Let me start by a disclaimer: I am not a marketing person.
Over the past 30 years I’ve first and foremost regarded myself as a salesperson.
Despite having an MBA majoring in marketing, I fully admit to having a rather simplistic view of marketing: present a product or service so people can see what it is. Then leave the selling to the sales department.
Marketing incorporates advertising, half of which we know works – we’re just not sure which half.
And that’s why I love online advertising.
If it doesn’t work, I can turn it off – instantly.
The beauty of online is that everything can be measured. The challenge is to work out what to measure. In ecommerce, that’s really easy – Return of Investment (ROI).
Everything we do online comes down to a very simple measurement of how much each sale costs (i.e. cost per conversion, or CPA), and whether that cost is less than what we make on the sale. If it does, keep doing it. If not, turn it off.
Enter social media, this wonderful Pandora’s box promising to be a marketers nirvana – two-way communication between your brand and audience, interacting directly in real time with thousands upon thousands of your most valued customer at once, creating trust, creating interest, creating sales.
Social media may be all of the above, but so far I certainly haven’t worked out how the online traffic we can create from Facebook, Twitter, MySpace, YouTube or any other broad based social media site creates sales. Or, more accurately, how traffic generated to our site from any of the above can create sales at an acceptable ROI.
A couple of years ago, all the rage was about viral marketing campaigns – at every online seminar or workshop you’d hear at least one amazing story about how someone sending this incredibly funny message to a handful of friends mushroomed into an audience of millions within weeks or even days.
Interestingly, I can’t recall too many stories about viral campaigns that resulted in equally amazing sales results.
I see an interesting parallel here. The viral campaigns we heard about were successful because they were funny, controversial, cheeky, silly or a combination of all of the above. The real value was in the message itself, not what it was trying to sell. Teetotallers with a sense of humour would laugh at Carlton Draught’s Very Big Ad, but they wouldn’t suddenly start buying Carlton Draught by the slab.
More to the point, viral campaigns were successful because they could be shared easily. I’d forward a funny email to my friends and colleagues because I wanted to share the laughter. Social media has a lot of the same characteristics – it attracts huge audiences because people want to share experiences, photographs, videos, thoughts, music, rumours, ideas, etc.
It’s the sharing and interaction that makes social media so successful and differentiates it from most other forms of media.
That doesn’t necessarily make it an effective sales channel.
A metaphor I often hear used is that social media is the modern day equivalent of the office water cooler (or the office canteen, smokers corner, the vending machine or the local café – wherever co-workers gather in groups). Which also reminds me that the most unpopular person in such gatherings is the guy who has just signed up with Amway (no link intended) – a sure-fire conversation stopper!
So just like the water cooler, trying to sell stuff on social media sites is not just difficult, but it may even be contrary to the very purpose of what social media is about – sharing and interaction between like-minded people.
Coming back to the viral campaign comparison, I haven’t had any agency trying to sell me on the cost-effectiveness of viral campaigns for a long time. I wonder if social media is going the same way?
Hang on a minute, I hear you say, whether you are a salesman or a marketer, you cannot possibly ignore such a huge audience.
And you’d be right.
But the point is, if social media has a place in the overall online marketing mix, it needs to be measured, and having people twitter, update a Facebook profile or post videos on YouTube costs money, too.
Social media may have a place in the overall marketing mix, but you need to understand where it fits into the sales process.
Kim Wingerei sells mobile phones and telco services online. He works to live, is easily distracted and likes sailing.
Photo: Respres (flickr)
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View Comments
Phil Corbett
July 8th, 2009 at 6:21 am
I understand the point you are trying to get here is that Social Media martketing needs to be measured, and that is true. A lot of us marketers who have incorporated this into our mix have found ways to measure the impact of Social Media on the sales pipeline.
There were a few things I had issue with in the piece. The first is how you pull marketing out of the mix after initial awareness has been generated. Marketers have to impact the conversations the sales reps are having at every stage of the sales cycle. To truly enable a sales team they need to be tapped into the tribal knowledge of their organization, especially in more complex sales. Also, to say only half of your advertising works, but you don’t know which half kind of flies in the face of the premise of the article, the importance of understanding ROI.
