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Wake up Call for B2B
Get Digital, Get Social or Get Lost
Ms. Mei Lin Fung
Chairman, www.isoe.com
G-CEM Global Adviosr
www.isoe.com
This article is exclusively written for G-CEM.
On November 17 2008, Baidu.com's share price dropped 25% after Chinese Central Television (CCTV) reported that Baidu, which initiates over 70% of the Internet searches in China, was accepting payments to show up in the top slots for searches from unlicensed medical companies. Coming after the milk/melamine scare which has rocked global sales of milk and milk products from China, shareholders were simply not reassured by Baidu's announcement that since November 1, pharmaceutical companies who were Baidu's customers had to provide a valid State Food and Drug Administration retail license. Baidu recently denied a former employee's claim that it was accepting money to hide "bad news". So it may take a while for Baidu to learn the hard lessons that others have painfully absorbed.
With precious few places to hide bad news when customers talk to one another and former employees freely chime in on the Internet, the wakeup call has been sounded for B2B Companies win on transparency, direct connection with customers, and systemized response to feedback using new media.
Dell's story illustrates the potential It was not an easy journey but the tough love worked, as I I wrote in March 2008, You can Learn from "Dell Hell". Dell Did .For its efforts in acknowledging that it had a problem, for the good job in measuring its progress, for involving everyone in the company from the top down, for using every tool it could find, on November 14, 2008, Dell won the Brand of the Year award from The Society for New Communications Research, a global nonprofit think tank focused on the latest developments in new media and communications. One of the 40 person judging panel for the award, SCNR Fellow Paul Gillin noted that "what made Dell remarkable was the turnaround in its attitude toward new media... Having endured... Jeff Jarvis (The blogger famous for coining the term Dell Hell)..., the company could have been excused for simply shutting down and refusing to engage with online influencers. Instead, it did exactly the opposite. The degree to which Dell embraced its critics and tried to learn from them makes it a fine example of an adaptable and learning culture... the constructive approach the company took to dealing with market perceptions is one that many other companies would do well to emulate." (my emphasis)
Dell is a company that started off with an advantage: From the beginning they were in direct contact with their customers - as a B2C company, and then expanded to cover the B2B market and the actions they have taken in embracing social media helped them keep up with the changing world. "Direct relationships with our customers are fundamentally part of the Dell DNA" said Richard Binhammer, Senior Manager of Conversations, Communities and Communication.
But being in contact wasn't enough.. Previously, Dell dealt individually with each input and taht meant that one side of the company did not know how the other side of the company was responding. Customers were frustrated by sending their earlier ideas into a black hole - they never knew if their suggestion was acted upon or not, whether others agreed with them or not, and whether Dell planned to act or not. With 2 billion conversations a year through letters, emails and calls, Dell needed to systemically combine and prioritize the feedback, and get back to customers on their ideas and suggestions and provide tools for customers to prioritize the suggestions made by other customers. They began aggregating the ideas, incorporating prioritization by customers would allow the company to take quick meaningful action on the things deemed most important by the customers.
In February 2007 www.ideastorm.com was launched. In stage one, customers post ideas, comment, brainstorm, argue, discuss them, and vote thumbs up or thumbs down. Over 2000 ideas were entered in the first month, with 10,000 by mid-2008. Of these just under 200 advanced to the next stage of "Implemented Ideas", and the status provided in "Ideas in Action" shows what Dell is doing with each implemented idea.
IdeaStorm is powered by Salesforce.com and hosts about 10,000 unique visitors a day, has recorded 670,000 positive votes and more than 77,000 comments. Digg is a popular US social media site which allows you to express your preference if you like a website, as in "I dig it". IdeaStorm has a voting system that works like Digg, so Dell takes action based on actual real-time recorded customer preferences. The system has had real impact with Dell taking major strategic steps like pre-installing Linux - the most voted on idea.
