Why metals executives should explore using powerful and popular social media tools to engage customers.
by Bill Barnhart
Fritz Prine, CFO of Westfield Steel Inc., in Westfield, Indiana, blogs about a new orbital stretch film wrapping machine his company has assembled for protecting finished parts pallets.
John Batiste, president and CEO of Klein Steel Service Inc., in Rochester, New York, uses Facebook, Twitter, LinkedIn and YouTube to generate business and recruit top talent. He is also working on new media strategies to cut costs in his supply chain.
Michael Petersen, CEO at Petersen Aluminum Corp. located outside Chicago, uses Facebook, Twitter and LinkedIn to steer people to his company's special website that tracks environmental issues and news.
Stephen Chiles, chief marketing officer for Majestic Steel USA Inc., in Cleveland says he is constantly working on new ways to integrate his daily blog with the company's Facebook and Twitter sites to explore business issues that will interest his existing customers and attract new ones.
These service center executives are talking about things that interest them, inviting others to join the conversations and hopefully building their businesses on an entirely new stage. They are industry leaders in the use of social media tools, such as Facebook, LinkedIn, YouTube, Flickr, Twitter and blogs, among others.
Social media, as the phrase implies, began as ways for individuals to communicate and share with one another socially, not as marketing tools for companies and certainly not as tools for industrial companies selling to others in metals and manufacturing. Large and successful consumer products companies and retailers have been using these tools to attract attention and customers for some time now. But for smaller, industrial companies, they are still a rarity. Most may have moved into cyberspace with a website that generally describes the company, its products and staff. But among U.S. companies across all industries that employ up to 249 people, nearly half said they had not used social media at all in their business, according to a survey last spring by in insurer Hiscox Inc.
That, however, is certainly changing. Fledgling social media strategies are starting to appear in the mature business of industrial metals, much like company websites emerged in the mid-1990s. And the questions metals executives are asking about this new media world are understandably the same as at the advent of e-mail and Web pages: How does this technology improve my business? Why should I devote time and resources to something I don't understand?
“We're no Starbucks,” says Brittany Todd, who was hired this summer as the marketing and media strategist at O'Neal Industries, parent company of O'Neal Steel Inc. in Birmingham, Alabama. “We can't give you a discount if you 'like' our Facebook page.” Starbucks has relationships in many cities with GPS-based social media applications that allow it to alert potential customers to sales and other promotions when the customer is near a Starbucks store. Still, O'Neal has hired Todd to develop a social media marketing plan, says Shirley Fagan, the company's strategic communications manager.
“We established a Facebook page a couple of years ago, but we didn't do much with it,” says Fagan. “People aren't going to keep coming back to it if nothing new is on it.” Rather than wait for people to respond to the company's Web page or Facebook page, she said, the company has turned 180 degrees to explore who was where in the social media world who might have interest in O'Neal.
“A Web page is static,” Todd said. “Social media [are] interactive. It requires engagement. It's more of a conversation. We're trying to figure out whom we want to engage. How do they want to engage? What are they doing [in social media]? Where are they doing it?”
Steve Chiles, who joined Majestic in April after more than 20 years in development and marketing at AOL Inc., Reprise Media and other Internet-based companies, sees social media in the industrial world as an extension of the existing relationships between sales staff and customers. He acknowledges, however, the novelty of the aggressive social media strategy he's developing this year at Cleveland-
“We still have customers who use fax. We still have customers that use the phone. What does Twitter have to do with that?” he says.
His answer: At a time of exceptional demand uncertainty and price volatility in industrial metals, “there is a huge opportunity to take information that not only we get but others get around the industry that is part of the public domain and distribute it in a way that educates and informs our constituents” with the goal of making them better buyers of metal. Being a source of useful information beyond material specs and prices builds customer loyalty, he says.
Mark Kasperowicz, global digital marketing director at Alcoa Inc., says comparisons are appropriate between adapting today's social media technologies and developing early websites and e-mail outreach. Alcoa is one of the more active participants in social media among major industrial companies.
The same questions were asked back then, he says: “Why can't we use the old tried and true methods? Why do we need this e-mail? We've got a telephone that works just fine.”
Alcoa began by following people already on the Internet who were “influencers,” people already contributing information and opinions relevant to Alcoa's business on Facebook, Twitter and LinkedIn, and then working to get “influencers to follow us,” Kasperowicz says.
These influencers whom he wants to reach are inside as well as outside Alcoa. “We don't approach social media as a silo,” he says. “Social media [have] brought us together across functions to take our messages to stakeholders.”