The next point is on the impact of viral marketing and how you can’t recall viral campaigns resulting in major sales results – a quick google search found this article as the number one result in news (http://www.toptechnews.com/story.xhtml?story_id=012000SSFL6O&full_skip=1) – meaning, viral does in fact work, if done properly.
The final point is on social media being an effective sales channel – if you use it properly it can be a huge channel for generating new leads, opportunities and sales. (Dell is a great example for B2C http://www.smallbusinesscomputing.com/news/article.php/3828291)
The thing is, there are a lot of snake oil salespeople in the world of social media passing themselves off as experts – they are pretty much having people do everything wrong though when it comes to creating an effective channel (similar to the rise of SEO/SEM experts a decade ago.) If you create a plan, set goals, maintain the initiative and measure results you will see that Social Media can be very successful (and at a very low cost.)
You wrapped it up with the mention of needing to be measured, which I could not agree more with that. But then again, I am a marketing person.
Cheers.
[Reply]
Kim W Reply:
July 8th, 2009 at 7:02 pm
Thanks Phil,
good comments – happy to hear from you if you can help us formulate a strategy – I am actually not against Social Media in my marketing mix, just struggling to understand how to get value out of it.
One of our challenges is that we’re a relatively large business with many brands, but most of those brands are not well known. I can see how Social Media can work if you have a recognisable brand (e.g. Dell), but in the absence of that, I am unsure if it is a worthwhile channel to help build brand?
Cheers
[Reply]
James Tuckerman Reply:
July 9th, 2009 at 10:50 am
Hi Kim,
You should read this article.
http://anthillonline.com/working-the-clock/
Tim Ferris was largely unknown. He embraced social media and his ‘Four Hour Work Week’ concept took off like a rocket.
I personally think social media is better suited to small businesses and individuals, that can engage with other humans in a genuine and honest (i.e. human) way.
[Reply]
Michael J
July 8th, 2009 at 10:40 am
Social media and the web in general are pull media. Ecommerce is a pull function. Customers find what they want. They buy it. Low cost of sales. Nice.
My two cents, is that social media is most useful as a research tool. The sales person/marketing person can get lots of data points as to what is happening in the community of interest. But connecting those data points to create actionable information is about what to measure and what it means. The best way to do that is with experienced highly incented professionals. Data points without a useful pattern are less than useless. They supply the data to do exactly the wrong things at the wrong times.
Just my little soapbox, Print and TV are push media. People love print and TV. They don’t love the social web. Print and TV stay around. There is a much longer time period for the moment of interest to occur. I could go own for quite a while, but it would be impolite to clog up this thread with my blablabla.
[Reply]
RBL
July 8th, 2009 at 10:42 am
Anyone who embarks on a social media campaign to goose sales is already on the wrong path. It’s not a sales tool. It’s a pre-sales communications channel. It’s a customer service channel. It’s a reputation monitoring channel. It’s a way to reach people who are not yet ready to buy, and are looking for information and interaction; and a way to interact with people who are already customers, and are having a problem that needs to be resolved, an idea that needs to be shared, etc. As far as business objectives go, social media can and does help with organic SEO via blogs, traffic generation, public awareness (i.e., publicity), and can help with lead (e-mail capture) generation when properly funnelled into other marketing efforts. But it is not, not, not useful for “sales,” just as a p.r. campaign isn’t useful for directly generating “sales.” Both p.r. and social media have indirect impact on sales efforts. Unlike p.r., the results of social media campaigns are easily measurable.
[Reply]
Andrew Simms
July 8th, 2009 at 12:44 pm
Your piece inspired this blog post, Kim (link below).
In summary, if social networks can’t monetize their core activities because users have come to expect them to be a certain way (as you say), then maybe the key to monetization for social networks is to find NON-core activities…..
enhancements and improved functionality where the value proposition (ie using these features with advertising alongside) makes sense to the customer/user.
http://www.optimize-video-tool.com/2009/July/Are-selling-and-social-media-incompatible.htm
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Tim Edwards
July 8th, 2009 at 6:50 pm
At the risk of repeating myself in this publication – B2B is different, and LinkedIn is for B2B.
