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DARDEN

Thought On
The Use of Social Media in a Business-to-Business Context

Most B2B marketers do not effectively use social technologies to influence purchasing decisions of their customers.

their customers. This begs the questions, why is there such a disconnect and how can this gap be reduced?

Robert E. Spekman

Tayloe Murphy Professor of Business Administration and Area Coordinator, Marketing University of Virginia Darden School of Business

B2B buying is fertile ground for social networks, communities of interest and content that is produced by ones customers. In practice, however, many marketers jump to the new technology without first asking fundamental Facebook, Twitter and a host of social networking questions about their customer base. To begin, it sites have been the domain of students and other is essential that you understand your customer, 20-somethings for a number of years. Yet, business appreciate the social media they are likely to use marketers have ignored such vehicles, and believe and begin to develop a plan to reach them. For that using social technology cannot work for B2B instance, Forrester has categorized the technology decision makers into groups, and among marketers. Many firms that are experimenting them are: with LinkedIn, blogs, webcast, and other social media have come to the realization that Creators who publish a blog, or web page, companies do not join communities people create and/or upload video or music or write do and if you sell to businesses your customers articles and post them online. already are a community because they share Critics that post reviews of products or certain attributes and characteristics. In fact, services, comment on others blogs or Marketing Business Weekly contends that, despite contribute to online forums. the fact that 77% of business technology Joiners who maintain a profile on, or visit, decision makers engage in social media on the job, social networking sites. most B2B marketers do not effectively use social Spectators that read blogs, participate in technologies to influence purchasing decisions of podcasts or read online reviews.

By profiling customers and using the information to construct social media tactics that complement the rest of the marketing mix, B2B marketers have begun to change the nature of the marketing relationship between B2B sellers and buyers. As markets become more fragmented and distribution channels become more diffuse and complex, it is more difficult to reach high-priority customers and segments. Social media allows another touch point that enables a closer and more personal relationship with ones customers. Yet, the ability to measure effectiveness is elusive due to the nascent nature of the social networking tools. B2B marketers also fear a paucity of reliable metrics to measure success in social media. Since demonstrating the value of social marketing is not easy, many B2B marketers find it difficult to justify allocating dollars to this new medium. However, to shy away from such efforts because you cannot measure outcomes avoids the real issue. Social media is less costly to implement than a full-blown communications strategy, so why not try something? Experiment and see what the results are. Much work is still needed before metrics reflect the effectiveness of a firms social media efforts. Although there is a marked increase in the use of Web 2.0 vehicles, the degree to which companies are satisfied with the results is a function of their comfort levels with these new social media tools. Interestingly, there is heavy reliance on past experience ( i.e., do what I did last time), and using qualitative data rather than more rigorous quantitative results. Poor measurement not only can impact any attempt to assess ROI, it can lead to bad decisions. The problems that might surface converge on the fact that a number of B2B firms go to market through third-party channels and might not have a direct linkage to, or knowledge of, the end-user. This lack of direct access can make any social media-based campaign more challenging. It would seem that knowledge of customers must be accompanied by a plan for gaining initial access to these priority prospects and customers. If the firm and the channel work cooperatively, these problems become less of an issue; however, many channel relationships are fraught with potential conflict that can dampen the effectiveness of any social media campaign. The type of social media used depends on both the customers needs and the marketing objective. Regardless of how their customers use social media, marketers must also determine the marketing objective before deciding whether social media can help accomplish the companys

goals. For companies launching a new product, generating awareness and providing product information are key priorities. Alternatively, companies with established customer relationships may focus more on account maintenance. B2B marketers need to understand how social media will change their relationships with customers and prospects, and then select metrics to measure these changes.

Many channel relationships are fraught with potential conflict that can dampen the effectiveness of any social media campaign.

The final step in the planning process is to pick the technology that will fit the marketing strategy. Not every social media tactic works in every situation, so marketers must carefully choose the tactic that will best enable them to communicate with their customers and prospects, and develop a valuable relationship. Using the example of a company launching a new product, social media can help generate awareness and interest through tactics that are more viral in nature. For instance, posting a clever video on YouTube, launching an application on Second Life or leaking information on industry blogs can get a company attention from people outside its typical marketing reach. On the other hand, providing account maintenance is better suited for brand-based social networks or blogs. These types of sites can serve as one-stop shops for customers looking for product information, customer service, or a place to give feedback. As with any communications strategy, effectiveness is a function of fit whether the message and customers information requirements are aligned and provide the answers that enable the buyer (or potential buyer) to move further along the sales funnel towards purchase. Given the interactive nature of social media, ones ability to maximize the benefits of such interaction may depend on the perceived appropriateness of the message and the tactic utilized to reach the target audience.

Executive Education

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