The Changing Rules of B2B Marketing

Here is a draft of the first chapter of Social Marketing to the Business Customer by Paul Gillin and Eric Schwartzman. This chapter focuses on drawing the major distinctions between business-to-business (B2B) and business-to-consumer (B2C) markets and where social marketing has particular value to B2B companies. Your feedback is welcome. Please ignore the typos and grammar flaws that inevitably appear at this stage.

Friends know Scott Hanson as an affable native Texan with a penchant for computers, cars and poker. But to thousands of technology professionals around the world, Hanson is a celebrity. By day, he and three other technologists at Dell Computer manage the Dell TechCenter, an online community that helps enterprise IT professionals unravel the thorniest problems that occur when trying to integrate technology from multiple vendors.

Dell conceived of the community in 2007 as a way to enhance loyalty among its largest customers. Members share advice and ask questions of Hanson and the other engineers, who dispense it for free. The community is open and fully searchable, although only registered members can submit articles and comments. In 2008, about 100 people visited the site every day. By early 2010, that number was over 5,000.

Hansen and colleagues Jeff Sullivan, Kong Yang and Dennis Smith are celebrities of sorts in the community of enterprise customers, who frequently seek them out for meetings at trade shows and during visits to the company’s executive briefing center. Their celebrity is paid off handsomely for Dell: Hanson won’t provide specifics, but Dell has estimated that the Tech Center is indirectly responsible for many millions of dollars in sales each year.

That’s despite the fact that Dell Tech Center isn’t charged with selling anything. The site is free of advertising and the member list may never be used for promotions. “The last thing IT people want when they come to a technical resource is an ad asking them to buy a laptop,” Hanson says.

Those sales are generated by the affinity that the staff has developed with these key corporate customers. It’s a camaraderie that is nurtured by personal contact. In the early days of Twitter, the Dell TechCenter staff had set up a common Twitter account as a secondary channel of communication. But it turned out that customers wanted to speak to people, not brands. The Twitter initiative really gained traction when Hanson became @DellServerGeek and Sullivan became @SANPenguin. Suddenly the discussion became more personal and the people behind Dell TechCenter more real to their constituents.

Welcome to the new world of B2B communications. Dell TechCenter and other initiatives like it are microcosms of the changes that are sweeping across corporate America as a consequence of the rapid growth of social media tools like blogs, communities and user-generated multimedia.

Companies like Dell, which does 80% of its sales volume with corporate customers, are ideally positioned to take advantage of these new channels. In fact, B2B companies were among the earliest adopters of social media. Technology leaders like Microsoft, IBM and Cisco had hundreds or thousands of employees blogging as early as 2005 and those same companies are now expanding their footprint into social networks like Facebook, YouTube and, overwhelmingly, Twitter.

Microsoft used a video program called Channel 9 to show its human side to a market that saw it as a closed and secretive company. B2B technology companies have also been among the most creative users of social channels to reach the highly skilled people they need to hire in competitive labor markets. Recruiters have found that social channels are far more effective in identifying prospective employees than recruitment advertising sources and that prospects came into the hiring cycle with a better understanding and more enthusiasm about the company they were hoping to work for.

Yet B2B applications of social media get remarkably little attention. Perhaps that’s because their focused communities of buyers pale in size to the millions who flock to Facebook Official Pages for Coca-Cola and Nike is. Perhaps it’s because glitzy video contests and games don’t resonate with the time-challenged professional audience. It doesn’t really matter. Few B2B companies seek the consumer spotlight and their audiences, which may spend millions of dollars with them, are more interested in substance than in style. Fortunately, B2B social media is all about substance.

3 thoughts on “The Changing Rules of B2B Marketing

  1. Pingback: How search and social media will shorten the B2B sales cycle. | The Top Line

  2. Paul, Eric – your first chapter inspired a lot of thought, and I would appreciate the chance to have a conversation offline.

    My (lengthy) comments are below, and you can reach me at ghalliwell@netprospex.com.

    It’s a great starting point. This topic is overdue for all the reasons you mention. That $80bn B2B marketing spend brings enormous clarity to the fact that this is hardly a backwater. I agree with most points, have questions on some and think there some other interesting things going on here that you might also consider.

    I like the story of B2B marketing momentum based around products of greater value which in comparison to B2C certainly have more objectivity. I don’t see this as an either/or though. I think it’s both. Most of us are very turned off by unimaginative marketing hyperbole that talks down to us and rigid corporate websites. B2C does navigation and tone very well, and it’s the B2C model to follow as an evolving set of B2B marketers.
    Many haven’t yet figured out that poking around the edges in navigation bars is not where the user’s attention is, it’s just a reflection of Microsoft’s navigation system. Users prefer information and decisions presented to them in the centered simplicity of the iPhone and iPad (which has almost all but replaced my PC) and the friendly, personable tone of Apple.

