Trickle-Up Socialnomics: Leveraging Social Media in the BtoB Context

Trickle-up Socialnomics™: Leveraging Social Media in the BtoB Context by Courtney Shelton Hunt, PhD Principal http://renaissance-solutions.com Founder Social Media in Organizations (SMinOrgs) Community http://sminorgs.net November 2010

Renaissance Strategic Solutions Renaissance Strategic Solutions (RSS) helps organizations increase their effectiveness through the design and implementation of innovative and leading-edge strategies and programs. Specializing in social media, communication, and human capital management, we work with organizations of all sizes in both the for-profit and not-for-profit sectors, in a wide range of industries. RSS focuses primarily on providing strategic guidance and solutions for the opportunities and challenges organizations face. Our value is best defined by providing a big picture, future- oriented, holistic perspective, but we can help with tactical challenges as well. We are happy to provide direct services or "over-the-shoulder" consulting, on either a project or retained basis. RSS was founded by Courtney Shelton Hunt. In her role as Principal, Courtney helps organizational leaders address strategic and human capital challenges and enhance their ability to communicate with employees, customers, and other key stakeholders. In addition to her blog, Renaissance Reflections, she regularly shares her expertise through presentations and publications. Social Media in Organizations (SMinOrgs) RSS is the founder and sponsor of the Social Media in Organizations (SMinOrgs) Community. Developing this community and meeting the needs of practitioners with respect to the strategic implications of social media is currently RSS's primary focus. Social Media in Organizations (SMinOrgs) is a professional community that provides information and guidance about the organizational implications of social media. A multi-disciplinary group, SMinOrgs functions as a global, virtual community complemented by a local/regional focus. Membership in SMinOrgs is currently free, and people can join on a variety of platforms. Visit http://sminorgs.net for details. The website features the SMinOrgs S.M.A.R.T. Blog, an educational blog about the implications and applications of social media in organizations. Focusing on both opportunities and challenges, it is targeted to organizational leaders and others who are in the early stages of climbing their social media learning curves. SMinOrgs Social Media Primer Realizing people need to develop a solid understanding of social media before they can create and implement the necessary strategic and tactical initiatives to exploit new 2.0 technologies, Courtney Hunt has been developing a Social Media Primer through the SMinOrgs S.M.A.R.T. Blog. Targeted to organizational leaders, the initial parts of the primer emphasize conceptual and strategic issues. Future parts will focus on more tactical aspects. You can learn more about the primer and access its parts at http://www.sminorgs.net/social-media-primer.html.

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ Executive Summary This white paper describes Trickle Up Socialnomics™* – how BtoB (business-to- *Socialnomics™ is a term business) firms can view their supply chain as a Social Media Chain and leverage it coined by Eric Qualman, a to identify business opportunities and increase revenues. Just as leaders of BtoB social media thought leader who wrote a book by the firms take a different approach to marketing and business development in general, same name in 2009. You they need to recognize the limitations of applying social media tactics used by BtoC can learn more about (business-to-consumer) firms to their businesses. They must think about how to Socialnomics by visiting leverage social media in unique and contextually-appropriate ways. their website. The purpose of this paper is not to tell leaders of BtoB organizations 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. 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. A digital copy of this white paper can be accessed through this link: http://tiny.cc/TUSpaper. © 2010 Courtney Shelton Hunt, all rights reserved

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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 *Socialnomics™ is a term development in general, leaders of BtoB enterprises need to employ social coined by Eric Qualman, a media in unique and contextually-appropriate ways. In this white paper, I social media thought leader introduce the idea of Trickle Up Socialnomics™* – how BtoB firms can view who wrote a book by the their supply chain as a social media chain and leverage it to identify business same name in 2009. You can learn more about opportunities and increase revenues. Although the model is built around Socialnomics by visiting participants in a classic manufacturing supply chain, the underlying ideas are their website. transferrable to virtually any organization since they all operate within economic ecosystems in which participants are directly and indirectly connected to each other. I welcome other people’s insights, healthy debate, and questions about the ideas I present in this white paper. The more we talk about social media issues and challenges, the faster we’ll figure out the best way to proceed. Please feel free to share your thoughts on the SMinOrgs S.M.A.R.T. Blog post introducing this white paper or on the SMinOrgs SlideShare document page. You may also send your comments and questions privately to cshunt@renaissance-solutions.com or cshunt@sminorgs.net. Should BtoB Enterprises Engage in Social Media? The purpose of this paper is not to tell leaders of BtoB organizations 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. As the SMinOrgs tagline says, 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, © 2010 Courtney Shelton Hunt, all rights reserved 1

