It is generally understood that in consumer markets, a strong brand is often always a better position to maximize its performance, grow shareholder equity than a weak one. But when it comes to business to business or institutional purchases, it is believed that branding does not play a major role (Millward Brown Knowledge Points, 2009). Business to business sales process is quite distinctly different from business to customer in a number of ways (Alanko, 2000). The prime differentiators are in the areas of relationship, complexity, duration of the sales cycle, rationale of decision making, and more of 'customer buying' rather than 'seller selling' the product or service. In order to be able to position a brand, the marketer has to be able to design an integrated marketing communication that addresses one or more of these factors. With the competition getting only more intense, the business is now about ensuring customer engagement, and not losing them over time.
The business to business decision making process is primarily governed by functional requirements and relationship building (Millward Brown Knowledge Points, 2009). The extent to which employees working for the brand can build relationships with their clients can often be a crucial factor in any deal to come through. Hence there is a vital need to be able to identify and deliver the right kind of engagement to the customer (Millward Brown Knowledge Points, 2009).
Though there is documented text regarding the lack of emotions in the business to business purchases, there is enough evidence to prove that branding can influence business to business decisions (Kidle, 1993). The situation then poses a question as to is there a way one can influence the minds of decision makers on the purchase side. If the above is an affirmation, then what are those tactics that need to be deployed to enjoy an emotional connect with a customer.
One of the more conspicuous changes in business has been the way customer and businesses interact (Miller, 2009). One major element has been tht of the internet as a medium. There are certain trends in the way media is being consumed, especially over the last few years (Carabiner Communications, 2009). With the advent of internet, searching for the information has taken a completely different turn. Following that, the rise of a new paradigm of user generated content, Web2.0, collaborative content - social media, has taken the levels of media consumption to unprecedented levels. This is mainly due to the information availability and the scalability infrastructure and wide penetration of such enabling technologies.
Social media is designed to be a media which is disseminated through social interaction. These media are often created on the base of highly scalable and accessible platforms. Social media also transforms the traditional notion of media being a "push" phenomenon to a more collaborative and a "pull" driven forum. Social media are not a sub-set of internet, but are increasingly becoming what we understand as the internet. Social media is seen as a breakdown of the 'us-and-them' concept and a rising of the idea of sharing, conversation, interaction, openness, etc between the peers (Thompson, 2009).
Social media is being explored by more businesses than before. Forrester's research predicted an annual increase of 34% in social media, reaching $3.1bn by 2014. One of the most significant advantages is that it aids in tracking and understanding the users. This creates an extensive potential for communicating for the marketers.
With such optimistic estimates of the reach of this medium, it gives marketers a new platform to reach out, communicate, engage and interact with the user. It is eventually this user base that is going to be deciding on the next enterprise purchase. Traditionally, it is the retail customer that has been the target of branding activities. However, with the increasing intervention of branding in the business to business space (Kotler, 2006) there has been great anticipation regarding the opportunities emerging out of social media and B2B sales and marketing integration.
According to Anderson and Narus, the prospecting funnel follows the steps as below:
What this presents is the current flow of a target customer to an established account in a business to business setup. At each of these levels of funneling, one needs to find out the reasons why some target customers drop out. There are a variety of reasons as to what causes these customers to drop out. However, there are very few effective ways to document these reasons for future use. One of possible ways of keeping track is by following the pre-dropping out and post dropping out social media consumption of the customer. This could give valuable inputs as to what has been the thought process of the customer.
At each stage of a customer funnel (J Anderson, 2008), there can be potential interactions between the marketer, customer and also, in a lot of cases, competitor. What the internet and social media provide is a possibility of tracking and sensing the intent and consideration factors of the customers. This was a major gap in the pre-social networking days. With the advent of blogs, Tweeter, Facebook, LinkedIn, sharing and co-creating information is the way forward (James, 2009). For a smart marketer, this facilitates a much seamless awareness about the existing customer needs and emerging trends in the market.
The question then is, are there definite benefits with a possible marriage between these two concepts. If yes, then what are the factors that can strengthen this relationship and is there a quantifiable way of measuring the returns of this engagement.
Business to business is different than business to customers. This is not so in terms of marketing techniques but because the buyer motivation and its context are more structured and complex than in a consumer environment (J Anderson, 2008). These elements make the entire process quite different and often involving and prolonged.
An important aspect for the seller companies in this context is to be able to connect well with the customers. This engagement is to be developed through social media as a tool. Social media is definitely not a fad any more. More businesses are valuing the power of social media for communications and marketing.
