Archive for October, 2010
Monday, October 25th, 2010
The Wall Street Journal reported last week on how business-to-business marketers are using social media to interact with their customers and attract new ones. The article opens with the social media experience of Bill.com. “Even though the venture-backed company has more than 10,000 clients, it has so far managed to secure only 67 ‘friends’ on the social-networking site,” The Journal reports. “These days, even small business-to-business concerns like Bill.com are experimenting with social media, perceiving the popular online hangouts as low-cost, easy-to-use venues for attracting new customers and retaining existing ones. But unlike their consumer-focused counterparts—retailers that sell smartphones, jeans, games and other personal products—so-called B-to-B businesses seem to be having a harder time connecting with their target audience.”
It’s interesting reading the comments on the idea that business-to-business marketing—and business-to-business offerings—aren’t “sexy,” so they don’t attract large following in the social media space.
In a way that misses the entire practice by quite a bit.
Business-to-business marketing has always been “social”. Most business-to-business marketers might have 100 or fewer customers, and many of the key ones they know personally, sell straight into their eyes, and know their children and their birthdays. Business to consumer marketers on the other hand may have millions and millions of customers. They may be lucky enough to know a few of them, but know their customers primarily as a sea of statistics, averages, and “typical behaviors.”
We have been studying the use of social media and business-to-business here in the Institute for the Study of Business Markets, and have discovered that the smartest marketers have discovered a key principle: content to contact to cash.
Although B-to-B blogs may only garner 20 to 30 participants, those participants can have a say in making business decisions that result in sales of many millions of dollars, following complex discussions, applications perspectives, and other “important content” which can be delivered by their peers in blogs. One of our ISBM member firms, Indium Corporation, has started 70 very focused blogs, and through them garnered several new customers. A new customer in the business market can be an annuity lasting for many years, and bringing in millions of dollars of revenue.
So I would say business-to-business companies “get” social media. A variety of interesting experiments are going on, but primarily what’s being seen is just a new electronic way to implement what always has been a very “social” process.
Social media existed long before the Web. It was often called “conversation.”
If you would like to learn more about how B-to-Bs can successfully leverage social media in their marketing efforts, sign up for the Oct. 27 webinar Socializing B2B Marketing: Lessons from Industry Leaders, hosted by the Institute for the Study of Business Markets. The webinar is free (but registration is required) and will explore how top B-to-B technology companies, including Cisco, EMC, IBM, SAP, and Xerox are successfully socializing marketing strategy and programs, while keeping a clear eye on the top and bottom lines.
Thursday, October 7th, 2010
“Technically, if the economy starts growing again, no matter how slowly, the economy has left the recession period,” explains Anthony Kwasnica, associate professor of business economics at Penn State’s Smeal College of Business.
“A recession is measured from the peak of the latest non-recession growth period to the trough or very bottom of the decline, before an upswing,” he adds. “People tend to think we’ve recovered only when we’ve returned to where we started from. Most would agree that the growth since June of 2009 has not been very robust.”
Since the gross domestic product (defined as the market value of a country’s goods and services produced in one year) didn’t decline more than 10 percent, our current crisis isn’t typically described as a depression. However, the “Great Recession”, as it has been dubbed, remains the most sustained economic slump the United States has weathered since World War II, with jobless rates hitting 10.8 percent, the highest since 1982.
Can we predict when we’ll be back in the black? “There is no clear answer,” Kwasnica says. “A number of factors are at work here. Some analysts use qualitative, survey-based measures of how people feel about the direction of the economy.” The most well-known of these, the Consumer Confidence Index, surveys households on their feelings about the economy, the idea being that confident consumers are more likely to make purchases resulting in economic growth.
Kwasnica cautions against relying too much on such tools. “While I generally like the Consumer Confidence Index, one often has to worry about the issue of self-fulfilling prophecies in terms of economic activity,” he warns. “Suppose everyone thought a decline in consumer confidence was a strong signal of a future economic downturn? Then it might seem rational for a business to cut down production. But this could help create the economic downturn. This suggests that we might be better off not knowing exactly what data sources predict recessions.”
View the complete story here.
Monday, October 4th, 2010
The Economist recently reported on a proposal introduced by the Financial Accounting Standards Board, which requires firms to publish information on reasons they might be sued and how much it would cost them. The Economist argues “this would provide a how-to guide for lawyers looking for targets.”
“Firms would have to disclose any money set aside for potential settlements,” they write. “This would reveal to tort lawyers the general area where the richest pickings might be.”
These new rules, which are scheduled to go into effect on Dec. 15, force firms to highlight their own vulnerabilities by regularly updating this disclosed information.
Smeal’s Ed Ketz believes this proposal goes too far and won’t help the investment community.
While I generally support more disclosure over less disclosure so that investors and creditors have more information about a business enterprise, the FASB proposal for greater disclosures on litigation goes too far. It likely won’t help the investment community because the estimates of payouts are not reliable; worse, the plaintiffs’ bar might use the estimated damages as a floor for lawsuits against corporate America. This would have the unintended effect of magnifying losses beyond reasonable amounts.