The Social Selling in the B2B Service Industry. Opportunities and Risks


Term Paper (Advanced seminar), 2021

18 Pages, Grade: 1,3


Excerpt

Table of Content

List of Abbreviations

1. Introduction

2. Sales in the B2B Service Industry
2.1 B2B Sales Process
2.2 Social Media in Sales
2.3 The Concept of Social Selling

3. Millennials in B2B Buying
3.2 Characteristics of Millennials
3.3 Social Media Use of Millennial B2B Buyers

4. The Impact of Social Selling on B2B Service Businesses
4.1 Opportunities of Social Selling to Millennial B2B Buyers
4.2 Risks of Social Selling to Millennial B2B Buyers

5. Conclusion

References

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

Research shows a convergence of business-to-consumer (B2C) and business-to-business (B2B) purchasing behaviour. Likewise, managers and employees search for information, check reviews and testimonials of sellers and their products online. (Hardiman, 2016, p. 398) To react to these changes, the sales process (SP) must be digitalised to serve the needs of today’s buyers (Schmäh et al., 2017, p. 77). This transformation is particularly driven by millennials since this generation, born between the 1980s and mid-1990s, forms the major part of today’s workforce (Käufer & Pawlik, 2020, pp. 5–34). They are curious, open-minded, and dependent on the knowledge and opinions of their peers. To gather information and connect to others, millennials use social media (SM) several times a week, browsing on Facebook, Instagram, YouTube, LinkedIn, or Xing. (Käufer & Pawlik, 2020, pp. 5–34; Marshall et al., 2012, p. 358; Oksa et al., 2021, pp. 14–16) To get attention from millennials, service providers must rethink the traditional SP and use SM to respond to changing customer demand and behaviour. This is crucial to gain a competitive advantage in highly concentrated markets to drive sales performance. (Chuang, 2020, p. 202; Hardiman, 2016, p. 404; Itani et al., 2017, p. 74) Therefore, content marketing and SM marketing must be applied to sales activities to understand, connect, and engage with prospects (Ancillai et al., 2019, p. 294). In the literature, this process is called social selling (SS), and several academics stress that different generations might influence the usefulness of SS and hence, call for further research on generation-related impacts on SS (Agnihotri et al., 2016, p. 178; Itani et al., 2017, p. 75; Marshall et al., 2012, p. 361; Ogilvie et al., 2018, p. 63; Barney-McNamara et al., in press). Furthermore, research on SM in the B2B sales environment is scarce and fragmented, although it strongly influences B2B sales since the omnipresence of information increases buyers’ bargaining power (Marshall et al., 2012, p. 357). Moreover, available literature and studies are limited due to the concept’s recency (Ancillai et al., 2019, pp. 293–294). Therefore, this article aims to close this research gap by analysing the effectiveness of SS when selling to millennial B2B buyers by responding to the following research question:

RQ: What impact do millennials’ generational characteristics have on the effectiveness of a SS approach of a service company selling to B2B prospects?

To identify and evaluate this impact, the first chapter assesses the current SP in B2B service companies and the state of utilising SM in sales. Afterwards, the concept of SS is defined and explained. Subsequently, millennials’ characteristics and their use of SM platforms are presented, which leads to different opportunities and risks for salespeople selling to millennial B2B buyers. Lastly, a conclusion is drawn to respond to the goal of this paper, address its limitations and give directions for further research.

2. Sales in the B2B Service Industry

Digitalisation affects various business units, which is why the sales department is also affected (Schmäh et al., 2017, p. 77). SM offers various advantages for organisations that can be exploited by salespeople (Chuang, 2020, p. 209). Thus, this chapter describes the changing SP, the characteristics of SM, and the resulting SS practises.

2.1 B2B Sales Process

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Sales Process for B2B Service Companies (Fraccastore et al., in press)

The traditional SP was subjected to several adjustments due to smaller budgets and expected flexibility from the sales department and is, therefore, more condensed (Moncrief et al., 2015, 531-360; Fraccastoro et al., in press). Especially the advent of SM changed the SP since it decreases the information asymmetry between seller and buyer, which drives prospective buyers to get in contact with sales departments themselves and hence, the first steps of the sales cycle become redundant (Hardiman, 2016, p. 400; Rodrigues et al., in press, pp. 10–11). Consequently, the conventional sequence of steps, namely “1. Prospecting; 2. Pre-approach; 3. Approach; 4. Presentation; 5. Overcoming objections; 6. Close; and 7. Follow-up” (Paschen et al., 2020, p. 406), are narrowed down to three steps including “identifying new business opportunities, persuasion, and relationship management” (Fraccastoro et al., in press) as illustrated in Figure 1.