One of the main reasons for companies to adopt social media is that they cannot afford not to. The prime reason is that their primary customers are already adopted the communication channel, and it makes no business sense in continuing to be confined in the traditional media space and hoping to keep drawing new customers. Also, the expenditure of these media has increased because these provide a much cost effective alternative to the existing methods of communication. Further, the targeting in these cases is far more accurate than the traditional methods (Carabiner Communications, 2009).
The report further goes on to say that the three primary goals of engaging in a social media campaign are: better prospects, finding additional avenues to market ones offerings, and establishing as a thought leader on a subject. As of now, large companies like Microsoft, Sun, etc are engaging in social blogging so as to establish their thought leadership in their respective domain (Carabiner Communications, 2009). Some more questions that are relevant in this context are: how much is the budget for expenditure, what are the goals, what social media channels to be used, and how success would be measured (Carabiner Communications, 2009).
Social media it can help fast growth companies latch onto the bandwagon and also help established players identify newer channels for their communication. Incorporating social media into the business cycle can drive traffic and shorten the buying cycle. However, this channel requires a sharp learning curve for effective deployment (Mathews, 2009). The sooner and better a marketing team can understand the tenets of social media; the stronger is the integration at each of the steps, resulting in much larger user engagement and consistent messaging.
The process of business to business buying is supposed to be rational. But at the end of the day, the buyers are humans themselves. And thus it is natural for feelings to play a part in the whole decision making process, alongside a rational judgment. This makes it important for the marketer to know what makes the top management attitudes tick (Kidle, 1993).
The social media does give a lot more information about a particular user and provide enough information to be able to understand the behavior. But often where it fails is the timing of the communication. As most of the typical social media usage is to interact and relax, just because the marketer has the information that a user is 'interested' in high performance computing, doesn't mean he would like to see an advertisement of it while he is watching his son's graduation photographs. This is one major gap in the current social media engagement.
Millward Brown (Millward Brown, 2008) suggests developing a successful social strategy which requires the marketer to understand the environment and create the right content. The timing of the communication is of prime importance along with creating a sense of community belonging.
There is however another school of thought which in a way, counters the above argument. Clara Shih (Shih, 2009) , mentions the importance of a social networking site, Facebook, in the context of business to business sales. According to her thought, B2B is all about sales. Greater implementation cycle and higher price point means decision risks being greater. Buyers hence often rely on trust than price. Trust is the central point in this engagement. Many marketers and sales people attempt to build trust using the connections over LinkedIn and Facebook. In many ways, the usage of facebook often becomes something like a personal CRM tool. Often personal contacts within an organization are tapped as potential clients, which then in turn snowballs into a larger and a much more 'reliable' customer base.
There have been a plethora of responses on how the social media has been embraced in the B2B industry. Steve Kemish (Steve Kemish, 2010) comments that social media is graduated from being just a fad into a much more strategic initiative and a platform which provides very real applications and great value. According to him, there are many marketers have the importance of social media in their media guidelines and policies, it is quite concerning to know that very few of them have it all in place.
The social media, however, as of now, has not been able to deliver as much as the hype it has created. There could be multiple reasons for this. Afterall it is quite a tough nut to crack. According to Millward Brown report (Millward Brown, 2008), social media, which started as a youth-centric online phenomenon, has now filtered into all age groups and also target segments. Now social networks have more than a billion registered users and this is what is causing the companies to pay attention to this medium. Advertisements are slated to grow faster on the social media more than that on the internet, but still the advertisers are struggling to find good ways to engage people in a meaningful in this evolving environment. What many do not realize is that traditionally, the very intent of the users to go to these sites is to interact with people. The intent is not to purchase or shop a high specialty product. Barring a few who do realize this, most of the advertisers continue to reach out to people with heavy handed mass marketing communication techniques. Social media are places where customer relationships can be built and strengthened, not started from scratch (Millward Brown, 2008).
Given the above, it is still unclear as to how can one measure the engagement on a social media forum. The industry best practices for such measurement are still not set. One of the most common and often considered the most often used word, i.e. 'engagement' is yet to have a standard definition (James, 2009).Once this is done, it is then important to demonstrate how these metrics contribute to overall campaign's business objectives.
Eric Dreckers (Dreckers, 2009), discusses how social media return on investment for social media be quantified. Eric suggests about clocking ones online engagement activities. However this cannot be made as an industry standard practice, as this would be too time intensive, and would change the prime focus of business.