    Paradoxically, while your points are convincing that B2B and B2C are different, there are similarities on some planes which I think are worth digging into. In the last 10 years, empires like Salesforce.com have been built on the principal of selling to individual salespeople as a way to storm the beachhead of a large corporation and gain that traditional enterprise sale. Salesforce has shown you can push back some pretty big players like Oracle, SAP and Microsoft, when you back into a market by delivering value to end-user business person who need to get their job done at a price they can afford. Another interesting convergence is that B2C companies are starting to market heavily to B2B. There are lots of retailers out there from clothing to food who use their internet presence to open up scalable markets to corporate buyers. In this sense the two worlds are becoming more fused.

    The fact that over 80% of B2B businesses have a greater corporate social presence than B2C is astounding. Our own mapping of the social networks of over 14 million business executives show that just under 40% of the workforce are members of one or more of the top 10 social networks. There’s a good summary in the Huffington Post that maps the top 50 corporations in this regard:

    Link to Huffington Post article: http://www.huffingtonpost.com/2010/05/18/companies-social-media-st_n_580609.html

    While B2C buyers might be more subjective as you suggest, with social media, B2B marketers cannot dismiss the “merely subjective” any longer as social is all about the inter-subjective of relationships and culture. The hidden issue here is that relationships impact us in ways we can’t control. That’s huge and it’s the unknown that B2B corporations needs to come to grips with. I think you covered this nicely when you point out on the corporate successes like Dell are based on the fact that people want to speak with people, not brands and the trade off will be to accept that to err is human and we will have to accommodate both. I think you are saying that the virtual world is beginning to look very much like the real world…which makes a lot of sense.

    I think the section “To Err is Human” is very strong and a key piece to the puzzle. As you point out with Dell, social can put personality back into the the business equation in a scalable manner and the acceptance that we people make mistakes and these can be forgiven in this trade off is a powerful argument. Its not trivial as I found at a recent conference of social media which I wrote about for iMedia Connection recently.

    Link to iMedia Connection article: http://blogs.imediaconnection.com/blog/2010/06/21/we-can%E2%80%99t-king-canute-the-social-media-tide/

    One point I’d like to disagree with is that buying made by groups means longer cycles. If you look at the software industry, prices have dropped with affordable end-user subscriptions. I agree that more people confer around a decision that may be linked between departments with the purchase of software, but IT is rarely in the mix, and the risk in the initial expense has effectively been removed with end-user pricing and freemiums. The risk is now about opportunity cost. We know there are solutions out there, as you point out we need to understand the value quickly and obfuscation with glitz isn’t helpful. I think we are seeing slightly shorter cycles because in a world that is increasingly plug and play due to cloud computing and platforms. Also, business can’t slow down our decision making processes…the market simply won’t allow it.

    The section on changing channels is really interesting and the rise of search is interesting. One thought here us that mention of email is warranted. B2B direct mail died over the past 10 years not because of social media, but because of email. Email was our first electronic social media, and I think B2B marketers have learned a lot in the past decade, and while push is not relevant across social networks, we have learned to speak to customers in email, by increasingly dialing back the direct sell and providing learning opportunities about the latest tools so business people better understand their options for tools that improve efficiency.

    In regards to the changing rules section, with the Adobe systems example, consider the backdrop of the platform war between Adobe and Apple. Adobe looks like it overplayed its hand in believing Flash was the ubiquitous internet platform. With Apple doing an end-run around this with the iPad, I think publicity, good or bad is about Adobe’s only recourse. Sorry…Mr Brimlow looks like a plant to me. Though that in itself is lesson enough in this new world. I’m not convinced that the guys at Adobe are on their game by any of this.

    I think your premise that the objective (scientific) B2B marketing contrasts starkly against the subjective (emotionally driven) B2C marketing is interesting and has some truth, but doesn’t social mess with that whole equation? The subjective is defined as what the individual might think of something, and has always been easily dismissed. But we can’t underestimate the inter-subjective that is massive in this new social world. When making a decision, only 20% of that decision is based on the information. 80% is based on where the information comes from. That’s why the inter-subjective flips the equation in B2B social marketing and is why the subjective and the inter-subjective and the emotional response to our companies, employees and brands is now really important in B2B.

    I think relationships are more important in B2B purchase because of the value issue you start with at the beginning of the chapter, and these relationships extend beyond co-worker and vendors, they extend across the network of colleagues, bloggers and influencers across the side range of our experience.
    James Burke’s book “Connections” points out that information and influence travel only 3 degrees but that this is measurable and predictable. Understanding the social map of business users is going to be critical to the next steps we take. As Burke point out, it’s not just the nodes in our relationships that are important but as far as creativity is concerned, it’s the nodes that connect into different networks that are the dark matter in this whole equation.
    Again.. would love to chat offline, and I welcome your thoughts and response.

    Cheers,
    Gary Halliwell
    CEO – NetProspex
    ghalliwell@netprospex.com

  3. I think relationships are more important in B2B purchase because of the value issue you start with at the beginning of the chapter, and these relationships extend beyond co-worker and vendors, they extend across the network of colleagues, bloggers and influencers across the side range of our experience.

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