B2B Social Media - Real World Research

I attended the New New Internet conference last week in Washington D.C. (Tyson's Corner, VA actually - we here in D.C. are trying to create a regional feel to the large but fragmented tech community). I had the good fortune to see a presentation by Janet Hall, CMO of TMNG Global on some qualitative research they did into B2B uses of social media. As serendipity would have it, I had been introduced to Janet virtually the week before and so this week I followed up with her in person to discuss some of the more detailed findings, including the importance of companies' Return on Engagement (ROE) and some actual examples of how companies are beginning to experiment with social media in a B2B context. First, Janet's summary of the "so what?" on B2B social media.

"Why should online communities matter so much to the B2B sector? For one thing, the opportunities from social media offer a perfect alignment with the key objectives B2B marketers cite most often: transforming customer relationships, expanding brand identity, and lead generation. Secondly, the ability to leverage the collaboration and participation in online communities – which is at the heart of what Web 2.0 is all about, after all – is becoming a critical differentiator in the B2B marketplace and is likely to define a successful marketing strategy in the future. Customer collaboration, a form of user generated content (UGC), is the ultimate value-added data for a company; harnessing that data is the Holy Grail for the marketing department. It’s as much about knowledge management as it is about marketing."         

-Excerpt from Janet Hall's TMNG GLobal blog entry Why Social Media Matters

Behind the link, I've summarized some of the other interesting findings from the research, and provide a link to the full study.

TMNG commissioned a research firm to interview 30 companies out of a larger universe, many of which were not yet exploring social media in their B2B markets (full study for registered site users). Their qualitative findings identified that improving the customer experience was the top priority for 70% of the companies experimenting in Web 2.0 technologies and that product development, customer collaboration and improved communication are the primary drivers. These findings are consistent with those of a September 2007 McKinsey study which found that in addition to advertising, as many as "two-thirds of all survey respondents use online tools to involve their customers in product development."

Interestingly, though perhaps not surprisingly, one of the findings of the TMNG Global research is that when the internal champions for social media are marketing departments, the company explores ways to connect the company to their customers and stakeholders more tightly. However, when the IT department plays a leadership role, the applications tend to be more internal, facilitating process efficiency. In some cases, creative companies have managed to do both. Janet cited the following example in her presentation:

"A consulting company has created a "customer engagement lifecycle model" - driven by an ongoing online community between clients and consultants on specific engagements - enabling them to establish closer relationships during an engagement, as well as to facilitate feedback from clients at all stages of the engagement."

Janet says the research indicates that the companies actively exploring social media technologies in the B2B marketplace are evaluating the success of their efforts based on a Return on Engagement (ROE) instead of an Return on Investment (ROI). This includes looking at metrics that indicate:

• levels of participation;
• quality of interaction;
• sentiment analysis (including brand awareness/impression); and
• degree of market influence.

I think this is fascinating since it assumes, correctly I think, that where people are interacting with each other about a company and/or it's products and services they are acting in relationship with the company itself. And where customers and market stakeholders are in relationship with a company, the potential for higher customer satisfaction and lower cost-of-sales and support result.

The study noted one other thing that caught my attention, which is that many companies are still experimenting with how to reach the tipping point where a company-sponsored social media opportunity (e.g., product innovation blog or customer support wiki) is seeded by company representatives and becomes successful when the customers/participants themselves become more involved, providing content and helping to moderate. The research did not uncover any magic bullet solutions to reaching the level of ROE where participants are "running the joint", so to speak, but Janet says that companies were finding that providing incentives (not always monetary) could help get people interested enough to try it out. Also, there seems to be a new marketing consulting opportunity in helping companies recruit participants and create enough buzz to help the community grow more organically.

My takeaway from the TMNG Global B2B social media research is that the adoption of social media in the B2B sector will follow the traditional new technology adoption cycle. Companies will first explore the 'no brainer' applications, which is to say that they will use the tools to do what they already do (e.g., customer acquisition, retention, support, and collaboration) more effectively. However, I think we all expect new patterns of company-customer-supplier relations to emerge as the customers themselves become more comfortable with their new influence in the relationship that result from the social media tools.

I'll be on the lookout for these new patterns of company-customer interaction and invite any readers who think they've identified one (or more) to tell me about it.

Comments

[Andy Steggles]

Dana, this is a really interesting blog, thanks so much for sharing. It's a question i hear often "how do we measure the ROI/ROE on social media?" I have a few of my own metrics, but your article really sums it up.

Andy