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!