11. It’s All About the Benjamins: Social Media Marketing Drives Sales
Okay. We will. But we won’t do it without first making sure you’re hearing us, loud and clear:
Stop thinking like a traditional marketing nimrod!
Yes, you can turn on a Twitter or Facebook profile and start dropping links to your online sales portal and drive sales. If you have a product that already has a recognizable brand name, high demand, or some timely news item or endorsement that puts the product top of mind for consumers, you’ll even make some money and see a nice return on something so simple.
But if your product is like 99% or more of the products out there, you’re not likely to attract much of an audience for your traditional, one-way, sales-spewing fire hose. Without some level of recognition that joining the conversation, engaging with your customers, and treating social media as a two-way, or even multidirectional, line of communications, any success you have will be short-lived.
The spray-and-pray approach in the social media realm requires a heck of a lot more than the typical prayer for success. Brands that are just yelling through megaphones and never turning it to their ear more often than not find themselves ignored. You can’t afford to be ignored if you’re going to invest time and money into social media marketing.
So you have to remember the fundamentals:
• Listen first.
• Be responsive.
• Be honest.
• Provide value.
• Sell last.
This doesn’t mean you should sit around on your hands and not sell for months, weeks, or even days. It just means there’s a lot more work to do in building relationships, establishing trust, and building an audience through social channels for success to work. You don’t just open the door and ask if someone wants to buy. Remember that social media marketing is about building relationships, not receipts. The receipts will come, but only if you invest the time and attention it takes to build relationships with your customers. Think lifetime value, not sale value.
Still, there are those of you who either need to see short-term gains or want to illustrate some dollar value through social channels before you invest more than cursory interest in social media marketing. Some of you might even think, “I’m not cut out for this conversation nonsense. I want to figure out how to sell stuff through social media.” All is not lost, but we have to frame the possibilities for you.
First, understand that there’s a difference in driving business from social media sites and driving business through social activity. The majority of this book is focused on the latter. For the former, you can buy advertising on Facebook, LinkedIn, and many other social media sites. Often, this type of online media is more effective than traditional advertising or even standard online media purchases (such as banner advertising or pay-per-click ads on search engines) because the social networks allow you to hypertarget. For instance, Facebook advertising allows you to choose targeting qualifications based on almost any type of user data it collects (see Figure 11.1). Think about all those interests you listed on your Facebook profile. When composing an advertisement for Facebook, you can target using those interests. What this means is that if you know your ideal target consumer is a 40- to 50-year-old male in Arizona who enjoys golf and gardening, you can deliver your advertisement only to Facebook users who meet those profile requirements.
Figure 11.1. Facebook advertisements allow you to hypertarget based on interests listed in users’ profiles. The site’s advertising tool also shows you the potential audience available based on your targeting before you deploy the advertisement.
Hypertargeting is only possible through social networks because they are the only types of websites that ask users for more than basic demographic information. Although dozens of factors go into an advertisement’s effectiveness, Facebook advertisements have been known to provide higher clickthrough rates than Google pay-per-click advertisements, lower cost-per-lead than traditional channels, and higher returns on awareness and recall than other mediums. Facebook’s own Advertising Case Studies site lists a 70% year-over-year sales increase for online scrapbooking site How Fast Time Flies.1 Portland, Oregon-based Daddies Board Shop, a local skateboard retail shop, used Facebook ads to expand its geographic target to a global scale and drove $45,000 in new revenues.2
How can this happen with a little box in the right sidebar in Facebook (see Figure 11.2)? Because of relevancy. The ads for How Fast Time Flies weren’t served up just to women age 35 to 65. They were served up to women in the company’s target age group that listed “scrapbooking” and similar interests on the network. So, the advertisements were seen by a more interested audience. This increased the chances that the audience would click and convert. Social networking sites have more information about their users and can thus better target messages to users. In advertising, relevancy always wins.
Figure 11.2. Facebook advertisements are typically relegated to the right sidebar, but are often more effective than larger or more prominently placed website banners because of hypertargeting.
Nothing’s Wrong with Advertising
Cantera Real Estate in Austin, Texas, took Facebook advertising and relevancy to new levels in 2010. Owner Jim Olenbush noticed a preponderance of stories in the news about violence in Mexico. The drug-related murders and shootings reached such a dangerous level by the fall of 2010 that affluent Mexican families were considering immigrating to the United States for safety. Putting two and two together, thinking strategically, and following a No Bullshit mindset, Olenbush turned to Facebook advertising. He did some research, but mostly assumed that affluent Mexicans would likely have Facebook accounts. He took out advertisements for houses for sale in the Austin, Texas, area and targeted them to Facebook users in Mexico City and Monterrey. He told us the results have been extremely profitable.