A broad-based message animating much of Alcoa's social media undertakings has been the aluminum industry's announced goal of recycling at least 75% of aluminum in the United States, up from 58% currently. “Sustainability is one of our cores, and we see a huge opportunity to leverage social media in support of our sustainability message,” he says.
One result was a YouTube video titled “InCANvenient Truth,” featuring Carl the Can Man, an enthusiastic but hapless motivational speaker trying to fire up a small audience about the importance of recycling beverage cans. The video attracted more than 200,000 views after it was posted in November 2010.
Why Social Media?
What can't social media do? A broad survey of companies published last spring by consultancy McKinsey & Co. found that most companies using Internet marketing strategies received the greatest benefits in the intangible goals such as “awareness,” “consideration” and “loyalty.” Only 24% attributed higher revenues to their Internet strategies.
“Social media [are] not sales channel[s],” says Gini Dietrich, chief executive officer at Chicago-based social media marketing consultancy Arment Dietrich Inc., who has worked with United Scrap Metal in Cicero, Illinois. It's a networking system and a reputation building tool, she says.
Just because social media aren't intended to be used as sales tools doesn't mean that they can't be used to communicate information about metals companies and their products. In the industrial sector, as well as the rest of the economy, “the world has changed in a marketing perspective from a push to a pull, where consumers and business consumers seek information versus waiting for information to come to them,” says Morris Sneor, vice president at Paradigm Productions Inc., an interactive, full-service advertising agency in Des Plaines, Illinois.
In social media consultants' parlance, traditional advertising, pamphlets and even e-mail outreach to potential customers represents targeted “push” or “outbound” marketing. These traditional strategies may or may not connect at the right moment with a sales prospect, Sneor says.
Social media applications, on the other hand, are a ubiquitous source of “inbound” information. People in their home and business lives pull from the digital ether what they want. “They'll seek when they are ready,” Sneor says. With social media, the audience does the selecting.
“If I tell you to go watch a video about a product, will you do that?” says Marsha Montori, strategic partner at Six-Point Creative Works, Inc., in Springfield, Massachusetts, which has a half-dozen manufacturing companies as clients. “Social media [marketing] is like word on the street that travels faster than if you are trying to spread the word.”
Moreover, social media allow potential customers who are browsing for information to experience your company for the first time without making any commitment to a sales meeting or even a phone call. “You are able to show something to somebody in a forum where they aren't committing a lot to you,” she said. “It's another vehicle for delivering your message beyond an in-person sale.”
Social media marketing has the advantage of being a low-cost strategy, compared to advertising and trade shows. It costs nothing to contribute or extract information from the principal social media sites. The major cost is time. Which also means that an effective social media strategy requires frequent updating and monitoring. And there are risks of being misunderstood or lampooned on a global Internet stage. Peter Baines, corporate vice president of communications at service center Samuel, Son & Co., Limited, in Mississauga, Ontario, monitors Internet content about his company and his industry through Google Alerts. But he hasn't embraced social media as marketing tools.
“We are not a market leader in new things. We're really concerned from a security standpoint and a use of time,” he says.
If you are contemplating a social media marketing program, you can test the waters by, in effect, pretending to be someone seeking to pull information related to your business from the Web. Wherever the most widely viewed information comes from is the best entry point for a social media program.
The theory “if you build it they will come” doesn't work in social media, says Susan Gunelius, CEO of KeySplash Creative Inc., a marketing communications provider in Clermont, Florida. A great blog, Twitter feed or website may go undiscovered, while the most amateur YouTube video instantly attracts thousands of viewers because it tickles a few funny bones. The goal for any business considering a social media strategy is to find those sites where your participation will increase visibility and interest in what you have to say, she says.
As a simple test, a recent Google search under the word “politics” displays a lead page with unpaid links to such well-known sites as CNN, Huffington Post, Fox News and The New York Times. If you were in politics, you would want to join and contribute frequently and compellingly to all those sites as a means of raising your profile. Each provides ways for viewers to comment on a story or opinion. Those comments often snowball into lengthy conversations involving many viewers. The high rank of the sites on the Google page proves that many people are pulling information from these sites.
But if you put the word “steel” in a simple Google search, the results are far less encouraging. A recent search turned up websites for civil engineering trade associations; U.S. Steel Corp.; a sushi restaurant in Atlanta, Georgia; a 1997 action movie starring Shaquille O'Neal; and an online steel dealer.
Clearly, social media conversations about industrial metals have not reached the level of politics. It's hard to get the ball rolling in maximizing your social media influence when there aren't enough people in the conversation.
