Social Marketing to the Business Customer: Listen to Your B2B Market, Generate Major Account Leads, and Build Client Relationships
By Paul Gillin and Eric Schwartzman
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About this ebook
B2B markets are fundamentally different from consumer markets. Decisions are made on value, not impulse. Buying cycles are complex, often with many stakeholders involved. Relationships and support are critical. Bet-the-business decisions demand discipline, knowledge, and lots of information.
This hands-on guide covers topics unique to this segment, including cost justification, prospecting and lead generation, matching tools to the sales funnel, building, B2B search engine optimization, social media monitoring, social media policy development, long-term client relationships, gaining stakeholder support, building a more transparent organization, and what's coming next.
- Features plentiful examples, case studies, and best practices
- Focuses on the channels that are most effective for B2B marketers
- Builds on the authors' more than 30 years of combined experience in the new media/social media space, as well as two previous successful books
Leverage the vast business-to-business potential of Facebook, LinkedIn, Twitter, and many other social media platforms today with Social Marketing to the Business Customer!
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Social Marketing to the Business Customer - Paul Gillin
PREFACE
The idea for this book was hatched in October 2009 at the Inbound Marketing Summit in Foxboro, Massachusetts. More than 70 speakers packed a terrific two-day agenda, relating stories of how they sold everything from cameras to Cabernet Sauvignon using the new tools of social media.
On the afternoon of the first day, an attendee raised her hand and asked how a speaker’s advice could be applied to business-to-business (B2B) marketing. The speaker (we can’t remember who it was) asked which members of the audience worked for B2B companies. More than half the hands in a room packed with 450 marketers went up.
Paul watched the scene with interest. He had been a journalist and executive at B2B publishers in the technology field for more than 20 years before making the switch to social media consulting in 2005. It had never occurred to him how different the needs are between a company that sells clothing and one that sells uniforms. A quick check on Amazon revealed that of the 50+ social media marketing books that had been published in the prior year, not one specifically addressed the needs of the B2B marketer.
We began to ask questions of event organizers and social media publishers. Why was it that consumer success stories like Zappos and Blendtec continued to dominate conference agendas and research reports when B2B companies had been such early and enthusiastic adopters of social tools? The answer we got back most often—that similar principles applied to both types of businesses—seemed insufficient. We love it when the two guys from EepyBird.com drop Mentos into bottles of Diet Coke, but we couldn’t see how that example would apply to a marketer at ConAgra.
The two of us were already planning to collaborate on a book based on Eric’s archive of On the Record . . . Online podcasts. We quickly switched gears and spent the next 6 months delving into the intricacies of the business buying decision. We learned how very different the two business types really are.
Changing Channels
B2B marketing has been conducted pretty much the same way for decades. Direct sales forces followed up on leads generated by trade print advertising, trade show exhibitions, direct-mail campaigns, and telemarketing. These channels were always expensive and have become less effective than they once were. As this Penril modem ad from an early 1980s issue of Computerworld demonstrates (Figure P.1), the limitations of traditional, intrusion-based advertising sometimes forced B2B marketers to use extreme tactics to attract attention.
Figure P.1 Old Computer Ad.
Consider the corporate technology executive, who was the target for this ad. Until about 10 years ago, the typical information technology (IT) manager’s mailbox bulged with print trade magazines. It was not unusual for IT executives to have a stack of unread magazines in the corner of their offices and to take piles of them on plane trips for rapid processing. Paul remembers with a chuckle the IT manager who referred to his weekly trade magazine deliveries in a metric he called stack feet.
This was a highly wasteful system. Technology companies could pay as much as $30,000 for a full-page advertisement that might be seen by only a tiny percentage of the magazine’s readers in any given week. Of those who noticed the ad, an even smaller percentage were in a position to make a purchase at that time. It was impossible to communicate the value of a product in this format; advertisers mainly relied on quick slogans borrowed from the consumer sector that they hoped would spur a phone call. Lead quality was poor, and sales cycles were long and arduous.
It’s not surprising that the technology sector was one of the first to discard print advertising. Today, only a handful of technology magazines still exist in the United States, and their average size has shrunk from hundreds of pages a week to a few dozen. In 2009, the trade publishing sector was the single largest declining print market, with ad pages contracting 28 percent on top of years of previous declines. The collapse of that industry was dramatized in November 2008, when PC Magazine, which once generated more than $100 million in annual revenues, announced it was exiting the print business and going fully online.
