June 14, 2012

Brands: How to cut your exposure to Facebook business risk

Will Facebook stick to its core competency or be waylaid?

This is third of a three-part series on Facebook as an investment. Also see:
• Facebook’s biggest barrier to enormous wealth? Trust
• Facebook will remain king, but social pure plays will fade

Many brands are boosting their investments in social business platforms like Facebook, Twitter, YouTube and Pinterest with every passing quarter, but CMOs are too often focused on next quarter’s numbers. They fail to insulate themselves against platforms’ business risks. Facebook’s IPO will likely cause the company to change its behavior in surprising ways, and without warning, by changing its policies and features. Here, I’ll address how brand executives can insulate themselves from Facebook’s — or any platform’s — fortunes by moving to make their relationships and networks portable.

Seeing beyond the platform

Pure play firms like Facebook, LinkedIn and Twitter have defined language, behavior, features and the very concepts of digital “social networks,” but they are quite expendable when brands manage their investments appropriately. However, brand leaders need to follow the digital ecosystem closely and be ready to adjust quickly.

Here are some principles for avoiding surprises. Specific action steps follow.

Assume pure plays’ gradual obsolescence

Watch the ecosystem’s major players, and the interactions among them, but the trend will be specialist sites maximizing value from “social networking” and fading dominance of pure plays. The latter will continue to exist, but they will not maximize value because they are designed for “socializing” (which people can’t resist), not doing things. Moreover, I use “ecosystem” intentionally because it indicates a pervasive, real-time network that increasingly interoperates. Because it’s digital, it’s more dynamic than any human market we’ve ever experienced. Here are brief comments on some of the players:

Buying RIM won’t help Facebook enough to warrant the distraction — not even close.

Facebook is so entrenched globally that it may remain the dominant general social network for many years. However, there is a big caveat. Facebook’s management team looks like it’s losing focus due to the IPO and too much time with Wall Street bankers. It’s “using the money it raised” for M&A, purportedly considering entering the hardware market (buying RIM). If Facebook’s management team and core competencies included M&A (like, say, Cisco), I would be confident. But they don’t. If Facebook buys RIM, I would seriously question Facebook’s medium-term relevance and long-term survival. Making phones will not help Facebook sell more mobile advertising. Not even Apple’s best-in-class iPhones will likely display much advertising due to user backlash. The device wouldn’t help Facebook enough to warrant the distraction — not even close. Continue reading →

April 9, 2012

How sales and marketing can collaborate in social business

Image by VLADGRIN on BigStockPhoto.com

Social business disrupts traditional roles of B2B sales & marketing

Sales and marketing sit on the edge of a massive disruption, and B2B professionals who realize it and act will reap enormous rewards. In a nutshell, the economics of “one-to-one” communications are networked now, which gives Sales huge new leverage. Meanwhile, Marketing has the opportunity to personalize its function in myriad ways. For one example, salespeople today go to their networks and try to create contacts for the pipeline using phone, email campaigns, referrals, etc. This is minimally scalable. Here’s the social business approach.

B2B sales

Social venues like LinkedIn, Twitter, Google+, mainstream media sites with comments, and blogs have created the opportunity for prospects and clients to connect with and educate each other very quickly, which enables them to be much smarter. They no longer depend on Sales to educate them as in the past. I met social marketer Paul Gillin recently, and he put it like this (paraphrased): “The sales funnel has inverted, the new funnel is: 1) go to where people are; 2) listen to what they care about (in their terms, not yours); 3) invite interaction (by helping them understand their situation); 4) respond to them and adjust your approach.” Continue reading →

March 13, 2012

How social business will transform B2B Sales & Marketing

BigStockPhoto image by kentoh

B2B must evolve to meet clients’ changing needs

Client work for B2B and B2C organizations has me reviewing thousands of conversations in social venues every month, and it’s becoming increasingly obvious that much of Sales and Marketing as we know them is significantly out of alignment with B2B clients. They are much smarter now and want a new style of relationship with their business partners (erstwhile “vendors,” “providers”). Social business is permeating client networks throughout the economy and changing client behavior and expectations.

This has created a rare opportunity for B2B sales and marketing people who understand and respond ahead of the market. Here I’ll do a deeper dive into how legacy Sales and Marketing functions will evolve, using social business as a lever.

Reexamining B2B Sales and Marketing

Marketing assumes it’s not economically feasible to have large-scale one-on-one client conversations. Sales assumes it must rely on one-on-one prospecting to drive value. Both assumptions are increasingly false.

Two examples of misalignment: One of Marketing’s underlying assumptions is that it is not economically feasible to have large-scale one-on-one client conversations, so marketing must achieve scale through secondary research (and remain isolated from the client). One of Sales’ key assumptions is that it must rely on primary one-on-one prospect/client/customer communications to drive value. Both of these are increasingly false, so I’ll drill down on them before offering practical recommendations for how Sales And Marketing can explore social business at a new level.

