The sixth question companies ask about social media

Because no one in the industry was even trying, and he could see the power and ROI that social media can give, as well as bring in customer relationships that traditional ads and PR can never do.

Gary jumped in, and he owns it. I want my employers to meet him.

That is to say, person-to-person loyalty. They don’t buy from WineLibrary, they buy from Gary.

oooh – provocative topic And contest incentive!
I’ll have 2 give this some deep thought & return with clever reply…

SMM increases targeted traffic by 1) generating traffic from niche communities that want to buy what you sell and 2) increasing organic traffic through SEO side effects. ( I would then give an example of how a site I did a SMM campaign for is still generating over 1000 unique visitors a day through organic search without any SMM for the past 8 months )

Targeted traffic (leads) combined with an efficient sales process will result in increased sales.

ThinkingSerious: I agree, but now prove it to a big-company executive who isn’t interested in spending money with you to build such a campaign. The clued in already get this and are already spending the money. The clueless? They’ll find 1000 excuses why what you are telling them isn’t guaranteed and isn’t real and won’t apply to their business anyway, or that the results will be too small. I know some arrogant types at big companies who would answer “1,000 uniques a day? I can’t even get out of bed in the morning for such a low number.”

“how will doing this help my sales?”

Short answer: No.
Longer answer: Your question betrays an incorrect assumption and is therefore incorrect or meaningless. If your goal is to ethically defend the deserved reputation of your business, then the question is “how much will it cost me to establish and defend myself in the wild west that is web2.0?”

In that case I would use examples of bigger companies. The key is to quantify the example and to use an example that the person you are talking to relates to. Just requires a bit of HW.

Richard: I don’t agree with your answer. I’ve seen a DIRECT correlation between social media and sales. All I have to do is look at all the Nokia N95 cell phones that are showing up at conferences lately (people have come up to me and said they bought theirs to do videos just like I’m doing).

Two quick points:
(1) Reducing prices (pretty much guarantees increased sales – especially if your product is good, but you may not increase profits – which is a trickier thing altogether).
(2) On the money question, when you engage in 2.0 technologies the aim of the company is to expand reach, increase (+ve) sentiment – through the most powerful marketing/advertising strategy which is personal recommendation and brand endorsement. Admittedly the statistics aren’t available yet (neither is there the technology – nor legal route around the privacy issue) to really track how deeply this “known” phenomena is operating in the Web 2.0 sphere. Fact remains, anecdotally your wine seller is probably being approached by more customers who are “personal recomendations” and he is probably satisfied that he able of penetrating beyond his customers into their friend networks.

“how will doing this help my sales?”

Would you rather buy something from someone you know, or from someone you don’t know? Social media is about personal relationships. Sometimes tenuous, to be sure, but still a relationship. When your customers (current and future) get to know you because you’ve engaged them in one flavor of social media or another (and ideally more than one), they’re going to be more likely to buy what you’re selling when they need it (or think they need it).

So, yes, it will help your sales – if you do it right. And that’s where the learning curve sits waiting for you.

we need for the dinosaurs to die, that is what allows progress. don’t try to convince them there is a better way, merely allow them to suicide while you build the better way. it is how a forest works.

Intangible assets generate intangible results.

That’s what I’d say. And if that doesn’t work, move on to your next client–and fast.

Intangible assets generate intangible results.

That’s what I would say. If that doesn’t work, I’d move on to the client–and fast.

The long answer (this is pretty much the same as the one I give when asked about how much return any new external marketing or communications activity will generate):

1) Can’t say for sure. Can put together some scenarios, based on logical assumptions and return from similar activity for other clients – but the only way to find out it to pilot, test and measure.
2) That the only way they’re going to find out, learn and move forward, is to bite the bullet and try it. Watching and listening to their competitors are doing won’t tell them – because these are different brands/ offerings/ messages/ target markets and that different set of circumstances will produce different results.
3) That they have to be in the running regardless, or be left behind and struggle to catch up later.

This is a much easier argument than it is for investment in more traditional media though, since you reach a far wider audience at a much reduced cost per person with social media. And it’s self-perpetuating, evolving and organic like nothing else, so it keeps on working for you long after you’ve made that initial investment. For charities (my clients), it’s a great medium to create brand advocates to spread the message for them.

Short answer: Any activity that gets your brand out there, whether people respond directly to it or not, will build awareness of your brand, and this will lead to increased sales – at some point. Unless your product or service and/ or brand messages and values aren’t attractive to anyone!

Also: It’s more trackable and measurable than most traditional above the line/ broadcast advertising – but they don’t have a problem investing in that! They’ll save money on market research and product development because they can use the communities they’ve built as focus groups.

Robert, the sales you refer to belong to the enabling product, the nokia, not the users of the nokia… I though the question was asked by users e.g. how live phonecasting would increase their sales.

So, we can prove social media increases sales for enablers of social media.
I presume Nokia is not asking the question, and maybe that’s my mistake.

Robert, that is a valid question or how does it reduce my costs..Whether we like it or not, social media is too “soft” a value proposition

In contrast, every CEO who sees a Cisco Telepresence demo wants it. Most CFOs who crunch the numbers can show quick payback particularly in intl airfare reduction. The CIO does not even need to help sell.

