Social media the new 'big thing' 4 March, 2009 By Steve Wexler

According to a recent study from IDC, more than half of U.S. consumers with Internet access use social networking services (SNS), such as Facebook and MySpace, and penetration will continue to grow. Even more significant, consumers are also spending ever-greater amounts of time on SNS.

In an eChannelLine Webinar hosted by Robert Cohen, president and business editor of Integrated mar.com (publishers of eChannelLine), Mike Dubrall, managing director, Gilwell Group, LLC, examined Web 2.0 social media tools and how resellers are using them. The focus was on providing resellers with the information they need to be successful.

"Social marketing is the way of the future," said Cohen, and a powerful tool for making resellers more efficient and profitable.

Web 2.0 concepts and tools are transforming the entire value chain, stated Dubrall. "We're just at the very beginning of that right now -- social media, the software-as-a-service model, open and instant communications, the freedom and necessity to share and re-use information, and the decentralization of authority and decision making. In the next three-four years we're going to go through some pretty interesting and profound changes. We need to understand this. Our customers are embracing it; we're going to have to embrace it."

With the rise of the Internet, customers have more access to information than they ever did before. "We know that 80-90% of purchase decisions get influenced by social interactions," he said. "They are more knowledgeable (and they're) going to engage with you on a different level." According to Dubrall, end users are flocking to it very quickly, with no advertising, no promotion. There are already over 250-300 million online (and it's) starting to overlap into business decisions. There are 9 million blogs out there, and 40,000 created every day. Even if 99% are irrelevant, that's still 400 that are relevant being created daily. "Resellers are adapting to this quickly because they have to."

Social media is changing everything, agreed Cohen, especially marketing. "You can get new customers more easily as well as talk to the existing customers you already have."

However, Dubrall said this is still a moving target. "The paradigm still hasn't been set. We're trying to figure this out. Vendors and resellers have to step back and think what's changing and how to handle it. Virtually all large technology vendors have a formal social media initiative, but not with the channel. They're going direct to their customers."

The channel must embrace social media, said Dubrall. VARs are starting to see the benefits, including customer referrals to others, and making problem solving easier and faster, he said. Vendors need to figure this out. Some are ahead, and some are behind. "If you look at the major distributors, they're all building communities, building tools& and the vendors are working through them to reach the channel," added Cohen.

According to a new Gilwell/Marcom survey of VARs, primarily selling to SMBs, all had some experience with social media, but most in a personal or experimental manner. For every active customer who made a purchase within the last six months, there were two inactive customers, who made a purchase more than six months ago. Growing resellers abandon inactive customers and acquire new customers significantly more often and quickly than non-growing resellers.

Fast-growing resellers are more active in social media than non-growing resellers, especially on business networking sites like LinkedIn. SFA/CRM tools are not being used except when pushed by vendors. When used, they are generally not effective for resellers. Resellers go through the motions but dont see real benefits. Current vendor offerings (portals, mass emails with attachments, webinars, forums) get mixed reactions as to their effectiveness.

Resellers do very little marketing. What they do is usually ad hoc. The channels electronic landscape has become a cluttered wasteland of outdated information, bloated PDF datasheet directories, and orphaned websites, said Dubrall. Very few resellers consider their Websites to be useful as a sales/marketing tool. Only about 10% of resellers are using new capabilities like RSS, Wikis, and blogging in their web sites. Non-growing resellers are not using them at all.

Resellers want and need their vendors to help them market and sell on-line, not just sell face-to-face, stated Dubrall. They want/need leadership and program support with on-line Web 2.0 tools. Resellers need/want more of the basics: on-line canned product demonstrations, on-line storefronts, e-newsletters and the capability to use them more efficiently and especially help with their web sites. Virtually all resellers had a high interest in receiving more information about available or potential hosted, multi-vendor, social media marketing programs.

A similar survey of vendors found that they are starting to see Web 2.0 as a game changer, but dont yet understand the business benefits. Vendor employed channel managers are using social media tools more often than resellers.

The bottom line, said Dubrall, is that resellers should embrace Web 2.0. "Pick your top five and be disciplined. You could spend six months wasting your time (on the wrong site). Pick the right one, where your customers are, and boom, you're golden. The absolute biggest mistake you can make is to absolutely ignore the communities your customers are building."

Cohen agreed. "That's marketing 101: who are your customers and where are they going. If your customers are there, that's where you want to be. Whatever it is you do, you have to make sure you have the time to do it right."

"Do that and you will be ahead of your competitors," said Dubrall.


Previous Trusted Business Advisor articles by this author:
07/30/09 The gray market (Part 2)
07/23/09 The black market and counterfeiting
06/11/09 Education key to reducing channel mistrust
05/29/09 Speed up your sales
05/15/09 Software piracy costs everybody
04/24/09 GTDC: Selling direct doesn't work
04/08/09 Is there a need for vendor-neutral education?
04/02/09 Twittering for success
03/25/09 Companies need to think smarter




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