Senior Executive Social Networking Survey ( November 2009)

SENIOR EXECUTIVE

social networking survey

We hear a steady drum of discussion about the impact of online social networking as a growing way for companies to reach consumers. Well-known companies, such as Ford and Best Buy, use several online social networking services, maintain large monitoring staffs and attract millions of followers.

But it’s not yet clear exactly how social networking will change business to business communications, so Margolis & Company and Young Presidents’ Organization asked leaders and decision makers for their thoughts and plans regarding online social networking in a business to business context. We created the Senior Executive Social Networking Survey to shed light on the question.

From September to October 2009, we interviewed 100 CEOs and Senior Executives about their viewpoints and investment plans for social networking in the B2B space, interviewing 85 YPO members and 15 other business leaders in the Americas, Europe, Middle East, Africa and Asia/Pacific. YPO is an international education and networking organization with members in more than 100 countries.

This is clearly a time of transition and explosive growth, and the contrasts between the “old era” and the “new era” are striking. A recent story in The Wall Street Journal went so far as to say that email’s “run as king of communication is over” and that social networking services will command a significant share of the new world.

Justin Kistner, Webtrends’ head of social media marketing, explains that social networking pieces still must adhere to proper ethics, fact gathering and story telling, but that the distribution model in the new world removes the “middle man.” The industrial media brands we have trusted are clearly under enormous pressure to remain a force, while their star reporters individually brand themselves in the new social networking venues. Social networking levels the playing field for growing small and medium-sized enterprises.

Most companies understand we’re experiencing a paradigm shift. This is the Wild West and the protocols are being established by the week. Interestingly, one senior executive we interviewed from a FORTUNE 50 company who enthused about the importance of social networking in his company’s customer management also revealed that most of the same company’s networks blocked rank and file staffers’ access to social media.

The Senior Executive Social Networking Survey results reflect contrasts in policy and approach. More than eight out of ten of the leaders responded that a traditional newspaper or magazine piece still was preferable to a piece in a prominent blog. At the same time 80 percent of the companies plan to allocate more resources to develop social networking strategies over the next two years. We believe that social networking will enhance speed and augment relationships with customers and clients. However, online networking will never be a substitute for real human interaction.

On behalf of YPO members and Margolis & Company, we hope that our readers find this survey useful for future planning and discussion. We wish to thank all the leaders that participated and for TNS for validating and co-processing the results. We look forward to hearing your perspective.

Dan Margolis Simon PrestonPresident & Managing Partner YPO-WPO International Chairman 2009-2010Margolis & Company YPO Pennine and YPO Greater Europe [email protected] [email protected]@danmargolis www.ypo.org

Executive message

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SENIOR EXECUTIVE social networking surveySENIOR EXECUTIVE social networking surveyPersonal attitudes towards social networking

Q1 Continued

Other None

0% 20% 40% 60% 80%

3%

16%

37%

42%

62%

75%

“We monitor Twitter, Facebook, YouTube

and Google so anytime someone references

‘Boingo’ we review it in real time and respond

as appropriate. This is a fantastic way to

understand what people are saying about

the company and manage a poor customer

experience and turn it into a win. Customers

are blown away when they tweet and we

immediately respond to solve the issue.” — David Hagan, President and CEO, Boingo Wireless

Q1 Which social media services do you use for business purposes?

4

Consumer

0% 20% 40% 60% 80% 100%

50%

43%

73%

67%

Financial

0% 20% 40% 60% 80% 100%

30%

20%

50%

80%

0% 20% 40% 60% 80% 100%

39%

56%

56%

94%

0% 20% 40% 60% 80% 100%

35%

35%

57%

74%

Social media services used for business purposes by sector

Q1 Continued

Professional services Technology

5

100%

80%

60%

40%

20%

0%Other

Consumer = 30Financial = 10Healthcare = 1Industrial = 6Professional Services = 18Technology = 23Other = 12

Total Consumer Financial ServicesProfessional ServicesTechnologyOther

Social media services used for business purposes by sector

Q1 Continued

6

1.0 1.5 2.0 2.5 3.0

1.9

2.13

2.47

2.58

2.67

2.32

Total Professional ServicesOtherConsumerTechnologyFinancial Services


Number of social media services used for business purposes by sector

Q1 Continued

7

Q2 Which is more valuable — a story written about your company in a prominent newspaper or business magazine or a story about your company on a prominent blog?