What explains this dramatic turnaround? Quite simply: choice. Business buyers are looking to make decisions as quickly and as intelligently as possible. Searching for solutions online is more efficient than relying on the serendipity of encountering an ad in a magazine or seeing a flyer in a mailbox. Americans older than age 15 conducted 131 billion searches in December 2009,¹ according to comScore. Marketo reported that 93 percent of B2B buyers use search to begin the buying process,² and Forbes Insight reported that 74 percent of C-level executives call the Internet very valuable,
and 53 percent said they prefer to locate information themselves.³ Nor is it shocking that direct-mail spending is expected to decline nearly 40 percent by 2014. Buyers’ information discovery habits have changed forever thanks to search engines.
But it isn’t just search. Business buyers have been saying for many years that their most important source of information is each other. Research in early 2010 by Genius.com and DemandGen Report found that 59 percent of B2B buyers engaged with peers before making a buying decision, 48 percent followed industry conversations, and 44 percent conducted anonymous research among a select group of vendors. Forrester Research reported that more than 8 in 10 IT decision makers said word-of-mouth recommendations are their most important source when making buying decisions.⁴ Countless other surveys, stretching back more than 30 years, have reached the same conclusions. Business buyers actively seek out others like them because they believe they will get the most direct, untarnished advice.
Marketers have many more options for reaching business buyers than they did just five years ago. All of the traditional channels are still available, and many new ones have also emerged. Marketing today is a lot more complex than it used to be, but the opportunities are also greater for marketers who can figure out the right combination of dials to turn.
Social media empowers individuals to share their experiences directly with one another and without the filters of corporate public relations (PR) departments and lawyers. People are more honest and direct when speaking with their peers, which is one reason why feedback from social networks is more compelling than packaged case studies. As the number of channels multiplies and more participants come online, the quality of information improves, a phenomenon knows as the network effect.
Today, prospective buyers have other options beyond search. They can ask questions directly of one another via Twitter, Facebook, and LinkedIn. Response is nearly instantaneous and, because each message is tied back to an individual profile, participants have a high degree of confidence in the quality of the information.
If a customer in the chemicals industry is having a challenge and wants to know best practices for distribution of chemicals through a supply chain, he or she can turn to another chemicals customer in our ecosystem through our [online] communities and learn,
says Mark Yolton, senior vice president of the 2-million-member SAP Community Network.
Andrew McAfee, principal research scientist at the MIT Sloan School and author of Enterprise 2.0, has gone so far as to suggest that a new kind of search is emerging based on the ask-and-answer metaphor. So now, not only can we search the web for others’ experiences, but we can ask questions directly of an anonymous or semi-anonymous group and get back experiential advice. Those stack feet
of printed magazines have been replaced by a vast network of people who freely share their firsthand experiences for no reason other than to help others make better decisions.
For many B2B companies, these new information-gathering metaphors will ripple across every function in the organization. Customers, suppliers, and investors will demand that businesses become more open and responsive. They will grant attention to companies that deliver useful information and shun those that simply deliver sales pitches. People want to buy, but they don’t want to be sold to,
says Benjamin Ellis, a serial entrepreneur based in the United Kingdom who now specializes in social marketing.
Find Your Own Path
There’s an inherent risk in generalizing about the needs of companies that run the gamut from high-volume office supply retailers like Staples to highly focused firms like American Biltrite, whose Autowrap division is so specialized that executives already know everyone who could possibly do business with them. In some ways, these two kinds of B2B companies couldn’t be more different, but there are also a surprising number of common threads to their experiences: their markets are value-driven and relationship-based. There are no impulse purchases and no fashion statements. Word of mouth is a powerful source of influence. Reputations and even careers ride on buying decisions.
Any company that sees virtue in better connecting the people who build and sell its products with the people who buy them can find opportunities to apply the new tools of social marketing. In the following pages, we’ll introduce you to dozens that already have. We’ll also continue to tell stories on our blogs: paulgillin.com, spinfluencer.com, and ontherecordpodcast.com. We hope you’ll contribute yours to the conversation.
Part One
Setting the Table
CHAPTER ONE
The Changing Rules of B2B Marketing
Friends know Scott Hanson as an affable native Texan with a penchant for computers, cars, and poker. But to thousands of technology professionals around the world, Hanson is a celebrity. By day, he and three other technologists at Dell manage the Dell TechCenter, an online community that helps enterprise information technology (IT) professionals unravel the thorniest problems that occur when trying to integrate technology from multiple vendors.
Dell conceived of the community in 2007 as a way to enhance loyalty among its largest customers. Members share advice and ask questions of Hanson and the other engineers, who dispense it for free. The community is open and fully searchable, although only registered members can submit articles and comments. In 2008, about 100 people visited the site every day. By early 2010, that number was over 5,000.
