B2B or not B2B: That Is No Longer a Social Media Question

Is there a place for social media in business-to-business (B2B) marketing? Up to a year or so ago, it might have been worthwhile pondering that question. Today the question is no longer whether or not. Rather it is how to best utilize social media in B2B marketing. A survey by White Horse finds 86 percent of B2B firms are using or having a presence on social media, compared to 82 percent for business-to-consumer (B2C) firms. They are not as actively engaging in social media activities, however — 45 percent of B2B firms have a basic presence (e.g., a Twitter or Facebook account,and/or a company blog) but no significant marketing activities (day-to-day engagement) on social media, compared to 26 percent of B2C firms. There is still a lack of executive buy-in among B2B firms (one in three B2B firms reports low executive interests, compared to one in eleven B2C firms). While both types of firms cite insufficient personnel to maintain social media activities as the most serious obstacle, B2B firms are several times more likely than B2C firms to prefer traditional marketing methods and to perceive social media as not relevant to their business. Being newcomers to social media, one in three B2B firms is not measuring how successful its social media efforts are, compared to one in ten B2C firms. In brief, B2B marketers are interested and have tiptoed into social media but they are not quite there yet.

The need to utilize social media is just as great for B2B firms as they are for B2C firms.

  1. In the B2B world, professional networking is everything — who you know and who they know form a web of relationships. Online social networks (OSNs) can be excellent tools for connecting with others. They are no longer heavens just for teens and college students. A majority of users on Facebook, LinkedIn and Twitter comprises of people 35 years of age or older.
    OSN users by age
    Source: “Who use Facebook, Twitter, LinkedIn and MySpace”, Paul Kiser’s Blog
  2. B2B marketing is not about lifestyle and personal interests as much as it is about helping customers to get their jobs done better. That means extending to them the B2B firm’s knowledge and expertise in the form of relevant, credible and useful content (e.g., white papers, case studies, product demo videos and webinars). Social media offer B2B marketers new opportunities to aggregate, share and co-create content with customers. Content provides the substance that attracts and engages prospective customers at various touch points. It turns simple network connections into rich social interactions that help build business relationships.
  3. B2B customers are also real people. They increasingly use social media at work and in their daily life, be that reading blogs, watching YouTube videos, staying in touch with friends on Facebook, or uploading presentations  to Slideshare.net. In that regard, the demarcation line between doing business and being a consumer, or that between B2B and B2C, is becoming harder to detect.
  4. Whether in B2B or B2C, listening to what is being talked about the firm and its brands is a must. Marketers are no longer the only one with a megaphone and in a commanding position to control their brand messages. Anyone else can blog, share with their 100+ Facebook friends or create YouTube video about their experience with the firm’s products and services. Letting negative blog posts, comments or videos spreading around without addressing their inaccuracies or customer grievances can be a costly mistake and failing to listen to customer suggestions can mean lost opportunities.

 

Once B2B marketers buy into the idea of utilizing social media, the next and more challenging question is what can B2B marketers do with specific social media tools? There are many tools and covering them all in this blog post would be impractical. Fortunately, Base One offers a relatively comprehensive drawing that depicts the B2B social media landscape. Click on it will lead you to a larger image where the details can be zoomed in and explored.

B2B Social Media Landscape

Just take a quick look at some tools.

