There are many definitions to social media. Social media is defined to be a tool for people to share ideas and content online and form relationships (Scott 2009; ref. Rodriquez, Peterson &
Krishan 2012). Moreover, Kaplan and Haenlein (2010) explained social media to be Internet-based applications that are Internet-based to Web 2.0 and they allow users to share, create and exchange content or any tool or service which eases the conversations in the internet. This was also agreed by Rodriquez et al. (2012). Further, previous research defines that people can through social media, in addition to sharing and creating content, communicate and build relationships (Agnihotri et al. 2012). Finally, according to Kietzmann, Hermkens, McCarthy and Silvestre (2011), social media can be part of maintaining and developing relationships.
Social media distributes information and content through various methods in interactions between individuals or organizations and it is referring to communication that is continuous and it aims to development of relationships and finally co-creation of value (Moncrief et al.
2015). In addition, Marketo (2010) explained social media to be an event where online social interactions and platforms are used to produce, consume and exchange information (Guesalaga 2016). It can also be “the technological component of the communication, transaction and relationship building functions of a business which leverages the network of customers and
prospects to promote value co-creation” (Andzulis et al. 2012, 308). According to Ploof (2009), social media enables companies to tell their stories online. Moreover, social media has to be treated as an explicit strategy activity (Andzulis et al. 2012). In this study, social media is referring to social media platforms such as Facebook, Instagram, LinkedIn, Snapchat, Twitter and Youtube that can be used in sales and where the people can share their content, communicate, form relationships and sell their product or service. However, for example WhatsApp is not seen as a social media channel in this study because it is more a messaging application.
1.4.2 Social capital theory
In social capital theory, the connections and social relations are at the center and it explains why social relations are important for the company to achieve goals (Lin 2001, 1) and it explains why social media is of great worth for organizations (Rodriquez et al. 2012). In business community, people are taking leverage of relationships to find solutions (Rodriquez et al. 2012) and when they are taking part to these networks they are communicated about and helped to generate opportunities which lead to higher rates of return (Burt 1992, 13). Social capital is developed when people are information creators and controllers in a network (Burt 1992, 9) and it eases information sharing and flow, trust among the members, problem solving and makes transactions more efficient (McEvily & Marcus 2005).
As mentioned earlier, social media is about sharing content and creating a network. Salespeople can find easier ways to traction with the customers when contacting is done through shared means and not only by doing cold calls. Organizations are able to increase their social capital if they are using social media constantly to expand their network and at the same time increase their performance. (Rodriquez et al. 2012.) In addition, when there is increase in social capital, organizations are able to create collaborative transactions with their customers which are not that expensive. Finally, risks are reduced because there is a mutual trust and the business decisions that are being made benefit both parties. (Van Deth 2003.)
1.4.3 Social Customer Relationship Management (Social CRM)
Customer Relationship Management relates to strategy, effective use of data and technology, increase in knowledge of the customers and relationship development which aims to long-term
relationships with the customers that are profitable to the company. In addition, it includes that this knowledge is distributed to the right stakeholders and customer value is generated through process integration inside the company and between the network of companies. (Boulding, Staelin, Ehret & Johnston 2005). Social media is a logical step after customer relationship management and some practitioners call it social customer relationship management (Rapp &
Panogopoulos 2012).
Social Customer Relationship Management came when social media developed into an important part of companies’ strategy, when they were using social media tools such as LinkedIn, Facebook Twitter et cetera to communicate with the customers (Rodriquez et al.
2012). Greenberg (2010) referred to customers as social customers and every interaction between the company and the prospect or customer shoud be seen as a new collaboration and a significant element of customer relationship management. Trainor (2012, 319) defined social CRM based on Greenberg’s (2010) definition: “Social CRM is the integration of traditional customer-facing activities including processes, systems, and technologies with emergent social media applications to engage customers in collaborative conversations and enhance customer relationships”. When sharing content and communicating with the customers, companies can create deeper and more important relationships with the prospects, customers and partners (Rodriquez et al. 2012) and this next level of CRM helps companies to use social media also in sales (Panagopoulos 2010; ref. Rodriquez et al. 2012).
Social CRM is concentrating more to integrate customer transactions and customer interactions compared to traditional CRM which was concentrating only customer transactions (Greenberg 2010). Social CRM pursues to build trust to be able to establish relationships with customers (Rapp & Panagopoulos 2012). Social CRM focus to integrate the traditional activities when approaching the customer such as processes, systems, and technologies with social media applications to enhance customer relationships by engaging the customers to have collaborative discussions with the company (Greenberg 2010).