It is also important to keep in mind that the trends in social media can change rather quickly. From the time when the information was available only through company released information, to information available through Google search engine to the current times of user generated and peer reviewed content, the change has been quite rapid (Miller, 2009). What is the most popular mode of interacting as of now might be disrupted and replaced by a competing technology overnight. Hence it is important to be abreast with the changing times of the social media (Carabiner Communications, 2009).
There is a definite rise in the per user social media consumption. This is verified not only by the reports, but also by the shear penetration of social media from the web into our daily lives. This is all the more related in the context of an IT B2B market. What social media also provide are immediate scalability and a sense of collaboration in the whole scenario. For example, more and more relevant and updated information is now available off the corporate website and on social media sites than through hard copies of company brochures. Customers can read, see, discuss about any offering, in greater detail with someone who has already bought the product, irrespective of the time, location and situation of purchase. Moreover, all these communication is viewable by any third party. Thus the original conversation not only benefits the involved parties, but also any other entrant at a later stage. This is one of the ways with which the engagement of the user has been increasing.
In an IT B2B market, the tech-savvyness of the buyer and seller are a given. It hence makes a very fertile case for the penetration of social and online media. However, over the past couple of years, the usage has risen considerably, but the returns haven't yet been completely impressive. A lot of companies are still groping in the dark regarding the right usage of the tool. There is a formidable hype towards it adoption, as refraining from it is a sign of technological ignorance. Almost every
The problem then is how this increased engagement is translated into meaningful interaction and add value to the entire business buying and selling cycle at each of the funneling stages. Current information does suggest a potential fit of the above idea in the given context (Mathews, 2009) . However, it is not completely clear as to, what factors and to what extent can they affect / add value in the business to business sales cycle.
Research Design and Objective
The research is exploratory in nature and hence would require industry insights from those in the business. The methodology would primarily be that of depth interviews with respondents who play role in the business to business sales and purchase. The respondents would be based on established and developed industry contacts.
The research aim at identifying what is the perception of the social media and its motivation for adoption in the IT B2B markets. The research also seeks to understand the key practices on this front so as to establish a social media presence and how is the media consumed by the buyers. Further, it seeks to pick out the prime factors that are influenced with the inclusion of this medium of communication. Through depth interviews, the research would try to identify the chief reasons for the filtering out of customers. Also, the interview would seek to gain insights as to how, in the respondents mind, can the social media (what aspects, utilities, etc) be utilized to benefit the entire sales and purchase cycle.
Data Analysis and Insight
The interactions with the respondents produced a plethora of information and insight.
There is a definite increment of the usage of social media.
It is important to position oneself as a social / new media-savvy organization, rather than be left behind
Driving force would be the need to engage with the customer
Content would continue to be major differentiator on the platform. In the process of creating content, there could be an overflow of ordinary and mediocre content
Social media budgets get a boost, but the rationale in spending is yet to be concretized.
Industry needs to get their act together: strategy for using it has to be clearly defined - so far it is not in place
Currently it is mainly being used for generating interaction in terms of YouTube videos, CXO blogs, question and answers. One serious forum emerging is the LinkedIn.
As of now, there is no way of measuring RoI on such investments. However, since the initial investments are fairly minimal, it is yet to mature into a quantifiable metric.
As of now, social media has not been able to deliver the kind of promise in a B2B market, as it has been able to do in B2C markets.
In the B2B environment, the role of social media in capturing of trends is fairly marginal. In IT services market in India, it is all the more marginal as the production of the good and delivery is simultaneous. Hence, there is very little one write about a over a online platform for others to read. Also, a good number of such transactions happen mainly on relationship basis, than on pure product quality basis.
Most of the activity is seen on the lead generation level of the funnel.
For the buyer, there is plenty of information available from various. The most trusted source is through the word of mouth, through professional network.
Social media is a good way to see what a third party has to say to it. However, most of the content as of now is generated by the owners of the media channel. Hence, a lot of the information provided is heavily biased towards the seller.
However reading discussion forums does provide a place where a prospective customer can find the relevant information. Deal building and materializing, however, doesn't happen much over the social media. As these are often big ticket purchases, buyers prefer to see the sales team in person before deciding. Social media however does provide to fertile forum to do various background checks about the product and / or company in terms of the quality and service.
The dissertation seeks at identifying the link between social media engagement for the business to business sales cycle. Further, it also aims at identifying the parameters that are most benefited in the process. The research can provide an entry point into the role of social media into the structured process of business and institutional purchases. By understanding this aspect of business interaction and its direct relevance in the entire sales cycle, yet another important link between marketing and sales can be understood.
