The Dilemma in Emco’s Equation: B2B + B2C = 2Bs + 2Cs (Covering Customers)

katie    May 23, 2017

Emco is a wholesale and retail plumbing supplier with highly sophisticated B2B clients doing multi-million dollar projects, and also has many ordinary B2C folk who just need a new faucet for their bathroom reno. How does a conglomerate like Emco engage their diverse customer base through social media, and, how effective is Emco’s social media customer engagement?

There are two types of B2B Emco customers. Let’s consider the “3 bids and a buy” customer who calls late Friday afternoon for a price comparison. Sure, the customer is just price shopping, but Emco’s local branch will gladly fill out the RFP (Request for Proposal) and email it back promptly. They’ll follow-up conscientiously, but they know only the lowest price wins with this particular client, and this time, it may not be in Emco’s best interests to match the competitor’s lowest price as margins, ROI, and the intrinsic cost of time necessary to get this sale may not fall within their sales formula.

Emco’s sales professionals know that selling on lowest price isn’t going to create an ongoing sales relationship. Emco wants all their customer’s business, and they are highly motivated to take a lot of time to cultivate multiple personal contacts to develop deep customer engagement, often requiring complicated engineering solutions to alleviate their customer’s pain points along the way. Emco’s mantra is “Get your customer out of pain”, and much like the intimate relationship between a doctor and his patient, Emco works fiercely to foster strong customer relationships based on person-to-person meetings, expertise, collaboration, and transparency formulated on correct customer problem diagnosis and resolution. Emco’s core belief: develop mutual respect and confidence based on providing solutions, and the customer–corporate relationship will have deep roots, based on mutual trust, and will have long-lasting mutual value.

Sometimes, that makes their products more expensive than their competitors’, but for a large B2B customer working on a multi-million dollar project, it’s getting the job done on time, and within budget that matters most. Is it even significant then, if the customer pays a few dollars more for Emco’s product if that special valve to finish this vital stage can arrive on-site tomorrow? Suppose there’s a crew of engineers stuck out in the field, ground to a halt in BC’s interior, because they can’t move on without that specialty item. The clock is ticking and time is money – big money. Often, taking the time a “3 bids and a buy” customer traditionally needs to get the lowest product price isn’t in Emco’s big B2B clients’ best interests. They’ve learned it’s better to deal with Emco because Emco has a proven track record that it can resolve an engineering problem expertly (and quickly), can deliver the goods expeditiously through their supply chain, and in effect, can get a multi-million dollar project re-ignited. Emco’s experts resolve client conundrums.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

However, the subject matter here is about the use of social media for customer engagement, and it is still unclear how Emco is using social media to engage their customers, B2B and B2C, and how effective social media engagement is in developing their corporate-client relationships.

I had the opportunity again to interview my Westlund contact, David Needham (Westlund is an Emco subsidiary), about his thoughts on how his use of social media engages his customers. He answered that he and his teammates are encouraged by the executive team to use LinkedIn to crack new accounts. Internally, LinkedIn is a means to collaborate amongst themselves when needing insight on how to engage a particular customer. Emco is a vast organization, spread across Canada, and many seasoned employees have inside information about accounts that may be new to the MT (Management Trainee), like David. LinkedIn, then, could be a useful internal social media tool within Emco.

As well, he said Westlund’s own proprietary internet tool, “Knowledge Network”  (which David developed), is the social media tool of choice for intra-company problem-solving. It allows company specialists across the country to provide an answer, often within an hour, for a solution to a customer’s complicated product problem. Bear in mind, it is not unusual for these customer projects to be in the millions and millions of dollars; hence, speed and efficacy make the “Knowledge Network” an extraordinarily valuable tool for inter-company employee engagement, thus leading to co-dependent employee and customer engagements, and hence, nurturing sound and strong customer relationships (and of course, that leads to profits for Westlund – that is the point, after all). Regarding customer engagement, David is quick to point out he makes sure every one of his customers knows about Westlund’s unique and proprietary problem-solver, “Knowledge Network,” to set him apart from his competitors.

However, with respect to conventional social media as a tool for customer engagement, in his case (virtually exclusive reliance on LinkedIn), David said it is only somewhat useful in connecting with former classmates from the University of Victoria where he did his MBA, and from Queen’s where he did his undergrad. His success with LinkedIn seems to rely on a serendipitous “connect-the-dots” approach, relying on some lucky component in the proverbial six degrees of separation to find someone who knows someone who knows the cold call he’s trying to crack. This time factor, the length of time between reaching out via LinkedIn, to finally reaching the appropriate contact, the new customer, can be tedious and disappointingly long. Often, for expediency, David will just do a personal cold-call, and has found that methodology to be the most effective. That being said, I asked David if he could check his LinkedIn account to see if he was getting any social media “word of mouth” thumbs-up with his existing clientele. I’ll check-in with him on that next week.