A more popular medium for testing metals-oriented social media strategies is LinkedIn, a networking site that caters to people in business and other professionals. Sixty percent of manufacturers acquired a customer using LinkedIn, compared to slightly more than 20% for Facebook and Twitter, according to a recent survey by Internet marketing consultancy HubSpot in Cambridge, Massachusetts.
LinkedIn conversations are conducted by individuals, companies and organizations, as well as groups formed specifically for LinkedIn relationships. In theory, LinkedIn groups represent an ideal entry point for social media marketing because the groups are focused according to business topic. Searching LinkedIn groups under the keyword “aluminum” shows a nascent social media phenomenon underway around the world.
TW Metals, a subsidiary of O'Neal Industries of Birmingham, Alabama, runs a LinkedIn group, called Aluminum Suppliers of America, with more than 800 members, including employees at peer companies Ryerson Inc., based in Chicago; ThyssenKrupp Materials, based in Southfield, Michigan; and Yarde Metals, Inc., based in Southington, Connecticut.
YouTube.com, a social media site that presents videos of almost any subject, is also a powerful Internet search engine. For example, if you search YouTube under “cut to length line,” you'll find videos posted by manufacturers of cut-to-length equipment in Russia, India, Spain, China and the United States. Each posting includes a link to the company's website and space for viewers to comment on the video.
Red Bud Industries in Red Bud, Illinois, has seven videos posted on YouTube about its equipment in action. The posts include text about the products and, in one case, a link to a separate company website for its stretcher-leveler machines used to get the kinks out of coiled steel.
The special site and the stretcher-leveler video, which has had more than 350 views since it was posted in January, helped Red Bud climb to the top of the Google page in this category of industrial products. Indeed, one of the byproducts of an active social media presence is greater prominence in search engines.
Opening the Blog
You might not imagine metal industry executives composing essays for public consumption, but the HubSpot survey found that blogging was the second most popular social media tool for manufacturers after LinkedIn, with 38% of those surveyed using blogs. In a corporate setting, a blog typically is part of a website that contains commentary by one or more company officials, news on industry interest and links to other relevant material on the Internet.
Fritz Prine of Westfield Steel in Westfield, Indiana, blogs once a month under the heading The Melting Point on topics ranging from his recent experience with an over-cooked steak at a restaurant to the installation of a stretch film pallet wrapping machine.
An upbeat story on Prine's blog about restaurant dining ends with a message about the value of customer service in any setting. And Prine's wrapping machine blog post got some social media traction; it was reposted on the blog of Jinhong Food Machinery, based in Zhejiang Province, China. So sharing ideas and best practices between suppliers and customers is another entry point into blogging for many industrial companies.
Generating traffic to a blog and prompting readers to respond and share your blog posts works best when you broaden your topics, according to social media consultants. It also helps to post messages on other social media outlets, such as tweets on Twitter or wall posts on Facebook, to coincide with your blog entries, they say.
“Cross promotion and integrating your marketing efforts across the social Web will create a domino effect that will boost visibility and entry points to your blog,” says Gunelius. She recommends that companies post one “share-worthy” blog every day.
Majestic Steel in Cleveland, Ohio, began blogging this summer, with short and almost daily frequent discussions of topics drawn from economic reports and news items affecting business in general. In early September, the company matched its blog post about the economic aftermath of Hurricane Irene with entries on the same topic on its Twitter account and Facebook page.
“We want to elevate the best practices of all the interactive media,” says marketing director Chiles. Eventually, he wants to initiate conversations more narrowly targeted to his audience, like a discussion about the relative advantages of spot vs. long-term contracts.
John Batiste, CEO at Klein Steel Service Inc. in Rochester, has a different idea.
Batiste is no stranger to social media in the conventional form. Sometimes it works, sometimes it doesn't. In August he posted on Klein's Facebook and Twitter accounts a link to a video interview with local newspaper about organizational leadership. The video also appeared on YouTube, where it attracted all of 10 views as of September.
On the other hand, Batiste, a retired U.S. Army major general, witnessed the power of social media four years earlier, when his video interview with MSNBC's Keith Olbermann about the Iraq war was posted on YouTube by a veterans organization. The video attracted more than 30,000 views.
Today, Batiste has an ambitious plan for social media at Klein Steel. He says the company wants to complete the circle from open social media conversations back to highly individualized relationship with—and service for—its customers. The vision is to engage customers using social media, then assign them passwords for individualized Internet-based communications relating to work in progress and order delivery, he says.
“It's part of what we're doing to reduce costs in the supply chain,” he says.
For now, social media serve another purpose: employee recruitment, he says. “Facebook and Twitter are our best sources of recruits. These kids are taking us in this direction whether we like it or not,” Batiste says.