As of now, the industry has very little information about how can the social communication media add any value to their business and customers.This research can address questions such as what are the touch points where in they can leverage the current engagement of users in social media. The ever changing buying behavior can be put in the perspective with the advent of this form of communication.
The dissertation would also serve as a reference point in future so as to provide a snap-shot of the social media engagement as of date. This work can also be touched upon by the way of the incorporating it in the curriculum.
A possible future scope of the dissertation could be to carry out a comparative study of the identified factors which emerge as a result of the above exploratory research. This study aims as establishing a connection between the business to business cycle and the role played by social media via identifying the prime stages where in the social media can play a critical role. s
The current research does not focus mainly on a particular industry, but deals with business to business buying cycles in general. Going forward, on possible scope could be to investigate these elements in the context of a particular industry in the business to business market.
These activities on the social media are after all a cost to the company. Developing applications, purchasing media spots on the internet, optimizations, following the customers, performing analytics, etc are costs in some form or the other. These costs are made with an expectation of them adding to the revenues of the organization. As of now, there existing ways of measuring these returns are not mature enough to be encompassing all returns. A study in the direction of measuring the return on investment in social media could also a future scope of the research.
Draft of the depth interview guideline:
The research guideline for the interview was as follows. Based on this, I would identify the key factors, and refine the same, if need be.
- What in your view is / are the prime offering of social media platforms
- Do you personally consume any of these media?
- Is your organization on the social media platform?
- If yes, what are the main drivers for the adoption?
what are the main activities -( blogging / tweeting / ceo interaction, etc)
If no, what are the key factors for not getting on with it?
- How, in your opinion, does the social media affect the sales / purchases (business factors) : (each point to be discussed individually)
On selling side
- In terms of customer engagement
- Shortening of cycles
- CRM activities
- Feedback / Reputation management
- Top of mind re-call
- Cross-selling / up-selling
- Sensing the up-coming trends
- Following word of mouth conversations on blogs / twitter, etc.
- Maintaining a connect with the customer post purchase
- Following and targeting the right customers
- Others: as per initiated during interview
On buying side
- Gathering word of mouth information
- Following an organization (sellers) WoM
- Getting understanding of and sensitized to latest trends in the business
- Reviews from peer / competition
- Reputation management
- Assessing the social media-savvy-ness, and hence the pedigree of sellers
- Others: as per initiated during interview
- Which of these stages of the customer funnel do the Social media tend to affect the most: target segment, leads, inquiries, prospects, new customer, and established accounts?
- Is social media perceived as a clutter breaking forum, or are the benefits yet to be clearly defined
- How has your organization proposed to manage its social media presence (in terms of resource allocation, focusing activities and generating content)
- What current challenges you do see being over-come using social media?
What changes do you foresee happening on the social media platform front? (In terms of technology, offerings feature, etc.)
- Alanko, J. (2000). The Case of Integration in B2B Marketing.
- Carabiner Communications. (2009). Social Media: How B2B Companies Can Connect.
- Dreckers, E. (2009, April 17). How to measure RoI for social media and Long Sales Cycle. Retrieved November 24, 2009, from Deckers Marketing: http://deckersmarketing.com/2009/04/17/how-to-measure-roi-for-social-media-and-the-long-sales-cycle/
- J Anderson, J. N. (2008). Business Market Management. Pearson Education.
- James, L. (2009). Should we Advertise on Social Networks. WARC Best Practices .
- Kidle, J. (1993, November). Business Audience Are Humans Too.
- Mathews, R. (2009, May). Shortening your sales cycle with social media. Retrieved from The Green Market: http://thegreenmarket.blogspot.com/2009/05/shortening-sales-cycle-through-social.html
- Miller, J. (2009, November 16). Modern B2B Marketing. Retrieved November 22, 2009, from B2B Social Media Marketing: Branding or Lead Generation?: http://www.marketo.com/b2b-marketing-software/b2b-social-media-marketing.php
- Millward Brown Knowledge Points. (2009). What role does brand have in business to business markets.
- Millward Brown. (2008, August). Point of View on Social Media.
- Narus, J. A. (2008). Business Market Management. Pearson Education.
- Steve Kemish. (2010, Jan 28). IDM Press Release. Retrieved from http://www.theidm.com/about/press-releases/social-media-gains-foothold-in-b2b-communications-as-marketers-increase-budgets-but-inexperience-will-compromise-results/