  • Among content-centric tools, Slideshare.net is a good place for sharing presentations with information-hungry prospects whose decisions can be influenced by informative content; and do not overlook YouTube for product demo videos. Quite often, the firm may have already produced these presentations and videos; so, all it takes is to sign up with these sites and upload the content. Blogs are well-recognized as a marketing tool but not yet widely used in B2B (only 50 percent of B2B marketers have used blogs, compared to 75 percent having used LinkedIn, according to eMarketer). They are a great way to put a human voice on a cold corporate website. They can be enormously effective — 71 percent of B2B users rate blogs as “very influential” in identifying and defining needs, 74 percent in identifying potential suppliers and 75 percent in final selection of a supplier.
  • Most often overlooked is Wikipedia, which is among the five most visited websites and a main source of knowledge for many prospects. B2B marketers should create, maintain and/or contribute to entries on their firms, products or the underlying technology and business processes.
  • Among the connection-centric tools, LinkedIn — the OSN for professionals — is the most obvious and widely popular with B2B marketers (3 out of 4 having used it). Do not overlook Facebook and Twitter. “[I]f LinkedIn is your business suit and Facebook is business casual, then Twitter is your business social networking cocktail hour, the place where you go to casually and informally interact with potentially thousands of others. Whereas LinkedIn tends to be a more latent form of engagement, Twitter is (or can be) very much in real-time” (Paul Chaney, 2009). Surprisingly (or perhaps not surprisingly), B2B buyers rate Twitter and Facebook more than LinkedIn as “very influential” in identifying and defining needs (67, 60 and 51 percent, respectively), identifying potential suppliers (81, 69 and 46 percent) and finally selecting a supplier (77, 87 and 54 percent).
  • There is a bonus for using social media: they help boost search engine rankings. Such rankings are largely driven by the volume of high-quality inbound links a website receives. A key element in optimizing websites for search engines is to get more links. Engaging with users on social media sites such as Facebook and Twitter can drive in lots of links from these sites, hence can boost search engine rankings. Nearly half of B2B marketers indicate their social media activities as having positive effects on their  search engine performance (eMarketer, 09/17/2010).

Looking forward, it is anticipated that “B2B spending on social media [is] to explode” (eMarketer). Besides increased spending on paid advertising (e.g., banners) on OSNs, a sizable portion of spending will go to  toward other social media initiatives such as creating and maintaining a branded profile page, managing promotions or public relations outreach within a social network, and measuring the effect of a social network presence on brand health and sales. Quite interestingly, there is a marked difference in social media usage between B2B marketers under 30 years or so of age and those older (Base One, “Buyersphere”). As those 30s and under move up the corporate ladder in the years ahead, expect even more changes in social media usage in B2B marketing.

Resources

  1. B2B Marketing Goes Social: a White Horse Survey Report (2010).
  2. Base One, “B2B Social Media Landscape” and “Buyersphere: Survey of B2B Buyers’ Use of Social Media” (2010).
  3. Who use Facebook, Twitter, LinkedIn and MySpace“, Paul Kiser’s Blog, (April 1, 2010).
  4. eMarketer, “Is B2B on Board with Social?” (March 13, 2010), “B2Bs Tap Social to Boost Search” (September 17 , 2010), “B2B Spending on Social Media to Explode” (June 1, 2010).
  5. Paul Chaney (2009), The Digital Handshake: Seven Proven Strategies to Grow Your Business Using Social Media, John Wiley & Sons.

Putting Web 2.0 and Social Media in Context

Note: A presentation on this topic is available on SlideRocket — “Web 2.0 and Social Media in Context”

The selection of “You” in 2006 and Facebook co-founder Mark Zuckerberg in 2010 as TIME’s Person of the Year provides two time markers in the “Web 2.0” or “social media” era (my earlier post: “TIME’s Person of the Year, 2006 and 2010“). Earlier on, the topic of discussion was all about Web 2.0; more recently, it is mostly about social media. Do not ask for a definition of these terms – Web 2.0 or social media (an attempt to define the latter term can be found in an earlier post: “Social Media: More ‘Social’ than ‘Media’“. Neither term is easy to define. Few business professionals have time to spare on such a definition. Ask someone for examples of the tools (i.e., applications and services) closely associated with either Web 2.0 or social media and you would get very much the same answers: blogs, RSS, tweets, online social networks, and so forth. If the two terms refer to the same phenomenon, then why do we need both? But if they do not, then how do they differ?

The Forces Behind

The terms Web 2.0 and social media essentially refer to the same phenomenon: the technological, social and economic transformations associated with a new era in the evolution of the Web. Initially, these transformations caught the attention of software developers, system architects and other information technology (IT) professionals. The term Web 2.0, used widely earlier on, tried to capture the transformation of the Web and eventually the society. These transformations are quite fundamental and lie mostly underneath the surface or behind the scene. They, hence the term Web 2.0, attracted little attention beyond IT professionals and some business strategists.

