Panelists describe success tied to changed marketing strategies, organizations

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Chicago—Web hosting company Rackspace began with a “denial of service” model under which complaining customers were given virtually no support. That changed in 2002, when it became an ardent proponent of what company CEO Graham Weston calls “fanatical support.”

“Marketing has the opportunity to set the tone, set the direction, of what the business is about,” said Weston, a panelist in a luncheon presentation at MarketingProfs’ Business-to-Business Forum here Tuesday. The two-day event, which kicked off Monday, attracted about 270 attendees.

Weston said that after his company made its shift in 2002, its growth accelerated, from less than $50 million to more than $350 million in revenue this year. While acknowledging Rackspace has pulled budget from advertising to boost customer support, he called this a marketing strategy that has had tangible returns. Moreover, he said, happy customers make for happier employees, resulting in what he called a “loyalty cycle” and better service.

“Not enough marketers think about the internal customers they have to serve,” said panel moderator Roy Young, president of MarketingProfs. Noting the relatively short life span of CMOs, Young added: “The issue is how to turn a so-called revolving door into a permanent position in the executive suite.”

Stuart Itkin, former CMO of human capital management solutions company Kronos, focused his remarks on how he convinced the company’s financial executives to support a branding campaign. Itkin described how the company learned, distressingly, that even among its top customers there was little understanding of the breadth of its services. Eventually, the executive team agreed that if a branding effort could yield just a 5% increase in consideration, this would mean a 13% increase in net sales, or at least $10 million annually. (Private equity firm Hellman & Friedman acquired Kronos in June.)

Eduardo Conrado, VP-global business and technology marketing & communications at Motorola Inc., described the technology vendor’s restructured marketing operations in the past year, which bifurcated the marketing organization to support the $18 billion b-to-b businesses and consumer ones, notably mobile devices. The effort also has included coordinating three teams working with R&D, product groups and channel distribution, respectively.

—Ellis Booker

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