by Ted Graham

Social media is currently top of mind for many brand owners. Not a day goes by without the appearance of headlines trumpeting new eye-popping growth stats (Facebook has grown by one million to 200 million users in less than five years), huge changes in where people go to get breaking news (Twitter became the de facto source of information when Iran expelled all foreign journalists during the last election), and massive shifts in marketing budgets (Forrester Research predicts U.S. online marketing spend to reach US$ 25 billion in 2009 and US$ 50 billion by 2014).

While social media promises efficient connection with a new type of engaged stakeholder, it also represents a real risk to companies that come down on the wrong side of the digital mob for a perceived transgression. Some companies have also been skewered online for trying to use social media as any other broadcast channel, pushing their key messages at a group of people, hoping that they can generate more positive impressions about their brand. For example, Kmart recently sponsored a pay-per-post campaign for influential people on Twitter. This move met much criticism, as it betrayed the spirit of what makes word of mouth so effective—i.e., unprompted, authentic recommendations for a product or service. As a result, many companies have been treading lightly while the medium continues to evolve, with their marketing, HR, IT, and legal departments continuing to slowly weigh the risks.

To date, the consumer products sector has been the most visible participant in the social media realm and, as such, is also reaping most of the rewards. Dell reportedly generated US$ 3 million in revenue since 2007 from its DellOutlet Twitter feed, and Nike has seen a double-digit market share gain in the running category as a result of the Nike community, which encourages runners to log in and record their times while competing with other users. Lubricant maker WD-40 has increased sales volume to existing customers by creating a site that takes user-generated suggestions for further uses of the product. To get a sense of the scale of participation in social media, consider that Gartner estimates that 60 percent of the Fortune 1000 will experiment with some sort of brand community in 2010.

So what about social media and B2B?

Social media encompasses the entire digital landscape where core content is user generated and the community often dictates the evolution of the space (e.g., brand communities, blogs, podcasts, wikis, and social networking). The key success factor is a high degree of participation.

Contrary to what one might naturally expect, business-to-business (B2B) is a sector that should be critically reliant on the key capabilities delivered by social media participation (content generation, community building, and decision support). Forrester, for example, notes that 91 percent of B2B decision makers participate in social media, and 69 percent use this technology for business purposes. B2B customers and prospects also tend to maintain much longer relationships, and in sectors such as enterprise software, ongoing upgrades and service contracts are often the key to profitability.

Somewhat surprisingly, many B2B businesses have already been involved with social media for years, but out of the public eye and under different names. While B2C companies have been recently building up very visible external networks, B2B companies have had a long run with developing internal networks. Employee intranets, client extranets, supplier sites, and customer forums were all early precursors of social media in terms of community building and user-generated content.

While B2B companies understood early on that they needed deeper engagement with customers and partners, to avoid risk they deliberately limited access to these sites to a select and carefully controlled group that could contribute. But this risk aversion has limited the potential that can only be achieved by high levels of participation and minimal, if any, supervision (e.g., crowdsourcing, innovations, and participatory marketing).

Understandably, what most B2B firms have been trying to avoid are social media blunders, which can easily occur when engagement is not done properly. Some embarrassing mistakes they’ve seen others make in the past involve disguised company representatives posting “AdverQuestions” (thinly veiled advertisements) to forums targeted to a particular set of customers/users. Honest peer-to-peer knowledge sharing is extremely valuable in a B2B context (think of industrial engineers finding other industrial engineers to share innovative new uses for an existing product), but this can turn frustrating if you have to wade through questions like “Does anyone know where I can buy that great new product from Company X?”

So what can B2B companies learn from both the positive and negative examples of businesses trying to engage with social media? There are three key ways to get started: listen, experiment, and evolve.

1. Listen
A conversation about your company is already taking place online. Invest the time and money to find out what’s being said and understand how that might be influencing others. Monitoring software from companies like Sysomos and Radian6 have made it incredibly simple to give you an early warning of what is being said about your brands online. They offer sentiment readings and help you gain valuable insights into what makes people bond with your brand or reject you outright. You can also see how you’re doing relative to the competition with tools like Twitalyzer, which ranks brands based on how they score against elements such as the ratio of positive to negative citations, number of unique individuals referencing your brand, and the likelihood that individuals talking about your brand will do so repeatedly.

2. Experiment
Don’t put all your bets on the latest shiny new social media object. Friendster was usurped by MySpace, which was overtaken by Facebook, which is currently being overshadowed by Twitter (in the media at least). Engage with multiple social media sites and networks. Create a fan page on Facebook for recruiting. Develop an alumni group on LinkedIn to share news, gain input, or generate referrals. Encourage employees to use Twitter as a way of sharing ideas and generating new ones. Companies should also syndicate their own digital content by creating RSS feeds for news, events, and job postings so that it can be easily found and shared by the numerous other social media sites.

3. Evolve
Try to remove “push” and “broadcast” from your vocabulary. The advantages of social media only come when the participants have a real role to play and are not just passive recipients of your corporate key messages (good examples include Intuit or Amex OPEN communities). Ask questions that you don’t know the answer to, try to answer other people’s questions, post links from other people and brands that inspire you, be conversational, be honest, and have a point of view.

Recently a research firm called the Altimeter Group released a widely cited study called ENGAGEMENTdb which used the Interbrand list of the 100 most valuable global brands as the basis for examining the level of engagement top brands had across social media channels (measuring factors such as a company’s likelihood to respond to blog posts). While Interbrand’s methodology for this particular ranking excludes firms that are exclusively B2B, it is interesting to see that two providers of business services (Thomson Reuters and SAP) found themselves in the top 10 of “engaged” brands (a list that includes Starbucks, Nike, and Google). The lesson here is that these firms are committed to engaging. In other words, once you open the door to dialogue, you must respond, and you need the resources to handle this responsibility.

Much of this advice presupposes that you have thought carefully about your brand from creation through to the ongoing management of its value. This will help you answer the question “Does a social media approach make sense for my particular business at this point in time?” In particular, you should carefully consider whether you’ve aligned the promise and delivery of your brand because, if you haven’t, this massive online, engaged constituency is sure to tell you…and the rest of the world. 

Ted Graham is the Director of Client Services at Interbrand Toronto and is responsible for helping grow the business while making global heroes out of Canadian brands. Ted's areas of expertise include knowledge management and social network analysis. A firm believer in the value of networks, he created a product called “Influencer Network Analysis,” or INA, which maps the relationships between the individuals, media, and organizations that are shaping opinions across various industries and realms of public life. INA was nominated for an “innovation of the year” award by PR Week.