Influence Pyramids Part 2 – why B2B is different from B2C

In a recent post, I was somewhat disparaging towards the idea of influence as a pyramid shaped hierarchy of cascading wisdom. Influence doesn’t work like that – it’s more a bidirectional conversation between influential people.

I was reminded of this by Dom Pannell in his guest post on the IIAR blog:  “an analyst only knows what she has been told”. With my influence hat on, this translates into the following “Influencers gain their influence from other influencers.” Influencers network and exchange views, and confirm or challenge their opinions.

So I was at first surprised to see that Forrester has jumped on the pyramid idea with its Online Peer Influence Pyramid.

Forrester in ‘Dodgy Analysis’ shock? But not so fast, Duncan.

Firstly, the pyramid represents number of people in each level, not a hierarchy of influence. Fair enough.

Secondly, it relates to online influence, which is part of but not synonymous with, the totality of influence in any market.*

And thirdly, it seems to refer to B2C terminology, rather than B2B cases, and indeed the research piece falls into the following categories: “Retail, Consumer Retail & CPG, Retail Marketing, Consumer Packaged Goods, Consumer Packaged Goods Marketing, Consumer Technology, Consumer Portals & Search, Consumer Software, Consumer Industries” (from the Forrester website).

It struck me that consumers buy, and are influenced, in different ways than B2B buyers. Consumers can buy spontaneously, they buy frequently, and they exchange views more frequently (on- and off-line). There’s no competitive pressure in a consumer buying a specific stereo or TV (other than temporary bragging rights).

It’s different for B2B buyers. Decisions take a long time – years, possibly. They don’t buy frequently (unless buying commodity items). And they generally don’t talk about what they’re thinking of buying, as this may disclose a competitive advantage (or some other commercial confidence).

That’s why B2B buyers go to trade shows and conferences – it’s one of the few places they can exchange information on potential purchases.

It’s also why they depend on third parties (influencers) to act as information sources and opinion validators – there’s little open discussion to engage in.

* See my recent posts on online influence, and the back catalogue of rants on a similar theme…

How should AR pros use online channels to increase influence on their target prospects?

[This article was originally posted on the IIAR blog a few weeks back]

This is the third and final post in a series of thought pieces on the role of online channels in influence. The first two articles are here and here.

There’s little doubt that online channels are important. I don’t believe that they are the whole story in measuring influence, but they are essential in reaching influencers.

There are two primary uses of online channels in an influencer relations programme:

1. Tracking what influencers do: online media don’t help identify influencers (I assert), but they are useful in post-identification analysis. What are influencers blogging on, are they Twittering, what webcasts and podcasts are they involved in, and so on. You can use online tools to track what influencers are doing and saying, even what they’re saying about you.
2. Engaging with influencers. If influencers are blogging and Tweeting, then that’s where you need to be too. If they’re on Facebook and LinkedIn then connect to them there. Comment on their blogs, request guest blog posts, follow them on Twitter. Be where they are.

Of course, if influencers are not online, then there’s no point in you trying to find them and interact with them there. Some influencers eschew online channels for communication, because of the time it diverts from other activities. (Seth Godin claims that he’d lose 6 hours per day if he Tweeted.)

I know some markets (web development, for example) where 100% of the influencer community blogs and uses discussion forums. I also know of tech markets where nearly 0% of influencers use online channels: they live in a face-to-face world. Most tech markets, but not all, have a spread of online- and offline-oriented influencers (and many influencers, of course, are both).

Make sure you know where your influencers are.

Measuring online influence

[This article was originally posted on the IIAR blog a few weeks back]

This second post on online influence looks at how one might measure influence using online metrics. It follows on from last week’s post which posed a lot of questions, but few answers. Fair cop.

But first, I think there are a couple of principles of influence to consider:

1. People buy people. Therefore influence measures need to identify individuals. It’s not sufficient to conclude that Gartner (for example) is influential – duh. Vendors need to know (a) who within Gartner is influential, (b) what’s their influence relative to other analyst influencers, and (c) what’s their influence relative to other non-analyst influencers. Influence isn’t distributed equally, either within organisations or throughout the market.

2. Influence is multi-dimensional. Some influencers are subject gurus, some command statutory authority, some are thought leaders and idea planters, some structure the financial elements of procurement, and so on. It’s important to understand why someone is influential, as much as the fact that they are influential.

So. Let’s look at some of the ways influence claims to be measured online:

- Citations – this measures the number of times a source refers back to an originating source. Google PageRank works this way: it rates pages highly if other people link back to it. It’s also how academic research works: a recent paper will refer to previous papers, and the more references a paper gets the more influential it is considered to be. Its strength is its weakness – it will persist in referring back to previously cited sources, even if they become superceded. It also build in something called the Matthew effect, where longevity is favoured over originality.

