Marketing Managed Services: Are the 4Ps still Relevant in the Cloud Era?
The 4Ps – Product, Place, Price, and Promotion – are well known by marketers as the fundamental building blocks of marketing mix. While the 4Ps have served consumer marketing well, some have said that a new model is required for marketing B2B services.
Harvard Business Review published the results of comprehensive study and suggested that SAVE – Solution, Access, Value, and Education – is a more appropriate approach for B2B. But in today’s competitive environment, marketing cloud services is challenging, no matter what terms you use.
SAVE and Solution
The SAVE model suggests that Solution encourages marketers to focus on solving the customer’s problem rather than emphasizing their product’s specific features and capabilities. For service providers, this means changing messaging from speeds and feeds, processing power, memory and storage. This is difficult for a cloud service like IaaS, because the technical features are tightly connected to the customer problem. Not only does the IaaS buyer needs access to technical resources – processing power, memory, and storage – but the buyer is usually technical, so marketing an IaaS cloud service in technical terms makes sense.
Some cloud service providers take a more comprehensive approach by recognizing that customers’ needs expand beyond just raw infrastructure. Layered Tech stresses PCI, HIPAA, and FISMA compliance as differentiators for its hosting and cloud services. CenturyLink® Private Cloud bundles private cloud along with high speed access for SMBs who need the security and control of a private cloud.
But what happens when you need to market a cloud service higher up the stack, where the customer’s problem is not a technical one, but a business one, like reacting to seasonal spikes in demand? How do marketers convey the benefits of their SaaS offerings to an enterprise application owner or line of business owner? Agility can be articulated in terms of time-to-market for new services, or speed to bring a new remote branch office on-line so it can start processing transactions. These positioning statements are much harder to obtain and justify.
Access is the second factor of the SAVE model, since physical locations are less relevant in a B2B world. Or at least many would have thought so, until the revelations of the NSA’s PRISM data gathering program. With a potential negative impact of $22-$35 billion to the US cloud market, physical place is clearly very much a concern for cloud service providers. As Business Insider reported, the Information Technology & Innovation Foundation estimated that the US cloud market could lose 10%-20% of the overseas cloud market over the next few years, as foreign governments implement protectionist measures to ensure local storage of their citizens’ sensitive information. Insistence on local storage means that service providers will have to establish the right relationships with overseas partners, and raise the prominence of Place in their marketing efforts.
The SAVE model recommends that Price be replaced with Value, as perceived by the customer. This certainly makes sense for the cloud market, since competing on price with the proverbial “800 pound gorilla” is a losing proposition. As Gartner’s Magic Quadrant for Cloud IaaS shows, Amazon Web Services’ compute power is more than 5 times that of the aggregate of the 14 other vendors listed, and it has leveraged its economies of scale by lowering prices numerous times over the past several years.
So how do you market your service based on value to the customer? Some providers use OPEX vs CAPEX comparisons to show the economic benefit of consumption-based costing versus outright purchasing. But since these models reflect only cost saving, the low price leader will always have the advantage.
The customer perspective is the key to positioning based on value. Customers, especially those in business side of things, want to consume a service, and they care about factors in addition to price when choosing a cloud provider. Enterprise class support, compliance certifications, security, and SLA commitments are all aspects other than price that fit into the cloud marketing mix.
Many B2B providers have moved from interruption-driven Promotion toward Education as the last component of marketing mix. My organization has recognized that customer success videos are especially useful in convincing prospects of your expertise in your target markets. Because the cloud market is evolving so quickly and requires such a broad range of expertise, an education program must consist of an ecosystem of partners with expertise spanning the range of cloud services and skills needed by customers.
Service providers should demand help from their vendors in marketing the cloud or managed services based on their software, hardware or services. Vendor partners should bring you a comprehensive program of best practices sharing that accelerates your time to market. After all, marketing in the cloud space is complex, no matter how you spell it.
What do you think? Are you getting the right help from your cloud vendor in marketing the services running on their solutions?
Mike Marks is responsible for all aspects of marketing for CA Technologies CA AppLogic cloud platform. In a 20 year career in tech, Mike has served in a variety of roles dealing with enterprise software and the service provider market, ranging from alliances and business development to product management and operations. Mike joined CA Technologies from Concord Communications, where he led service provider marketing and focused deeply on managed services.