Blog

Newspaper / magazine

N/A

82%

16%2%


“Social media provides the opportunity

to reach consumers directly and at a more

individual level, versus mass advertising.” — Margaret Hardin, President & COO, Munchkin

8

Q3 Are you more likely to respond more quickly to a question or inquiry from a known business contact you receive through social networking messaging (e.g Facebook, LinkedIn or Twitter) versus your regular business email?

I respond faster to known sources

From social networking messages

From regular business email

N/A

2%

20%

78%


“We are regulated by The Financial

Industry Regulatory Authority (FINRA)

and are very concerned that regulators

will penalize us for using social

networking sites.” — Douglas Rodgers, CEO, FOCUS,

Investment Bankers

9

Ways of using social networks

More resources / 80%Much more resources

None or much less / Somewhat less 4%

Same amount of resources as current More resources

Much more resources

None or much less

0% Somewhat less

20%

61%

19%4%

Q4 Should your company invest more resources (time, money or both) for social media management in the next year or two?


“Social media will impact all industries,

not just ours. Social networks are the

closest thing to ESP that CEOs can use to

determine what his or her customers are

saying about their company and/or brand.

I have a great deal of experience in social

media and feel that the transformation has

begun - those that don’t embrace it will

be left behind.” — Rajeev Kapur, Chairman and CEO, Greenwala

11

Future investment in social media management by sector

Q4 Continued

100%

80%

60%

40%

20%

0%

More resourcesMuch more resources

Total Consumer Financial Professional Technology Other Services Services

_80%

_19%

_61%

_76%

_33%

_43%

_80%

_20%

_60%

_83%

_17%

_67%

_91%

_13%

_78%

_75%_8%

_67%


12

Q5 How hard is it to manage business correspondence that is sent through social media sites?

16%

5%5%

32%

42%

Very easy / Easy 21%

Very difficult / Difficult 37%

Easy

Very easy

Very difficult

Difficult

Manageable but occasionally difficult

“The phrase ‘social networks’ is much

more relevant than ‘social media.’ Social

media are simply tools which vastly improve

the functioning of pre-existing and new

social networks.” — Dave Maney, Chairman, Headwaters Incorporated

13

Q6 How much has the use of authorized social media for business opportunities increased in your company over the past year?

20%5%

21%

53%

Use has dropped significantly

Use has dropped a little (1%)

Use is the same as a year ago

Use is increasing

Use is very much increasing

“We’ve been getting a lot of questions

about social networking. We are intrigued

how it may help our firm and our portfolio

of companies and how it can be used for

branding, marketing and greater awareness

of products and services.” — Michel Glouchevitch, Partner, Riordan, Lewis & Haden

14

Future investment in social media management by sector

Q6 Continued

100%

80%

60%

40%

20%

0%


_73%

_20%

_53%

_63%

_23%

_40%

_70%

_20%

_50%

_95%

_17%

_78%_70%

_26%

_44%

_75%

_17%

_58%

Use is increasingUse is very much increasing

15

Q7 Social networking plays an important role in deepening your business relationships with colleagues, clients and potential clients. Please select the response most accurate for your business and company.

0% 10% 20% 30% 40%

66%Agree

34%Disagree 6% Very strongly

28% Somewhat

40% Agree

16% Strongly

10% Very strongly

“Social media will improve relationships

with customers, the profiling and

knowledge of customers’ needs and trends,

help drive innovation and R&D for new

solutions, and improve customer care and

company reputation.” — Juan Carlos Fouz, CEO, IZO SYSTEM

16

Deepening business relationships through social networking by sector

Q7 Continued

100%

80%

60%

40%

20%

0%

_66%_10%

_16%

_40%

_56%

_13%

_10%

_33%

_50%

_20%

_30%

_89%

_17%

_22%

_50%

_79%_9%

_26%

_44%

_66%_8%

_8%

_50%


AgreeStrongly agreeVery strongly agree

17

Q8 Do you expect social media to play a bigger role in next two years in deepening your business relationships and increasing your access to new information?

10% 15%

11%26%

Same as today

20% more

50% more

100% more More than 100% compared to today

38%

“It’s like being at a cocktail party and

we just get to stand aside and listen.

Social media allows us to be more aware

of what people are saying to each other

about our company and address the issues

and concerns.” — Executive, FORTUNE 50 company

18

Q9 Do you have a social media strategy for your company? If yes, please rank the following in order of importance, with “1” being most important and “5” being the least important.