- Connections – how many outbound links a source has. LinkedIn, Facebook, MySpace, Twitter (following) and other social networks work this way. Count the connections to determine how well connected the person is. It’s also easy to fake, by link swaps, indiscriminate “friending” and so on.

- Subscriptions and readership – Technorati works this way, measuring the number of readers a blog has, and Twitter also publishes this information as followers.

- Noise – references to subjects and/or individual firms. Radian 6, Techrigy, and a bunch of other providers do this, measuring the number of times your firm is mentioned. Some also claim to measure the sentiment of the mention, usually using natural language processing tech.

All of these measures are indicators of online activity, and you can see the usefulness of them, as far as they go. They are, in my view, the equivalent of PR clippings services.

However, none of them measure whether the critical community, decision makers, are remotely influenced by online channels. It’s always necessary to ask: Influence on whom? Do any of these measures accurately assess the impact on real decision makers? In other words, do they measure the likely impact on behaviour of a buyer? Because if they don’t, if they measure a vague notion of industry activity or sentiment, then do they really reflect the ecosystem of influencers that impacts decisions?

More critically, can vendors construct marketing programmes around these measures to improve knowledge, lead generation and useful sales collateral? Because if they can’t, what are these measures useful for?

Tssk – more questions.That last one was rhetorical.

Next week’s post will probably pose more questions about how AR can use online channels to increase influence on their firms’ prospective customers.

Personal versus ‘Firm’ influence

Does a person’s influence come from their own expertise and authority, or does it come from the credibility of the firm they work for? Actually it’s a bit of both, and I was intrigued to read via Augie Ray that Forrester is banning its analysts from blogging outside the ‘official’ Forrester blog platform.

The policy reads: “analysts with personally-branded research blogs must take the blog down or redirect readers to a Forrester-branded role-based blogs” (Source: Sagecircle).

I wonder if this is in any way related to the rise of Charlene Li and her groundswell blog and book, which positioned her as a leading social media analyst, only for her to scamper away and set up Altimeter, personal influence and credibility intact.

It’s a tough one for firms in the influence game. Do you, like McKinsey, hide the identities and personalities behind an anonymous company byline? Does your company brand immediately convey authority? Or do you promote your top staff as stars, in the hope that their individual reputation rubs off on the rest of the firm, and subsequent sales?

There are two things a company can do. Firstly it can recognise where company influence is most effective. This is in market reach and independence. Market reach, it turns out is influenced by both company reach and personal reach. Few have both, many benefit from just company reach, and personal reach is (obviously) the most transferable. But many an influencer has underestimated the balance between the two, having left their prestigious employers and struggle to make it on their personal brand alone. Gary Barnett at The Bathwick Group (and ex-Ovum colleague of mine) calls the critical degree of personal reach the ‘personal escape velocity’, which neatly explains the idea. Does an individual have enough ‘velocity’ to escape the ‘gravitational pull’ of the company?

A company’s stance also determines precisely the extent of independence of an individual. One may be an acknowledged expert in an area, but if the person also works for a vendor then their overall influence is qualified by this, and diluted accordingly. A non-vendor company can increase the influence of its staff by having a clear position on independence. Most analyst firms get this now, but the journey was fraught with conflicts and there remain some ‘analyst-for-hire’* firms. Other types of firm can also benefit from a stance on independence, including consulting firms, channel partners, services firms, and so on.

The second thing forms can do to increase the influence of its staff is to get them closer to decision makers. Normally the people that get to talk to decision makers are sales people, which are exactly the wrong type of people to position as influencers. Now despite the warm and cuddly reputation that sales people have, they unfortunately possess a fatal flaw, in that they want to sell something. It’s the hardest thing to influence someone while trying to sell them something**, because you have a clear, unambiguous and pressing interest in the outcome. Additionally, most sales people lack sufficient expertise and other influence attributes.

But there are other people in an organisation that are more suited to be positioned as influencers. The best influencers often come from the technical department, product development and design areas. They have a deep expertise, enthusiasm and energy, and a surprising lack of interest in making a sale. These people can be employed as influencers on specific deals, but they become much more influential at a market level if given the scope and support. Many adopt blogs as a medium to increase their reach and frequency of impact, which is why blogs are a useful influence enabler, but other avenues of outreach should also be used (conferences, seminars, press, etc).

Consultants, analysts and any other adviser types have the best chance at influencing decision makers, because (often) that is precisely what they are employed to do. They advise decision makers on what decisions to make, and in that sense they are professional influencers.