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ higher net profits. What they DO offer are potentially better ways to pursue those objectives. In addition, as I discuss in Part 3 of the SMinOrgs Social Media Primer, 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 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 (if that seems counterintuitive, see Part 3 of the SMinOrgs Social Media Primer for an explanation). • 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. 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. © 2010 Courtney Shelton Hunt, all rights reserved 2

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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. 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 © 2010 Courtney Shelton Hunt, all rights reserved 3

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ the blue/yellow dialogue links, and the more complex, relationship-oriented interactions are represented by the boxed exchanges. 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 (they’ll be addressed in a future part of the SMinOrgs Social Media Primer), there are three basic rules that should be kept in mind to maximize the effectiveness of leveraging social media for engagement: • Participants should not assume, “if we build it, they will come.” When a participant 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, participants 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.” As I alluded to in Part 4 of the Social Media Primer, ultimately social media engagement boils down to engagement between and among individuals. • 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. How the Social Media Chain Works To illustrate how the Social Media Chain can work, we’ll start with the BtoC Although there are good level (Dealers and Consumers) and work our way back through the chain to examples for many of the Component Producers. For each participant, I describe how they can use individual activities I suggest, social media to listen to and then engage with their direct clients. It’s important there are no organizations or industries that have yet to remember, however, that other participants in the Social Media Chain could leveraged social media also be listening to publicly-shared messages and may respond, so extensively enough to provide engagement can occur across all levels. a best practices case study. Please contact me if you’d like a concrete example of one of Given the layered nature of the Social Media Chain, each set of suggestions is the suggested tactics and/or intended to build on the preceding one(s). Therefore, rather than repeating you’d like to share an specific tactics, I focus on additional and/or unique activities that can be example of an enterprise that seems to have mastered the employed by each type of participant for both listening and engagement. The Social Media Chain. suggestions are intended to be illustrative rather than exhaustive. © 2010 Courtney Shelton Hunt, all rights reserved 4

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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. • Identify and follow Twitter hashtags and search for tweets that don’t include hashtags. • Like Facebook pages and follow the news and other information shared, as well as the dialogue exchanged on their walls. • Find and “favorite” YouTube videos. • Search for photos that have been tagged on Flickr. • Subscribe to blogs written by loyalists and/or product experts. • Join special communities (e.g., through Ning). 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.” 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. © 2010 Courtney Shelton Hunt, all rights reserved 5

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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) 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. • Identify trends and issues through the LinkedIn Answers feature. • Create and share polls on LinkedIn to get feedback on ideas and issues. 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. • 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 private channels (e.g., LinkedIn groups or private social networks) to address confidential industry or brand-specific issues and challenges. © 2010 Courtney Shelton Hunt, all rights reserved 6

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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. © 2010 Courtney Shelton Hunt, all rights reserved 7

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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. 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 leverages a private social media platform to form an advisory group of current clients to identify and analyze problems and brainstorm solutions. Even though © 2010 Courtney Shelton Hunt, all rights reserved 8

-up Socialnomics™: Leveraging Social Media in the BtoB Context ¡ ¢ £ ¤ ¥ ¦ 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 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 social media platform to manage the project using 2.0 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 organizations 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 organization 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 will be addressed in future white papers and/or parts of the SMinOrgs Social Media Primer. If you have not already done so, I encourage you to subscribe to the SMinOrgs S.M.A.R.T. Blog so you will be notified as soon as those pieces are published. In the meantime, I welcome your comments and questions on the ideas I’ve presented here. © 2010 Courtney Shelton Hunt, all rights reserved 9

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Trickle-Up Socialnomics: Leveraging Social Media in the BtoB Context

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Trickle-Up Socialnomics: Leveraging Social Media in the BtoB Context Document Transcript