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Trickle-Up Socialnomics: How BtoB Firms Can Leverage Social Media

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This white paper introduces the idea of Trickle-Up Socialnomics™, which describes how BtoB (business-to-business) firms can view their supply chain as a Social Media Chain and leverage it to identify …

This white paper introduces the idea of Trickle-Up Socialnomics™, which describes how BtoB (business-to-business) firms can view their supply chain as a Social Media Chain and leverage it to identify business opportunities and increase revenues. It details the elements of the Social Media Chain and provides examples of how participants can both listen to and engage with individuals and organizations at different levels. It also provides examples of the Trickle-Up Socialnomics™ effect resulting from these activities.

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  • 1. Trickle-Up SocialnomicsTM How BtoB Firms Can Leverage Social Media Courtney Shelton Hunt, PhD Founder, The Denovati Group ©April 2014, All Rights Reserved
  • 2. 1Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved *Socialnomics™ is a term coined by Erik Qualman, a social media thought leader who wrote a book by the same name in 2009. You can learn more about Socialnomics by visiting their website. Executive Summary This white paper describes Trickle-Up Socialnomics™* – how BtoB (business- to-business) firms can view their supply chain as a Social Media Chain and leverage it to identify business opportunities and increase revenues. Just as leaders of BtoB firms take a different approach to marketing and business development in general, they need to recognize the limitations of applying social media tactics used by BtoC (business-to-consumer) firms to their businesses. They must think about how to leverage social media in unique and contextually-appropriate ways. The purpose of this paper is not to tell leaders of BtoB companies they should engage in social media. Rather, it is intended to help them better understand what they can do. New technologies don’t fundamentally change what a firm is trying to achieve. What they do offer are potentially better ways to pursue those objectives. Social media initiatives should be integrated into an enterprise’s other business development activities; however, limited resources may necessitate trade- offs. The expected utility of various efforts should be compared to determine which can produce the highest possible return relative to the required investment. Social media approaches are often superior because in addition to other benefits, they enable firms to access “actionable intelligence” from more high-quality sources faster and more cheaply than traditional communication channels. The Social Media Chain can be conceptualized as follows. The upper half of the model represents the Listening Chain, and the lower half represents the Engagement Chain. It incorporates both private (boxed) and public communications.
  • 3. 2Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Participants in the Social Media Chain can listen to the publicly-shared communications of any other participant, even without a direct connection. Though engagement can also occur across levels, participants will generally engage directly with their own clients and prospects. Listening to and engaging with other Social Media Chain participants can enable BtoB firms to identify and pursue new business opportunities and better serve existing customers. Although engagement itself can’t be focused on selling, listening and engaging can both lead to revenue-generating opportunities. This paper describes the Social Media Chain and provides examples of how participants can both listen to and engage with individuals and organizations at different levels. It also provides examples of the Trickle-Up Socialnomics™ effect resulting from these activities.
  • 4. 3Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Contents Executive Summary....................................................................................................................................1 Introduction ...............................................................................................................................................4 Should BtoB Enterprises Engage in Social Media?.....................................................................................5 The Supply Chain as Social Media Chain....................................................................................................6 How the Social Media Chain Works.........................................................................................................10 The Trickle-Up Socialnomics™ Effect.......................................................................................................16 Conclusion................................................................................................................................................17 About The Denovati Group......................................................................................................................18
  • 5. 4Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved *Socialnomics™ is a term coined by Erik Qualman, a social media thought leader who wrote a book by the same name in 2009. You can learn more about Socialnomics by visiting their website. Introduction Leaders of many BtoB (business-to-business) firms are uncertain – if not downright skeptical – about how social media can help them achieve their business development objectives. Tempted by the media hype and low barriers to entry, some BtoB firms have experimented with establishing a presence on some of the best known social networking platforms (e.g., Facebook, Twitter, and LinkedIn), but many of these experiments have met with limited results. Generally speaking, poor results can be attributed to a failure to recognize that: • The approaches used by BtoC (business-to-consumer) firms cannot be applied wholesale to their businesses. • Popular social networking channels may not be the most appropriate places to engage with current and potential BtoB customers. • The social media universe is much larger than the “big three” social networking platforms. • Although it may not require a huge cash investment, the time commitment necessary for social media success should not be underestimated. • Tactical experimentation is not the same as strategic implementation. Even a low-cost investment is no bargain if it is not strategically oriented. Just as they take a different approach to marketing and business development in general, leaders of BtoB enterprises need to employ social media in unique and contextually-appropriate ways. In this white paper, I introduce the idea of Trickle-Up Socialnomics™* – how BtoB firms can view their supply chain as a Social Media Chain and leverage it to identify business opportunities and increase revenues. Although the model is built around participants in a classic manufacturing supply chain, the underlying ideas are transferrable to virtually any organization since they all operate within economic ecosystems in which participants are directly and indirectly connected to each other.
