B2B Social Media and the Upside Down Funnel

THIS POST WAS NAMED 1 OF THE BEST B2B SOCIAL MEDIA POST OF 2010, also a TOP 111 POST ON B2B MARKETING ZONE FOR 2010

In my post on 6 Steps to Getting Control of Social Media, I mentioned the concept of an “upside-down funnel”.  I thought I’d spend some time explaining it in this post.  

As with most new technologies, social media is starting to “settle in” and common applications of the platforms are becoming known.   In many large B2B organizations, that means social media is finding a home in the marketing communications group, often landing in PR.  That seems fine for B2C organizations, however, I’m convinced that it’s the right spot, and/or the only spot for social media in B2B companies.  

The Upside Down Funnel

In most B2B organizations corporate marketing’s role is related to driving “top-of-the-funnel” activities.  From advertising,  PR, and now social media,  the focus is on creating awareness…and hopefully, driving consideration and preference. 

There is another opportunity that may not be considered, a part of the funnel where marketing, in particular social media, can play a valuable role.  

It’s at the very bottom of what I’ll refer to as the “upside down” funnel.   To find such an opportunity you have to think about a funnel that starts with once a prospect becomes a customer. 

Just as a sales funnel has stages so does customer relationship management (and I’m not talking about the technology).  Companies should be actively pursuing strategies and tactics to retain, expand, grow and then leverage customer accounts to win business.  This is where I think the “sweetspot” is for social media in B2B.

Here’s why: social media is about “consumers selling to consumers”, or “professional-to-professional.”  If a company does its job of nurturing and retaining customers, it should be able to transition from having a relatively unknown prospect, to a known customer, to hopefully, a well-understood customer advocate…at least that’s the goal.  

                        The Opportunity

If a company enables those customer advocates with social media it gives them a platform to spread the good word.  The potential of this opportunity is huge, and for the most part, being missed at most companies today.     

As we all know, word of mouth is the most effective marketing there is, enabling it with technology creates scale, and the ability to track it. To do this successfully, companies have to first identify this opportunity within their organization;  second, they have to change their current way of thinking about social media beyond its present use in marcomm and PR.  It means finding uses and opportunities within sales and customer service. Yes, listening to customers chat about your service on Twitter is important, but I’m talking about creative ways to use it for: 1) customer-to-customer referrals, 2) community building, and 3) facilitating user groups.  The goal is to find ways to emotional connect avid customers to the company and/or products, and then provide them with an outlet to communicate that passion. 

What to Do

As relationships deepen, customers begin interacting in more personal channels.  Through those interactions they are likely to share more intimate details about themselves, and their relationship with products/services and the company.   Companies have to be able to collect this information across channels to create a complete profile of a customer.  If this can be achieved, an organization will have everything it needs to begin enabling, influencing and studying cusomer advocates.

Finally, watch out for the “silo” effect.   Typically at least three different organizations will be interacting with the customer as the relationship develops.  But it’s only one customer interfacing with what the customer expects to be one company.  The organization has to be “in sync” because the last thing a company wants is to provide a customer with a platform for communicating the wrong message.  Turning an advocate into an adversary is not the goal.  

Channel Strategy and the Recession

“Because things are the way they are, things will not stay the way they are.”
 Bertolt Brecht

I have been surprised with how executives perceive their channel strategy in battling the "Great Recession."  Through recent conversations, it has become clear to me that many executives have not completely thought through the impact of the events of the last 24 months on their go to market models

They have downsized, cut budgets, and exited markets but that has been a reaction to declining demand and revenue. Cutting cost is not change; it is doing more with less and should only be considered a short-term solution.

Executives must now explore what changes will impact the way future financial results are delivered to the company.  To begin, it’s helpful to look at what shapes and informs an organization’s channel and go-to-market strategy. There are four main forces at work:

1. Market Dynamics  
2. Customer Preferences
3. Product Attributes
4. Organizational Economics  

The four areas are interconnected - they’re like atoms bumping into each other and often – a change in one area sets off a domino effect in that changes in the market environment (the health of the economy, technology and regulatory changes, etc.) impacts customers’/consumers’ buying behavior, which may cause changes in product design, and so forth.

Smart and successful companies recognize and anticipate market shifts and, as a result, use market data to create, modify, and improve products, pricing, and channel strategies. Ultimately, these changes impact the organization’s revenue outlook and profits; in other words, their “organizational economics”, and ultimately how they go to market.

The “Great Recession” has been a significant disruptive event and it has impacted all four of the key forces. Companies who fail to recognize this will awaken to new competitors eating their lunch, customers who will just “disappear”, and more budget and resource cuts.

For example 

Years ago, I did some work for a technology company who was missing opportunities in a certain segment of the market and could not determine why. We uncovered that a new product innovation had given rise to a new buyer/key influence that was not being covered.  As a result, we developed a new value proposition, messages specific to that buyer, and a specialist sales force.

Two years later, we were re-hired because they were getting beat in the small/medium business (SMB) segment by a competitor, and couldn’t figure out why. Everything that was put in place two years prior had been working; they made sizable market share gains.

Finally, we discovered that the key consideration driver in the SMB had shifted dramatically from Product to Price (the cost of product and service) because of a downturn in the economy.

