Social Media Utilization in Industrial B2B Relations

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Jari Jussila Tampere University of Technology

Hannu Kärkkäinen Tampere University of Technology

Heli Aramo-Immonen Tampere University of Technology

Jani Multasuo Tampere University of Technology

Outline

•  Definitions of social media and the related concept web 2.0

•  Research motivations, aims, and design •  Results of empirical study of 125 Finnish

business-to-business companies

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Definition of Social Media and Web 2.0

•  Not only Facebook! •  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.

•  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.

•  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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Focus on B2B (Business-to-Business) sector

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•  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. However, B2B social media research is scarce and B2B differs significantly from B2C context considering the use and usefulness of social media.

•  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 and partners

Research motivation 5

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•  The literature survey revealed that the knowledge about social media use in business-to-business relations is currently fragmented into studies of individual tools and technologies with little focus on the big picture, and it is mainly based on individual cases. •  The very few studies combining social media and B2B standpoint

have been mainly studied from a marketing perspective, and less attention placed on knowledge management.

•  Moreover, empirical research is scarce in the area where social media, B2B relations and knowledge management intersect.

B2B

Customers

B2B

Partners / Suppliers

B2B Company

Research aims

•  We wanted to study how industrial B2B companies perceive the potential, opportunities and challenges in using social media with customers and partners

•  In addition, we also wanted to gain further understanding from the technological and organizational points of view of how business-to-business organizations currently utilize social media.

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Research design

•  A questionnaire was designed to study social media potential and use in the above mentioned context utilizing found social media related literature, survey- type empirical social media studies, as well as several social media expert interviews.

•  A sample of 2488 Finnish decision makers from the Federation of Finnish Technology Industries were surveyed. The survey was sent to managing directors of small and medium sized businesses and to business development, product development and communication managers in large companies

•  A total of 151 responses were received to the Internet-based survey, of which 143 were from unique companies. The duplicate answers form same company were removed based on the completeness of the answers. The effective response rate was thus 6% (143/2488). From the answers of 143 unique companies, 125 companies represented fully (100%) business-to-business markets, which were chosen as the focus of this

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Functions of social media in customer interface of B2B companies

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1.  Most actively used in marketing, communication and branding (~40 %)2.  Improving customer service (21 %) and customer participation in R&D (9 %) less common, but

developing ways of using social media in B2B companies * percentages represent at least some use in the above functions or practices

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Customer participation in R&D

Gathering customer leads

Building thought leadership

Improving customer service

Discovering customer needs

Product demos

Sales support

Employer branding and recruitment

Communications

Marketing

Social tools used in customer interface of business-to-business companies

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0% 5% 10% 15% 20% 25% 30% 35% 40%

Blogs

Microblogs

Wikis

Discussion forums

Social office tools

Open or private communities

Social networking sites e.g. Facebook,LinkedIn

e.g. customersupport forums

e.g. Twitter,Yammer

Partner use of social media in B2B companies

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0% 5% 10% 15% 20% 25% 30%

Induction

Transfer of tacit knowledge

Network management

Preserving information in networks

Change management and communication

Improving the efficiency of project work

Utilize expert know-how and reduce workload

Sharing best practices

Project communication

General communication

Communication and collaboration

1.  Social media use in communicating and collaborating with partners (¼ of B2B companies), but2.  less than 15 % of the survey B2B companies use social media in knowledge management with their

partners

Perceived potential of social media use with customer and partners

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0% 20% 40% 60% 80%

Gathering customer leads

Building thought leadership

Customer participation in R&D

Discovering customer needs

Improving customer service

Product demos

Sales support

Marketing

Communications

Employer branding and recruitment

0% 10% 20% 30% 40% 50% 60% 70% 80%

Transfer of tacit knowledge

Change management and communication

Induction

Preserving information in networks

Network management

Utilize expert know-how and reduce workload

Improving the efficiency of project work

Sharing best practices

Project communication

Communication and collaboration

General communication

Conclusions

•  Concerning the experienced potential in the customer interface, six studied items out of ten had a perceived potential of more than 20%. The studied B2B’s seemed to perceive clearly a larger potential in the customer interface than in the partner interface, while none of the studied eleven partner-related items were perceived very important by more than 20%

•  Currently, only a very minor part of studied B2B’s social media used social media very actively. The partner-oriented use was even less active. Both the current use and the seen potential seemed to be clearly higher in the customer interface than in partner use.

•  Our study discovered several potential factors at least partly explaining the limited use: the most common reasons for not using social media were: a) other projects being more important, b) and the companies not being able to measure or assess the benefits for business, c) lack of good case studies, d) lack of understanding the possibilities, and e) lack of resources

•  To increase social media use in B2B context, at least the above-mentioned most important social media adoption barriers should be addressed in companies, and academic research should be carried out to produce a more systematically organized, more holistic and less fragmented picture of the above issues.

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