CEO Michael Dell, driver one of the leading business social media initiatives explains why he believes it's very important for Dell to be open, to reach out in every imaginable form, to have more and more conversations and be inspired by customers : "These conversations are going to occur whether you like it or not. Do you want to be part of that or not? My argument is you absolutely do. You can learn from them. You can improve your reaction time. And you can be a better company by listening and being involved in that conversation."
IBM also has embraced new media, combining it with traditional print media to address the problem of how to communicate and collaborate better with their Business Partners who had begun to complain that IBM was not listening to their needs. With a difficult economic climate, IBM wanted to make sure that the Partners felt IBM listening and responding to their concerns.
To achieve this, IBM developed the "Voice of the Business Partner Campaign" encompassing:
- PRINT: Ads in magazines: VAR Business, Channel Pro & Computer Reseller News (CRN) magazines announcing the survey and inviting BPs give feedback to IBM at www.voicebp.com .
- ONLINE: VAR Business, CRN, Channel Pro, CMP Everything Channel. And the campaign & the response URL to www.voicebp.com is featured on IBM partner web pages. IBM Business Partners: ISVs, Resellers and IBM PartnerWorld Members.
- SOCIAL NETWORKS: Viral Marketing promotions were conducted on Twitter, Facebook, BLOGS on VAR Business, CRN, Channel Pro, CMP Everything Channel, eChannel Insider , ebizQ and IBM DeveloperWorks. E-mails, social networks, and blogs encouraging midmarket partners to take part in an interactive online forum called the Voice of the Business Partner.
- NEWSLETTERS: Over 20 IBM Newsletters announced the campaign.
- PR: Aggressive press announcement of the campaign which was picked up in Word of Mouth Marketing Organization (WOMMA).
- LIVE: Voice of the Business Partner is featured at all IBM's live partner events and tradeshows via presentations and tradeshow flyers.
RESULT: Over a thousand visits to the VoiceBP.com collaborative online partner forum site with an overall survey completion rate of 16%. The comments on the surveys indicate that the partners are very pleased to have the opportunity to share information with IBM.
SAP also has made strides in innovative B2B. SAP (www.sap.com) set a 2010 goal to increase their mid-market customer base from 40,000 to 100,000. To achieve this SAP set a goal to connect beyond the traditional influencers on the purchase: industry analysts, academics, customers, business influencers, and partners, and get through to their communities of influence with a consistent message. SAP recognized that it was more difficult to maintain control over the perception of SAP in the marketplace because of the shift away from a known group of "experts" to more trusted peer groups which exerted increasing power and global reach. SAP created a new group called Industry and Influencer Relations (IIR) with five teams each reaching out to a different audience with specific goals:
- IT INFLUENCER RELATIONS - Influence the research agendas and opinions of leading IT industry influencers and communities (e.g., SAP Developer Network)
- UNIVERSITY ALLIANCES - More SAP-trained graduates to accelerate SAP adoption.
- CUSTOMER COMMUNITY RELATIONS: - Create a worldwide SAP User Group program to increase customer engagement with SAP that supports thought leadership, education, reference.
- BUSINESS INFLUENCER RELATIONS: - Extend relationships with business thought leaders, communities, and social networks that influence the business agenda and purchase decisions in vertical markets and small and medium-sized companies
- INTEGRATED PARTNER COMMUNICATIONS - Maximize the communication opportunities with SAP's most strategic partners and partner programs
To achieve this IIR sought out, learned about and embraced the best practices in managing communities using a variety of tools and technologies as follows:
TEAM WIKI: Established IIR wiki for internal team collaboration
ONLINE SURVEYS: Determined influencers' opinions, interests, perceptions, and opportunities
ONLINE NEWSLETTERS: Delivered bi-monthly or quarterly global newsletters to each target audience with feedback mechanism to SAP
COLLABORATION WORKSPACE: Provided an internal collaboration tool for member use
COMMUNITY PORTALs: Self-service center for each target audience including
a. B2B social networking site for small business owners
b. SAP Community Network (SCN) - https://www.sdn.sap.com/irj/sdn). Has1.3 million members, and is 100 percent self managed and user regulated with thousands of posts per day and thousands of unique visitors each week.