Not wanting to state that “100% of my interviews at Westlund confirmed social media is not a particularly effective means to engage customers” (in that my survey’s statistical base so far is made up of only one person), I had the opportunity to interview Michael Lojka, Management Trainee in Westlund’s St. John’s, NL’s location (Vancouver//St. John’s – west coast//east coast  – pretty awesome national Westlund survey coverage now!) to get his take on how effective social media is for him in creating customer engagement. Please find following a transcript of our telephone interview:

Lubin:  Michael, you’re working for Westlund in St. John’s Newfoundland. Has the use of social media been helpful in your role as a trainee and future PCM at Westlund to help you engage your customers?

Lojka:  I think that social media has proven to be somewhat useful in my role as an Outside Account Manager (OAM) and I’m sure it will continue to have importance in my future with Emco. It is generally rare that an opportunity falls into your lap and becomes fruitful on its own. Increasing sales with a customer usually requires cultivation over time. Some customer accounts are more straight-forward than others; however, some prove difficult to crack.

Close to the beginning of my OAM phase, I had a hard time just getting my foot in the door with the local Labatt brewery which I thought might have some potential. This experience which I have talked about with a few MT’s is a basic example of how reaching out to my teammates helped a lot, and LinkedIn was the start-point behind my success at getting this customer.

My teammates did have some LinkedIn contacts; however, they were from long ago and turned out to be a dead-end. So I called Labatt’s main office number, but that was just a recording of the brewery’s address and fax number. I found that at the brewery itself I would have to get past a separate security building in order to meet with anyone inside. I was a bit stumped. I then contacted two people that worked in the St. John’s brewery on LinkedIn. I thought that maybe because I used to work for Labatt in Edmonton it would be an easy in. However, I did not hear back from them. I sent them regular emails after figuring out what their email format was by trial and error. I didn’t hear back. I eventually came up with the idea of dialling a variation of the fax number and spoke to a random person in the brewery. I asked for the direct number of one of the people I contacted on LinkedIn. I called that number a few times on different days but no one would pick up, so I left a message. However, I didn’t hear back. I called again and finally spoke to the Operations Manager that I contacted on LinkedIn over a month prior and he agreed to meet me. When I did finally meet with him, he brought in other people on his team and we had a great discussion which prompted several follow-up meetings. It seemed odd that face-to-face they were so open and receptive, but getting in to meet with them was such a challenge. So much for LinkedIn fast-tracking this, but I have to say if I hadn’t used it, I wouldn’t have got the face-to-face a month later. Since then, we have made a lot of progress with Labatt. We now have a pending Vendor Managed Inventory agreement and are negotiating better payment terms.

As I approach the one-year mark in my Outside Account Manager journey, I certainly have more examples of customers which required multiple personal visits and attempts in order see anything from them, than customers which grew immediately. “Knowledge Network” helped a lot to gain their trust.

I recently partnered with someone from another division of Emco to do a joint presentation to the procurement team of a very large general contractor. My thinking was that since some projects require a wide range of products including plumbing, mechanical, and industrial components which come from different Emco divisions, and it made sense to present a united front to our mutual customer. Using “Knowledge Network”, our own internet problem-solving tool to group-think some of the technical problems my customer was facing, was a big help. The customer was confused by all of our divisions anyway so it would at least be beneficial to clear that up. The meeting was great; however, getting to that point was not easy.

And in another big customer situation where a lot of money was at stake, “Knowledge Network” played a huge part again in getting expertise quickly to solve the customer’s problems. During the construction of an offshore oil platform, my PCM, Tony Collins, received many orders from a particular customer for specialized valves. However, the orders were complicated by the fact that there were several revisions to the valve specifications and price changes along the way. “Knowledge Network” simplified and speeded up the project.  In the end, the customer was happy with the result.  They actually have come to trust and respect our business more, and a lot of that is because we can use “Knowledge Network” to solve problems.

My Westlund employee survey conclusions? Indeed, 100% of Westlund employees interviewed (2 for 2) use LinkedIn for B2B connections but find it hit-and-miss with respect to its effectiveness. Without question, personal contact in very large customer accounts is the tried-and-true method for Westlund customer engagement (and financial success).

 

There’s no doubt in my mind Westlund’s B2B social media engagement to help create customer engagement is limited: just LinkedIn and YouTube information videos. Perhaps, dealing with large B2B multinational accounts, social engagement is considered irrelevant, even perhaps frivolous by Westlund? Might their C-suite have an anti-social media attitude bias?

I have an opportunity later to interview David Needham again and I’ll discuss Westlund’s corporate approach to social media (and lack thereof) with him then.

However, Emco is more than a B2B company; Emco is also a formidable B2C company.