“We invested about $300 to $400 over three or four months,” Olenbush explained. “Facebook even suggested bids of like 25 cents per click and I would lowball it and put in bids of 10 cents. No one else was really focusing on those markets for Facebook ads at the time, so we got lots of impressions. One person moved to Austin and bought a house from us for $1.1 million. While our numerical conversion rate for Facebook clickthroughs wasn’t very good, I spent $400 to make commission off of a $1.1 million house. That’s a really high return.”
Another tactic Olenbush uses is to target companies that announce they are moving corporate operations to Austin. He immediately takes out real estate ads for Austin houses and directs them to be delivered to Facebook users whose profiles and interests include the name of the company relocating. Cantera Real Estate typically spends less than $100 on these types of advertisements for relocating companies but has closed seven deals in the year leading up to April of 2011.
As this real estate advertising example shows, achieving conversions, leads, and sales from social media platforms is possible, even with very little lead time. We asked Olenbush what type of activity he was pursuing to embrace social media marketing like the purists preach—long-term engagement, content-driven, relationship building—and he responded that, in essence, he wasn’t.
“I don’t have the personality for it and the time involved is considerable for [what I perceive as] vague results,” he told us. “Facebook ads can run while I’m out meeting with a client. I was looking for a way to use Facebook and advertising that made sense to me.”
And that approach is perfectly fine. If you can use a traditional method like online display advertising on a new media channel like Facebook and see positive results, we would be insane to recommend you not do it. If no one in your organization, including you, has the interest or desire to engage in conversations with customers regularly and in the online realm, then advertising on social networks may be a good alternative for you.
But understand that advertising is advertising. It typically does little to foster trust between your audience and you, build relationships with customers, or engage them in any sort of unique or interesting way. The one benefit to advertising mechanisms on social media sites is that they allow for hypertargeting. Having that laser focus on your customers or prospective customers and delivering them relevancy—the right message at the right time and in the right place—often delivers you conversions or sales.
Advertising Is Outbound. Social Media Is Inbound.
That laser focus, though, is not exclusive to advertising on social media sites. The other side of the coin—driving business through social activity, not just from social media sites—offers your business hypertargeting as well. In fact, social interaction done well attracts more than just impressions or eyeballs. It attracts customers who consciously engage and interact with your brand or organization. Advertising makes you throw up a message, drive impressions (which is an incredibly vague metric), and hope the user or viewer then consciously interacts with the advertisement by reading, watching, or listening to it with some level of comprehension. This is outbound marketing, the kind that takes place when a company sends a message outward to its customers.
Social media interaction and engagement, on the other hand, is inbound marketing, the kind that takes place when customers or audience members approach the brand or company because they want to interact. Inbound marketing is achieved through social media marketing when your business asks and answers questions, provides information or engagement through content, or simply shows up when audience members are having conversations about the industry, the company, or sometimes anything at all. By having a social presence—a seat at the online table, if you will—your company becomes one that consumers are accustomed to seeing and hearing from, interacting with, and even trusting. Think about it: Instead of advertising that interrupts the audience, consumers begin to see your company’s name pop up on Twitter, Facebook, or even in their email Inbox because someone they know has shared a great piece of advice they found on your blog. Over time, they see it consistently enough that they click through and consume a piece of your content. They decide you’re being very helpful and the advice or value you are providing is interesting to them. Then they subscribe to your blog, follow you on Twitter, or “like” you on Facebook. Your quarterly webinar, coupon special, or event promotion comes up and they see it, offering up their email address to receive access—and you have yourself a new business lead.
The consumer in this case has come to you. He has taken notice because your marketing actions—providing content, engaging with the greater community online—are not interruptive, but participatory. He likely found you through a recommendation from a friend, which is exponentially more reliable than other mechanisms of product or service discovery. Consumers like this take their time in getting to know you, investigating your content and interactions over time to ensure they can trust you’re not just in it for a short-term buck. And when they do come to you, they’re far more ready to listen, convert, or purchase than almost anyone clicking through a display advertisement.