Transformed by Apps

At the heart of Web 2.0 transformations is the new system architecture centering on the lightweight programming model. This model is intended on delivering interoperability for easy deployment of applications over the network, independent of operating systems and hardware devices. Lightweight applications, often taking the form of Web services, are built as reusable, self-contained, function-specific software components that can be easily selected, extended and combined into new applications known as mashups. An example is HousingMaps, which meshes Google Maps data with home listings from Craig’s List to offer users the convenience of searching for rental and for-sale properties and getting their map locations on the same website. Such applications are highly modular and hence allow complementary services and functionalities to be added easily.

Modular application architecture introduces new sets of design possibilities and thereby creates opportunities for entry by new developers, including individuals with limited technological and financial resources. It means products do not create much value on their own as stand-alone elements. Rather, they depend on complementary products and services from other producers or providers to be useful. Think of Apple and the tens of thousands of iPhone and iPad apps available on AppStore plus all the entertainment on iTunes. The value of the iPad and iPhone lie as much in these apps and content as in the hardware (“There’s an app for that”). These devices plus iTunes and AppStore function as a platform that brings together several groups from different sides of the market – app developers, content publishers and users – and facilitate their transactions. For competitors, they need not only match Apple hardware quality and features but also build a comparable ecosystem of app developers and content publishers. Look at Facebook. It was trailing behind MySpace until it decided in May 2007 to let independent software developers to build apps for Facebook (and earn a share of advertising revenues). As more such apps become available, users can do more things (e.g., sharing shopping info with friends) and hence spend more time on Facebook, making it an attractive platform for advertisers. Meanwhile, MySpace and other online social networks did not respond to Facebook in the timely fashion; when they did, they did so in a half-heartedly manner through Google’s app development platform OpenSocial. By then many app developers had joined the Facebook platform and would be reluctant to spare their limited resources on another platform. Like Apple, Facebook offers much more value as a platform, bringing together multiple sides of a market, than a standalone product or service.

Propelled by Network Effect

To any side of a market (group of market participants), the value of a platform depends of its ability to attract participants on the other side or sides. To users, the value of Apple iPhone and iPad or that of Facebook social network depends on their ability to attract more app developers and content publishers or advertisers, respectively; to developers and publishers/advertisers, that value depends on the number of users buying Apple devices or signing up for Facebook. This is known as the network effect, which creates a virtuous cycle that can drastically reshape market landscape (an earlier post: “What do Amazon, Apple, eBay,Facebook and Saleforce have in common?“).

The presence of network effect is not uniquely Web 2.0, but its magnitude is. Modular application architecture has lowers the entry barriers for complementary service providers so drastically that a visionary platform operator like Apple or Facebook can mobilize enormous pools of developer resources and quickly scale up its offerings to offer so compelling value to users. Three years after its launch, Facebook development platform has attracted 2.5 million developers offering more than 75,000 apps; 20 millions apps are installed by Facebook users every day. As more apps become available, users can do more things (e.g., sharing shopping info with friends) on Facebook, they spend more time there instead of searching on Google or going somewhere else. As users spend more time on Facebook, advertisers become attracted. As more advertisers spend their ad dollars on Facebook, more app developers become interested; as more apps become available, users spend more time on Facebook… The virtuous circle spirals upward. Facebook user population has reached 500 millions, ten folds what it was in Oct 2007.

The Public Face

While some transformational effects of the new Web era (e.g., modular application architecture) lie beneath the surface, others (e.g., the proliferation of online social networks – OSNs) are much more visible. The term “social media” captures the essence of the latter transformations .