  • 6. 5Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Should BtoB Enterprises Engage in Social Media? The purpose of this paper is not to tell leaders of BtoB companies they should engage in social media. In my view, "should we or shouldn't we?" is the wrong question – or at least it shouldn't be the first question. The determination whether and how to leverage social media will be unique for each BtoB enterprise, but it generally involves the following steps: • Identify (or revisit) strategic goals and objectives and assess whether and how social media technologies can help achieve them. • Assess current business development approaches and determine if new approaches leveraging social media might be more effective. • Develop a plan for integrating new technologies if they can improve the efficiency and effectiveness of business development efforts. During the evaluation process, it’s important to put social media in perspective. Social media should be viewed as “new tools for doing old things.” In other words, new technologies don’t fundamentally change what a firm is trying to achieve: increased revenues, decreased expenses, higher net profits. What they DO offer are potentially better ways to pursue those objectives. In addition, the pursuit of social media initiatives should be integrated with an enterprise’s other initiatives and programs. From a business development perspective, that means that rather than simply layering social media on top of more traditional efforts, leaders should determine how to weave them into the overall fabric of their business development, marketing, sales, and customer service efforts to increase the synergy among them and maximize potential results. With limited resources, integrating social media initiatives may necessitate trade-offs. The expected utility of various efforts should be compared to determine which can produce the highest possible return relative to their required investment. Some of the reasons that social media can produce a “bigger bang for the buck” include: • The ability to get more information about leads, trends and significant developments from a wider array of sources, more quickly than through traditional channels. • The ability to reach a greater number of people faster, with less effort, at lower cost, and in places they’re likely to “hang out.” • Greater control over communications and conversations, by providing outlets for stakeholder complaints and concerns that the enterprise can address directly (rather than having them voice their concerns somewhere else). • The ability to generate business opportunistically as well as strategically.
  • 7. 6Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved The Supply Chain as Social Media Chain Here is a conceptualization of the Supply Chain as Social Media Chain. For purposes of this illustration I’ve included five participants in the classic manufacturing supply chain, represented by blue/yellow ovals and avatars. The model doesn’t include all relevant participants for a manufacturing supply chain and doesn’t recognize the inherent messiness and nonlinearity of the relationships among participants. I simplified the components to focus on the core social media themes, which should be transferrable to more complex configurations. The top half of the diagram shows what I refer to as the “Listening Chain,” with different layers of listening for different types of participants. The bottom half of the diagram shows the “Engagement Chain,” which is where dialogue and other interactions occur.
  • 8. 7Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved The Listening Chain Any participant in the Social Media Chain can listen to any other participant’s publicly-shared communications. The layers in the listening chain are as follows: • The orange “sound waves” indicate listening between parties that are directly connected. For example, Dealers can listen to Consumers. • The green “sound waves” indicate listening between parties that are one layer removed from each other. Component Producers can listen to Distributors, for example. • The red “sound waves” indicate listening between parties that are two layers removed from each other. Manufacturers, for example, can listen to Consumers. • The gray “sound wave” indicates listening between parties that are three layers removed from each other. Component Producers can listen to Consumers.
  • 9. 8Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved The Engagement Chain Although participants in the Social Media Chain can listen across all levels, their engagement will generally be focused on their direct relationships. There are two basic types of engagement: • Public: All participants can share information and ideas openly through a variety of means and can invite conversation from other participants. The initiation of these exchanges is indicated by the teal “sound waves.” • Private: Participants can engage in private interactions with other participants with whom they’re directly connected. These exchanges can take the form of single conversations or more complex interactions. The simpler, more transactional interactions are indicated by the blue/yellow dialogue links, and the more complex, relationship-oriented interactions are represented by the boxed exchanges.