From Emco’s website I find that Kohler and Emco just teamed up in April, 2017, to open the first exclusive Kohler Signature Store in Canada for designers and homeowners (consumers = B2C), as well as to contractors (= small to medium-size B2B).

In addition to faucets, sinks, showerheads, bathtubs, toilets, tile and other premium kitchen and bathroom products from the Kohler Co. collections, in the new store customers will be able to experience working faucets, showers and bathtubs and peruse an eclectic series of fully designed room layouts that replicate real-life settings and feature cutting-edge technology.

The Kohler Signature Store website is stunning, and has all the popular social media icons.

On Kohler’s Facebook page, I find a hilarious YouTube video on potty training that has 8,686,577 views. There are almost 700,000 Total Page Likes.

Emco’s own luxury consumer and contractor’s plumbing line, The Ensuite, has excellent Google reviews and also the full range of social media icons. Their Facebook link takes you directly to the Kohler Facebook page.

Is there a difference, then, in Emco’s B2B versus B2C social media strategy?

To summarize the above-mentioned article, a main difference between the 2B’s is it’s about having interesting content using different styles and tone (B2B is more formal with in-depth analysis using case studies, the #1 tool for lead generation. B2C is informal but still informative, and tries more to entertain the consumer. [Again, please take a couple of minutes to watch Kohler’s video on potty-training in the link below. Humour is indeed engaging, and this video is a welcome relief in this very dry blog!]).

In addition, lead generation metrics are important for both. B2B may require a metrics’ social media platform to analyze how the number of clicks can be converted to a percentage of sales generated.

However, on the Emco main website page (not updated since 2011 and clearly lacking any consumer “sizzle”),  there are no links to social media icons, other than on their Careers page which has a LinkedIn icon only. This makes sense in that LinkedIn is the business professional’s social media tool of choice, and Emco’s Career’s page is about recruitment.

It would seem, then, that Emco’s approach to social media is straightforward and unpretentious (read “boring and dowdy”): their B2B companies, contractors, use the Emco websites to gather traditional product information and location, have the ability to order on-line, or can go to the location for product order pick-up. In analyzing Emco’s social media approach, then, it would seem their belief is Facebook (nor any other popular social media channel) is not how contractors do business with them.

But! Luxury retail customers (designers and homeowners), another segment of Emco’s B2C market segment, have the full range of social media tools to communicate with and about the Company; however, it is per individual Emco location website only. It seems Emco’s approach for social media involvement then is to deal with B2B and B2C, not only as per customer behaviour patterns, but as per luxury versus conventional item demand.

In Mark Kovac’s Harvard Business Review’s article, “Social Media Works for B2B Sales, Too”, the chief marketing officer at a major technology provider voiced concerns that Mark had heard from many other CMOs: “Our customers have gotten way ahead of our sales efforts. Too often, we’re not even getting invited to the dance.”

Kovac states that this tech company’s website, like many others, overflows with information about product features but offers few perspectives about how the products truly solve customer’s problems.

It seems to be a common issue in B2B markets. According to Kovacs, “the wealth of information available online for prospective customers has effectively uncoupled buying cycles from selling cycles. This is a terrifying development for B2B firms, and especially for their sales and marketing teams. Bain & Company recently surveyed 370 sales and marketing executives of large technology or industrial companies. Of this group, half acknowledged that digital marketing and sales channels are significantly changing customer behaviours, yet only 12% feel well prepared for the digital disruption (January 2013).

However, according to Kovacs, “Maersk Line, the world’s largest container shipping company, started experimenting with social media several years ago and now has 1.1 million followers on Facebook and large audiences on other channels including Twitter and Pinterest. Maersk has learned to publish captains’ blogs and stories about people, environmental issues, and other topics at a fraction of the cost of traditional advertising. … Although Maersk uses social media primarily for marketing and improving customer perceptions of the firm, this campaign also resulted in 150 unique sales leads, which is quite a large number in the shipping industry”.

Further, Kovacs states that the Forrester Report states, “All business customers can be reached by social channels, and 98% of business decision-makers also read blogs, watch videos or listen to podcasts. “It’s no longer a question of whether you should use social, but how,” the Forrester Report said. Just as B2B marketers target their customers for different stages of their customer lifecycle, so they now must factor in how social media is used in those stages”.

 

 

I contacted David Needham again to ask his opinion if he thought Emco’s social media strategy would remain the same for now despite compelling statistical evidence that even large B2B companies were starting to embrace it. His answer was a “Eureka!” moment for me, and one that I had never considered: Emco’s organizational structure is a decentralized model, not a centralized one. Definition of a decentralized organization:  “An organization wherein the decision-making authority does not sit with a central figure or group. Some decentralized organizations empower all levels within the hierarchy with decision influence”.