1.4.4 Customer engagement
According to Bowden (2009), in customer engagement, there is a calculative commitment which leads to consequent buying. In addition, it can lead to emotional commitment which on the other hand is necessity for buyer loyalty. Furthermore, customer engagement leads to increased trust and involvement of the buyers. (Bowden 2009.) Customer engagement in social
media is defined to be the activity of important customer of the organization to use social media tools (Guesalaga 2016). The acitivity of the customers to use of social media has an effect to social media usage of the sales company (Jelinek, Ahearne, Mathieu & Schillewaert 2006).
Customer engagement can be build through interactive customer experiences that are aiming to value co-creation. Customer engagement is important for the companies because engaged customers are the ones who give referrals and recommendations. (Brodie, Hollebeek, Juric &
Ilic 2011.)
1.4.5 Business-to-business (B2B) sales process
Sales processes are explained to be those operations that salespeople do to ensure a lead, make it into a prospect and then finally into a customer (Rodriquez et al. 2012). Before, the effective sales process practice included product and service selling but nowadays sales processes are focusing more to increase customer productivity (Leigh & Marshall 2001) and organizational performance (Rodriquez et al. 2012). Sales are proposed to be several activities in sales which are done by the sales force of the selling company and of which goal is relationship and business engagement with the possible buyer (Viio & Grönroos 2014). Process of these activites by a seller in order to sell is defined to be sales process (e.g Storbacka, Ryals, Davies & Nenonen 2009). In B2B sales process, buyers’ risk is higher because also the value of the sales is higher.
Customers need the right information that they are able to do the best purchase decision.
(Schultz et al. 2012.) According to Storbacka et al. (2009), sales process is nowadays more about creating a relationship than only selling a product. The B2B sales process is based on relationships and trust and in social media era, buyers are considering recommendations, reviews etc. to make their purchase decision (Seley 2011).
1.4.6 Social selling
Agnihotri et al. (2012, 341) defined social selling to be ”new era in which professional selling is predicated on the strength of social media allies within a social enterprise”. Social selling uses social networks to prospect search, relationship building and sales making (Offenberger 2016). According to Hudson (2014, 56), ”social selling is the practice of leveraging social networks and the associated tools in the overall sales function, from lead generation to closed deal to account management”. Companies are using power of social media to achieve relational benefits (Agnihotri et al. 2012). Social selling will probably occur when the social CRM technology is implemented to sales processes and technologies that already exist in the
company (Trainor 2012). According to Curtis and Giamanco (2010), salespeople can draw attention, communicate and close business with the potential customers when doing social selling (Schultz et al. 2012). Social CRM enables the salespeople to develop deeper knowledge of their customers and it has rised the need for social selling which uses the knowledge from social CRM resources. Social selling is also explained to be knowledge of the customers and their network of relationships that can be leveraged in sales. (Trainor 2012.) According to Kim and Talbott (2018), in social selling, salespeople concentrate to understand the customer and his/her pain points through communications in social media channels. In this study, concept of social selling is referring to sales acitivities done through social media and applying social media to entire B2B sales process.
1.4.7 Sales performance
Sales performance is explained to be behavior that is linked to input to achieve the company’s goals (Johnston & Marshall 2006, 412; ref. Rodriquez et al. 2012). Sales performance can be for example customer leads, close rates, retention, revenue etc. (Sullivan, Peterson & Krishnan 2012). Brown & Peterson (1994) defined sales performance narrowly to be outcomes that are instrumental to the organization. Sales performance can be divided into two parts: relationship performance and outcome-based performance. The previous one, relationship sales performance, is focusing on the measures that focus on behaviors which are strengthening the relationship between buyers and sellers. (Hunter & Perreault 2007.) The latter, outcome-based sales performance, is focusing on the measures that are concentrating to measure salesperson performance (Anderson & Oliver 1987; Cravens, Ingram, Laforge & Young 1993) which include for example increase in billing and sales productivity and overall revenue gain (Rodriquez et al. 2012).
In this study, the term sales performance is used in the literature review but the theoretical framework, results and conclusions are focusing to sales outcomes such as benefits and disadvantages because this study is a qualitative study and sales performance can not be measured by qualitative means. However, it is still included in this study in the literature review section because it is an important topic in social selling and possible for research in the future.
2 LITERATURE REVIEW
This chapter reviews previous literature that is affiliated to topic of this study. Literature review contains social selling in B2B context and how it is affecting to B2B sales process and sales outcomes. This literature review is divided to six sections. The first section presents the seven steps of B2B sales process and how those steps have evolved and what are the reasons for this evolution. The second section goes through all the steps of the B2B sales process and explains how social selling brings benefits to each of these steps. The third section discusses about social selling’s impact on sales performance. Next, in the fourth section, the importance of strategy for social selling and the implementation of the strategy is highlighted. Section five brings contrast to previous sections of the study by presenting the risks and challenges of social selling and how to resolve these issues. Finally, the theoretical framework of the study is presented.