November 1, 2014

Service Centers Get Social

Why metals companies are adopting social media to get in front of customers

Majestic Steel USA had ambitious plans for marketing via the Web. To accompany a new presence on several social media platforms such as Facebook, LinkedIn and Twitter, the Cleveland-based metals service center created a weekly proprietary report on the steel industry and a mobile app, named Unravel, for both Apple and Android devices. That was three years ago. Today, Majestic boasts thousands of subscribers to what it calls its Core report, and has more than 1,500 LinkedIn followers. But its Facebook page has only been updated a few times in 2014, its main Twitter handle recently went nine months without a tweet and the company’s marketing team is retooling, having concluded that the seller of galvanized and stainless products pushed out too many social initiatives at once without a clear strategy.

“We’re currently in transition,” says Derek Stanley, director of brand at Majestic, who left the tech industry in 2013 to help the company get its online marketing back on track after a busy period of launching digital initiatives, some successful, some not. “We put a hold on most of those social media channels until we figure out the best direction to head in.”


Searching for the Right Strategy

Majestic isn’t the only one experimenting with social media and other digital marketing tools. Many metals companies are finding out what works and what doesn’t the hard way, and then trying again. Despite the challenge of marshaling resources and developing a cost-effective strategy for posting, blogging and tweeting, there is increasing evidence of a cautious optimism from the industry regarding social media. Even though metrics for defining return on investment remain elusive, there seems to be broad acceptance by the business community that social networks, mobile devices and content platforms like Google’s YouTube can be used—with the right plan—to boost traditional marketing efforts, publicize a company’s brand or heritage and advertise an attractive culture to prospective employees.

The mingling of social media with older forms of online marketing—blogs, websites, email newsletters, search engine advertising—is a common theme, with most businesses using social media as a way to drive traffic to a website or amplify the reach of content generated elsewhere, such as press releases. Outside of metals, some global firms are using social media as business tools themselves, investing heavily to integrate them into recruiting, for example, or building their own social platforms to promote internal collaboration or provide online communities and sounding boards for customers.

Manufacturers are less likely to use social media or blogs than the typical business marketer. 

The drive to use social media, however, masks some stark disparities between the business-to-consumer (B2C) and business-to-business (B2B) worlds. While nearly three-quarters of respondents to a July Deloitte/MIT Sloan Management Review survey said social media was important to their business (up from half in 2011), B2B firms still appear hesitant to adopt social media tools for a simple reason: It’s not clear how to get value out of them.

“The way people use those different [social media] sites is still kind of evolving,” says Mike Petersen of Petersen Aluminum Corp. in Elk Grove Village, Illinois. His company has been using Facebook, Twitter and even Pinterest—a platform for collecting images from around the Web, with a predominately female user base—to test out a variety of strategies for connecting with the company’s customer base of architects and builders. Petersen says social media is now a necessary piece of his online marketing, helping to boost the company’s ranking in Google searches. It also allows staff to answer questions from prospective buyers, such as the West Virginia woman who used Twitter to say she was having trouble finding Petersen’s products locally (Petersen responded via tweet, sending her to the company’s Baltimore regional office).

Still, Petersen says his firm’s social media efforts rarely provide that kind of obvious financial return. “I think you have to commit to the fact that you’re not going to have a totally quantifiable result,” he says. Lack of a clear ROI, or even a benchmark for spending, may be holding back a wide swath of industrial firms while consumer companies push forward.

In the Deloitte/MIT survey, firms that sell primarily to other businesses were less likely to say social media had a positive effect on their business. A 2012 study of B2B firms by marketing software maker Optify ranked social media dead last for turning online visitors into sales leads, below email, Web search and other channels. Social media made up only a tiny fraction of traffic to companies’ websites, though the survey noted that firms with well-developed social strategies were seeing more success.


Some Tactics Catching On

In spite of that, manufacturing and metals companies are trying out a surprising range of tactics: posting videos of new machines at work, asking employees to blog about their expertise, advertising remnant inventory on Twitter and starting LinkedIn groups, to name just a few.

Majestic relaunched its website in September with more original content—provided by in-house writers, designers and even a steel artist-in-residence—before judging which social platforms to pursue, Stanley says. The goal is to tap the internal expertise of salespeople who have been with the company for decades, partner with groups in the industry, and highlight anything and everything interesting about the world of steel.

“For us it comes down to rolling out content that our customers want to read and that will help them in their day-to-day job,” Stanley says. “There’s a lot of effort around tracking and making sure the content is really speaking to those people. We’re able to follow up and hopefully build stronger relationships with our customers so they think of us not just as steel suppliers but also as a resource for steel in general.”

Big steelmakers, on the other hand, are using social media primarily as a public-relations tool, for example to announce policy positions on trade issues, says Steel Manufacturers Association President Philip K. Bell.