The first step, identifying s ales opportunities, includes searching for potential customers, initiating conversations, and detecting demands (Fraccastoro et al., in press). Schmäh et al. (2017, p. 80) classify it as the active approach of SS and indicate that the distribution of customer-relevant content describes the passive tactic. The second step, persuasion, emphasises sales pitches, negotiating about terms and conditions, and signing the contract (Fraccastoro et al., in press). Hereby, delivering correct and useful information to prospects is key to a successful sales closure (Agnihotri et al., 2016, p. 174). Lastly, in the third step, relationship management, salespeople build and nurture relationships because, compared to B2C transactions, B2B matters are long-term and hence, require comprehensive relationship management (Hardiman, 2016, p. 408; Fraccastoro et al., in press).

2.2 Social Media in Sales

SM technologies enable sales representatives to better connect to prospects or customers and recognise their requirements and desires (Chuang, 2020, p. 209; Marshall et al., 2012, pp. 357–358). In the literature, SM is commonly defined as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content.” (Kaplan & Haenlein, 2010, p. 61) The way of communicating to prospects or clients is, due to the nature of social networks, biliteral and additionally allows the contact between customers (Schmäh et al., 2017, p. 77). It “increase[s] the speed, accuracy, cost efficiency, and flexibility with which services … are offered in response to market changes.” (Chuang, 2020, p. 209) Furthermore, SM provides a possibility for “completely virtual relationships with clients” (Marshall et al., 2012, p. 358), which is necessary to keep up with today’s businesses’ focus on increased efficiency and cost-cutting. Besides monetary benefits, studies show that SM positively influences lead generation, client’s contentment, bonding with clients, trust, and sales (Dwivedi et al., 2021, p. 16). Hence, it requires the collaboration of the marketing and sales departments to reach strategic and tactical advantages (Moncrief et al., 2015, pp. 351–360). SM affects all parts of the SP, and therefore, impacts salespeople’s working routines (Moncrief et al., 2015, pp. 351–360; Fraccastoro et al., in press). When integrating SM into sales, analyses prove that companies strategically employing SS are more successful than their counterparts, which is why the following chapter describes the integration of SM into B2B sales (Hardiman, 2016, pp. 406–407).

2.3 The Concept of Social Selling

SS conceptualises the idea of turning conversations and followers into transactions and business relationships (Schmäh et al., 2017, p. 77). It is an additional sales tool that focuses on creating relations by taking advantage of social and digital means of communication (Ancillai et al., 2019, p. 298). In the literature, several definitions for SS exist. For instance, it is defined:

“[A]s an integrative and reciprocal process, which intends the establishment of sustainable relationships and trust with existing or potentially new customers via the comprehensive usage of social media in order to identify and meet their preferences and core needs which are relevant to the company.” (Schmäh et al., 2017, p. 78)

More precisely, it is a sales method that concentrates on applying online marketing activities to understand, connect and engage (potential) clients (Ancillai et al., 2019, p. 294). Thus, the SS is an integrated function of all sales activities and compromises the realms of listening, analysing, and collaborating. Whereby listening includes the systematic evaluation of potential buyers and their networks. Besides, sales representatives can contact prospects after analysing their needs to provide an individualised solution-focused sales presentation. Moreover, the collaboration between buyer and seller can be supported by using SM platforms to establish and foster long-term commitment and co-creation. (Hardiman, 2016, pp. 407–408; Barney-McNamara et al., in press) Hence, in the following, SS is defined as an additional marketing and sales technique to enhance the SP by making strategic use of push and pull content marketing and networking on SM to find and connect to prospects, identify their needs, individualise the service offering accordingly, as well as build and maintain existing relationships.

In comparison to other marketing and sales activities, SS focuses on the selling company’s main target segment rather than all stakeholders. In contrast to SM, it concentrates on providing industry and market-relevant content rather than product and brand-specific information. (Hartmann et al., 2018, pp. 7–15) The employment of a strategic SS approach can decrease costs and enable easier international customers acquisition (Fraccastoro et al., in press). Furthermore, it helps to analyse the company’s reputation, and in the long-term, increases the sales performance level (Agnihotri et al., 2012, p. 342; Guesalaga, 2016, p. 73; Itani et al., 2017, pp. 65–73). However, this performance outcome depends on multiple factors, such as the buyer’s generation and specific demands. Hence, the following chapter describes the special characteristics of millennial B2B buyers. (Hardiman, 2016, p. 406; Kaplan & Haenlein, 2010, p. 59)

3. Millennials in B2B Buying

Since millennials expect business partners to be active on SM, the next section describes their generational attributes and the importance of SM in their professional working routine (Agnihotri et al., 2016, p. 178).