Hanson and colleagues Jeff Sullivan, Kong Yang, and Dennis Smith are celebrities of sorts in the community of enterprise customers, who frequently seek them out for meetings at trade shows and during visits to the company’s executive briefing center. Their celebrity has paid off handsomely for Dell: Hanson won’t provide specifics, but Dell has estimated that the TechCenter is indirectly responsible for many millions of dollars in sales each year.
That’s despite the fact that Dell TechCenter isn’t charged with selling anything. The site is free of advertising, and the member list may never be used for promotions. The last thing IT people want when they come to a technical resource is an ad asking them to buy a laptop,
Hanson says.
Those sales are generated by the affinity that the staff has developed with these key corporate customers. It’s a camaraderie that is nurtured by personal contact. In the early days of Twitter, the Dell TechCenter staff had set up a common Twitter account as a secondary channel of communication. But it turned out that customers wanted to speak to people, not brands. The Twitter initiative really gained traction when Hanson became @DellServerGeek and Sullivan became @SANPenguin. Suddenly the discussion became more personal and the people behind Dell TechCenter more real to their constituents.
Welcome to the new world of business-to-business (B2B) communications. Dell TechCenter and other initiatives like it are microcosms of the changes that are sweeping across the corporate world as a consequence of the rapid growth of social media tools like blogs, communities, and user-generated multimedia.
Companies like Dell, which does 80 percent of its sales volume with corporate customers, are ideally positioned to take advantage of these new channels. In fact, B2B companies were among the earliest adopters of social media. Technology leaders such as Microsoft, IBM, and Cisco had hundreds of thousands of employees blogging as early as 2005, and those same companies are now expanding their footprint into social networks like Facebook, YouTube, and, overwhelmingly, Twitter. Microsoft has featured interviews with thousands of its own employees in video programs on its Channel 9 web site. The company wanted to expose its human side to a market that saw it as closed and secretive.
B2B technology companies have also been among the most creative users of social channels to reach the highly skilled people they need to hire in competitive labor markets. Recruiters have found that social channels are far more effective in identifying prospective employees than recruitment advertising sources, and that prospects came into the hiring cycle with a better understanding and more enthusiasm about the company they were hoping to work for.
Yet B2B applications of social media get remarkably little attention. Perhaps that’s because their focused communities of buyers pale in size to the millions who flock to Facebook Official Pages for Coca-Cola and Nike. Perhaps it’s because glitzy video contests and games don’t resonate with the time-challenged professional audience. It doesn’t really matter. Few B2B companies seek the consumer spotlight, and their audiences, which may spend millions of dollars with them, are more interested in substance than in style. Fortunately, B2B social media is all about substance.
The B2B Difference
Why are B2B companies different, and why do they justify a social media book just for them? For one thing, B2B marketers quietly spend about $80 billion per year, some $3 billion of that online. Spending on B2B Internet marketing is expected to grow at a compound rate of 12 percent through 2013, with social media spending showing a 21 percent compound annual growth rate.¹
B2B marketers are far more entrenched in social channels than they are given credit for. Business.com reported in late 2009 that 81 percent of B2B companies maintain company-related accounts or profiles on social media sites, versus 67 percent of business-to-consumer (B2C) companies.² The same study also found that three out of four B2B companies have a presence on Twitter, compared with half of B2C companies. Research by BtoB magazine and the Association of National Advertisers in early 2010 found that 57 percent of B2B marketers were using social media channels, compared with 66 percent of all marketers and up from just 15 percent in 2007. A study of social network usage by employees of major corporations conducted by NetProspex in May, 2009 found that 12 of the top 20 most active employee populations were at companies that sell primarily to other businesses.
There are big differences between selling to organizations and selling to individuals (Figure 1.1). Let’s look at a few:
B2B marketing is much more likely to focus on value than experience. This distinction isn’t absolute, of course; makers of automobiles and dishwashing detergent also figure value into the equation. But in nearly all B2B decisions, value is the driving force. Value can be expressed in many ways, including price/performance, the fit with the customer’s business objective, flexibility, and compatibility with existing systems. The point is that the Wow!
factor that is so important to many consumer buying decisions rarely means much in business engagements. In fact, flash obfuscates the clarity that business buyers need.
B2B buying decisions are usually made by groups, whereas consumer buying decisions are made by individuals. This has huge implications for marketing. B2B marketing programs must influence multiple people at multiple stages of the buying process, and each of those individuals has different priorities. The chief financial officer (CFO), for example, is focused on return, whereas the product manager may be thinking more about user experience or lead generation. In B2B marketing, your end consumer is often not the same person as the purchaser,
says Alan Belniak, social media director at enterprise software maker PTC.
