November 2010 Feature

Next Generation Partner Marketing

Leveraging social media for the channel

Channel Management Insights speaks with Axel Schultze, Founder and President of the SocialMediaAcademy and CEO of Xeesm Corp.

LinkedIn, Twitter, Facebook. These are just a few of the big social media sites, and today most people have heard of them. In fact, many businesses have begun to use them as communication tools. Some have been successful in their efforts; others have failed. Why?

Using social media for the channel is more complicated than just setting up a page and waiting for people to message you. And contrary to popular belief, social media and promotions rarely mix.

Axel Schultze, a leader in both social media and channel marketing, provides his insights on how to combine the two. He discusses 1) the benefits of entering into this brave new world, 2) integrating social media into channel marketing communications, 3) the integration of social media into other marketing initiatives and  4) ways to get channel partners to buy into the program.

1 — Benefits of social media

Channel Management Insights:For vendors, what are the advantages of using social media?

Axel Schultze: The advantage for any company is creating a better customer experience, which drives more recommendations. An estimated 60 to 80 percent of purchases are based on recommendations. Driving up the customer experience model drives an increase in revenue and profits.

In the ’70s, “feet on the street” was what mattered. Then, vendors’ number of customers became so big, their salespeople couldn’t touch base with most of them. But in a way, “feet on the street” is coming back, especially for vendors that leverage social media for the channel.

A vendor that involves channel partners in its social media program can have as many as 1,000 “salespeople” communicating with 10,000 people a month for a total of 10 million customer contacts. Encouraging partners to participate in social media is a strategic advantage and makes a wild difference. Vendors have a magnitude of leverage they’ve never had before.

2 — Integrating social media into channel marketing communications

CMI: What are some of the typical social media businesses employ?

Schultze: There are no typical social media. A variety of networks, places and spaces are available — LinkedIn, Facebook and Twitter are some of the best known. But these sites have a variety of groups.

For instance, LinkedIn is important, but it’s segmented into 600,000 groups, so which of these should a vendor address? Also, even though LinkedIn is considered to be a “professional” website, a vendor may find better groups on MySpace, for example, because the end-customer is involved in something like sports. Vendors need to make an analysis to find out where their customers are involved in the social web and where to go with their initiatives.

They can’t just say others in their industry participate in this site or that one and follow their lead. Yahoo, Google, Facebook and MySpace groups may be a better choice. And global channel organizations should remember Orkut. Which medium a vendor uses depends on the industry and customer segmentation.

Also, vendors should identify major issues and topics for their customers, what they’re excited and frustrated about. They should look for pockets where customers talk about concerns and should build relationships with them. These conversations tell vendors what to improve or amplify, maybe a product or feature.

In addition, vendors must involve their partners in a strategic way to build relationships with customers, since it’s important to have lots of people engaging with customers and responding to their frustrations right away. Channel partners can handle these issues.

In return, the partners realize benefits from the vendor’s social media program, improving their own customer experience model and receiving more recommendations.

CMI: What types of information should vendors include in their postings?

Schultze: The single biggest mistake companies make is thinking social media is just another media outlet. But promoting products can be counterproductive. Vendors come across as “salesy” or pushy and lose their reputation overnight. People are interested in relationships, not promotions.

Companies used to think “roll out and promote.” But this doesn’t work any longer. Customers are influenced about products and services by independent people. Channel partners are independent companies, so it’s better for them to talk about these than the vendor.

Vendors can be factual about products and services, but they should let their partners handle customer communication. This is the conversation age, so postings must be dialogue, not a promotion.

CMI: How do vendors and their partners set the right tone for communications?

Schultze: Think about walking into a large party. You sense the situation and respond in ways to benefit both parties. On the other hand, if you walk into the party and say, “Here I am. Buy my stuff,” people will think you’re a jerk. Many companies make this mistake with social media.

Vendors and their partners shouldn’t “post;” they should “engage,” and their messages should be reflective of what customers are saying. Response is the No. 1 thing.

CMI: Who should respond, and why?

Schultze: Everybody should stay in touch with the customer ecosystem, so anyone who has relationships with customers should be allowed to post messages. If they have good relationships and post things customers are interested in, customers will respond.

For instance, at Whole Foods, every employee can respond to customers’ posts. An official at the company said that its employees meet with and deal with customers every day, and the people at Whole Foods trust employees to have direct conversations on Twitter and Facebook.

The more relaxed companies are and the more they trust their employees to respond, the better. If companies aren’t like this, they will either have to change or go away.

But initially, employees shouldn’t spend more than 20 minutes a day — 4 percent of their workday — posting. If a company sees success, it may expand the time it allows its people to post.

Social Minutes is an example of a website that managers can use to start with social media and measure success.

3 — Integrating social media into other marketing initiatives

CMI: How do vendors integrate social media into their other communication/marketing efforts?

Schultze: Most companies will just find the right blend of social media and traditional communications and marketing. It almost falls into place once they see what customers want.

For example, after the vendor knows what its customers want, the communications department can send out press releases on these topics. And marketing learns how to tweak products and the ways they’re perceived in the market.

4 — Securing partner buy-in

CMI: Should vendors encourage partners to initiate their own social media plans?

Schultze: Yes. Partners have their own teams, customers and ways of presenting themselves, so they should have their own plans. Who pays for them? Partners won’t invest money in social media engagement. That’s a fact of life. Consequently, some vendors help their partners get social media training — what they should do, how and why.

Some partners get very engaged and become very visible. Since the conversations are public, vendors notice active partners and thank them for their participation. In addition, vendors invest more time and resources in partners that participate in the education and a social media plan. Other partners see this, and they decide to participate too.

CMI: How does a channel marketing professional convince upper management that social media is a good idea?

Schultze: They can stress cost since this isn’t an issue with social media; it’s free. Of course, there is cost in the time people invest, so the channel marketing professional must get upper management to commit to giving employees time to engage. Otherwise, a serious problem may come up almost instantaneously for everyone to see — without anyone handling it.

The marketing professional should also emphasize that companies recommended by their customer base have a free sales force — their customers. For example, people love Apple, they talk about it and it has the best valuation of the stock exchange.

The SocialMediaAcademy did a study nine months ago where we looked at Fortune 500 companies. Which had a good reputation in the industry with a good customer experience model? Which didn’t have these attributes?

CISCO, Virgin Atlantic, Whole Foods and Starbucks are examples of companies with them. But Bank of America, Nortel and Avia don’t have these qualities. Then we looked at profitability and found 100 percent of the companies with a good customer experience model were profitable, while 100 percent of those with customers who talked about them negatively were not profitable.

Many companies perceive social media as something to do because everyone else does it, so the channel marketer should convince upper management to see it as the best vehicle to drive customer experiences. It should be used to amplify positive things about the company and fix things customers talk about. Companies can only do these things with social media.

 

Axel_Schultze Axel Schultze is the founder and president of the Social Media Academy, which provides business-focused social media education. He is also CEO of Xeesm Corp., a social business application provider that lets companies reach more people faster and helps their teams create better customer experiences. A frequent speaker at industry events, Schultze is the author of Channel Excellence, a comprehensive book about channel management.