Empowered by UGC

One highly visible transformation of the Web is the meteoric rise of user-generated content (UGC). Behind that rise is the modular application architecture, which “shifts computing to the edge of network, and empowers individual users with relative low technological sophistication in using the web to manifest their creativity, engage in social interaction, contribute their expertise, share content, collectively build new tools, disseminate information and propaganda, and assimilate collective bargaining power” (Parameswaran and Whinston, 2007). That shift, in the form of UGC, has transformed the Web from a ‘publishing’ to a ‘participatory’ medium. In the publishing Web era, institutions (e.g., corporate establishments, website operators, marketers and publishers) provided virtually all the content on the web. Users were primarily passive consumers of such content. In the participatory web era, users can now be active creators, not just passive consumers, of content on a scale never seen before, e.g., creating Facebook profiles, building Second Life avatars, recording podcasts, and blogging about political candidates, social causes or consumption experience. They have wrested power from the few (e.g., newspaper editors, broadcasters, marketers and advertisers). In the process, they have not only changed the world but also the way the world changes. “For seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game”, Internet users (“You” included) were selected as TIME’s 2006 Person of the Year.

What drives the participatory Web is not simply user participation per se, but an implicit “architecture of participation”. More than just facilitating user participation, it enables user interactions and collaborations such that services improve and content get richer as more users participate (O’Reilly, 2005). As more users collaborate on a Wikipedia entry, for instance, errors and intentionally bias can be detected and corrected more rapidly. Passive participation can contribute as well. Most users, for instance, bookmark web pages and tag content on social bookmarking sites such as Delicious and Furl for personal use rather for the collective benefits. Social bookmarking still can benefit other users by functioning as a recommendation system even without explicitly providing recommendations; tagging data can be automatically aggregated into useful information, e.g., folksonomy in form of a tag cloud.

Propelled by Social Interactions

UGC is not just about content. It is also about connectivity and collaboration on a massive scale. It depends on some media (means of mass communication, e.g., blogs, wikis and tweets) to deliver, aggregate, collaborate and/or improve on the content (e.g., entertainment, viewpoints, information, ratings, bookmarks, etc.). The more users it reaches or brings in, the more powerful or useful it gets. Blog posts by themselves are “isolated” content pieces. Commenting and hyperlinking can turn these isolated posts into running conversations and passionate debates or even start a social movement. Wiki entries are not content pieces by individuals but a product of the collective intelligence and collaborative efforts of crowds. User profiles on online social networks help people find and connect with each other. Web 2.0-era media are therefore social media.

Connectivity and collaboration constitute the “social” part of social media. This social dimension distinguishes UGC (contributed by the mass) from the commercially developed content (controlled by the few) in the Web 1.0 era. It shifts the balance to power from the center (e.g., advertisers and website operators) to the edge (e.g., consumers and web users). Connectivity offers content a mechanism for wider reach, or in other words, the “multiplier” effect that makes UGC so powerful. Collaboration ensures content its richness. Content constitutes the “media” part of social media. It provides the “substance”; in its void, there is nothing to converse about, nothing to share with each other, and nothing to collaborate on. Content transforms (plain) connectivity into (rich) interactions.

Social interactions follow primarily a many-to-many pattern among interconnected users, in place of a one-to-many broadcasting pattern that was well orchestrated by institutions (e.g., companies) in the past. They entail various levels of user engagement, ranging from passive usage (e.g., tagging content or joining groups) and limited engagement (e.g., rating and voting on content or commenting on blog posts) to active contributions (e.g., writing blogs or uploading photos and videos) and deep involvement (e.g., networking with others or running online communities). Depending on the level of engagement, social interactions can support sharing, facilitate conversations, engage users and help build community. They deliver a level of “stickiness” that has been elusive to website operators, advertisers and content publishers with faith in the “content is king” mantra. Commercially developed content, lacking social interactions and hence user engagement, often fails to attract visitors and keep them coming back (an earlier post: “Is [Commercially Developed] Content King?“). Social interactions, on the other hand, engage users, nurture relationships and build brand loyalty. The resulting “customer lock-in” (or stickiness) helps the firm fortify its customer base or even expand it with “word of mouth” and viral messages, and thus allow the firm to successfully leverage the network effect.