With these efforts, SAP achieved key advances in market share over their primary competitor, Oracle in the large enterprise ERP space (July07-July08).
-2007 SAP 39.3%, Oracle 35.3 %
-2008 SAP 48.4 %, Oracle at 32.4%
Meanwhile, in the target Small and Medium Size Enterprise market (July07-July08)
-2007 Microsoft 28%, SAP 27.2 %, Oracle 22%
2008 SAP was 33.7%, Oracle 24.3%, Microsoft 23.1 %
So we come back to Baidu, facing the power of the customer and disgruntled former employee, finding its share price beaten down. Looking at the strenuous efforts undertaken by Dell, IBM and SAP, how can Baidu succeed in this new environment of Customer power?
B2B companies have to find their own sources of competitive advantage by harnessing social media to engage customers, increase revenue and lower costs. Dell has "shown just how creative and effective one company can be at using the web to tap into the opinions and passions of their customer base. ...several other projects like Studio Dell, Direct2Dell, Digital Nomads, and just the general thought leadership from Dell community evangelists, like Lionel Menchaca, Bob Pearson, and others, worked together to shape and inform our nomination...(of Dell as Brand of the Year)" said Mike Manuel, Fellow at the Society for New Communication Research.
IBM has opted to combine traditional and social media in order to develop better relations with their business partners and open the communication channels to improve listening and response.
SAP achieved great advances in market share through intelligently pursuing influencers in three ways
- Build deeper, lasting relationships with the influencers;
- Develop every influencer to become a vocal and active SAP champion;
- Foster a lasting dialogue of mutual benefit to SAP and the influencer.
In fact, the situation Baidu faces is very similar to the one faced by Dell when confronted with Jeff Jarvis of Buzz Machine, the blogger whose quote was picked up by the New York Times and Business Week:
"I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie. I'm having all kinds of trouble with the hardware: overheats, network doesn't work, maxes out on CPU usage. It's a lemon."
Michael Dell recognized the seriousness of the threat that faced the company, even though Dell's stock price did not drop 25% in one day like Baidu's. He mobilized the entire executive team and sought out thought leadership of the technical support engineers like Lionel Menchaca who were close to the customer. It takes a powerful and committed CEO to make such a change, and this could be the difference between survival and bankruptcy in the current challenging global economic environment.
The decision Baidu faces is one that your company is already facing or will face in the near future. The customer of 2008 expects a high degree of transparency and openness in the vendors they deal with. Customers are looking for a vendor to earn and keep their trust, who shares their values. And in the difficult economic environment we face, the customers are looking for the best deal they can get.
What do you need to do to Get Digital, Get Social?
Industry expert Barton Goldenberg www.ismguide.com says "Customer collaboration is a necessity." With better informed, better connected, more communicative, more in control customers, B2B businesses must appreciate that the Internet era digital customer is talking about your products and services - using blogs and engaging through social networks, and is much more in control of the buying process than you, the business. Get close to the customer, listen carefully, so that as their perceptions change, you know what's going on and can respond appropriately.
Customers will tell you how they want to buy - you can't tell them. Listen and respond to them before it's too late!
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About the Author
Mei Lin Fung works with Oklahoma State University's Spears Business School to offer certificate and performance management programs in business-customer relations. She recently assisted communications firm Avaya in developing an innovative public and private customer relations partnership, honored with the American Society of Competitiveness' Phillip B. Crosby Golden Medallion. Fung was an early pioneer in CRM, having worked with both Tom Siebel, founder of Siebel Systems, and Marc Benioff, founder of salesforce.com in 1988 at Oracle at the very beginning of the CRM industry. Blog: Professionals Earn Customer Trust |
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