  • 10. 9Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Listen First, Then Engage Many people think that leveraging social media means using the platforms and technologies to push messages out. The tendency to focus on “talking” not only reflects a misunderstanding of the power of these channels for gathering information, it can also lead to wasted effort if the push communications are not valued by their recipients and/or do not pull them into an interaction with their senders. BtoB enterprises are better served by focusing their initial social media efforts on listening, for several reasons: • It is a very powerful way to gather “actionable intelligence” about what is happening in the industry, as well as with customers, prospects, and competitors. • The firm may not have the resources or staff with the expertise to actively engage. • The firm can maximize the effectiveness of their efforts when they do engage by following and learning from the activities of earlier adopters. In addition, although rules of engagement are outside the scope of this paper, there are three basic rules that should be kept in mind to maximize the effectiveness of leveraging social media for engagement: • Companies should not assume, “if we build it, they will come.” When a company establishes public social media channels, they should identify them as official sites, add links on their websites to connect to them directly, and promote them through a variety of channels. Similarly, companies leveraging private social media channels should ensure that the folks using them understand and are trained in how to use them effectively. • Even in a BtoB context, engagement is “IwithI.” Ultimately social media engagement boils down to engagement between and among individuals. That means companies should ensure that individuals who engage on their behalf do so with a human rather than corporate voice, and that they respect the individuality and fundamental humanity of those with whom they are interacting. • Engagement does not mean selling. It means participating in conversations, offering expertise, asking and answering pertinent questions, creating and strengthening relationships, and being a good citizen. Selling may be the end game, but service is the name of the game.
  • 11. 10Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved How the Social Media Chain Works To illustrate how the Social Media Chain can work, we’ll start with the BtoC level (Dealers and Consumers) and work our way back through the chain to Component Producers. For each participant, I describe how they can use social media to listen to and then engage with their direct clients. It’s important to remember, however, that other participants in the Social Media Chain could also be listening to publicly-shared messages and may respond, so engagement can occur across all levels. Given the layered nature of the Social Media Chain, each set of suggestions is intended to build on the preceding one(s). Therefore, rather than repeating specific tactics, I focus on additional and/or unique activities that can be employed by each type of participant for both listening and engagement. The suggestions are intended to be illustrative rather than exhaustive. Dealers Listening. As indicated in orange, Dealers can listen directly to Consumers through a variety of means. Focusing on their own brand, the brands they sell, and their competitors (both other dealers and other brands), they can, for example: • Set up Google alerts to notify them when a brand has been mentioned in cyberspace. • Follow specific Tweeters, identify and track Twitter hashtags, and search for tweets that don’t include hashtags.
  • 12. 11Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved • Like Facebook pages and follow the news and other information shared, as well as the dialogue exchanged on their walls. • Subscribe to YouTube channels; search for and “favorite” specific videos. • Find and follow Pinterest boards and Instagram accounts. • Subscribe to blogs written by loyalists and/or product experts. • Join special communities (e.g., Facebook groups, private online communities, and discussion boards). Engagement. Dealers can leverage social media to communicate directly with past, current, and prospective customers in a variety of ways. They can use various channels to broadcast messages and invite Consumers to interact with them. For example, they can: • Use Twitter to share relevant information and resources and receive questions and comments. • Establish a Facebook page and share information, resources, pictures, and videos, in addition to allowing others to share too. • Create a YouTube channel that features self-created videos as well as videos created by others that they’ve “favorited.” • Establish their own Pinterest and/or Instagram accounts to share their own visual images, as well as those created by others. Dealers can also encourage private interactions with Consumers. For example, they can: • Add a chat feature to their website that allows people to ask questions and get answers in real time. • Create private social networks with key customers to conduct market research, get feedback on specific ideas or initiatives, and/or to identify potential improvements in products and services.