Most business’s have a B2B element that can be tapped via LinkedIn. The conversations you have on LinkedIn are professional and personal. If that is not a pre cursor to sales I do not know what is. At the same time there are probably 35M professionals on LinkedIn now.
For an organization interested in Global B2b – LinkedIn is a god send.
For people that want to learn about trends in their industry – LinkedIn is a good source.
I will be amazed if the development of LinkedIn does not lead to more use of the other social media by professionals for awareness generation in the B2B sector.
[Reply]
Graeme Bowman
July 8th, 2009 at 11:40 pm
As a Corporate Comedian, Hoax Speaker and Lateral Thinking Facilitator, I mainly use social media to find other professionals who share my target market. These other professionals include fellow speakers and trainers, and people in marketing, PR, event management, etc. It’s about creating a referral network of people who gain an understanding of each other’s work, and who can keep an eye out for opportunities for each other.
I don’t expect to connect to many customers directly via social media, but I will reach a growing number via introductions and referrals.
One specific thing I do is find and connect with many folk on Twitter, then try to convert the serious players into Linkedin contacts.
[Reply]
Paul Byres
July 9th, 2009 at 1:12 pm
I like your last point, Kim. “Understanding where social media fits in the sales process.”
My view is that social media is very similar to mass media with regards wastage. For example, your ad campaign may reach 100,000 people but you may only get 100 sales or 1 in 1,000 conversion.
For this reason, not all brands are viable for social or mainstream media.
In much the same way that brands have associated with stars in mainstream ways, I expect that star power and opinion leaders will come more to the fore of social media to directly sell products that can be sold online and create word of mouth for products more suited for offline sales channels.
For example:
1. Paris Hilton is used as talent by an online sunglass retailer.
2. The sunglass retailer runs 100,000 online ads at Facebook with Paris modelling the sunnies. There is a promotion prompting people to imitate Paris’s modelling style on their Facebook pages.
3. A popular year 12 student somewhere in the world buys, takes some photos, enters the comp, uploads them on her Facebook page with the link to the sunnies.
3. Friends visits the girl’s Facebook page. Buy the sunnies to enter the comp and the cycle goes on because it’s fun & interactive.
4. Worldwide sales mushroom and magazines pick up the story with no paid mainstream mass media.
The sunglass retailer’s campaign may only get a 1 in 1,000 conversion rate but the media cost per sale could be very low because the paid component stimulated the word of mouth or viral campaign.
[Reply]
James Tuckerman
July 13th, 2009 at 2:54 pm
Wrigley’s, of chewing gum fame, are having a crack, according to marketing website, Mumbrella:
“Wrigley’s has today launched an ambitious social media campaign masterminded by Clemenger BBDO Sydney to promote its new range of gum, Five.”
http://mumbrella.com.au/wrigleys-spearheads-new-gum-launch-with-social-media-campaign-7654
Can’t wait to see whether they release hard data at its conclusion.
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Geoff McDonald
July 14th, 2009 at 1:39 pm
My take on Social Media and sales is that we are putting our old values and expectations onto new things. And, and they’re not quite fitting.
Previously, there was a very direct channel called advertising. If you promoted your product you made some sales. It was also easy to see the mainstream message because one popped up on your TV every 6 minutes or so.
Now, with social media things are less direct, less obvious and more subtle. Firstly, you have millions of channels, ie. millions of people talking. Advertising and the push for sales is not front and centre anymore. It has simply become one channel amongst millions.
Also, if you observed the millions of conversations people are having, we’re not thinking and talking about buying stuff all the time as the advertisers and sales mindset wants us to.
My view is that most organizations still have the mindset to pummel people with ads and therefore create a short cut to sales. Social Media is more subtle. It is more about influence than direct sales.
The big challenge is that the old rules of advertising and mass selling don’t work on social media because social media plays by different rules.
The consumer is back in charge of the conversation!
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STEVE HEIMOFF| WINE BLOG » Blog Archive » Has social media ever sold anything, besides itself?
August 31st, 2009 at 5:10 pm
[...] Call me a revanchist if you want. It’s a common charge against someone who dares to question whether social media is all its most ardent supporters claim it to be. The question is not, I think, What is the ROI for a social media sales campaign so much as this: Can social media sell anything but itself? [...]