“Your number of Twitter followers, Facebook likes or LinkedIn connections is not really going to sell steel,” says Bell, who is also in the process of revamping the association’s social strategy and website. “Social media is really designed to connect people with each other, not so much to connect people with products.”

Lack of a clear ROI, or even a benchmark for spending, may be holding back a wide swath of industrial firms while consumer companies push forward.


Connecting With Customers

Service centers and other steel buyers are most interested in transacting online, seeing inventory levels, product specifications and rolling schedules. “Social media doesn’t do that,” says Bell. Yet metals industry players want to connect with customers wherever they are.

High-performance steelmaker The Timken Company based in North Canton, Ohio, for example, has more than 1,000 subscribers to its YouTube channel, where the firm posts how-to and product videos, some of which have garnered more than 300,000 views. Social media is also a way for business leaders to communicate their views directly. Nucor Chairman Emeritus Dan DiMicco can be found blogging (, tweeting (@DanRDimicco) and collecting Facebook likes (3,200 at last count) while talking global trade.

Samuel, Son & Co. Limited has a bigger online footprint than most service centers. The Ontario-based carbon, aluminum and stainless distributor advertises on Google, uses email marketing and boasts nearly 6,000 followers on LinkedIn, where it posts three to four times a month, says Ryan Van Horne, Samuel’s marketing manager. With over 110 locations, Van Horne and Bill Hutton, corporate vice president for marketing and national accounts, are focused on giving Samuel’s multiple divisions some autonomy to post content while ensuring a common look, feel and voice across the company’s family of websites and social accounts. For example, Samuel Strapping Systems has its own YouTube channel where a video titled “Slit Coil Packaging Solutions” has more than 4,000 views. The unit’s salespeople can use the videos to demonstrate new machinery to clients, says Van Horne.

Still, metals industry numbers pale in comparison to household brands: Walmart has a half million Twitter followers, nearly 35 million Facebook likes and 400,000 LinkedIn followers (it helps to have 194,000 employees on that network).

At the heart of the business world’s willingness to engage with social media is an acknowledgment that customers, suppliers, partners and employees are all spending more time interacting on social networks and that buying habits are shifting.

The global social media audience grew to 1.7 billion in 2013, up 18% from 2012, and will reach 2.6 billion by 2017, says eMarketer, a market research company. According to Pew Research Center, 74% of U.S. adults who go online now use at least one social network, with Facebook being by far the most popular. More than 40% of adults use multiple social platforms, and usage by older Americans has risen dramatically, with two-thirds of Web surfers aged 50 to 64, and just under half of over-65s, on a social network. In part, this is because mobile usage is rising too. More than a quarter of American cellphone owners access social media at least once a day.

Changes in search engines like Google may also be playing a role in encouraging metals companies to focus more on creating content, including on social networks. While Google is still the biggest driver of Web traffic, the company has repeatedly changed its rules to foil businesses trying to game its algorithms to rise to the top of search rankings. The search giant’s current ranking regime favors websites with frequently posted content and a robust social presence.


Industrial Suppliers Are Increasingly Online

While the typical Facebook member or mobile Web user is unlikely to be looking for cold-rolled steel or aluminum sheets, there’s little doubt that personal habits are impacting business ones. A survey by UPS published last April found that purchasers of industrial products are increasingly going online to find information before buying. The Web was cited by respondents as both the most used and most preferred method for researching and purchasing industrial products. Buyers also said the majority of their suppliers offer online ordering, with younger business purchasers and those with bigger budgets saying that e-commerce is most important to them.

“Buyers want a rich experience,” says Simon Bhadra, senior marketing manager at UPS for industrial clients. The survey cited easily accessible product information, the ability to purchase online and the quality of a supplier’s website as factors in purchase decisions. Distributors tell Bhadra that customers want to see shipping rates, warranty details and maintenance manuals online, and have a personalized online shopping experience.

Social media, Bhadra says, is part of that presentation to the customer. “It’s another component to creating demand. You’ve got banner ads, you’ve got search engine optimization, you’ve got direct email, you’ve got a blog, and then you’ve got social media like LinkedIn.”

Some global firms have taken social media beyond marketing and sales, and social features are starting to show up in business software packages. Starbucks famously launched the My Starbucks Idea website in 2008 to tap into customers’ collective wisdom for new product suggestions and fixes for its coffee shops, using social features such as voting and discussion boards. Business software maker SAP has built an online network for users and developers to exchange ideas, tips and advice, incorporating many features from consumer-oriented sites like Facebook. Chemical company BASF built connect.BASF to let its 111,000 worldwide employees better collaborate.


ROI Remains Murky

But for smaller firms with niche products, figuring out exactly what role social media should play, who should manage it and whether ROI should be determined by page views, pennies or something else isn’t easy.