  • 13. 12Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Distributors Listening. Like Dealers, Distributors can listen directly to Consumers through the means defined above. Distributors can also listen directly to Dealers through the social media presences they create for engaging with Consumers, as well as through other channels. They can, for example: • Set up Google alerts to notify them when current/prospective Dealer clients and/or one of their relevant brands has been mentioned in cyberspace. • Follow Dealer clients and prospects on Twitter and LinkedIn (both individuals and organizations), as well as other social channels like those mentioned above, to stay current on their activities and issues and learn about significant changes and opportunities. • Join industry-specific and professionally-relevant LinkedIn groups and monitor the discussions taking place. Engagement. Like Dealers, Distributors can leverage social media to communicate in a variety of ways. They can use various channels to broadcast messages and invite others to interact with them. For example, they can: • Use Twitter to share relevant information and resources, either directly or by retweeting items shared by others. • Get all relevant externally facing folks on LinkedIn (or other networking groups) and have them connect with Dealer representatives.
  • 14. 13Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved • Participate in LinkedIn groups by sharing news items and engaging in discussions. • Demonstrate expertise by answering questions raised by others through LinkedIn, Facebook, and other networks and discussion forums. • Write blog posts to demonstrate expertise and/or key competitive differentiators. These posts can be guest posts on other blogs and/or their own. Self-run blogs are also a great way to share relevant news, press releases, and/or case studies. Distributors can also encourage private interactions with Dealers. For example, they can: • Reach out to current and prospective clients in response to a trend, issue or question a Dealer might have raised through a public social media channel. • Establish (semi)private channels (e.g., LinkedIn groups or private social networks) to address industry or brand-specific issues and challenges.
  • 15. 14Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Manufacturers Listening. Like Dealers and Distributors, Manufacturers can listen directly to Consumers through the means defined above. They can also listen directly to Dealers and Distributors through the social media presences they create for engaging with other participants. And they can employ the same kinds of listening tactics that Distributors do. Engagement. Manufacturers can leverage social media to communicate in the same ways that Dealers and Distributors do, both publicly and privately. Given their focus on product creation, they can target their engagement to both end users (i.e., Consumers) and other supply chain participants (e.g., Dealers and Distributors). Although it’s not illustrated in the simplified Social Media Chain model, Manufacturers can also engage privately with Dealers and Consumers as well as Distributors. Depending on the industry, product, and brand, Manufacturers can: • Create a private social network of Consumers to conduct market research, get feedback on specific product ideas, and/or to identify potential improvements. • Establish private networks of Dealers to address confidential industry or brand-specific issues and challenges, as well as to share best practices.
  • 16. 15Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved Component Producers Listening. Like other Social Media Chain participants, Component Producers can listen directly to Consumers through the means defined above. They can also listen directly to Manufacturers, Dealers and Distributors through the social media presences they create for engaging with other participants. And they can employ the same kinds of listening tactics that Distributors do. Engagement. Component Producers can leverage social media to communicate in the same ways that Dealers and Distributors do, both publicly and privately. Component Producers can also encourage private interactions with Manufacturers. For example, they can: • Reach out to current and prospective clients in response to a trend, issue or question they or a Consumer, Dealer, or Distributor might have raised through a public social media channel. • Create a private social network of key customers to get their feedback on specific ideas or initiatives and/or to identify potential improvements in products and services. • Establish a private channel for managing large-scale projects and/or highly-customized products.