Interestingly, the opportunities for individual engagement are changing the group-buying dynamic in some cases. Salesforce.com, an enormously successful B2B software provider, gained a foothold in large corporations by pitching its service directly to individual sales representatives. By building a groundswell of enthusiasm, Salesforce was able to unseat major enterprise competitors who sold from the top down. However, even with this influence inversion, a company-wide commitment to Salesforce remains a group decision.
For this and other reasons, business buying cycles are longer than consumer buying cycles. This is primarily because more dollars are at stake and more people are involved in the decision. The choice of packaging machinery for a manufacturing plant, for example, affects that company’s ability to deliver its product to the marketplace, which in turn affects its sales and stock value. With so much at stake, decisions often involve many rounds of meetings and may take a year or longer to conclude.
Business buying decisions are more likely to be a commitment than consumer buying decisions. Products like enterprise e-mail systems or aircraft engines live with the customer for a very long time. Issues such as the viability of the manufacturer, its quality of support, and its future product road maps have significant influence on these decisions. Once the sale is made, buyer and seller are bound together in an ongoing dialog. Businesses do business with those they trust.
Relationships play a more important role in B2B than in B2C decisions. In some cases, business buyers bet their careers on the choices they make. They need to feel confident that their supplier will validate the soundness of their judgment. Smart B2B marketers realize that their job is as much about ensuring the success of the buyer as it is about selling the product.
Service and support are essential decision factors. Business customers won’t wait 20 minutes on hold to speak to a support technician, particularly if their assembly line is down. They expect their problems to be solved when they need them solved.
B2B sales have lots of moving parts. At the high end in particular, contracts are often custom bid and may include bundled services, special discounts, and detailed price schedules. This process involves extensive communication between the parties and direct contact between different departments of both organizations.
Channel relationships are complicating factors in the marketing equation. B2B marketers constantly struggle to strike a balance between selling to channel partners such as resellers and distributors and selling directly to customers. Channel partners ultimately sign the check for many B2B transactions and see themselves as owning the relationship with the customer. However, customer pull is a significant influence on sales, regardless of the channel. This is a perpetual quandary for many B2B companies, which must market to both constituencies without muddling the message or creating conflict.
Figure 1.1 People involved in buying decision.
Source: Marketing Sherpha/TechWeb.
Social media are well suited to addressing many of the unique issues noted so far. They’re particularly effective at connecting customers with the people behind the products they buy. This barely matters in consumer markets, but in high-dollar transactions that may affect the fate of the buying company, the ability to communicate directly with designers, engineers, and support personnel can make all the difference. This is why we recommend that B2B companies that undertake social initiatives apply them broadly across the organization. The more you open up your company, the more credibility and trust you earn from your prospects and customers.
Buyers want their suppliers to use these channels. Cone Inc.’s 2009 Social Media in Business study found that 93 percent of business buyers believe all companies should have a presence in social media and 85 percent believe social media should be used to interact and become more engaged with them.
The value of social is in building stronger, more connected relationships that extend beyond the traditional face-to-face kind,
says Adam Christensen, manager of social media at IBM. It’s now more of a continuing conversation, so that when two people do actually get together again . . . the relationship is better.
Engagement won’t work if it’s limited to traditional marketing and sales; to be effective, social media must be adopted broadly throughout the company. Some executives will find much to fear in these developments. They have been trained to believe that employees are not fit to speak for the company and that disaster ensues when the message is not tightly controlled. For large companies in particular, an image of invincibility is a treasured corporate asset. That makes their inevitable pratfalls all the more embarrassing.
This isn’t to say that fears of loss of control are invalid. Adobe Systems found out the hard way in early 2010 that even unbridled employee enthusiasm can have undesirable side effects. An Adobe Platform Evangelist named Lee Brimelow posted a series of screenshots on Adobe’s Flash blog that were intended to show how bleak the online world would look without Adobe’s Flash video display technology. In a subtle attempt at humor, Brimelow included a screenshot of a pornography site in his gallery (see Figure 1.2). Adobe was not amused when the gaffe exploded into a firestorm of mockery and anger.
Figure 1.2 Lee Brimelow’s screen shot.
Nevertheless, we are confident Adobe will recover from this incident and may actually benefit from it. Brimelow’s halfhearted apology had a kind of lighten up
tone to it that reminded his audience that no lives had been lost. And the furor gave him another chance to state his passion for Flash and for Apple, whose omission of Flash from the iPad computer had sparked the blog entry in the first place. The fact that Adobe didn’t fire or publicly rebuke its evangelist actually burnished its image as a tolerant and forgiving employer.
On the other hand, the upside of spreading social tools throughout the organization can be enormous, particularly for companies that have enthusiastic customers and passionate employees. Consider the once popular case study,
an essential B2B marketing document that has become a rat’s nest of approvals and legal concerns. All you have to do is scan the web sites of a few