Introduction to Social Media

Introduction to Social Media for B2B

You’ve no doubt been reading about the use of social media to generate business leads. For many of us, there are more questions than answers regarding how to go about this.

In this record, we’ll behold at B2B participation in social media and results of these efforts, and then move more specifically into examining the opportunities and challenges such media present to the financial services sector.

Testing the waters

There’s been an explosion of original social media applications, and businesses are scrambling to figure out how they can integrate these new communication channels into their marketing. What started out as an entertainment-oriented medium with YouTube has become one of the more popular topics in the online business marketing space.

Ignite Social Media is an advertising and marketing agency devoted exclusively to helping companies get the most from social media. Ignite explains that while advertising and public relations are “one-way communications” with businesses talking to their customers, social media allow customers to talk as well. Social media enable companies to engage in two-way conversations with their customers in “a meaningful, manageable way,” Ignite reports.

Experts agree that social media can be a worthy resource for businesses to use in branding and reputation and relationship creation, and B2B companies are brainstorming about how to harness the social media phenomenon.

Forrester finds social media for business ‘imperative’

In the August issue of BtoB Magazine, Forrester analyst Josh Bernoff notes that in 2008 B2B activity on social media sites actually exceeded business-to-consumer (B2C) activity, for both content providers and content consumers. He also reports that, while planning to cut spending in traditional media in the year ahead, business marketers expect to increase spending for online video, podcasts, blogs and social media in general.

Thought that increased spending does not necessarily translate into increased awareness, Bernoff suggests some strategies for optimizing a company’s investment in social media channels. He suggests the acronym POST as a formula for establishing an effective social media strategy.

First he suggests analyzing People — how are customers spending their time in social activities?
Next consider your corporate Objective — what do you hope to accomplish as a result of your social media outreach?
Then look at Strategy — how do you see your relationships with customers evolving in the long-term?
Finally, think Technology — pick the most suitable media strategy suggested by your findings in the first three analyses.

One of biggest mistakes businesses make is not establishing a clear business objective before launching a social media initiative, Bernoff says. He adds that businesses using social media often fail to assume advantage of the opportunity to engage audiences on more than one level. For example, when posting an article or blog on a social media venue, you should include a link back to landing pages, videos or white papers that provide opportunities for prospects to continue interacting with your business.

Because of the significant time investment required to properly utilize a social media site, Bernoff suggests that businesses start itsy-bitsy and use the start-up period to gain a deeper understanding of their target audience and its needs. While on any given site there are typically a number of relevant groups with which you might want to communicate, Bernoff recommends that you start with just one and learn “the ropes” before proceeding. That way you can avoid lost opportunities and costly mistakes.

While engaging social media requires great effort, businesses cannot afford to ignore this interactive marketing channel. Social media affords companies a rare opportunity to delve deeply into client and prospect relationships, to be more acutely aware of what’s on customers’ minds, and to use this information to increase the firm’s perceived value as a trusted belief leader.

Banks must find ways to overcome the obstacles to getting more deeply entrenched in social media. That was the consensus at a recent London meeting of the Financial Services Club. Because social media encourage informal and candid exchanges, banks must find a way to address their internal compliance issues while participating in such exchanges, counsels Carl Flinders, deputy news editor for Computer Weekly, who attended the London meeting. At the same time, Flinders notes, the relationship-building opportunities, particularly among younger prospects and women, are considerable enough that even those financial institutions that initially took a “wait and see” approach are now hopping on the social media bandwagon.

Survey: Social networks emerging as B2B lead-generators

DemandGen Report* recently surveyed 218 sales and marketing professionals to learn which B2B companies were using social media, how they were using them and with what results.

The view, titled “The Social Strategy for Driving Demand,” found that early adopters are generating between 10% and 15% of their leads through social mediaconnections. Meanwhile, 35% of respondents quiz their number of social media leads to increase by 1% to 5% over the next 12 months.

Marketing was found to be the most likely department to shepherd the lead-generation efforts.

While it’s no surprise that the expend of social media to generate leads is still in its infancy, some absorbing statistics emerged from the DemandGen survey. LinkedIn and Twitter were the best B2B social media channels, with 58% of respondents citing LinkedIn as most effective in generating leads and connecting with prospective buyers.

Participants distinguished three strategies as being most effective in their lead-generation efforts: joining/participating in industry groups (25%), starting conversations on industry topics (25%), and answering questions on industry topics (23%).