Companies trying to position staff as influencers must make their employees at least as effects as the professional influencers for them to have measureable impact on decision makers.

*This term was coined by Bill Hopkins at KCG.

**In a B2B world, that is. The influence of sales in B2C seems to be much easier…

Have online channels changed the nature of influence?

[This article was originally posted on the IIAR blog last month]

Determining the impact of the growth in online channels such as social media is one of the things that taxes most of us. I’m forever seeing new ‘influencer tracker’ services pop up, and in the world of analyst relations there’s continual discussion on whether and how to engage in online options like blogs, podcasts and social networking.

In response to the explosion of online influencer tracker services – there are over 100 nowadays, and counting – Nick Hayes and I wrote a paper* on how we think they are misleading marketers. The paper led to an invitation to post on the IIAR blog, to hopefully spark some discussion – thanks for the invite, Ludovic.

This first post focuses on whether influence as a concept has changed with the use of online channels. The second will look at how influence can be measured using online metrics. And the third will discuss the implications of online channels for AR and Influencer Relations professionals.

There’s an important context to any debate on influence, online or otherwise. It is that ecosystems of influencers are highly fragmented these days. Most decision makers are influenced by the traditional journalists and analysts, but also by consultants, academics, regulators, financiers, sourcing advisors, procurement professionals and other specialists, as well as peer end users.

Much of the influence exerted by this group has been enabled, in large part, by online channels. This has been an ongoing process for a decade. The web and search engines make it easier for anyone to reach the market, and easier for buyers to find what they’re looking for. Blogs and podcasts increase the reach of anyone inclined to use them. Social media is just the next step in this evolution – there’s no social media revolution going on.

But social media has provided a new channel for those people with the potential to influence, making communication between those people frictionless. To reach a group of like-minded adopters of a technology you used to have to organise a meeting in a mutually inconvenient location. Nowadays, you organise an unconference or participate in an online forum. It used to take months to organise an event, now it can take hours.

But has the nature of influence changed? Are decision makers influenced in different ways through online channels? You’d think so, given the hype, but as Nate Elliott at Forrester observed, “the huge majority of users influence each other face to face rather than through social online channels.”

It makes sense to understand the attributes of influence – the ability to discuss and persuade, knowledge and experience, willingness to express an opinion, the authority and gravitas with which to communicate that opinion, the opportunity to convey that opinion to the right audience at the right time. And so on.

Some of these attributes are facilitated by online channels, for sure. Others are removed from online impact completely. There’s no doubt that some of the smaller analyst firms, for example, are benefitting from their online presence, in terms of reaching their potential audience through blogging and other social media technologies. But these channels are not creating expertise or authority – simply the means to communicate them.

Can social media create a new kind of influence, by collating the collective wisdom of a connected crowd? After all, there is safety in numbers in doing what the crowd does. We used to have a version of that in the IT industry – no-one ever got fired for buying IBM. Imagine the power of that kind of statement, communicated instantly over the blogosphere. Or would it be immediately challenged and rejected by real users’ experience?

So, are analysts influencing via online channels? How is influence really conveyed by analysts to decision makers? Has it moved mainly to online or is it still by telephone enquiries and face-to-face advice?

*Free registration required, or email me at duncan.brown(at)influencer50.com.

Influence isn’t pyramid shaped

I was directed to this video of a model for influence by a member of the Influencer Marketing LinkedIn group. Have a look.

It is, of course, utter nonsense:

Influence is not unidirectional – it flows in all directions. You are as likely to influence as you are to be influenced.

Influence does not cascade down from ’super-influencers’, despite what advertising executives might want you to believe.

Influencers are not always obvious and high-profile. You are more likely to be influenced by a Tesco’s wine buyers than any wine connoisseur.

Influence models need to be holistic in order to be effective. The decision maker needs to hear the same message from a wide array of influencers, so you need to identify and engage different types of influencer. Where are the health influencers in this pyramid model? Ethical sourcing and Fairtrade influencers? Retail supply chain?

There is danger in simplifying complex ideas like influence – communicating the wrong framework just stores up trouble later on.

FT’s Decision Dynamics – 3

This is the third and final part of a look at the FT’s Decision Dynamics survey (see here for part 1 and part 2. This part looks at the role of social media in decision making.

Frankly, I think there’s a lot of tosh and assertion on the importance of social media in influence. In short, while there’s been a rapid rise in the use of social media there’s little evidence that it’s impact decisions, particularly in the B2B world. We’re all blogging and Twittering and ‘LinkingIn’ to each other but not in the context of decision making. Anyway, back to the FT survey.