Some Takeaways

The terms Web 2.0 and social media essentially refer to the same set of tools and transformational changes taking place in the new Web era. Web 2.0 focuses on the forces behind the scene (i.e., modular application architecture and network effect) that are of interest to system architect, application developers and IT professionals. Social media, on the other hand, represent the public face of the new Web (e.g., UGC and social interactions) that captivates marketers, advertisers and PR professionals.

CRM Goes Social

It is a well-known fact that CRM implementations have had a relatively high rate of disappointing results. While still trying to address these poor results, marketing and strategy planners now have to address a new set of challenges: the rise of social media, which has radically altered the relationships between businesses and consumers. Social media have enabled consumers to communicate among themselves and greatly curtailed marketers’ ability to control the messages and information about their brands and products.

Why CRM Must Go Social

Consumers can now produce and share their views and creative content, and connect with one other online with ease. Social media give them a mighty megaphone with which to tell the world their experience with product X or brand Y. As a result, the influence from traditional marketing communication channels has become increasingly negligible. Consumers can educate themselves over the Internet through their connections in social networks, blogs, discussion forums, chat and more. Consumer-to-consumer communication becomes frictionless such that it is no longer one-to-one, but rather many-to-many. Messages, good or bad, can spread so widely and so fast just like viral infection. All of these take place on Twitter, Facebook, YouTube and other social media that lie completely outside any company’s control.

CRM, as we knew it, is ill-equipped to utilize social media for building and managing customer relationships.

  • CRM was conceived and developed in an era of information asymmetry. Communication followed a one-to-many pattern. Companies were able to tightly control the information and image about themselves, their products, brands and services as they could use their communication channels to simply broadcast their marketing monologues.
  • The mindset underlying CRM implementation was “command and control” – customers would interact directly with the company in a controlled manner across multiple, well-managed touch points. Much of the information available to consumers was marketing messages (e.g., advertisements, product brochures and web-page content) being produced by the company.
  • CRM therefore optimizes relationships around the company, not its customers. Although the goal of CRM is to provide a single view of individual customers and manage one-to-one relationships with them, its implementation in the Web 1.0 era often focused on automation of front-office tasks. At its most basic level, CRM is a fancy contact database. It lets sales representatives view “profiles” of their accounts, capture deal information, track performance, communicate with contacts, and share information internally with sales managers and other members of their account team.

In this social media era, the term CRM (“customer relationship management”) has become a misnomer, argues Maria Ognewa (2010), Director of Social Media at Attensity. After all, the company no longer controls or manages the relationship; the customer does. To remain effective, marketing must become engaging and conversational, and CRM (or any other term you prefer) must get social.

Social CRM Defined

Social CRM, also known as CRM 2.0, capitalizes on technology and utilizes social media tools. However, it is none of these. Rather, as described by leading CRM expert Paul Greenberg (2009), it is “a philosophy and a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It is the company’s response to the customer’s ownership of the conversation” (emphasis added). Or more briefly (as in a “tweetable” definition), it is “the company’s response to the customer’s control of the conversation.”

Social CRM vs. Traditional CRM

Social CRM does not replace traditional CRM, but augments it instead. Customers can still interact with the company through conventional media (e.g., phone, postal and electronic mail). Social CRM extends traditional CRM capabilities with social networking capabilities – marrying the company’s existing systems and customer touch points with data provided by user-contributed content and communities. It taps social media to first understand consumers’ perceptions and then takes actions within those outlets to improve the standing of the company and its products. Consider online sales, for example. They account for only 10 percent of total retail sales; the remaining 90 percent still remains offline. Yet social networks influence more than 40 percent of all offline sales.  The challenge for marketers is to determine how best to leverage the collective intelligence inherent in social networks and effectively evangelize the company’s products, services and/or brand propositions through social media. These media are like traditional touch points such as call centers, sales organizations, partner portals and marketing applications. There is one key difference, however. With social media, the company must engage and join in ongoing conversations as participants, not as overseers.

Differences between social and traditional CRM have been widely discussed (see “Notes” below). I highlight a few of them here.