3.2 Characteristics of Millennials

Millennials are born between the 1980s and mid-1990s and grew up in a fast-changing technological environment. They naturally deal with a globalised world and all its world-wide communication possibilities. This generation builds a major part of the workforce nowadays and appreciates digital tools to support their daily work. (Käufer & Pawlik, 2020, pp. 5–34; Myers & Sadaghiani, 2010, p. 235; Viswanathan & Jain, 2013, pp. 486–489) Millennials are success-driven, motivated, and willing to go a step further to reach the company’s goals. They are open-minded, inquisitive, and foster the equality of gender, culture, and opportunities. In their private life, they are always connected to peers using digital communication programs and appreciate their feedback to make better purchasing decisions. Collaborating in teams and networking is essential at work since this age group likes to benefit from different viewpoints for improved decision-making. Additionally, flexibility, work-life balance, and less corporate policies are fundamental prerequisites, which is why they prefer low hierarchies at the workplace. (Moreno et al., 2017, pp. 140–142; Myers & Sadaghiani, 2010, p. 235; Smith & Nichols, 2015, pp. 43–44) According to Marshall et al. (2012, p. 358), buyers of younger age groups appreciate virtual relationships, which is in line with the findings of Myers & Sadaghiani (2010, pp. 231–235). Due to technological advances, millennials are used to receive personalised product offerings and make purchases online and on SM. Thereby, they favour brands with strong ethical principles and standards. However, they are more likely than the previous generation to switch brands and are therefore considered non-loyal consumers. (Moreno et al., 2017, pp. 140–142) Furthermore, on average, millennials switch jobs more frequently and seek new challenges and opportunities for firstly, self-realisation and, secondly, create, cause, and change something impactful (Huber & Rauch, 2013, pp. 35–37; Kurian, 2017, p. 5).

3.3 Social Media Use of Millennial B2B Buyers

Millennials are today the largest group of SM users (Helal & Ozuem, 2019, p. 61). Privately, 81.7 per cent use SM several times per week and mainly utilise Facebook, YouTube, and Instagram. They demand current content and quick responding from channel providers. LinkedIn (18 per cent) and Xing (13 per cent) are the main channels used to collect and spread information for business purposes. (Käufer & Pawlik, 2020, pp. 5–34; Moreno et al., 2017, p. 140; Viswanathan & Jain, 2013, pp. 486–489) Several researchers emphasise that SM’s utilisation and motives vary, ranging on the one side, from staying up to date on the market and industry developments or trends and, on the other side, from learning and enhancing own competences to managing relations with business partners. Therefore, SM users can either proceed actively by posting, sharing, and commenting on content themselves or passively by following respective channels and experts. (Marshall et al., 2012, p. 358; Oksa et al., 2021, pp. 14–16) However, in B2B companies, the buying decisions are mostly made by groups rather than individuals. Nevertheless, the process takes place online, and information is collected online about different brands and products, considering reviews and testimonials of potential sellers. (Hardiman, 2016, pp. 398–400) Corporate buyers can autonomously, not reliable on salespersons, search for products themselves. Thereby, resources can be saved because SM enables buying centres to identify solution-oriented requirements and necessities faster and cheaper. Hence, B2B buyers are well informed when they contact salespersons and benefit from the induced bargaining power. (Gustafson et al., 2021, p. 807; Hardiman, 2016, p. 406; Marshall et al., 2012, p. 359) Besides the perceived key benefit of SM, which is the ubiquitous access to information, it improves networking and collaboration with business partners, offering various benefits for SS. (Oksa et al., 2021, pp. 14–16)

4. The Impact of Social Selling on B2B Service Businesses

In the previous parts, the function of SS in service companies was portrayed. Furthermore, the working methods and values of professional buyers were introduced. To evaluate the effectiveness of implementing SS, when targeting millennial B2B buyers, occurring opportunities and risks for the sales company are assessed in the following.

[...]

Excerpt out of 18 pages

Details

Title
The Social Selling in the B2B Service Industry. Opportunities and Risks
College
University of Applied Sciences Münster  (Wirtschaft)
Course
Business-to-Business Marketing & Service Marketing
Grade
1,3
Author
Year
2021
Pages
18
Catalog Number
V1061002
ISBN (eBook)
9783346476647
ISBN (Book)
9783346476654
Language
English
Tags
b2b, social selling, social media, service, sales, millennial
Quote paper
Jasmin Armbruster (Author), 2021, The Social Selling in the B2B Service Industry. Opportunities and Risks, Munich, GRIN Verlag, https://www.grin.com/document/1061002

Comments

  • No comments yet.
Read the ebook
Title: The Social Selling in the B2B Service Industry. Opportunities and Risks



Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free