This first chart (below) illustrates that rapid rise in use of social media by enterprise decision makers. As the FT notes, “Work-related use of social bookmarking and community sites has exploded in the past year.” It has, but only to the levels seen to date for reading blogs and using professional networking sites.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

The most telling chart, though, is this next one, which shows the usage of various types of social media in a work or leisure context. It’s interesting to see the use of social bookmarking (Dig, Delicious, etc) as a decision making aid. But webcasts and streaming video are also important and more established in the B2B marketing mix.

Most surprising, given the volume of noise on the subject, is the low penetration of Twitter.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

My own take on this is that Twitter:

(a) Is useful if you know who you want to follow, but can’t help identify important people

(b) Is a great echo chamber of followers and followees, but has limited reach outside the Twitterverse, and

(c) Is really only used by people that don’t have a “traditional” job (autonomous, mobile, networked), which may include most of the readership of this blog and most analysts, but not your average CIO.

FT’s Decision Dynamics – 2

This second installment of thoughts on the FT’s Decision Dynamics survey focuses on the importance of providers to business strategy. We saw in my first post that providers (suppliers) have suffered a consistent decline in trust since 2003 when the FT’s annual survey began. What’s interesting is that the level of trust in suppliers does not correlate with the criticality of those suppliers (as in the chart below). In other words, suppliers provide important services to firms and, despite a decline in trust they are still considered vital. Reading between the lines, this could mean that the services provided are important but the suppliers themselves are not, due to falling trust levels. This then would translate into a greater competitive environment.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

So how do suppliers bridge the gap between demand for important services and the decline in trust in suppliers? The FT survey points to the key factors in choosing a supplier (besides price). Interestingly, high ethical standards comes out on top, though one wonders how a supplier can communicate this effectively (and differentiate on it). The more predictable string management and financial performance come next. Stable employee relations and a sense of the environment and communities are least important.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

The recession has had an impact on decision-making. Not surprisingly, price becomes more of an issue, but the increased involvement of senior supplier management can also be a differentiator. Recession drives competition, as can clearly been seen (below) by the increased likelihood of trying new suppliers and the longer shopping lists of suppliers considered by decision makers.

Impact of recession on choosing suppliers

(Source: Financial Times Annual Decision Dynamics Survey 2009)

Perhaps what’s most interesting is that, regardless of the recession, what is most important in winning business is the ability to be proactive with prospects, and to build a long and fruitful relationship. Although there is some shift in the score awarded to each of these depending on the prevailing economic situation, they are both the top parameters in determining which supplier is most likely to get work.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

As I’ve said before on this blog, the biggest influencer on your success is you. Proactivity and relationships make a real difference and help to influence others in the market – influence starts at home.

FT’s Decision Dynamics – 1

I was recently sent a copy of the FT’s Decision Dynamics report. It’s an interesting read on how senior execs make decisions. There are several observations relevant to the subject of influence, so I’ll break these up into separate posts.

The first is the shift in levels of trust in suppliers. One might expect the decline in trust in bankers, given the various collapses, bail-outs and bonus scandals. It’s interesting that this reaches corporate decision makers as well as the ‘man in the street,’ which indicates that perceptions of banking run deep.

More importantly, there is an overall decline in trust of suppliers, not just bankers. The chart below shows the decline in trust in professional services providers. All show net negative levels of trust. What’s driving this? A general decline in trust and a rise in skepticism? A recession-driven reaction to more aggressive sales techniques?

(Source: Financial Times Annual Decision Dynamics Survey 2009)

This next chart shows some further provider categories, more technology based. Similar picture – all categories show a net decline in levels of trust.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

What’s most relevant across these two charts is that trust in suppliers has declined since the survey started in 2003. There is an exodus of trust away from suppliers. The question is, where does trust now lie? There are two options: it lies in third parties (I’d call them influencers), or it lies in peer individuals and organisations. Or (more likely) some combination of the two.

What’s clear is that if you’re a provider you’re increasingly destined not to be trusted. Customer reference programmes and influencer marketing approaches are essential.

To network well you need to be a great host

The best piece of advice I ever heard on how to network is by Kesh Morjaria, Owner of thebestof Brent, on an interview on the KnowledgePeers site. He says that you should act as a host, even at other people’s events. Welcome people, introduce them to others, show interest in them. It’s a great mindset to have at these large networking events where you don’t know many people.

The KnowledgePeers service is growing into a useful collection of small pieces of advice on a wide range of topics relevant to SMEs. There’s even an intro to Influencer Marketing featuring your truly.