All the new messaging developed two years prior for the new buyer about their innovation was now being used against them. The smaller competitor was telling the company’s customers that they overbought, and that they had the right solution for their budgets.

“Because things are the way they are, things will not stay the way they are.” 

Things change, and typically faster than most people understand, and companies can digest. Included below are three tips to get your started:

1. Recognize that change has occurred - your mission is to discover it. Here’s another tip, static research will not be enough to unlock the insight you’ll need, look for YOY changes. 
2. Set up a system - monitor the four forces on an ongoing basis. Change can come from any direction.
3. Determine the key market driver(s) in your industry - for example in Healthcare: Regulatory/Legislative changes.  Establish research tracks in order to detect trends and do scenario planning on a ongoing basis.

And finally, recognize that channel strategy (actually any strategy), should be considered alive and fluid, it’s not “set it and forget it.”

How has your organization been impacted by the recession?  

6 Steps for Getting Control of B2B Social Media

A version of this post can also be found as a featured article on the Demand Gen Report website. 

I had the opportunity last week to speak on social media at a couple of B2B conferences. It gave me a chance to get out of the bubble and speak with folks in the trenches. It turned out to be an eye-opener.

Attendees at the conferences were marketers representing original equipment manufacturers (OEMs) heavy industry, and the financial services industries. As a group, they market complex, long sales cycle products to a well-defined B2B audience. As a result, understanding the value of social media is more difficult.

I found that many of the marketers I spoke with to be somewhat exhausted by social media. From trying to stay current to learning the application in their business, they felt like they just couldn’t stay current.

Based on what I experienced, I’ve put together six tips that might be helpful:

1. False Prophets – Combine high employment with a fast-moving space like Web 2.0, and suddenly everyone is an expert. Buyers beware. If you need outside expertise, go with a firm that has experience in this space.

Click here to read more

Best of the Blog 2009

Best of the best, and a few fun facts from the past year.  I know this is kind of like a band putting out their greatest hits collection.   Trying to buy some time as I work on fresh content for next post, you'll understand why soon.   But then again, it is kind of cool, how many bloggers give you a peak inside their blog.  

Top Blog Post of 2009 (out of 27 post)

1. Unclogging the Pipeline (post was picked up by MarketingProf, helping to make it #1) 
2. CMO to Chief Revenue Office (highest page view times)
3. Social Media Company  (1st of a 2 part series)
4. The $1 Razor (receives the most consistent hits, and has turned into one of the most frequently used search terms for the blog...go figure).  
5. Why Sales Channels sand Marketing Campaigns Fail 

Average time on the site was 2 minutes and 50 seconds, about twice the time of an average blog.  

Visitors - close to 10,000 unique visitors (not bad for only 27 post)  from 112 countries, top 5 countries:

1. USA - every state except Wyoming, top 3 cities; DC, NYC, SF
2. India
3. UK
4. Canada
5. France   

Vistors from Malaysia spent the most time on the site 2:32 minutes, while folks from Bangladesh consumed the most content at over 3 pgs/visit.  May had the highest traffic, closely followed by October, and Tuesday was the best day of the week to post (highest average traffic).  

The goal this year is to average three post a month and to get someone, somewhere in Wyoming reading the blog! 

New Year, New Journey

In Mid-December, I joined a new team—which you could probably figure out by the lack of activity on the blog.  Even though I have enjoyed, and learned an incredible amount about sales and marketing during my twelve 12 years with MarketBridge, I came across an opportunity that was too good to miss.  

For years, the Big 4 (WPP, IPG, Omnicom and Publicis Groupe) had rolled up agencies to create vast global networks with a broad spectrum of services to meet the needs of their global client base.  The strategy of following the money and clients had served them well, and it grew the business substantially over the years.  

However, it left a gap in the market. The “big” focused on big and primarily consumer ad budgets, leaving the complex needs of business-to-business companies unmet. For business-to-business companies, having a big ad budget isn’t necessarily as important and/or effective as targeted, highly customized one-to-one communication,…but it does matter to big agencies. 

A few smart folks, including Rick Segal, CEO of the former HSR Business to Business headquartered in Cincinnati, and Richard Glasson, CEO of Gyro International, out of London, recognized this opportunity and the need for a new agency model. 

The group has been busily assembling a collection of best-in-class B-to-2B agencies with services ranging from traditional direct marketing to leading-edge digital shops.   The agency, now called GyroHSR, combines the names of two leading, awarding-winning agencies. 

Customer feedback on the new agency model pointed to the need to add greater expertise and experience in understanding channels.  With the noise and confusion surrounding Web 2.0, and the necessity to increase precision with marketing investments, adding a new team member was essential.        

That’s where I come in. My role on the team is to add a bit of some little left-brain thinking to the right- brain creativity, blending the best of the art and science worlds.   

I’m starting a new practice that will focus on helping clients better understand how customers buy and what channels they prefer to use during that process.  The Channel Marketing practice is going to be based in a new Washington, D.C. office, opening this month.

Over the next few months, I’ll be tweeting and posting about my assimilation into the new world of art.   My “online diary” should provide an interesting view into the agency world through the lens of a left-brain consultant.  I can tell you this already: We definitely do see the world differently, not better or worse. Just differently. Stayed tuned. It should be an interesting journey.