. The 7th, 8th, 9th , 10th, etc question I would be a is how does this stack against an investment in telepresence, in telemetry (sensors, GPS etc), in virtualization, in a data center consolidation, in predictive analytics, in green computing… companies have finite budgets and bandwidth for new IT projects. and social media is competing with other technology projects…

.there are more people hyping up and hoping social media – But after 3 years of trying it still sounds like a solution looking for early sponsors not a solution with a compelling value proposition

Down south, we always take some work time in the spring to bring TVs to work to watch the ACC (basketball, to the rest of you). Having the game in-house in a familiar medium makes workers happy and does more for morale than any ‘exercises.’ TV at work? Always been a hot-button issue for employers.

My web 2.0, no-land-line daughter watches TV (tivo’ed at home) to catch up on what the buyers of her company’s products watch and listen to. Then she grabs an idea, mixes up the product (more about that if you want; involves teams) and uses all the social platforms (blogs, YahooAnswers, groups, twitter, you name it) to share the product with the new cool name and timely (oh, TIMELY is the key) hook to something they’re talking about on Oprah or another such show. As much as her creativity was key, timing mattered as much. Business – the teams – have to respond fast to use social media to increase sales.

Fact: sales increased huge-fold on that current product that was mixed into a new one and spiked the stats on the ecommerce site with a huge reduction in abandoned shopping carts. Measurable stats. It’s building the social method of prompting key sales efforts. Kid gets to blog for work and as-yet-no-video tools in-house (but it’s coming because they just got some Macs) campaign results in promotable products available after being repackaged and those products that you can tie into national events are selling like hotcakes. Numbers back it up; company is happy. Wants her to “do it again.” She gets TV in office and is getting video and an SMS campaign and the team liked working in a fast environment from a great idea.

Don’t want to out her or her business on your blog but if you give me a call or email, I’ll send you details. Both my kids are in this sort of industry in different states. We talk about it all the time. I showed them Twitter and they showed me stats and sales figures and how to make a channel at every video sharing site around.

Robert – is there any data other than anecdotal evidence? Studies, done with rigor, go a long way towards convincing people rather than saying “I saw a bunch of people…”

Its that ‘sales conversation’ in context of the conversation that affects sales..

For example ads on facebook do not work because they never enter the context of the conversation.. however..pay for services sales at LinkediN work because the sale is context of the ocurring conversation..

great stuff

Richard’s on to something – I would tell the company that sixth question is the wrong question to ask – then quickly explain to them how conversations and stories sell products. This would be easy enough to back up with articles and possibly even research (ie., charts). And I’m not talking about digital at this point – just normal, non-web conversation and story – anything from viral marketing (non digital) to floor sales staff sharing that heartwarming story about how their product met someone else’s needs (and closes the sale).

Then, you can easily step into the digital space, and show how social networking and 2.0 is not about technology – it’s all about enabling MORE conversations and MORE stories. Stories about YOUR product.

Then end your pitch this way – tell them that conversations about their product are already happening (you can probably show it via blogs, twitter, forum conversations). They have the opportunity to LEAD those conversations via social networks, and by starting, participating in, and finishing those conversations.

That’s what I’d do, anyway… works in libraries!

In my opinion, the only sure factor that can be tied to increases sales/revenue is supply/demand. I could also argue for “location, location, location,” but, on the Internet, that is irrelevant.

In pre-web business, consumers would generally buy the least expensive product that fit their demand. But now with Web 2.0, many products (demands) are fulfilled by free services (Gmail, Twitter, Skype etc.). So demand in terms of cost/benefit analysis is also out the window on the web.

But supply of products is still a factor. The technologies/products with the best/most features win. People use Google and click its ads because it can search basically everything effectively; conversely, people do not use Windows Live search (except accidentally of course) because it cannot keep up with Google’s features which fulfill various demands of a Web 2.0 society.

Companies that supply social media features that fit Web 2.0 or other demands and monetize those features most likely free services will see increased revenue. Simple old traditional supply-side economics.

Robert: The funny thing is, having already made the sale (I bought an N95 back in November), the difficult marketing job now will be getting it out of my coat pocket once in a while to take the place of the iPhone I bought the following month!

When I first compared the two on paper, the N95 blew the iPhone away: more bandwidth, better camera, fewer restrictions … yet it just sits forgotten, usually with a flat battery, while the iPhone gets constant use. It’s a crucial lesson, I think: build a compact handset with every feature you could possibly want, shackle it to a clunky braindead UI and you have an expensive shiny paperweight. It’s a shame: if Nokia had just put in the little bit of extra effort to give it a *responsive* UI, I’d be far, far happier with it.

It’s interesting to note “they bought theirs to do videos”, which tends to confirm my impression: as a phone, it’s a miserable failure – it’s just good at streaming video.

I like to use a few examples from a very, very similar battle with those old school CEO’s about 10yrs ago during that whole “brick and mortor” time. Yep, that was fun. They always had the same question because people do buy in the store, the demos prove it. But, why would investing in a e-commerce site lead to sales.

Shove that in his face, of course with a little more data, and I think any CEO would be stupid not to pickup what you are putting down!

Social Media will help increase sales in the same way training a salesman to connect with his customers, work the pipeline, deliver effective presentations, followup, work the pipeline and maintain relationship does. Except this is teaching the organization to do the same with is customer base as a whole. By making these same sort of connections as an organization the effective is tremendous in increasing sales just as an effective salesman, properly trained, and relationally competent grows in his customer base, sales, and retention.