Case Studies in Social Media Marketing for Sales
Jeff Moore of Moore and More Print in St. Louis reached out to TKO Graphix in Indianapolis after seeing photos of the company’s vehicle wrap graphics on the photo-sharing site Flickr.com. Moore’s company also did vehicle graphics and admired TKO’s work. He connected with Josh Humble, TKO’s social media manager, and met with Glenn Burris, one of the company’s national account representatives. And a relationship was born. Humble and Burris told us this story in April of 2011.
Just a few weeks after the people from each company connected—simply because of a photo posted on Flickr—Moore referred a large advertising agency to TKO that was in need of a project beyond his company’s means. The referral led to a wrap and graphics project that involved 4,000 vehicles in more than 200 locations across the United States. The total sale for TKO Graphix? Almost $2 million.
But social media marketing success doesn’t have to be measured in millions of dollars. Sometimes it can be enacted around something as simple as competition and measured in small business numbers. Take Miss Shirley’s, a casual dining spot in Baltimore that’s especially popular on Sunday mornings. It’s one of those Sunday breakfast-and-brunch restaurants that, no matter what time you come—before church or after—there’s always a wait for tables. In the spring of 2010, Miss Shirley’s marketing agency, MGH, recommended a way to turn the Sunday morning wait time into more business. The restaurant would use Foursquare, which beckons users to check in and let their networks know where they are physically located; the service then rewards the person who checks in most frequently with the imaginary title of “Mayor” of that location. Anyone who earned the mayorship of either of Miss Shirley’s two locations would be entitled to skip the wait and be seated immediately.
We learned of Miss Shirley’s Foursquare idea from MGH’s Ryan Goff, who told us they got the word out to customers using social channels like Facebook, where the restaurants had about 5,000 fans. They also used their email list and reached out to Baltimore area bloggers to help spread the word. A printed card with an explanation of how to download the Foursquare application to a smart phone and the process of checking in to participate in the promotion was distributed to guests in the restaurant.
“The restaurants got a ton of buzz and media coverage from the Foursquare campaign,” Goff said. “A lot of people were talking about skipping the wait at Miss Shirley’s. We changed the conversation. It was already a great breakfast place—we just implemented some ideas that added a fun competition to the mix for patrons.”
Over the course of the first three months of the promotion, Miss Shirley’s saw a 427% increase in check-ins at the restaurants. (People were checking in before the company offered incentive to do so.) More important, however, Miss Shirley’s saw an 18% increase in sales. After all, to check in at Miss Shirley’s on Foursquare enough to earn the title of mayor, you had to come more often than just on Sunday mornings. The program drove people to frequent the restaurant more often, which logically led to increased use and sales. And each Sunday morning, one active Foursquare user and their guests could spend more money at Miss Shirley’s without the wait.
The PIs and the KPIs
It would be easy to get caught up in the key performance indicator in the Miss Shirley’s story. A 427% increase in check-ins is phenomenal. But that measure only proves one thing: The restaurant convinced customers to use Foursquare. What the heck does that have to do with driving business for Miss Shirley’s? Any metric you track, and percent increase in check-ins is one you might want to monitor, is either proof that you are accomplishing your objectives or it is a performance indicator (PI). Key performance indicators (KPIs) will have a direct correlation to the objective you’re focused upon.
For instance, if you track brochure requests from your website over time and see that the number of brochure requests per month has a direct correlation to the number of sales in each month, then brochure requests is a KPI. If lots of people download brochures, but there’s no direct correlation between brochure downloads and sales, then it’s just a performance indicator. Sure, it might be one you want to continue to monitor and report on; but if fluctuations in its numbers do not correlate to sales fluctuations, keep looking, because something will. In this case, maybe the number that correlates with sales is follow-up phone calls to a dedicated number posted on the brochure or information cards returned from the brochure.
In the case of Miss Shirley’s, check-ins were a KPI. It’s reasonable to assume that the more times a person checked in, the more money the restaurant made. After all, most people don’t stop into a restaurant without spending something.
