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What kind of ROI have you seen for employing social selling in your sales department?
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Hi Lauren: Sales executives bring up this question regularly. I think it reflects an overall trepidation about what social media can do, or has done. But there are two problems. First, the ROI equation doesn't consider two of the most important variables for financial decision making: timing and risk. So analysis of a project of any type--whether sales, IT, or capital investment--that is based on ROI alone might yield a number that looks attractive superficially, but might not be realistically achievable. A $10 million dollar payoff for purchasing one $5.00 lottery ticket looks great, but based on the risk, it's not a great investment if you need the $5.00. And it probably wouldn't matter at all if the fine print said "first check will be paid in 100 years." People who look at ROI alone would decide on purchasing the lottery ticket every time, because the return is undeniably attractive.
The second issue is defining or partitioning 'social selling' from selling in general, because there aren't clear boundaries. If you're working with a selling system that embeds lots of things, including people, processes, and technology, it's hard to rip out pieces and parts and come up with a measurement of financial return. The analogy that's frequently given is 'what's the financial return on electricity?' It's hard to say with certainty, since electricity is integral to everything a business does. Even in the short time social media has been embedded in sales and CRM systems, it's hard to look at its value without considering the entire system.
Great question Lauren. As a small business, we use social media to generate leads. We have essentially 50% of a full time equivalent dedicated to social media engagement such as responding to questions like this.
To date, we have gotten several leads through social channels including Facebook, LinkedIn and Twitter. ROI is negative if only looking at the value of the leads that come directly from social, but it is important to recognize the inter dependencies between different channels such as social signals driving search engine rankings resulting in additional targeted traffic.
For instance, some may find your business through Google because others "liked" or "shared" a blog post you posted on Facebook. These second order effects need to be factored in to the ROI equation. Also, attribution is difficult as marketers know that a number of brand exposures (7-20 depending who you ask) must occur prior to an action taking place.
If you are like most business using a muti-channel approach with a mix of traditional offline and online media, then understanding the contribution of social media in the mix to actions can be tricky, but for certain, almost all business recognize the change in mix of media consumption and recognize that they can not ignore social, which by the way, can be a great customer service tool as well.
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