Have you ever heard about the “Network Effect”? According to Investopedia: “The network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service. The Internet is an example of the network effect. Initially, there were few users on the Internet since it was of little value to anyone outside of the military.” Though there are great examples in social media and e-commerce, like Facebook, Amazon, WhatsApp, etc. the question is how network effect works in B2B?
Network Effect in B2B and Partnership ecosystems
Let’s suppose partners with their strong solutions are available to a network of partners and customers. When the company introduces its partners as part of its ecosystem becomes stronger, they achieve a greater position in the market. This is the network effect in action. Alliances and partnerships add power to the network effect. Is that really practical? Let’s say when the company is in a partnership ecosystem, and posts quality content, that leads to other relevant partners and they enjoy the experience. Hence it’ll boost engagement–creating a network effect.
This adds huge value. B2B marketers believe that businesses are only as strong as the weakest link in their supply chain, a wealth of healthy relationships can create a network effect that drives even greater value. If a company nurtures its network and is able to form cast iron connections, it stands to reason that targets of growth and excellence are even more likely to be achieved. Especially if their joint goals are based on shared resources and expertise.
According to Connie O’Brien: This is what Facebook and other social networks can teach all of us in B2B marketing. Open, positive communication is a good thing, and as B2B marketers we should be doing more of it. As people share their knowledge and experiences, the total value increases. The network effect equals good business.