  • 17. 16Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved The Trickle-Up Socialnomics™ Effect The idea behind Trickle-Up Socialnomics™ is that listening to and engaging with other Social Media Chain participants can enable BtoB firms to identify and pursue new business opportunities and better serve existing customers. Although engagement itself can’t be focused on selling, listening and engaging can both lead to revenue-generating opportunities. Here are some examples of how this can work: Distributors Listening. Listening to conversations in cyberspace, a Distributor senses a growing dissatisfaction among Dealers (who are not current clients) with their current supplier(s). The Dealers are not actively seeking a new supplier, but they’re likely to be more receptive to a prospecting call than they had been in the past. The firm adjusts its sales plan to prioritize these prospects. Engagement. To improve its service, a Distributor creates a private social network to form an advisory group of current clients to identify and analyze problems and brainstorm solutions. Even though these Dealer clients are geographically disbursed and in different time zones, they are able to communicate asynchronously in a shared space with threaded conversations. The advisory group produces multiple benefits: the Distributor improves its service and strengthens its relationship with key clients, making them “stickier.” The Dealers benefit from the improved service and are able to pass along those benefits to Consumers. They also form close relationships with other advisory group members and leverage each other’s expertise to address other challenges and issues. Manufacturers Listening. A Manufacturer of specialty containers follows the activities of wine and beer making hobbyists and discovers there is demand for certain types of containers that are not currently manufactured. It reaches out to other end users of its products via various social media platforms to see how universal the demand is and to assess whether further exploration into expanding its product line is warranted. Engagement. Given limited resources, a start-up firm has decided to focus only on pursuing new clients in the US. It can easily provide its products to other regions, but it doesn’t have the sales staff to make the necessary investments to cultivate those markets. Because it has established a strong digital presence, however, a prospective overseas client can learn about them, their products and expertise and reach out to them for more information and/or to request a proposal. Component Producers Listening. Following the conversations of Consumers, Dealers, and Manufacturers, a company learns there may be a quality issue with a part provided by a competitor. It recognizes the concern being raised is directly connected to a factor its engineers had just improved in its own product line. The firm wasn’t
  • 18. 17Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved planning to announce these changes broadly, but it decides that under the circumstances promoting its quality improvements might be a good idea. Engagement. A firm produces highly-customized parts for an OEM (original equipment manufacturer). The parts have complicated specifications that change through the course of a multi-month design process. The firm used to use email and conference calls to manage the design projects, but switches to a private digital network to manage the project using advanced social technologies. They can store, share, and edit master project files, maintain a master timeline, and create and manage a single project calendar. They can also use the platform to create and manage threaded conversations on specific issues and develop wikis for different topics. By increasing the efficiency and effectiveness of project management, they are better able to meet the client’s needs while reducing costs. Conclusion The goal of this paper is to help leaders of BtoB companies better understand how they can use social media to achieve their business development goals through enhanced communication. As I mentioned in the introduction, it is not intended to tell leaders they should leverage new digital technologies, or even if leveraging them is necessary. The paper also doesn’t address how an company should get started and expand/maintain their efforts over time. Nor does it address the challenges inherent in pursuing social media initiatives (e.g., time and information management issues, ROI questions, intellectual property risks). Those questions and more are addressed via our SMART Resources and the SMART Blog. I encourage you to check them out.
  • 19. 18Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context ©Courtney Shelton Hunt The Denovati Group April 2014, All Rights Reserved About The Denovati Group The Denovati Group (denovati.com) enhances the success of individuals and organizations in the Digital Era through an alliance that provides thought leadership and guidance, research, consulting and training services, and a professional community that fosters the sharing of information and best practices. These objectives are accomplished primarily through: Denovati Solutions: helps individuals and organizations function more efficiently and effectively in the Digital Era through the design and implementation of innovative and leading-edge strategies and programs (denovati-solutions.com). SMART* Resources: offer in-depth treatment of a variety of topics related to the applications and implications of social and digital technologies. These resources provide both strategic and tactical Digital Era guidance for individuals and organizations. They include the SMART* Blog, as well as white papers, (e)books, and research reports, and graphically-oriented pieces that provide at-a-glance information (denovati.com/smart-resources). SMART* Courses: provide digital literacy training through an online platform that offers the benefits of text-based books, video tutorials, self-paced learning, and group-based instructor-led coaching in a single package (smart-courses.com). (*SMART = Social Media And Related Technologies) The Denovati Difference The Denovati Group distinguishes itself from other seemingly similar organizations in three ways: • Our approach is inclusive and balanced • We believe technology is about people • Our ultimate goal is YOUR success—we want to help individuals and organizations - Maximize the benefits of leveraging social and digital technologies, while minimizing risks - Increase the efficiency and effectiveness of their digital engagement efforts - Enhance the likelihood of success in achieving goals and objectives - Save time and money over the long term Connect with The Denovati Group In addition to our websites, blog, and email list, you can find, follow, and engage with The Denovati Group through a variety of social and digital channels. Just search for Denovati on the following: