Social media has obviously generated a lot of interest among B2B sellers and marketers as a tool to find prospects and close deals. The sheer number of people on social networks is impressive (LinkedIn: 225 million users, Twitter: 200+ million active users, Facebook: 1.1 billion users), and the numbers continue to grow. With all that activity, you’ve got to figure that at least some percent of those users are B2B buyers. And if you’re in sales or marketing, you want to be where the buyers are.
A few years back, a study from CEB of more than 1,400 B2B buyers in various industries revealed that up to 57% of a typical purchasing decision has been made before talking with a salesperson. That’s how much the Internet has changed the sales cycle. It’s a powerful statistic, but it hasn’t quite dissuaded skeptics from dismissing social media and social selling as a waste of time.
If you’re a regular reader of this blog, you already know that I’m always talking about value. Sellers and marketers must clearly define their value -- and, most important, quantify that value in financial terms -- if they want to gain traction with prospects in a B2B space. The interesting question to me is how we can actually show the value or ROI of using social media (which I’m defining not just as participation on social networks but also inbound marketing and content marketing).
Let’s start by considering where we might see quantified benefits via social selling:
- Additional leads (which should lead to more closed deals)
- Higher close ratios (based on the idea that social engagement is highly targeted and relevant)
- Higher average selling price (because you've used social insight to figure out what buyers want and are tailoring products and services accordingly)
- Slight reduction in selling cost and traditional marketing (rather than producing expensive printed assets and advertising, etc., you could potentially use social engagement instead)
From a business perspective, you need to evaluate social activity based on how it impacts your income statement. Personally I believe that every company should leverage social media on some level. It’s just a question of where, and how much. That’s one of the reasons we created our B2B Social Media ROI Calculator. We want to help companies see where those opportunities are. For your company, ROI may be something you have to build slowly, over time, because not much opportunity is there yet. But it could be very helpful to senior executives to see the financial impact of a higher close ratio that is a result of your social activity.
On the other hand, if many of your B2B prospecting opportunities are already seeking information on social media, you’ll eventually suffer if you don’t get on board. In other words, it may not be a matter of increasing your close ratio -- it may be that your lack of social activity is causing your close ratio to drop. (That’s where I’d say the technology markets are right now. In the tech sector, anyone who’s not on social media is virtually invisible to B2B customers and prospects.)
Over time as more people engage on social media, all companies will need to choose which channels are best to reach their target audience. If you’re curious, spend a few minutes with our social media ROI tool today and let us know what you think of your potential!