Kendra Townsend joined Schupan & Sons Inc. after a career in advertising. She’s doing a top-to-bottom review of the Kalamazoo, Michigan-based recycler and distributor’s marketing strategy, weighing a presence on Twitter and Instagram, and hoping to keep the strong personality the family-owned company has already developed online. The firm has several hundred fans on both Facebook and LinkedIn, and uses both to recruit and hire.

“Our accuracy, speed and integrity, doing what we say we’re going to do—all of those things can be conveyed through social media,” Townsend says. “Unfortunately, there’s going to be a lot of failure until we find the right formula.”

Schupan & Sons tapped a small ad agency to help (which it has used before for more traditional tactics such as radio ads), Townsend says. Because the overall cost to the company is more about time invested than money spent, the return is harder to measure.

Like Schupan & Sons, Petersen Aluminum had turned to its longtime advertising agency to help create enough posts, tweets and videos  to feed the social media platforms, hungry for a daily supply of content. The company recently hired trade magazine editor Rob Heselbarth to act as communications head and is looking to use its salespeople and its own customers to generate more clicks and links. Petersen says that online marketing, of which social media is a component, works—his firm’s sales and share are growing in a construction market that isn’t—but quantifying investment and results remains a challenge.

“If you’re a bean counter and you’re lost in that, you’re not going to be very successful at using these tools,” he says. “You can get quantifiable results, like the amount of people clicking through to your site. How to put a value on it, that’s a judgment call.”

Eaton Steel Bar Company of Oak Park, Michigan, focuses on getting clicks from social media back to the company’s website where customers can read articles, newsletters and request a quote. Says Craig Cipa, the company’s inside sales manager: “We watch our followers and all that kind of stuff. Can you correlate your social posting back to an increase in sales? I think that’s a little bit tougher path to go. Does that mean it’s not worthwhile? No.”

“[Using social media] we’re able to follow up and hopefully build stronger relationships with our customers so they think of us not just as steel suppliers but also as a resource for steel in general.”

Measuring financial returns from the Web typically relies on tracking how visitors from your Facebook page or Twitter links become leads (say, by signing up for a free quote), then customers, then applying the value of a lead or customer to the original investment in getting the Web traffic, says Frank Isca, of Weidert Group, a Wisconsin-based online marketing agency hired by manufacturing and industrial firms. That works fine for consumer-facing companies where someone might click a link and make a purchase the same day. For businesses where personal relationships are far more important and months might pass from click to purchase, that formula doesn’t work as well, Isca says, though a commitment to doing online marketing right can pay off well.

As a result, wholesale companies use social media differently than consumer companies. In a survey by the Content Marketing Institute (CMI), a training outfit, and consultants MarketingProfs, B2B companies ranked brand awareness first and sales last as their top content marketing goals. LinkedIn, Twitter and YouTube beat out Facebook as their preferred platforms. Manufacturers, in particular, were less likely to use social media or blogs than the typical business marketer. The time and effort needed to produce the content for social networks—articles, photos, charts and the like—may be one obstacle. Nearly half of business marketers in the CMI survey said producing engaging content is a challenge. Nearly two-thirds of manufacturers agreed.

Weidert charges typical clients between $4,000 and $9,000 a month to produce blog posts, manage social media channels and generate more in-depth studies and e-books for download. Clients often see a return of three times what they have invested, but usually after one or two years of building up an online presence, Isca says. Most companies he works with spend at least half their online marketing budget on creating content. Another 25% of their budget goes to managing social media with the remainder going to software tools and project management.

Isca helped Fisher Tank Company, a Pennsylvania-based maker of welded steel tanks serving the petroleum, chemical, power and water industries, revamp its online marketing to engage more buyers and compete with larger rivals. The strategy started with a new mobile-friendly website and a plan to produce a steady stream of content that would boost search results and entice prospective buyers into downloading e-books and other information in exchange for their email addresses.

Lori Riddle, Fisher’s marketing assistant, says that business slowed down several years ago and younger, Web-savvy clients were having a hard time finding the company online. Searching “Fisher Tank” in Google didn’t even pull up the company’s home page. The company’s new site, launched in mid-2013, has paid off with millions of dollars in new business Fisher can bid for. It generates a steady stream of leads, though sales typically come two or three years later and after much back and forth with Fisher’s team.

“It’s a long sales cycle,” Riddle says. “We don’t have a catalog. It’s a very niche market.”

The company is less focused on measuring the return on investment than on generating awareness and a relationship with customers. Riddle posts articles from the company’s Think Tank blog to its LinkedIn page, which has become a source of traffic as a result.

“LinkedIn for us has been a great resource for reaching out and connecting to … not just potential customers but vendors we might work with, people in different aspects of our business,” Riddle says. “I feel like there’s a whole lot more potential there.”

Peter C. Beller is a Los Angeles-based business journalist and editorial director at A former staff writer for Forbes and MarketWatch, Peter’s reporting has appeared in The New York Times, New York magazine, the Jerusalem Post and elsewhere.

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