, in terms of really hard metrics. Then [these plans] are renewed annually.

BtoB: Does it ever happen that the two sides cannot come to a decision about the marketing approach?

Rothman: Yes. You do get to a solution, but there’s a lot of pain to get there. There are certain alliances that are more difficult than others because our philosophy about marketing may be different. You have to have people who have a lot of stamina and perseverance, who aren’t faint of heart.

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