The Carlton Hotel in New York City is a different story. Many of its social media KPIs revolve around the number of people who visit employee profiles or the company pages on LinkedIn. Here, the staff is focused on optimizing their pages for keywords to attract LinkedIn users looking for group, conference, and executive event space. By optimizing company pages and individual profiles as well as using LinkedIn’s premium (paid) features to track and reach out to prospects in 2010, the hotel drove $186,550 in new corporate and group business in just three months of trying.3
Not every company has products or services that tally $2 million for a single sale, or a Sunday wait time worth competing to circumvent, or Manhattan real estate to rent out for corporate or group events. Nevertheless, these types of financial transactions can absolutely happen in your company. Whether it’s showing off your work through photo- or video-sharing sites, applying a game application to your locations, aggressively seeking prospects on LinkedIn, or just being present and accounted for when potential customers are asking questions about the topics you’re qualified to speak to, both planned and serendipitous moments of social media marketing sales success happen daily.
But serendipity, which transpired in the case of TKO Graphix, isn’t predictable. You can’t afford to roll the dice and hope to get lucky, can you? This brings us back to the No Bullshit approach. By planning to succeed using social media marketing—establishing goals, laying out measurable objectives, and developing strategies and concepts built on tactics and tasks that focus on accomplishing the objectives and goals—you build in strategic communications through social media channels that don’t need serendipity to work. This happened in the cases of Miss Shirley’s and the Carlton Hotel. Their success wasn’t happenstance or the result of one-to-one networking. It was planned for and calculated.
Seeing the social media marketing world through a strategic filter enables you to plan and calculate your success, too. On a tactical level, this can be done by attaching clear calls-to-action to all of your blog, Facebook, or Twitter posts, converting the public into prospects by giving them reason to volunteer their email address, or even using customer care and outreach through social channels to softly push up-sells and add-on offers. No, you don’t want to be pushy or turn into a call-to-action spam monster, but, for example, if a customer says she’s worried about the longevity of the product, you’re well within the bounds of relevant messaging to say, “We do offer a service plan and warranty.”
Putting Metrics Around Sales
Your plan for using social media marketing to drive sales should be steeped in measurable objectives that prescribe what metrics you will focus on, just like any of the previous six benefit areas have. But don’t limit yourself to measuring just direct sales. Anything that moves the needle on the bottom line—that sells a product or service or leads to the sale of a product or service—should be quantified, reported on, and tracked to help you understand what your return on investment in social media marketing will be. Keep in mind you’re not limiting yourself by measuring ROI—by now you should understand it’s not about ROI, but what you get out of social media marketing. But sales is the primary area we can apply financial metrics to and report as a monetary return.
Some other areas to consider measuring include the following:
• Leads
• Cost per lead
• Lead value
• Nonsales conversions
• Cost per conversion
• Repeat purchase value
• Retention rate
• Average order value
• Time to close
• Referrals
Although many of these might wind up being KPIs rather than final program metrics, each one can be tracked and monitored over time to help you fine-tune your social media marketing efforts related to sales. Some can also be tracked and compared with similar metrics from other channels to prove efficiencies. You might find that you get twice as many leads using pay-per-click advertising, but pay three times as much for them than those you garner through blogging or social networking activity. Even subtleties in your measurements can uncover insights that save your company thousands of dollars or make your cost-per-acquisition exponentially smaller. Something we think is lost on many marketers is going beyond the top layer of metrics and assigning a value to some of the measures considered “soft.” Let’s start simple and focus on the lead. A lead could be a person’s email address or a phone number or even just the name of a company. These are superficial, or “cold,” leads unless there’s more information or context added. If the lead is a name and email address accompanied by information that he or she filled out in an online contact form, now you have a “warm” lead. If it’s someone who approached you at a trade show booth and says, “I need a product like yours. Let me see it,” then you have a “hot” lead. They’re interested in buying and have said as much.
Good salesmen believe in strong metrics and can typically tell you the value of each of the three kinds of leads. Some will say a hot lead is worth $15.00. Others will say something like, “I need six leads per day/hour/week.” What they’re referring to is a conversion rate. These marketers know that on average, and as a simple example, it takes 10 leads to get one successful sale. If each sale is worth $500, then each lead is worth $50. Yes, you need to factor in profits, overhead, and so on, but you get the point.
That same salesman or marketer can also tell you how many conversions or sales he needs to make a profit, a weekly quota, and so forth. So he’ll come to a trade show and know that he needs to close $50,000 in business during the three days. If each sale is worth $500, he needs 100 sales. If it takes 10 leads to get one sale, he needs 1,000 warm leads. Let’s hope there are a lot of people at this trade show!