0% 20% 40% 60% 80% 100%

Marketing

Email

Innovations

Customer Support

Others

Most important 2 3 4 5 Least important N/A

46% 17% 8% 7% 12% 10%

“We believe the largest single value is

creating a loyal following of peers who are

interested in our technical blogs we are

working to create. Our biggest challenge is

creating meaningful content.” — Scott Irwin, President, Aktion Associates

11% 27% 21% 14% 16% 11%

8% 18% 21% 26% 16% 11%

8% 15% 22% 21% 23% 11%

9% 5% 15% 10% 47% 14%

19

Q10 How much do you use social media for communicating with friends, colleagues and business contacts for purely social correspondence, versus how much for business related communication?

Only social

Mostly social

Equally social and business

Mostly business

Business only

28%16%

4%

42%

10%

“Social media is an investment

of image so that fact and perception of fact

can coincide and thus reinforce the brand.

When East works with West, and South with

North, it will help understanding of cultural

norms and reduce pre-conceived notions

by further bringing people together.”— Robert Wong, Founding Partner and CEO, Robert Wong Executive Consulting

20

Accessibility and restrictions

Q11 Does your company limit employee access to social media services and sites while at work?

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

9% Some sites are blocked and hours of use are somewhat limited

51% Most sites are permitted with few limitations

21% The organization strongly encourages employees to maintain social networking accounts and usage during business hours

12% Most sites are blocked or use is limited to non-business hours only

7% Social media sites are blocked by network services

“Social media will increase customer

service awareness and consumer approval

of products, as well as highlight features

and benefits and/or shortcomings

and deficiencies.”— Allen Furrer, President, Ascend Wireless

22

Limitations on access to social media by sector

Q11 Continued

100%

80%

60%

40%

20%

0%

-20%

-40%

-60%Total Consumer Financial Professional Technology Other Services Services

Social media sites are blocked by network services

Most sites are blocked or use is limited to non-business hours only

Some sites are blocked and hours of use are somewhat limited

Most sites are permitted and there are few limitations

The organization strongly encourages employees to maintain social networking accounts and usage during business hours


_25%

_25%

_-25%

_-25%

_70%

_9%

_-17%

_-4%

_50%

_39%

_-6%

_-6%

_70%

_20%

_-10%

_47%

_23%

_-7%

_-7%

_-17%

_51%

_21%

_-9%

_-12%

_-7%

23

Q12 How often do social media and related topics surface in discussions with your executive team?

21%29%

15%26%

Never Occasionally

Sometimes

Often Very often

9%

“In the professional services space,

where there is not a single brand, but

two important brands — the company

brand and the individual brand of

the professional, the challenge or the

opportunity is to effectively manage

these brands together. And social media

enables this.”— Gray Hollett, VP of Marketing, Boyden World Corporation

24

Social media topics in discussions with executive teams by sector

Q12 Continued

60%

50%

40%

30%

20%

10%

0%


OftenVery often


_42%_17%

_22%

_17%

_33%_30%

_27%

_33%

_15%

_29%

25

Attitudinal segments

Personal attitude towards social networks


Institutional restrictions

Construction of attitudinal segments - Indicators (I)

Q2 Which is more valuable – a story written about your company in a prominent newspaper or business magazine or a story about your company on a prominent blog?

Q3 Are you more likely to respond more quickly to a question or inquiry from a known business contact you receive through social networking messaging (e.g. Facebook, LinkedIn, Twitter) versus your regular business email?

Q4 Should your company invest more resources for social media management in the next year or two?

Q6 How much has the use of authorized social media for business opportunities increased in your company over the past year?

Q7 “Social networking plays an important role in deepening your business relationships with colleagues, clients and potential clients.” Please select the response most accurate for your business and company. Q8 Do you expect social media to play a bigger role in next two years in deepening your business relationships and increasing your access to new information?

Q10 How much do you use social media for communicating with friends, colleagues and business contacts for purely social correspondence, versus how much for business related communication?

Q11 Does your company limit employee access to social media services and sites while at work?

Q12 How often do social media and related topics surface in discussions with your executive team?

