Every leadership team is asking questions about their social networking strategies. They wonder how Twitter, LinkedIn, Facebook, Google Plus and others can be utilized for business development purposes. As we have worked on The Global Leaders, we have spoken with hundreds of companies, and have found a wide disparity between their efforts and the type of business they are in. Although not a formal study, our general findings are as follows:
- Media companies have the highest level of networking activity for sales and brand building. They should, given their business model.
- Retailers are next as they utilize networking activities as a compliment to their bricks and mortar business locations.
- Manufacturing companies have spotty usage of networks for building brand awareness and taking advantage of their long tail.
- Service providers utilize networks the least because they often don’t believe it will provide them with a significant advantage.
As we looked further, we found that the utilization of networks for business development is closely aligned with utilization of traditional advertising media. Companies who have significant advertising activities [and budgets] have the most clarity around what these new networks can provide for them. They recognize that the basic tenants of an effective social media strategy includes the need to continuously touch their current and potential customers with communications focused on maintaining existing relationships and building new ones. The age old rule of thumb is that you need to touch someone 7 times to build awareness of your company and its product offerings.
Advertising has been the principal method utilized by businesses, but as the number of advertising venues has exploded in recent years, we, as consumers have learned to tune these out, fast forward through them, or just ignore them all together. Banner ads on the internet are a classic example. In recent years, consumers [personal and professional] have become savvy. Although not a majority of consumers follow these steps, they soon will. They:
- Go online
- Find the product or service that best fits their needs
- Shop for the best price
- Then decide to buy it online or at a bricks and mortar location. In the case of service providers, they call the one with the best location and expertise.
Media companies and retailers get it, so what is in it for manufacturers and service providers? There are several examples that are noteworthy. Recently, in a company that we did work for, we noticed that they had over 3,500 stock keeping units in their product offerings. About 700 made up 80% of the sales. 20% of their sales were made up of the other 2,800 units [their long tail] and were randomly stocked by distributors around the nation. The cost of keeping these units in stock was very high. The company was faced with the issue of consumers [in this case plumbers and home owners] wanting their product, but not being able to have it in stock when needed. So we embarked on a program to create a website that offered all of their products at list price, with the appropriate networking activities to spread the word. We went to work on designing a social networking strategy.
We found a website developer who was willing to put the site up and become the company’s web representative with a generous commission and realized who realized a payback of less than 10 months. There were a large number of customers who were not aware of the company’s full product offering and the myriad of new products the company was launching. The company was able to use this new resource for introducing new products, developing a large following and routinely sold products at list price plus shipping. This channel of distribution quickly became 10% of sales.
Service providers [legal firms, consultants, wealth managers, accounting firms, etc.] have a similar opportunity. They have a product to sell and usually get the majority of their business from the services they are most known for. In those companies, they too have a long tail and have difficulty getting the word out. Service providers get business because of their expertise. If you look at the large consulting and accounting firms, they are using networks extensively. They showcase their expertise on their websites and in their blogs. They routinely touch their contacts and gain new ones through a robust social media strategy.
About Group50 Consulting:
Established in 2003, Group50 Consulting provides manufacturers and distributors with resources focused on speed, quality, cost, productivity and growth. Group50 has advised several companies on the utilization of business networks for business development. To find out more about our services, write email@example.com, visit our website at www.group50.com, (909) 949-9083 or click here.
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