Social really is here when it comes to the enterprise. Many see the role of social in consumer-focused businesses but have not absorbed what it means for the enterprise. Social is having a direct impact in 5 areas: 1. DIY prospecting: Customers conduct research on products and services well ahead of the official start to the sales cycle 2. Peer influence: Customers “pulse” their peers at every step of the journey 3. Trial before purchase: User testing requires grassroot support. It’s no longer a single decision instance rather smaller purchase bundles 4. Buyer & user are the same: The phenomenon changes decision and influence points in enterprise purchasing 5. Click to compare: Pricing transparency is foundational; consumer expectations are shaping enterprise behavior

1. McKinsey & Company | 1
McKinsey on Marketing & Sales – Slideshare Brief
LAREINA YEE | @LareinaYee
@McK_MktgSales
The Social
Enterprise
How your customers produce
and consume in the social world

2. McKinsey & Company | 2
Productivity & Management
Social is
shaping
enterprise

3. McKinsey & Company | 3
Social is easier
today

4. McKinsey & Company | 4
Record speed
adoption
SOURCE: Multiple press reports
Time to reach 50 million users
Radio 13 years
iPod 3 years
Internet 4 years
Facebook 1 year
Twitter 9 months
TV 38 years

5. McKinsey & Company | 5
Social is everyone
SOURCE: eMarketer, February 2011, McKinsey Global Institute Analysis
Age
NOTE: Numbers may not sum due to rounding.
16 14 13
20 18 17
22
21 21
65+
15
2
12--17
2011
0-11
18-24
25-34
35-44
45-54
55-64
18
10
4
2010
2
17
15
9
4
2009
2
16
14
8
3% of total US users

6. McKinsey & Company | 6
Social is growing faster than
traditional communications
Unique monthly visitors
SOURCE: comScore Media Metrix, October 2011; McKinsey Global Institute Analysis
31
36
-5 p.p.
2011
64
2007
69 53
69
-16 p.p.
31
47 44
18
100% =
1,430
+26 p.p.
82
76056
E-mail Instant messaging Social networking
Users of service
Non-users
% of global online population

7. McKinsey & Company | 7
Enterprise usage is growing fast
SOURCE: McKinsey Global Institute
2011
41
2008
29
2011
50
2008
23
2011
38
2008
27
Blogs Video Sharing Social Networking
% of respondents of enterprise users
Social is in the enterprise

8. McKinsey & Company | 8
Social impacts enterprise
processes
SOURCE: McKinsey web 2.0 survey, 2011, McKinsey Quarterly
Scanning external
environment
Finding new ideas
Managing projects
Developing strategic
plan
Allocating resources
Social
networking
n = 1,728
Wikis
n = 809
Micro-
blogging
n = 654
Prediction
markets
n = 190
Blogs
n = 1,322
40 9 13 529
36 12 13 429
19 17 5 212
16 8 5 411
10 4 2 25
20 - 40% 5 - 10%
10 - 20% Less than 5%
Top Ranking
Dimensions Total
75
73
56
43
30

9. McKinsey & Company | 9
Greater collaboration
drives value
SOURCE: McKinsey Global Institute analysis
Total value at
stake
% of revenue
Product
development
Operations
and
distribution
Sales and
marketing
Customer
service
Business
support
functions
Financial
services
Insurance—
P&C ~3–6
Insurance—
life ~3–4
Retail banking ~4–7
Consumer packaged goods ~5–6
Professional services n/a ~8–11
Advanced
manufacturing
Semi-
conductors ~5–7
Automotive ~4–6
<0.5
0.5–2.0
>2.0
Potential value chain productivity benefit

10. McKinsey & Company | 10
Distributes decision making
Creates permeable
organizational boundaries
Rapid adaptation and a shift
to more iterative problem
solving and product delivery
Your customers’
environment is different

11. McKinsey & Company | 11
5ways social is
shaping your
customers

12. McKinsey & Company | 12
Customers conduct research on products and services
well ahead of the official start to the sales cycle
#1DIY
prospecting

13. McKinsey & Company | 13
Peer
influence
Customers pulse their peers at every step of the journey
#2

14. McKinsey & Company | 14
Trial before
purchase
User testing; grassroot support; no longer a single decision
instance; smaller purchase bundles
#3

15. McKinsey & Company | 15
Buyer & user
are the same#4
Changes decision and influence points
in enterprise purchasing

16. McKinsey & Company | 16
Click to
compare
Pricing transparency is foundational; consumer
expectations have shaped enterprise behavior
#5

17. McKinsey & Company | 17
Change is good
Reboot sales
& marketing
teams

18. McKinsey & Company | 18SOURCE: Internet search, Salesforce.com video library; KLM Facebook page
Reimagine data and
customer loyalty

19. McKinsey & Company | 19SOURCE: McKinsey Marketing and Sales practice, McKinsey Quarterly ―The consumer decision journey‖
39
26 22
28
11
12
26
42
100%
Marketing led by
the company
Marketing led by
the consumer
Previous experience
with product/brand
Contact in store/
with sales agent
31
5
37
21
▪ Word of mouth
▪ Online research
▪ Recommendations/
criticisms
▪ Traditional advertising
▪ Direct marketing
▪ Sponsorship
▪ Store experience
Consider | Evaluate | Buy
Rethink how you
reach customers

20. McKinsey & Company | 20
9.3% increase in
customer
satisfaction as
benchmarked by
American Customer
Satisfaction Index
150,000 customers
helped through
Twitter
Personalized
10 versus 25,000
@comcastcares = ―Make it Right‖
Alternative rather than primary customer
support channel
Handles customer complaint in public
arena
SOURCE: Internet search, Comcast Twitter Feed, Business Week 2009 ―Comcast’s Twitter Man‖
Reimagine service
and information

21. McKinsey & Company | 21SOURCE: McKinsey expert interviews
Customer asks Account Leader for additional information about product capabilities . . .
~5-10 emails
~3 man hours
2 days round trip
~5-10 tweets/
Chatters/ Jabbers
~30 minutes
2 hours round trip
Redefine sales
team workflow

22. McKinsey & Company | 22
The business case is clear
Your customers’
expectations are shifting
Be ready to adapt
Social sales & marketing

23. McKinsey & Company | 23
LAREINA YEE | @LAREINAYEE
@McK_CMSOForum
―Social economy: unlocking value and productivity through social technologies‖
http://www.mckinsey.com/insights/mgi
The Social
Enterprise
How your customers produce
and consume in the social world