The case for social media marketing and "Extreme B2B"

At one point in my career, I had one of the largest (if not THE largest!) sales positions in the world. I had just one customer and they bought more than US$1.5 billion of goods and services from my company every year.  That’s what I call Extreme B2B. Long sales cycle. High stakes. Extraordinary power in the hands of the buyer.

Is there a place for social media marketing even in “Extreme B2B?” Before applying any tactic like social media — in any situation — you first need to consider the strategy. In my position, there were four strategies I employed to keep and grow this mega-customer:

Apply high-touch throughout the organization. With a customer that large, you can imagine that operations were dispersed throughout the world. So my contacts were broad … and they were also deep – from the CEO to the machine operator on the floor, from Purchasing to R&D. There were dozens of people who influenced the purchasing decision and I had to earn trust with all of them! It was also a challenge connecting all the communication synapses between the two companies: executive, manufacturing, R&D, etc.

Raise switching costs through service innovations. Not only did I want to grow my business at this customer, I wanted to do it at the most profitable plant locations. To achieve this, I wanted to provide some extraordinary service that would make it painful for the plant to switch to a competitor. For example, at our most profitable customer location, we designed a special truck that could haul away their waste material after delivering a shipment of finished product, saving them waste hauling fees. Those trucks made us a lot of money!

Improve profitability through incremental cost savings. With an account that large, the purchasing power is extreme and that keeps margins low. It was always a challenge to find small ways to save money, especially if it also provided a win for the customer. With revenues that large, even an improvement of a fraction of a cent per unit could have a dramatic impact on profitability.

Listen better, act faster. Listening to my customer was serious business. We actually conducted formal “listen to the customer” visits using trained facilitators. Information from these visits, conducted throughout the world, was carefully compiled, thoroughly analyzed and used to create our marketing and R&D plans.

In summary, my strategy was: Be accessible, innovate through service, lower costs, and listen effectively. Hmmm … doesn’t that sound like a PERFECT business case for social media applications? Even in a case of extreme B2B there are likely applications for these new tools, right?

Yes … and no. I’m sure you can think of many great social web applications to support these strategies, but that doesn’t mean that B2B companies will necessarily act on them. Why not?

Even with a strong business case, there may be very good reasons why a B2B company should reject social media marketing (gasp!). More on that in the next post!

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  • Jeremy bramwell

    Very interesting I've dealt with the more extreme end of B2B, high ticket, infrequent purchase and it's the relationship your brand maintains with all levels of the customer that will put you at the forefront of future opportunities for either new systems, upgrades, service packs etc. Some of the relationship building and 'conversation' aspects of social media canand should be applied at Extreme B2B but what channels to use is another matter.

  • MARK W. SCHAEFER

    Thanks, Jeremy. I'll be getting into that a bit with the post tomorrow!

  • autom

    great post as always, Mark. look forward to tomorrow's post!

  • Chris Oquist

    Great post – I would also add that a cogent social media strategy can benefit a long sales cycle by enabling your organization to remain relevant in the mind of the potential buyer without relying on more interruptive methods.

    And your caveat abou rejecting social is also important" any kind of action – like implementing a social media strategy or tactic – needs to be purpose-driven. In business, if it can't drive an outcome, it isn't worth doing.

    Chris

  • MARK W. SCHAEFER

    Really great addition, Chris. Yeah, in this specific case, the sales cycle wasn't just long, it was CONSTANT!

  • Jim LeBlanc

    This definitely hits home for me. My B2B sales strategy is similar but not so well articulated! Thanks for providing my new sales plan as I enter the 2010 planning cycle!

  • Rhino B2B Lead Generation

    Interesting Thats a huge egg in one massive basket. I bet all lines of comunication were open at all times for that client with all ears and eyes open. Great strategy. BTW love the huge dog pic

  • MARK W. SCHAEFER

    @ Jim — good luck!!

    @ Rhino — well, I tried to keep all lines of communication open but sometimes that was a challenge too. When I was considering taking the job, my boss warned me that managing an account that large was like watching an octopus make love to another octopus — tenacles flying everywhere, but somehow the job gets done.

  • Mark,

    Agree 100% on the importance of “listen better, act faster.” And, from my experience, the ultimate partnership (for marketing) with Sales is to get a good debrief after each visit to major accounts. Sales helps fuel marketing efforts.

  • Mark

    @Mark Yup. Don’t know how you can get by without effective CRM in any sizable organization.

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