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Consultancy firms, social media & the hysteria that comes with it

Author: Asif Khan

The consulting industry has widened substantially in recent years, perhaps partly due to its use of social media. In their fourth annual study, Buday & Caputo (2013) discovered that the vast majority of consulting firms (87%) are using LinkedIn to market their services.

About two-thirds (68%) promote themselves through Facebook, and just over half of the consulting firms (54%) use Twitter. Consulting firms are far more socially interactive than they used to be online, and this has taken them from strength to strength in terms of recruiting customers and clients by engaging with them on platforms their target contacts use regularly.

“Social media is a genuine game changer for business” (Firstbrook and Wollan, 2011:2). It was found in Firstbrook and Wollan’s study that companies who made an early investment into social media for their business claimed returns as high as 20 to 1, with even greater gains predicted for the future. However, utilizing social media as an essential part of a company’s strategy does not always yield high returns of investment or aid financial development for every business, industry sector or organisation as Firstbrook and Wollan propose. 

Consultancies look to Thought Leaders

Buday and Caputo’s (2011)  research report ‘Marketing Consulting through Social Media’, found that social media would account for 16% of the thought leadership marketing budget that year, and was expected to grow quickly, enough to command 26% of the budget by 2013.  In today’s indeterminate, fast changing environment, consultancies are looking to the Thought Leaders of today such as journalists, investors, and market analysts for their points of view.  The term “thought leadership” is often heard these days but it is a repeatedly abused and misconstrued idiom. 

Forbes Magazine which is regarded as a prominent source for dependable business news and financial information came up with a two part definition when defining the term. They centre their definition after decades working with professionals and organisations worldwide. 

Forbes Magazine defines the first part as:

“an individual or firm that prospects, clients, referral sources, intermediaries and even competitors recognize as one of the foremost authorities in selected areas of specialization, resulting in its being the go-to individual or organization for said expertise”. 

The second part of the definition moves more to the commercial aspect that follows a thought leader: 

“A thought leader is an individual or firm that significantly profits from being recognized as such”. 

The views of “Thought Leaders” has a direct link to what follows after, since a growing number of consulting firms have proceeded far past the exploration stage and taken the plunge (Buday & Caputo, 2010).  in their research reported in the following year they found that ‘Consulting firms are making their marketing more sociable’. They concluded that social media consumed a considerable amount of the consulting marketing budget compared with previous years. They also reported that the majority of consulting company respondents admitted they are “devoting a bigger chunk of their thought leadership marketing dollars to social media, and expect to devote nearly a third of that budget to social media by 2014”.

Social spend is being re-evaluated now

However, last year in their fourth annual study titled “Consulting firms retrench with social media: A 2013 research report”, they found that consultancies are limiting both their budgets and activities on social media. Overall, they are spending 4% less of their marketing budget on social media this year than they did last year. Some may question why, and an answer is provided. 

After re-evaluating the actual benefit that social media has on consulting firms, it was revealed that social media did not do much in relation to business activities. Buday & Caputo established that barely half of the consulting firms said with confidence that they can tie their social media activities to leads and client projects. 

Tata Consultancy Services (TCS) global trend report found similar findings when launching a global study, in which 655 enterprises (consumer companies) took part, of which the average revenues were $15.6 billion each. Despite the initial hype of social networks, enterprises are still struggling to reap the benefits of social media for business. It was found that roughly 10% of enterprises have generated significant improvements in multiple areas of their business as a result of social media investments.

A new Social Network for Global Commerce

If we address the premise of this article after studying the facts, the answer is very simple. Most consultancy companies have failed to consider the social networks of tomorrow, which do much more than allow connections and communication for users. The whole purpose of social networks for consultancies is not only to expose and promote their company, but to also create project work and generate money for their business.

A social network that allows for work and projects to be undertaken by companies and individuals completely online would benefit consultancies dearly. These Next Generation Social Networks of the future are not a long way off but are already in existence, and are growing year on year. One of such is INNOVO which was launched this year. They bring commercial transactions to a whole new level.

INNOVO is a free to access social network which enables companies to acquire new customers, enter new markets, find cost savings and develop new products at no cost, just a share of the profit on the project. INNOVO also enables business executives and people from all walks of life to work on these projects for a share of the project’s profit. The global network infrastructure for the Network is fully operational, the business models have been developed and there are project case studies with global companies such as Pearson PLC (owners of The Financial Times) and Bank of America Merrill Lynch.

If you are interested in finding out more please visit www.innovo-network.com

Image courtesy of KROMKRATHOG at FreeDigitalPhotos.net

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