Overall, less than 4% of the DemandGen survey respondents indicated that social media generates 20% or more of their leads while 72% or respondents indicated that social media accounts for less than 5% of leads.

Overcoming hurdles in the financial services space

In reading the many articles, blogs and surveys pertaining to banks and social media, there are some key issues that continue to be at the forefront.

Reasons to Consume Social Media

Statistics show that the majority of purchasers on social media are B2B buyers. The informality and two way dialogues are very conducive to trust and relationship-building. It is also the preferred information source for the younger demographic, which many banks are looking to come, in an attempt to begin a relationship with a target group that will only become more profitable as they mature.

Among others such as Wells Fargo and American Express, Bank of the Southwest has been dabbling in social and new media, in an effort to target the 18-35 demographic.

Josh Ragsdale, Head of Marketing for Bank of Southwest states “It connects to them and speaks to them,” . Unlike his parents’ generation, “my generation doesn’t call customer service,” he says. Instead, it looks to places like the web.

Bank of America has launched a puny business banking community that has attracted over 15,000 members. Here customers can chat with other entrepreneurs and business owners or just post useful articles. Alan Maginn, senior analyst for Corporate Insight, points out “The banks are learning from clients, but it also extends the brand.”

During a presentation at an association of B2B national advertisers in August, Marcy Shinder, VP-brand strategy and marketing for American Express OPEN, says social media has given them much greater marketing efficiency during the economic downturn.

A social media site created by American Express, called “OPENForum”, provides small businesses with the type of content and tools that can help them grow their business. Marcy likes the fact that this initiative costs “exponentially less” than broken-down media and provides more of a “pull than push” marketing strategy. she said Amex has scaled back its TV advertising, although she added that shifting from expensive TV executions to digital and social media channels “is not just about cost, it’s about what people are responding to.”

The Flip Side of the Coin

We all know social media is growing exponentially and B2B companies are jumping on more business oriented sites, such as LinkedIn, Biznik, etc., with many having their own blogs with which to post command. They’re enthralled with the open exchange of ideas, support and advice that can be freely shared, plus the unprecedented networking opportunities this informal atmosphere can invite.

Not so much for the financial industry. The unique challenge in finance, as you know, is keeping everything safely corralled within the boundaries of compliance. This explains why many more banks are “planning” a foray into social media, while relatively few are even testing the waters. The informality and initiate exchanges inherent in this media are the very characteristics that can create compliance disasters that, unlike most other media channels, cannot be caught before the damage is done.

Breeching the formidable compliance rules and regulations is just too easy to do, however inadvertently. For instance there can be no product or service promotions, offers or advice given on financial matters without prior review by compliance. The very nature of a sales oriented message is in and of itself a violation.

Added to this is the overwhelming opinion that if social media ‘players’ do not participate at least weekly, their efforts are largely for naught. In her Social Media Marketing blog, Kristen Luke underscores this pickle and recommends a solution. “If you post a blog weekly, you can expect to employ two to four hours each week writing the article. This is time that may or may not be better spent elsewhere. Another disadvantage is the compliance issues involved with creating original content. Depending on the policies and procedures of your compliance department, writing original articles may be more of a headache than they are worth… Articles ghostwritten by third parties can be a good option for advisors who don’t like to write, don’t have the time to write, or have strict compliance departments.

The Happy ‘Medium’

So how can banks avoid the potential land mines while partaking of the fruit of this new media? One way is to re-purpose informative state that has already been accepted.

Newsletters, white papers, case studies, if created in the informative and objective format for which these outlets were created, can be of high interest to sure target groups. LinkedIn features thousands of “groups” on their social media site, from which you can target and join. In searching the term “CFO”, 321 groups popped up.

Within your group(s), you can post discussions or news items, taken from existing collateral and ask for questions or comments. Over time, you commence to establish yourself as a thought-leader among your group peers.

Another option is to post a summary of a newsletter article or news item, and include a link to the full story. This has shown to boost newsletter sign-ups from those who have utilized this feature.

Finally (though there are no doubt many more options available for compliant participation), many social media sites, like LinkedIn, sell advertising with guaranteed placement on relevant group sites.

These also, can be linked to a Special landing page, or other ‘dangling carrot’ content, that will plan the reader further into your marketing ‘lair’.

*DemandGen Report focuses on strategies, tactics and measurements central to driving growth in sales and marketing automation.