B2B Marketing:  Why Social Media Matters

I’ve noticed that press coverage of the social media phenomenon continues to focus heavily on the impact on the consumer market, with considerable discussion of specific Web 2.0 technologies – blogs, wikis, widgets, etc. – but without much illumination of the goals of the companies using these technologies nor of their results.  This dearth of information led TMNG Global to conduct a qualitative study assessing the current practices of businesses building online communities across a broad spectrum of verticals.  We wanted to know what they are doing – or planning to do – and what they are finding in terms of results and challenges. 

As we know, the consumer sector is taking advantage of online communities to innovate in areas like product design and features as well as to create a loyal online audience that eventually may be monetized through advertising.  But what we learned in our research is that the potential impact of social media may be more significant on the B2B sector.   Companies in the business marketplace are experimenting with online communities across all of their stakeholder groups – customers, partners and suppliers – and across a range of creative applications, such as R&D groups, client project collaboration, health care delivery collaboration, and film production coordination.   

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.

Our research indicated that the greatest challenges B2B companies face in managing online communities are achieving customer/partner participation in the first place, harvesting the information gleaned from that participation, and then deciding how to act on it.  But we found that those companies with early successes are thinking broadly about the integration of social media into their business strategies and that, in general, their efforts are characterized by the following:

• An understanding that communities must be seeded, cultivated and maintained by the companies themselves, but that they must grow organically.
• A recognition that there are organizational implications if community building is to be successful, particularly in the marketing and strategy departments.
• The giving of considerable thought to the use of feedback, both negative and positive.
• A focus on ROE – return on engagement – rather than ROI as a metric of success.

While it is too early to tell whether most B2B companies will decide to embrace Web 2.0, it is clear that the value from successful community building is potentially game-changing.  In today’s hyper-competitive marketplace, businesses can’t afford not to consider the opportunities and begin experimenting creatively.  The good news is that the technology is relatively inexpensive, but the bad news is that it’s harder than it looks.  Smart companies are already engaged in thinking not only about the integration of communities into their business strategies but also about the organizational and operational imperatives.