Effective Ways Social Media Drives Sales

Brad Smith Partner, Codeless Interactive, LLC

Posted on December 10th 2012

Effective Ways Social Media Drives Sales

"Social tactics are not meaningful sales drivers", according to one of Forrester's recent reports.

And in a way, they're right.

You can't sell directly with social media. At least, not very effectively.

Because it's like trying to pick up a date at a funeral. Wrong place, wrong time.

It will never convert like Google AdWords, where people show intent by typing in exactly what they're looking for.

And it will never be as effective as a triggered, event-based email campaign, which has been shown to provide a 600% lift over traditional outbound programs by Gartner (another market research firm).

But that doesn't mean social media is worthless.

In fact, it can significantly drive revenue in an indirect, hard-to-measure kind of way.

Here are 3 effective ways social media can improve your bottom line.


1. The Zero Moment of Truth

Think about the last time you bought a car.

You probably didn't walk in to a dealership blind, forced to negotiate for hours.

After a few minutes Googling, you can find the Kelly Blue Book value for the exact car you want, the dealer's profit markup on that exact model, and even individual reviews of the salesmen themselves.

Buying a car is different today in the information age, because you can easily do proactive research in just a few minutes. And this doesn't only apply to commodities.

For example, marketing for doctors is now a necessary evil. Because you can use Zagat (which connects with Google+) to rate physicians based on trust, communication, availability, and office environment. This has already happened for Wellpoint and Anthem BlueCross BlueShield members, according to Rheumatologist.org.

This critical first-touch with your brand is dubbed the "Zero Moment of Truth" by Google. And it's critical you have a marketing strategy that will connect with people who are doing this type of proactive research.

Social media is one of the best tactics you can use, because it will quickly give your company visibility that used to cost millions in mass-media advertising. Here's a perfect example...

Let's say I'm hungry for pizza, so I go to Google and do a quick search. Here's what I see:

Sure, you recognize some big names. But look at how many small brands there are. Ones you've probably never heard of.

In traditional SEO, these small brands would NEVER be on the first page for a popular, competitive keyphrase. But look at how a Yelp review shows up first, and then each location has reviews on Google+ (which is one of the few reasons why Google Plus is essential for businesses).

And if you don't conquer this "Zero Moment of Truth", then people will just move on to the next company and you'll never get further consideration.


2. Engagement

Engagement is the missing link between getting awareness, and generating sales.

Because at the end of the day, people have to want to do business with you. There's too many alternatives, and too much competition today.

Seth Godin published Permission Marketing over a decade ago, which had a simple premise that still holds true: marketing is more effective when you first ask for permission to engage.

In 2009, software giants HubSpot further extended this philosophy to "inbound marketing", and have built a large business around helping companies do just that: ask for permission and follow-up.

But the problem with engagement is that it's hard to measure. That's why you can't point to a direct ROI for social media, or why large market-research firms don't recognize the true value.

So we make up KPI's instead.

People love to talk about blog comments, and track how many they're getting per post. But does that really tell you anything? And are those blog commenters really buying anything?

Many times it depends on your industry, business, content topics, and customer segments. Because a blog post about celebrity gossip will ALWAYS get more comments than one about how to use a power tool to improve your deck. (But which one do you think is more likely to lead to sales for the power tool company?)

So go deeper, and see if people are truly engaged with what you're saying. Look at data and make informed decisions. Are they staying on your site for a couple minutes? Are they viewing multiple pages per visit? Are they clicking the links in your emails? Is your conversion rate above industry averages?

Either way, social media is the perfect channel to improve engagement, because you're on the front-lines with customers 24/7. And if there are any roadblocks, then you'll hear about them immediately.


3. Retention

Marketing 101 says it's MUCH better to focus on existing customers, rather than having to get new ones.

But then we obsess over things like traffic and new Followers, while at the same time neglect things like customer service and systemically following-up.

One of the biggest shifts in the past few years is how you can buy software today. For example, the latest version of Microsoft Office used to set you back several hundred dollars. So you had to pay a huge lump sum up-front, without even knowing if it was any good or not.

But with improvements in technology and distribution, you now have Software as a Service (SaaS), which enables you to log-in anytime, anywhere, on any device, and access all of your information.

And instead of paying one huge lump sum up-front, you only have to pay a tiny fraction each month. In some cases, it might only be a few dollars.

Netflix only charges $8 per month for access to a HUGE library of content. That same content cost millions of dollars to produce originally. Then it cost consumers $20 per person, per viewing to watch it in theaters.

Netflix may have made enemies with bad PR moves and a botched pricing change recently. But you can't deny how incredible it is to get acccess to so much value for only $8 per month.

And yet they're a public company. The biggest in the industry.

How can any company survive by only charging $8 per month?

By focusing on the lifetime value of a customer. If the average customer stays with Netflix for 36 months, then suddenly that's a powerful revenue stream.

Social media channels have now made it infinitely easier to connect with people immediately before, during, and after their purchases.

For example, on a past campaign for a client, I set-up a process with incentives for customers to "check-in" at their physical locations. Then when the customer did, my client's employees could follow-up immediately and strike up a conversation with them in real-time -- while the customer was still standing in the location. Then my client could also follow-up a day or two later and see how each customer's experience was.

This might not be as glamorous as a multi-million dollar ad campaign. But it's much more effective in the long-run.

Because customer loyalty can be extremely profitable. These are the people who need little motivation, incentives, or flashy marketing campaigns to re-purchase.

And they're the first to recommend your product or service to their friends.

Which happens today, almost exclusively, on social media.


Brad Smith

Partner, Codeless Interactive, LLC

Brad Smith is a Partner at Codeless Interactive, LLC, which specializes in custom web development and customer acquisition services.

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Posted on December 10th 2012 at 6:08PM

Brands and Retailers can translate these three key drivers (zero moment of truth; engagement; and retention) from social media to mobile ROI via #SoLoMo #CEM (customer engagement-mobile), with targeted marketing, end-to-end personalization, social sharing, closing sales, + mobile customer support: http://bit.ly/KDVEn4

Posted on December 11th 2012 at 2:40AM

Social media is a great place and way to help increase your sales goals.  While it is not possible to focus solely on social media as a place to sell your product or service, it is a great way to get your name out there to all of your followers and potential new customers.

Posted on December 14th 2012 at 5:21PM


Very concisely written and so sensical.  I'm trying to raise awareness of the importance of SM in general in the golf industry to PGA Professionals, GM's of facilities and golf course owners.  The golf industry in general is a few years behind in their thinking.....lack of education and awareness.  I'm going to direct a few of my peers in your direction.  I think they can learn a great deal just from this post.  I know I did.  Thank you.

Jeff Molander
Posted on December 18th 2012 at 7:53PM

Brad, I keep hearing people say that "nobody wants to be sold" on social media but I just cannot look past how millions of dollars transact every day---directly---from people who Google a question, land on a blog, locate an answer and sign up for more answers---become a lead that eventually transacts.

Damn trackable.

I keep reading you and this is what I get: I guess you're referring to "direct" as immediate. That seems to be the rub.

But the truth is that I keep running into people who use Facebook to create near-term sales all the time. Small businesses like www.jandofabrics.com or www.logan-inc.com (HVAC units of all things!) and big brands like Intuit.

They're all SELLING on social media and tracking it to the penny.

IMHO, the only people who can't point to a direct ROI or don't appreciate the true value social media can contribute (perhaps we agree?) are the boneheads (and I mean that in the sweetest of ways!) that continue to compare social media to advertising---rather than the next evolution in direct response (ie. AdWords!).

Happy holidays!