FACILITATING INNOVATIONS AND VALUE CO-CREATION IN INDUSTRIAL B2B FIRMS BY COMBINING DIGITAL MARKETING, SOCIAL MEDIA AND CROWDSOURCING Henri Simula, Aarne Töllinen & Heikki Karjaluoto

There are already many cases which have demonstrated the power of social media and crowdsourcing separately (e.g. Li and Bernhoff 2008; Howe 2008; Parent et al. 2011). The purpose of our paper is to examine how industrial business-to-business (B2B) firms could interact with their products’ end-users via social media in order to receive new ideas, feedback and solutions to improve their innovation process.

MOTIVATION

”Beyond advertising on Facebook or Twitter, companies are using social networks to build teams that solve problems faster, share information better among their employees and partners, bring customer ideas for new product designs to market earlier, and redesign all kinds of corporate software in Facebook's easy-to-learn style.”

USA Today, Cover Story, May 17, 2012

MOTIVATION

THE INITIAL IDEA

FIRM X

Customer Y

SOCIAL MEDIA

CROWDSOURCING

THE INITIAL IDEA EXTENDED

FIRM X

Customer Y

SOCIAL MEDIA

CROWDSOURCING

End User Z

PROPOSED MODEL

B2B  SALES  &  MARKETING

B2B  CUSTOMER  

END  USER

(B2C  CUSTOMER) B2B    R&D

SERVICE  &  

MAINTENANCE

 Crowdsourcing  new  ideas  

and  soluDons

 Social  Media  applicaDons  (Blogs,  Discussion  forums,  TwiIer,  Facebook,  LinkedIn,  YouTube)  and  viral  markeDng  to  improve  awareness  of  idea  challenges  

Manufacturer

•  Marketing communications in the digital world is about creating presence, relationships and mutual value

•  Ideally the digital communication is two-way, personalized dialogue with each customer, which can potentially be a source for innovations too

•  Social media provides a way to share ideas, content, thoughts and relationships online i.e. people are connecting, interacting and sharing online with each other.

•  The two key characteristics of social media are user generated content and customer interaction

SOCIAL MEDIA

Scott 2010; Halligan & Shah 2010; van Zyl 2009; Riegner 2007; Wertime & Fenwick, 2008; Rowley 2004

•  In a B2B context, social media is much more than mainstream applications such as Facebook, LinkedIn, Twitter or YouTube.

•  E.g. instant messenger applications, modern intranets and interactive digital selling tools can be social in a nature.

•  Also social Customer Relationship Management (CRM) can be considered as a social media application.

SOCIAL MEDIA

Acker et al. 2011

•  Tools enable fast and personalized communication with customers

•  Can enhance corporate credibility and deepen the customer relationship.

•  B2B companies can use it to both attract new customers and cultivate existing relationships.

•  Provides a new tool for an organization to create a unique brand identity and to differentiate itself from its competitors.

•  Tools make it easy for a B2B company to stay connected with its partners, distributors and manufacturers.

SOCIAL MEDIA & B2B

Kho 2008; Weber 2009; Michaelidou et al. 2011

•  B2B companies have been quite slow to adopt SM in their marketing communications

•  There is a significant gap between the potential and the actual use of social media in B2B business.

•  Academic research is quite limited in the field of social media use in the B2B sector. (Most likely this about to change…)

SOCIAL MEDIA & B2B

Michaelidou et al. 2011; Jussila et al. 2011

“Crowdsourcing is thus a powerful resource for innovators. ... A world of people and organizations is available to assist you, if you have the commitment and care to engage them properly.” (Chesbrough 2011)

CROWDSOURCING

CONCEPTUAL MESS

… also peer production, collaborative systems, community systems, collective intelligence, crowd wisdom, customer empowerment & mass collaboration…

“Simply defined, crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.”

CROWDSOURCING

Howe, 2006

“Crowdsourcing is a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage that what the user has brought to the venture, whose form will depend on the type of activity undertaken.”

CROWDSOURCING

Estellés-Arolas & González-Ladrón-de-Guevara, 2012

CASE EXAMPLES…

•  Cross-industry research project’s workshops •  Survey data from industrial firms (n=145) •  Interviews with three large industrial B2B firms;

global manufacturers with products that are visible and observable to potential end-users; (# of employees varied from 10,000 to 30,000, revenue from €1.5 billion to €5 billion.)

EMPIRIA

•  Social media tools were used, but not to their full potential. •  Social media was also seen mainly as being for marketing

purposes, rather than for evoking ideas or for innovation co-creation among people outside the organization.

•  Companies had published YouTube videos for marketing purposes, some firms participated in LinkedIn group discussions and some level of Facebook and Twitter presence had been established.

•  However, no external crowdsourcing was established in practice in these firms.

FINDINGS

•  Industrial purchasing processes (IPPs) •  Intellectual property rights (IPRs) in general created some

worries. •  Products are complex and require technical know-how and are

governed by several strict standards and legislation. •  “A layman, does not have a sufficiently deep knowledge of that

product.” •  People in organizations are already busy and there are no

resources to conduct crowdsourcing •  A global idea competitions would provide too many ideas. (?) •  Fear of leaking ideas to competitors.

BARRIERS

•  Setting up crowdsourcing seems to be more a question of company culture than of technical implementation.

•  Actual end- users would become more ‘computer savvy’ in the future, and perhaps the field workforce would be using more social media when the next generation came into the workplace.

•  In general it is likely to assume that both social media use and crowdsourcing in the B2B sector will grow in the future

•  More research is needed… J

FUTURE POTENTIAL

henri.simula@aalto.fi

Twitter @HenriSimula

THANK YOU