Benefits of Social Media in

Business-to-Business

Customer Interface in

Innovation

Jari Jussila

Tampere University of Technology

Hannu Kärkkäinen

Tampere University of Technology

Maija Leino

Tampere University of Technology

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Definition of social media and web 2.0

• Web 2.0 means technologies that enable users to communicate, create

content and share it with each other via communities, social networks and

virtual worlds, making it easier than before.

• They also make it easier to have real life experiences in virtual worlds

and to organize content on the internet with content aggregators.

(Lehtimäki et al., 2009)

• Such tools and technologies emphasize the power of users to select,

filter, publish and edit information (Tredinnick, 2006), as well as to

participate in the creation of content in social media.

• According to Constantinides and Fountain (2008), "Web 2.0 is a collection

of open-source, interactive and user-controlled online applications

expanding the experiences, knowledge and market power of the users as

participants in business and social processes. “

• “Web 2.0 applications support the creation of informal users’ networks

facilitating the flow of ideas and knowledge by allowing the efficient

generation, dissemination, sharing and editing / refining of informational

content."

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Customers

Employees

Partners

B2B

Company

Goals, objectives and limitations

• To study and analyse the role, benefits and pragmatic company examples of social

media from business-to-business innovation and related customer interface

perspective, and to create a more comprehensive picture of the possibilities of social

media for the business-to-business sector

• More specifically, we want to understand

• what is the status of social media research in business-to-business innovation and related

customer interface

• which type of benefits can social media bring for business-to-business innovation in the

different phases of the innovation process?

• what broader classes of innovation –related benefits social media can provide for B2B

companies

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Customer interface

Focus on B2B

(Business-to-Business) sector

• Important starting points: large part of B2B’s consider social media as “something

that is out there but is not for us” (Finnish and international studies; conferences,

seminars, etc.); lack of suitable cases major factor hindering adoption in B2B’s

• B2C (Business-to-consumer) social media already has much research; e.g.

crowdsourcing (outsourcing to crowds) approaches well applicable and useful

when large masses of users, or crowds, can be engaged

• However, B2B social media research is scarce; B2B differs significantly from B2C

context considering the use and usefulness of social media, and “huge masses” of

customers seldom exist that would allow crowdsourcing types of approaches

• Key factors (both challenges and opportunities for social media) affecting B2B

interaction

• fewer customers and more in depth customer relationships in B2B’s

• gatekeeper persons between customers and B2B’s

• IPR and information security issues also affect B2B interaction between customers, etc.

• Since the above issues have to be taken into consideration, customer interactions

often take very different shapes in B2B’s than in B2C’s.

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Customer roles in innovation – more

than buyer?

• In the first innovation process phase customers can be regarded as a

Resource

• i.e. the source of ideas or need –related information

• In the second phase customers can be regarded as Co-creators

• Co-creation can include for example validation of product architectural choices,

design and prioritization of product features, specification of product interface

requirements and establishment of development process priorities and metrics

with customers

• In the final phase customers can be regarded as Buyers and/or (End)Users

or as Product

• the focus of Buyer role is on converting potential customers into actual customers

• Users role suggests that companies can receive valuable contributions in product

testing and product support from customers

• customer as Product means that the ultimate outcome of the innovation process

or the following transformation process is change in behavior or condition of the

customer, i.e. the customer both experiences transformation activities and

becomes the final stage of the transformation process

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22.5.2012 Jari Jussila, Hannu Kärkkäinen, Maija Leino

Method

In order to get a larger picture => a systematic literature review:

• Databases Scirus, ABI, Emerald, ScienceDirect and EBSCO

• Main search term combinations: impact and social media, impact and social

media and B2B, value and social media, value and social media and B2B,

measurement and social media and B2B, measurement of social media, ROI and

social media, ROI and social media and B2B, ROI of social media

• In addition to the above, we made searches concerning individual web 2.0 -

related tools, such as wikis, blogs, Twitter, LinkedIn, etc. in the specific context of

B2B, using various combinations of search terms and above research databases

• A total of 414 were first received as a result, and then skimmed for relevance and

43 reviewed in more detail

• We searched and discovered some additional references by searching forward

and backward referencing of the most relevant discovered articles.

• In addition, authoritative blogs and books used as additional sources to extend

the literature review to cover more business-to-business examples (shown in

results)

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Results

• We were able to find more than twenty studies or cases that reported benefits

of using social media in the customer interface of innovation in business-to-

business companies [Table 1]

• Eight were journal articles (1), five authorative books, one research report and

three blog articles (2)

• We were able to find social media –related benefits for four customer roles:

resource (R), co-creator (C), user (U), buyer (B)

• In some cases, it was not fully clear in which innovation process phases and

exact tasks the tools and approaches had been utilized *

• The type and the explicitness of reporting in found references for social media

benefits in innovation: shown in superscript in references

[(1),(2),(R),(C),(U),(B)*,]

• Despite the mentioned challenges, we were able find a relatively large variety

of different approaches and following benefits for social media use in B2B’s

and their customer interface.