Please use the link (https://smbp.uwaterloo.ca/wp-admin/media-new.phpto) to listen to David’s audio interview. In it, I ask David to help me come to terms with my puzzlement studying Emco’s use of social media for customer engagement: my cognitive dissonance between the President’s  passionate online letter about developing leadership amongst employees, yet an important tool, sophisticated social media usage, is missing from their employees’ armamentarium to engage deeply, not only amongst themselves, but with their customers.

To summarize my “Eureka!” moment, what David explained in Emco’s decentralized organization structure is that decisions about big capital infrastructure expenses, like a national CRM capability and a complete IT overhaul, are made by the almost 250 profit centre managers collectively, not by the executive team. And, if the majority of profit centre managers are making money now, there is little incentive for them to vote collectively (democracy wins here!) to invest in a new IT system that would cost millions and take years to revamp Emco’s (and Westlund’s) national IT infrastructure. By the time it was ready, it could quite realistically be obsolete.

That answers my puzzlement: why do only the luxury B2C Emco websites use popular social media channels? – they are published by individually-owned profit centres. How that location invests in infrastructure is decided by the profit centre manager, and the Emco executive team supports this business model 100%.

What a B2B Catch-22 for Emco to have to contemplate.

 

https://smbp.uwaterloo.ca/wp-admin/media-new.php

Lessons for Others

Lessons Learned:

The cardinal rule for business success is, “Know your client”. Emco and Westlund seem to tailor their social media activities based on the client profile of the respective profit centre, both B2C and B2B, and it is the individual profit centre manager who decides on the degree to which he/she shall use social media implementation to engage their customer base.

I have learned this capital expense investment decision-making process in a decentralized structure like Emco’s is pivotal to how much it influences social media and fundamental IT investment upgrades at the corporate level. It will cost millions and take years for an overhaul. The executive team respects that, but in the interim, they will continue to develop the leadership program with management trainees, in whose hands Emco’s future ultimately lies.

I suspect that only when (centralized) competitors start to make inroads with Emco’s clientele will Emco embrace consistent implementation of social media engagement vigorously; and only then, maybe, will profit centre managers agree to collectively upgrade their IT capabilities with a goal to start to retrieve diminished customer engagement (profits).

If it costs them money now, they won’t do it, because the Company is making its financial goals. But if their competitors start making significant inroads with Emco’s customers’ business via social media channels, then watch out: Emco’s profit centre managers are pragmatists: they will “bite the bullet” and agree to spend millions “like, can we have it now… please?”.

There will be a brand-new business Facebook profile up-and-running with fabulous video content and “how-to” case studies in record time. I know … try to imagine B2B clientele visiting Emco’s (new) corporate Facebook page!! But Emco will make sure of it. And who knows? Maybe David and his colleagues will be Tweeting, using Snapchat, and Instagram, too! I’ll keep you (blog) posted…

Organization: Emco Corporation
Industry: Wholesale and Retail Plumbing Distribution
Name of Organization Contact: David Needham, MT (Manager-in-Training)

Authored by: Katie Lubin

If you have concerns as to the accuracy of anything posted on this site, please send your concerns to Peter Carr, Program Director, Social Media for Business Performance.


References

https://en.wikipedia.org/wiki/LinkedIn

http://info.marketscale.com/blog/for-b2b-brands-on-linkedin-employees-are-key-to-success

The Best Social Media Channels for B2B Marketers in 2017

https://www.forbes.com/sites/joshsteimle/2013/09/29/the-anti-social-ceos-guide-to-social-media/#309256cf480b

http://www.kohlersignaturestorevancouver.com/

http://plumbingandhvac.ca/kohler-emco-launch-vancouver-showroom/

www.theensuitevancouver.com

https://www.oktopost.com/blog/differences-b2c-and-b2b-social-media-marketing/

http://www.cmswire.com/cms/customer-experience/forrester-report-the-social-media-habits-of-b2b-customers-021777.php

http://www.businessdictionary.com/definition/case-study.html

https://www.oktopost.com/

Kovac, M. (2016, January 04) Social Media Works for B2B Sales, Too. Retrieved from https://hbr.org/2016/01/social-media-works-for-b2b-sales-too/

https://www.facebook.com/MaerskGroup

http://www.cmswire.com/cms/customer-experience/forrester-report-the-social-media-habits-of-b2b-customers-021777.php

http://www.businessdictionary.com/definition/decentralized-organization.html

http://www.supplyht.com/articles/98778-networking-at-its-finest

https://knowledge.insead.edu/customers/making-digital-marketing-strategy-work-4770

https://knowledge.insead.edu/blog/insead-blog/setting-the-stage-for-digital-transformation-6101

https://knowledge.insead.edu/leadership-management/strategy/social-media-in-b2b-marketing-publish-or-perish-2508

https://knowledge.insead.edu/leadership-management/strategy/social-media-in-b2b-marketing-publish-or-perish-2508