You need to treat your social media marketing the same way. Look at your website analytics and conversion rates. If it takes you 10,000 unique visitors to convert 100 customers, you have a website conversion rate of 1%. Let’s say your average customer spends $35.00 when purchasing from your company’s site. If, over time, your Facebook activity drives 5,000 unique visitors per month, then you can do some quick math:
5,000 visits = 50 customers
50 customers at $35.00 each = $1,750.00 revenue per month from Facebook
Now let’s say that you filter your website analytics and learn that customers coming from Facebook actually convert at a 1.5 percent rate and spend $5 more per visit than regular visitors.
5,000 visits = 75 customers (1.5% of 5,000)
75 customers at $40.00 each = $3,000.00 revenue per month from Facebook
Keep in mind that some of these numbers are impossible to track unless you plan for them first. But knowing what you want to measure before you start—which happens when you follow our strategic planning recommendations we started with in Chapter 1, “Ignore the Hype. Believe the Facts.”—enables you to set up your website analytics and sales tracking to measure the information you want to collect.
Let’s say you don’t sell things on your website. The math is no different, but the place you look for the numbers is. Jason had a professional services client who once told him, “If we can get a prospect on the phone, we’re pretty confident we can close the deal and get a new customer.” Jason helped the client figure out how many deals the client closed after phone contact with prospects (turns out it was about 55%) and the average value of the deals (around $75,000). The ensuing content strategy revolved around building premium white papers and webinars that interested audience members had to register to download or attend. A required field in the form was the person’s phone number. After several months of building a base list of email subscribers using a corporate blog offering good, but basic, free content, the client’s webinars were bringing in 100 to 200 participants, while the white papers pulled in about 200 to 300 registrations. Removing duplicates, current customers and prospects, and other unqualified leads (like junior-level audience members), each content effort was delivering between 25 and 40 new prospects. Apply the low number and assume you have the same 55% conversion rate to a $75,000 account, and each content effort was worth $1,031,250. The strategy and ensuing content executions cost the client around $65,000—less than the revenue from just one conversion.
All this might sound like complicated math, but it really doesn’t have to be. Ask yourself how much you’re paying to acquire a customer, then how much that customer is worth. Keep in mind that a customer often isn’t worth just the initial purchase price. Happy customers buy from you again and again. The only things you really buy once are coffins and headstones. Every other customer has a larger lifetime value. The day you can place numbers around those two things—acquisition cost and customer value—your ROI becomes more easily measurable.
Understanding those factors not only helps you put metrics around driving sales and leads through, but can also clarify efforts to measure in the other six areas social media marketing helps your business. Building backward from customer value and acquisition cost, you can look at branding and awareness metrics like impressions or conversational market share, compare those metrics with sales volumes, and see where correlations arise. If you see that more impressions have a direct impact on leads or sales, you can begin to associate financial metrics with those goal areas. We still recommend you look for the results of each of the seven benefits of social media marketing while answering the more broad question of, “What do I get out of it,” rather than the financially focused, “What is the ROI?” But sometimes the opportunity to connect dots to intrinsic value and extrinsic value arises. Look for it.
We Know What It Can Do; Now How Do We Do It?
This chapter and the previous six chapters have been focused on the seven major benefits social media marketing has for businesses. Social media marketing can
• Aid in branding and awareness
• Protect your reputation
• Extend public relations
• Build community
• Drive customer service
• Funnel research and development
• Drive sales and leads
We’ve talked a lot about planning, setting goals, accounting for measures of success, and applying metrics to what your company does in each. You now have a better foundation of what strategic planning is and how it applies to social media marketing.
But strategic planning is only half the battle. Executing on your plan, incorporating social media marketing into the day-to-day operations of your organization, and moving toward a more socially aware and enabled business is the other half. You need to understand how to take the goals you lay out for your efforts and activate them within your company. We’ll now look at developing internal and external social media policies and then move through important ideas on managing and activating social media marketing efforts.
After all, if you have a plan on paper but fail to put it to action then what you get out of social media marketing is just a plan on paper. That isn’t enough.
Endnotes
1. “How Fast Time Flies,” http://ads.ak.facebook.com/ads/FacebookAds/How_Fast_Time_Flies_CaseStudy.pdf.
2. “Daddies Board Shop,” http://ads.ak.facebook.com/ads/FacebookAds/Daddies_Board_Shop_CaseStudy.pdf.
3. Emily Molitor, “How the Carlton Hotel Leverages LinkedIn for Business Development,” November 8, 2010. http://smartblogs.com/socialmedia/2010/11/08/the-carlton-hotel-leverages-linkedin-for-business-development.