B2B And The Customer of 1

High-tech companies with revenues between $20M and $250M are Fire Alarm Marketing's "sweet-spot."

Most of our clients can be further defined as follows; they sell into specific verticals or niches, they have a small customer base…sometimes up to 1,000, sometimes more, but rarely over 10,000 buying entities.  Their products are sold in the upper five to six-figure range, can have a significant impact (cost savings, productivity improvement, etc.) have a long sell cycle (12-18 months) where the sale is frequently finalized after a pilot or trial.  Usually there are 2-3 competitors, some of them direct, others who compete via product overlap in functional capability.  R & D efforts are directed toward product improvements and functionality, not taking cost out of the product, as there is little price elasticity.  Their products are sold by salespeople (or reseller’s salespeople) through relationship selling coupled with client management support.  Leads have been generated via traditional marketing means, i.e., trade shows, print, direct mail, email, etc.

These clients ask, “How do we best use social media tools?”  The questions behind this question are “Can we use some of these new tools to shorten the selling cycle and/or take cost out of our Sales and Marketing efforts.”

Our answers vary depending upon the specifics of each company, but generally hit the following points:

  • From a strategic planning view, think 3-5 years out.  The social tools that are being used today will be obsolete then (think My Space).  New hardware and software will be used to promote and demonstrate your products, probably tablets, specific applications and video.
  • The customer is now in charge.  They can find out more information about you, your products and your competitors than your salesman knows.  When they are ready to buy, they will, and the buying cycle will be short.  You want to be ready to serve them when they want to buy.  As a result you have to have information readily available, constantly.
  • In order to work through to the next stage, you need to start now, both with in using social media as well as changing the culture of your company.
  • Becoming a thought leader, building trusting relationships and responding the your “community” need to be targeted objectives on a par with number of qualified leads, and number of leads closed.
    • One way to start is to make sure that your web site is up-to-date, and that it works well if accessed by mobile devices.
    • Second, enhance your listening skills through user groups, twitter, facebook, etc.
    • Third, blog…adding new content that adds value and is positive in tone.
    • Fourth, monitor your activities
    • These four tactics take time and people.  These are not part time jobs, people have to be dedicated to them.  If you cannot commit to supporting these activities for the foreseeable future, don’t start as it is more damaging to start, stop and then try to start again.

In short, the use of social media by relatively small B2B companies is not a “try it, you’ll like it” proposition.  It requires a commitment to a long-term strategy that understands that today's buying and distribution paradigms are changing, and that the new models have not yet formed.  Mistakes and errors will be made, but this will be part of the learning process.  And no, there does not yet exist a correlation between dollars spent on social media and leads generated and sales made.

Some of our clients have accepted this and are moving ahead, at differing rates.  Others have elected not to be “early adopters” as they call it, and are continuing with their tried and true ways.

Any thoughts on who will be successful in the long run?

RHM  10/7/2010

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