As head of marketing for several B2B firms with direct sales forces since the 1980s, I have worked with my fellow execs in Sales, Operations, Finance & IT to drive the top line. As a management consultant, I have advised clients in adopting numerous disruptive technologies that have confronted enterprise functions with change. These experiences lead me to believe that social business will transform B2B Sales And Marketing during the next 5-10 years. Moreover, organizations that begin the transformation process earlier will profit at the expense of laggards because social business will improve enterprises’ communications and collaborations with clients by an order of magnitude. Continue reading →

March 6, 2012

2012: The year of B2B social business adoption

How B2B firms can reduce their cost of sales 30-50% by using social platforms

Based on CSRA’s recent research as well as my 25 years’ experience with guiding B2Bs’ adoption of disruptive technology, I predict that 2012 will see significant social business takeup among B2B pioneers. First, a critical mass of B2B executive leaders are familiar enough with social technologies to consider them for the first time. Second, the business driver will be the economy. During the past 4-5 years, enterprises have continue to cut costs wherever they could, but few are performing at the level they want to be. B2B sales and marketing are under more pressure to perform very efficiently than ever, and some leaders will enlist social business because they have tried everything else.

B2B adoption

Although I have served numerous B2C enterprises, I have a more profound understanding of B2B because my businesses and employers have sold to businesses. Web 1.0 (“The Internet”) adoption is a very useful pattern for understanding Web 3.0 adoption (we’re way past Web 2.0 now). For brevity, I’ll use it, along with some other patterns, to explain why my crystal ball says that 2012 will see serious B2B adoption of social business.

Adoption of disruptive technology begins with consumers because their cost of trying new things is far lower than businesses’. In addition, families, since they include people of all ages, are hotbeds of disruptive technology adoption. What’s better than confounding parents by doing marvelous things that they don’t understand?
B2B executive parents, being upstanding responsible adults, always reject such frivolities at first; however, they cannot stop themselves from peering over their kids’ shoulders. When a situation occurs in which the disruptive innovation adds surprising value, their attitudes begin to change. They start experimenting (what’s the No. 1 reason execs joined Facebook?), but since they have preconceived notions about how things should work, the learning process is slow. But they eventually learn to adopt the disruption in their personal lives.
Once executives get comfortable enough with the disruption, the adventurous portion of them starts taking its disruption-enabled “approaches” to doing things to work. Experimentation continues for a while, during which the disruption is a “nice to have” option. In some cases a situation develops in which the innovation adds surprising value in the work context, which drives adoption further.
Social business — applying social technologies to evolve business processes — is reaching this point. Another Web 1.0 lesson is that the early 2000s’ bad economy helped Internet adoption after the meltdown. Although most executives were too ready to dismiss “the Internet” as a fad, enough of them persisted and proved the value in increasing areas of business.
At PricewaterhouseCoopers, I helped B2Bs apply Internet applications to their business processes. Once they dropped the assumption that the Internet was about Pets.com and money-losing online bookstores, they could start thinking about how they could save serious money by empowering stakeholders with real-time information and the ability to transact with their enterprise systems.

Continue reading →

February 2, 2011

Social businesses: Glimmers of a macro trend

Social Business Design (CC image by Dachis Group)

Annual look at the best strategies, tactics, case studies & insights in the enterprise space

Compared to 2009 and 2008, the past year was a relatively calm one because the amplitude of market gyrations clearly diminished and businesses began to find a new floor on which to build stakeholder expectations. Although I watched with high interest the unfolding financial drama in Europe, I didn’t have the time to conduct the research necessary to do a rigorous interpretation, although I published a brief reflection last week. The big story of the past year was this: 2010 marked a turning point in the adoption of social technologies and in the recognition that analysis and strategy are necessary to achieve consistent results with social initiatives.

Macro trends: Moving from broadcast to relationship building

Until recently, being on Facebook was an end in itself, agencies produced vapid content and little interaction occurred because people rarely interact when brands are talking at them instead of listening

Social has been in adolescence until recently — “being on Facebook” was an end in itself, agencies produced vapid content and little interaction happened because people rarely interact when brands are talking at them instead of listening. People feel it when a brand is interested in using social tools to promote itself. They also feel it when a brand is interested in building relationship, which is marked by active listening and responding, along with a relative absence of self-promotion. Brands that build relationship learn that they don’t have to try so hard to promote themselves: when they are truly interested in people, people will promote them. However, this approach remains a future state for most companies. Relationships take serious work — thus, a need for a strategy.

The growing use of strategy is also a harbinger for what I call “social business” (a step beyond social media), in which leaders use social technologies to transform their businesses by collaborating openly with various outside and inside stakeholders to innovate constantly. Early movers will begin emerging this year: Only a few gutsy players will aggressively adopt social business practices in 2011. I believe they can change markets.

Continue reading →