Number of social media services used for business purposes

“Social media helps us get the word out

on our new products... putting a human

face on our company.”— Chuck Tanner, Wholesale Interiors

27

Construction of attitudinal segments - Indicators (II)

Personal attitude towards social

networks

Rejectors

Followers

Leaders of change


Leisure

Let the business in

Market developers

0 - 40%

41 - 70%

71 - 100%

• All indicators included in each attitudinal segment regarding three dimensions are recorded in scales

• The closer to change towards using social networks for business, the higher the scale

• Sum of all indicators in every attitudinal segment goes from “0” to “100”

• Scale is split into three categories:


Restricted

Unrestricted

Encouraged

Construction of attitudinal segments - Indicators (III)

• After constructing three attitudinal segments (personal attitude towards social networks, ways of using social networks and institutional restrictions) all of them are combined to define a final segmentation. • The results of the three dimensions are converted into five categories:

Promoters Believers Led Reticent Resistant

“In Brazil, business is more personable.

It’s important to maintain eye contact.

Brazilians want to hear you, see you

and feel you, so social media is not a

substitute for that real connection, but

rather a complement to it.”— Robert Wong

28

Followers

Market developers

Leisure

Let the business in

Analysis by segment


Personal attitude towards social networks


Social network uses

55%

36%40%

24%

16%

58%26%

Leaders of change

Rejectors

Unrestricted

Encouraged

Restricted

15%

30%

29

Analysis by segment: attitudinal segments

Promoters — Making changes happen

Believers — Enthusiastic but not proactive towards changes

Led — Fitting to expected changes in the future

Reticent — Slower to change from traditional habits

Resistant — Unlikely to adopt social networks as a tool for business

16%

31%

22%

23%

8%

30


100%

80%

60%

40%

20%

0%


PromotersBelieversLedReticentResistant

_25%

_8%

_17%

_33%

_17%

_30%

_35%

_22%

_13%

_6%

_50%

_17%

_28%

_6%

_50%

_30%

_10%

_13%

_17%

_23%

_17%

_17%

_23%

_8%

_31%

_22%

_16%

31

Final thoughts

The data shows that while only 20 percent of the participating leaders use social networking primarily for commercial purposes, most executives believe social media in a business to business context will achieve significant growth in the next two years. The slight resistance executives expressed about social networking derives more from old habits than any fundamental philosophical rejection of social networking or the new media’s services.

We asked the participating leaders to respond in a business context, though a number of the respondents based their projections on a consumer model. We conclude that this is because the business to business model is so new.

The effectiveness of the “promoters” will be important to define the growth rate in the business sector. From the survey, the professional services sector, and to some extent the consumer sector, are the most likely to promote the use in commercial activity and business communication. Consumer sector executives already show predisposition for social media, especially in their personal lives. Social media will only further merge our business and personal lives, according to several top national business reporters we interviewed.

Social networking will also force marketers to become succinct and targeted in their communications to elevate their brands. With increased consumer expectations that marketing messages will become briefer and briefer, we must ensure we do not misread basic outcomes by minimizing necessary information too much. As we accelerate down the social networking highway, we expect there will be a modest correction to again further appreciate in-depth content.

One conclusion is certain: In the new world with tens of thousands of interesting choices, relevance and relationships will remain crucial.

We welcome your input and we’re eager to continue the conversation.

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About the survey

For the survey preparation, Margolis & Company and YPO developed the questions and TNS validated the methodology. The executive interviews were by invitation only and were conducted online and by telephone through a structured questionnaire. Margolis & Company analyzed each interview and TNS co-processed the data.

Special thanks are due to Birgit Johnston, Lisa Spangenberg, Sheldon Renan and Steve Gumplo for their contributions to the survey. We also wish to thank Urbana Creative for its perspective and support.

About Margolis & Company

Founded in 2005, Margolis & Company specializes in business to business public relations and thought leadership. The firm, based in Santa Monica, California, focuses on national and international positioning in the professional/financial services, entertainment/sports and government/non-profit sectors.

Margolis & Company’s track record is tied to more than 15 years of building deep relationships with thousands of top-level national and international media contacts, corporate executives, government officials and community leaders. Decision - makers know the firm is committed to client issues and services that make a difference and are worthy of their attention. For more information, visit www.margoliscompany.com.

About YPO

YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected around the shared mission of becoming Better Leaders Through Education and Idea Exchange TM. Founded in 1950, YPO today provides 17,000 peers and their families in 100 countries with access to unique experiences, world-class resources, alliances with top learning institutions, and specialized networks that help them enhance their business, community and personal leadership. For more information, www.ypo.org.

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Automotive

Senior Executive Social Networking Survey ( November 2009)