The Sad State of Software Marketing

Having spent most of my career in software marketing, I have a definite opinion on what it takes to create and maintain a world-class enterprise software marketing organization. While I think I created such a team in my last job, that group has mostly disbanded in the two years since I resigned from that position, and I think it’s increasingly difficult to create such a team today.

In some ways I feel prescient. I could see the marketing storm clouds forming, both at my last job and in enterprise software in general. While I may take an example or two from my last employer (Business Objects), I see the problems I’m about to describe as a software industry problem; my views are shaped both by my direct experience building and running a marketing team as well as discussions with friends who’ve done the same thing.

So what’s happening?

Marketing Eaten Alive
From a scope and investment perspective, marketing is being eaten alive:

  • Marketing budgets are being slashed as growth slows and margin pressure continues
  • Product management is increasingly given unilateral control over product strategy, leaving product marketing, at best, with a toy car steering wheel. (“Look Jimmy thinks he’s driving the little car!”)
  • Customer support is upgrading itself into customer advocacy, taking over satisfaction surveys, customer advisory boards, and sometimes user groups and conferences.
  • The rise of the chief strategy officer (CSO) is removing corporate strategy (either formulation or process-driving) from marketing.
  • Sales, unhappy with marketing’s output, is increasingly taking matters into its own hands, chartering sales operations with pricing and sales tools.

Marketing-Ignorant CEOs
New CEOs, typically promoted from sales or operational roles, often arrive with little or no understanding of marketing. This creates two problems:

  • Because the CEO doesn’t understand marketing, he or she doesn’t understand the depth of the damage inflicted by the eaten-alive problem, above. Each incremental suggestion (e.g., hey, let sales ops run pricing) seems logical. Marketing can even appear territorial in self-defense.
  • The CEO ends up scapegoating marketing when he or she should be trying to understand it. No area is more mysterious and confusing to an operations-person than corporate communications (e.g., analyst relations, public relations, investor relations), so problems usually arise there, first.

Symptoms of a problem include:

  • One or more major PR gaffes at the start of their tenure
  • Commands from the CEO to PR saying, “your job is to set these people straight,” or “that’s not what I said, make them retract.” (Both statements, incidentally, demonstrate profound ignorance of PR.)
  • Over time, an increasing non-desire on the CEO’s part to participate in PR activities. Once bitten, twice shy.
  • In extreme cases, blacklisting of certain journalists, analysts, or entire analyst firms. (For years, CA effectively boycotted Gartner.)
  • Termination of the PR agency.

Usually, the new CEO is confusing “PR problem” with “reality problem” because he thinks marketing is tactical and PR’s job is to “make us look good” no matter how bad or silly our decisions are. Great marketers reject this hypothesis and instead focus on “making their own luck” by first creating a good reality, laced with smart decisions, that is easy to promote.

Loss of Influence
Marketing is losing its seat at the table. In many companies marketing is no longer on the executive staff, perhaps reporting to the COO, or even to sales. Once stripped of its important duties this often makes perverse sense, because, once marginalized, there truly is no good reason to include marketing on the exec team.

Marketing Death Spiral
These problems, when combined, turn marketing jobs into “bad jobs,” and as definitively stated in Kellogg’s 6th rule of business: only bad people take (or keep) bad jobs.

So the problems initiate a self-fulfilling prophecy, a death spiral whereby marketing actually does, over time, become populated with airheads because only airheads would work in this type of marketing organization. The smart folk either move to other companies where marketing has a more strategic position, or they move to other departments within the organization that retain influence.

So marketing — what Theodore Levitt once described as “the whole company as seen from the point of view of the customer” — becomes so hollowed out that the head job degenerates to SVP or CMO of brochure writing and lead generation. (Long ago I once removed myself from consideration for a very senior job at a top ten software company and described the position back to the president in that very way.)

The Solution: Put the Jelly Back in the Donut
If your firm is in this situation, then the problem is serious, but the solution is simple provided the CEO wants to fix it (and intractable if he or she does not).

  • Start by hiring a marketing leader who has the right vision and is worthy of a seat around the executive table. Have him/her report to the CEO. Tell him/her his job is to “make sales easier” (in both tactical and very strategic ways – e.g., by helping design more sellable products).
  • Give marketing a real voice in both corporate and product strategy. Reinforce that by placing competitive analysis under marketing. This forces marketing to both increase its own knowledge and to be dead-center in important corporate debates.
  • Have the CEO learn how marketing works. Step one is getting him/her to admit they don’t understand marketing. Step two is learning from the team. Step three is reading Kotler and Levitt.
  • Start separating “reality problems” from “PR problems”. If your partners are upset about your new channel program or services business, then first try to understand why.
  • Reverse the various bad decisions, described in the eaten alive section, thus forcing marketing functions back into marketing.
  • Then make the rest of the organization demand accountability from marketing for good results. The solution to poor marketing output, is not to have other departments take matters into their own hands, but instead to replace/upgrade the relevant broken leaders and/or departments in marketing.

2 responses to “The Sad State of Software Marketing

  1. Tony Byrne - CMS Watch

    As someone at the receiving end of a lot of software marketing, I would have to disagree that your “Eaten Alive” bullets constitute a real problem. Inasmuch as buyers have more choices and arguably less attention, then companies need to approach relationships differently and engage more than just an uber-CMO to deliver. For example, as a technology buyer, I prefer having customer support organize user group meetings rather than corporate marketing. And what makes marketing people innately better at competitive intelligence than product managers? I’m not dismissing classic marketing techniques, but I think the contemporary ISV does well to distribute its promotional and relationship-management energy more broadly within the company…

  2. I guess my first question is why do you prefer having user groups run by support over marketing? I’d argue that this a symptom of the problem I’m trying to describe. (Bonehead marketing teams will turn user groups into sales events while good ones will run an effective input session.) The root problem is that a hollowed-out marketing dept is a bad place to work, and therefore only bad people will work there. So while I can’t give any first principle for why some things should be in marketing, it’s the simple truth that good rich jobs attract strong players to fill them. As for why marketing should do competitive intelligence, I do have first principles argument. Support provide services and product builds product so they will be surveying about their own activities. This is always dangerous. Corporate America being what it is I can assure you (and I have personally witnessed) VPs biasing surveys and/or incorrectly reporting results in order to avoid calling the baby ugly.Because marketing is organizationally neutral in this situation, I’d argue they are a great place from which to do such research.

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