Every leadership team should be asking questions about their social networking strategy. They wonder how Twitter, LinkedIn, Facebook, Google Plus, CRM, Sales Force, Customer Portals, Websites, Blogs and other platforms can be utilized for business development purposes. We have been developing those thoughts at Group50 for the last 14+ years. 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, taking advantage of their long tail and customer service.
- 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. That rule has been augmented by:
“Today’s businesses need to provide methods for their customers to do business with them any time they want and any way they want”
Advertising has been the principal method utilized by businesses, but 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. The majority of consumers and customers (over 80%) follow these steps. They:
- Go online
- Find the product or service that best fits their needs
- Shop for the best price
- Decide whether 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?
Here are a couple of 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. They 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 and the most profitable.
- We worked on a project where a medical device company that was having difficulty servicing their customers. They weren’t using tools available to them to meet the need for customers to be able to do business with them any time and any way they wanted. We suggested the implementation of a customer portal (they were the only one who didn’t have one) and also changed the shifts in customer service that “followed the sun”
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 referrals for the services they are most known for. In those companies, they too have a long tail and have difficulty getting the word out. Today’s customer will go to Facebook, LinkedIn, Google+, the company’s website and many other locations before they ever make a call. Service providers get business because of their expertise and need to demonstrate it without any doubt. A robust social networking strategy is a prerequisite to Market Effectiveness.
If your company doesn’t have a robust networking strategy, then you are missing out on a lot of business. A good strategy doesn’t require a lot of money, or a lot of time, but it does require discipline like every other business process you have.
About the author: Jim Gitney is the CEO of Group50® and specializes in the development and implementation of business strategies with a deep understanding of manufacturing and distribution. Jim and the Group50 team are all former executives with well-known companies who understand what it takes to put together and manage the implementation of strategic initiatives, including social media strategies. Group50 has designed a unique strategic planning methodology, a series of strategic assessments, workshops and strategic execution tools that refocus companies and their critical business processes on cash flow, working capital, profitability and Market Effectiveness.
- Digital Technology as a Strategic Asset
- 12 Purchasing Best Practices
- Group50® Recaps 2018, Announces Addition of Lara Abrams to the Group50 Team
- The Need for Technology Succession Planning
- What is Kaizen ?
- Developing an IoT strategy for your business
- What is a “ Brown Paper Exercise “ and What is its’ Value?
- Blockchain – IoT Strategies and Use Cases – Oil and Gas Industry
- Blockchain and IoT Strategy and Use Cases – Aviation
- Group50 Announces a Mid-Market Blockchain Working Group