Traditional CRM v. Social CRM

  • Specific-department responsibilities vs. enterprise-wide engagement. The responsibilities for building and managing relationships under traditional CRM implementation reside with specific departments. By contrast, customer engagement under social CRM must be enterprise-wide. That means empowering employees, especially those facing customers, to engage customers and prospects on social media channels within well-defined usage guidelines.
  • Company-defined channels vs. customer-driven channels. Under traditional CRM implementation, the firm selects and manages the contact points (e.g., company’s website, customer help desks, email) through which it interacts with its customers. Its single view of each customer is built upon the data collected from such interactions. Under social CRM, the number of possible channels for engaging with its customers has multiplied many folds (e.g., traditional contact points, plus online social networks, blogs, tweets, video sharing, etc.). Few of them can be defined and managed by the company. Instead, many of them are determined by customers, organized on the ground up and/or managed by third parties. They can easily move on to other channels when feeling such engagement lacks authenticity.
  • Operationally-focused vs. people/community-focused. Businesses typically turn to CRM to improve communication between sales and marketing operations, and to improve data-access so as to positively impact decision-making. Toward this goal, traditional CRM focuses on operational effectiveness and its impact, both internally and on the customer, whereas social CRM is all about people and community – joining conversations with consumers on relevant online communities and build the kind of reputation needed to maintain credibility and trust.
  • Data-driven vs. content-driven. Traditional CRM grew out of the need to store, track, and report on contact data and other critical information about customers and prospects. Social CRM is growing out of a need to attract the attention of those using the Internet to find answers to their problems by providing right content, and just enough of it, in formats that are easy for them, whether blog posts, podcasts, YouTube videos, or Webinars. Offering compelling content is a key pillar of social CRM strategy. The aims are to convert content into conversations, extend these conversations into collaborative experiences, then to transform these experiences into relationships.
  • Process-centric vs. conversation-centric. Traditional CRM focuses on implementing and automating processes to ensure the proper activities and tasks would be performed by the appropriate people, in the correct sequences. Although processes are still essential for a successful social CRM strategy, conversations with consumers looking for help in solving their challenges are at the heart of it. The goal is making it easy for consumers to find the company (through its content – a comment left on a blog post or following the company on Twitter) and invite it into a conversation on their terms.

Social or Traditional, It’s CRM

It is quite easy to get carried away by all the talks about how different social CRM is from traditional CRM and how much things will have to change. Let us not forget that social CRM is supposed to bring together the company’s CRM and social media capabilities. Customer information and insights from social media engagement must be brought together with customer data from traditional CRM system into a single view of the customer. Likewise, social media initiatives must be integrated with traditional customer service and support to be effective. Leading vendors of CRM systems and services such as SAP and Salesforce.com seem to understand this. They are investing in integrating CRM with networking platforms such as LinkedIn, Facebook, and Twitter. Hopefully, we will once again talk about CRM, not social vs. traditional CRM.

Notes

  1. Paul Greenberg, “Time to put a stake in the ground on Social CRM”, PGreenblog, (July 06, 2009), URL: http://the56group.typepad.com/pgreenblog/2009/07/time-to-put-a-stake-in-the-ground-on-social-crm.html
  2. Dion Hinchcliffe “Using social software to reinvent the customer relationship”, Enterprise Web 2.0 Blog, (August 18, 2009), URL: http://www.zdnet.com/blog/hinchcliffe/using-social-software-to-reinvent-the-customer-relationship/699?tag=mantle_skin;content
  3. Brent Leary, “Traditional CRM vs. Social CRM”, (June 2009), URL: http://technology.inc.com/software/articles/200906/leary.html
  4. R. Wang and J. Owyang, “Social CRM: the New Rules of Relationship Management”, Altimeter, (March 5, 2010), URL: http://www.slideshare.net/jeremiah_owyang/social-crm-the-new-rules-of-relationship-management
  5. Bob Warfield, “A social CRM Manifesto: How to Succeed with the Social CRM Virtuous Cycle”, Helpstream, URL: http://www.slideshare.net/Helpstream/a-social-crm-manifesto-how-to-succeed-with-the-social-crm-virtuous-cycle