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Applications Front end Development phase Commercialization

Blogs Obtaining customer feedback and customer need data more

favorably than by traditional marketing methods, also in the case

of anonymous blogs it is possible to receive unfiltered (candid

and uncensored) information from customers [62] (1) [5] (1) (R)

Cisco achieved 75 % cost savings and increased

customer interaction by virtual product launches through

blogs [6] (2) (B). Real time user feedback concerning

products [62] (1) (U), Hinda Incentives blog has

increased traffic to the company website by about 15 %,

in addition 1 000 visits a month with subscribers from at

least 30 different customers to the blog. [13] (2) (B)

Microblogs Obtaining real time and honest feedback [28] (2) (R) Faster communications with customers [42] (1)* (U),

Twitter increased brand exposure as cost effectively as

newsletter and more effectively than other media, Think

Big event marketing campaign on Twitter resulted in

increase of Twitter followers from 0 to 1540 in 1 day, 15

% of traffic to the blog and promotional pages from social

media, with an effect of nearly 5 % to ticket sales (B),

Twitter in CorePurpose marketing resulted in converting

contacts to customers at a higher rate in 1 year than

traditional marketing strategies in first 7 years of

operation [61] (2) (B)

Wikis Quicker capture of ideas, also enable asynchronous

distributed brainstorming [63] (1) (R)

GoodWater Inc achieved 85 % ROI in investing blogging, Wiki

and social networking platform for internal collaboration. By

means of the wikis, over 400 product features were described

as a response to customers’ requests [51] (1) (R)

Sharing ideas on commercialization and obtaining

feedback from customer [63] (1) (U), OSIsoft improved

the solving time of customer problems by 22 % by

sharing customer service info using Wikis [37] (2) (U)

Mashups Mashups in improving customer enhancement requests.

[56] (2) (R)

Mashups in improving, customer service and product

trials. Significant savings in product deployment. [56] (2)

(U)

Social /

professional

networking

tools

Gaining more detailed information about prospects [42]

(1) (B), enhanced B2B prospecting [31] (2) (B), Over 300

customers have joined the GoodWater social network,

over 1 000 employee-customer interactions being

recorded, with more than 50 % of the customers started

interacting with each other [51] (1) (U)

Online

communities

Dell: IdeaStorm box gathered more than 14 000 ideas

from customers, with more than 89 000 comments, of

which Dell has implemented over 400 ideas [31] [58] (2)

(R). RidgidForum community’s product ideas lead to

product enhancements for RIDGID Branding [31] (2) (R).

Reducing time-to-market and NPD budgets by engaging

customers as innovation agents [16] (1), LabVIEW Idea

Exchange helped R&D to prioritize product ideas submitted by

customers [31] (2) (C). TechSmith received hundreds of product

development ideas with over 700 actively engaged users [65] (2)

(C), The SAP Community Network has more than 2 million users

participating in sharing and co-creating knowledge on SAP’s

products and services. [19] (1) (C), Innovation contest by

Bombardier aimed at identifying new interior designs for trains

resulted in 2 232 participants, 4 298 designs, 26 617 ratings and

8 562 comments. [32] (1) (R) (C)

Better customer care through peer support and feedback

[42] (1) (U). RidgidForum community’s value to

customers has lead to measurable benefits in customer

loyalty. [31] (2) (B) (U)

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22.5.2012

Some key findings

• Majority of the reported benefits were qualitative, non-quantified benefits of using social

media, such as

• better feedback,

• increased customer service,

• gaining more detailed information about prospects,

• and increased knowledge transparency

• However, in almost half of the cases, the benefits were tried to be quantified at least on the

general level (as outputs), such as

• Dell: more than 14 000 ideas from customers, and with more than 89 000 comments on the created

product ideas, over 400 implemented in practice (R)

• Bombardier: 2 232 participants for innovation contests, 4 298 new interior designs, 26 617 ratings

and 8 562 comments (R)(C)

• over 1 000 employee-customer interactions being recorded, and more than 50% of the customers

starting interaction with each other (U)

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Conclusions

• We have demonstrated in our study that B2B environment does differ significantly from

B2C environment in several ways, especially when the contexts of innovation

management, customer interaction and creation of customer knowledge and

understanding are in the focal interest

• We demonstrate that not only B2C’s but also B2B’s really can use and benefit from

social media in their innovation process and customer interface

• We also demonstrate that there are a multitude of very different types of ways for using

social media in innovation and customer interface which B2B’s can utilize.

• Furthermore, a large variety of tools and approaches from blogs and wikis to online

communities have been and can be applied in B2B context.

• Broader classes of innovation-related benefits:

• Increased customer focus and understanding

• Increased level of customer service

• Decreased time-to-market

• In addition, the benefitting B2B companies were from different types of industries, e.g.

software, ICT, pharmaceuticals, consulting and various B2B services (from small to

large companies)

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

Conclusively, we can say that despite the rather general

skepticism towards the use of social media in B2B sector showed

by many practitioners and some academics, the results of this

study demonstrate that social media offers significant possibilities

and benefits to B2B sector, concerning both the innovation

process and the related customer information and knowledge

management

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Jari Jussila, Hannu Kärkkäinen, Maija Leino

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see more research on social media

“SOITA- Social Media in Innovation Process in the Customer Interface” – is a research project which

studies and experiments the ways of using social media in innovation process with b-to-b companies.

The goal is to support business-to-business sector companies’ innovation process and especially the

creation of new customer knowledge and understanding for innovation with the help of social media and

communities. Project is led by Tampere University of Technology / Novi Research Center and Åbo

Akademi University / MediaCity with co-operation of project companies, Beckhoff Automation Oy,

Brandstairs Oy, Intosome Oy, and Simosol Oy, together with Intelligent Machines & Digibusiness –

Competence Clusters

Project is funded by Tekes, Tampere University of Technology, Åbo Akademi University , Technology

Centre Innopark Ltd and project companies.