Socialselling works, only when done right
There are lots of positive buzz around social selling. However, most of the articles are fairly generic (works/ does not work …) and very few actually go into facts and data:
- in what situation does it work or not
- how to setup the right processes and metrics to generate a positive ROI.
Having practiced social selling for a few years now in different verticals (Wealth Management, B2B Tech, Consulting Services, Pharma), here are a two learning’s we’d like to share:
#1 social selling is like consultative selling and it only make sense for products and services with significant value ( >~ $20K), where trust & knowledge are key selling points.
#2 Social selling without a plan does not work. It’s is like distributing flyers to a random audience.
Let’s start with #2: Serendipity Social Selling
The first step in social selling is to build relations with potential buyers. This is done by actively listening to people in your target market and engaging with them on a regular basis with meaningful comments.
- Social Selling can’t be automated (no-one wants to talk to a robot and it is a recipe for an immediate turn off).
- Social Selling can’t be done by the “Brand”: most consumer don’t want to build a relationship with a brand on social media – they want to build a relationship with the people behind the brand.
- Social Selling can’t be delegated to a first line agent that would take over the initial discussion. You need to be authentic and relevant in each and every engagement you have a potential client.
- This process takes time and is similar to networking in the real life.
The net that the social selling process does not scale. You can reach 100M’s of people at once on the web. You can spam as many people as you want but you can’t really get their sustained quality attention.
There is therefore a limit on how many people you can target. Our experience is that this limit fluctuates around the Dunbar number (~150).
It is critical to carefully pick your 150 i.e the 150 people you need to listen to , engage with, transform into “professional friends” and become the go-to person for your domain of expertise.
Should you not limit yourself to 150 and grow your network in the 1000’s, the maths will kill you: The probability that you engage with the same person frequently enough to build a relation is too low and your chances to build a meaningful relation vanishes.
It may be fun but from a business standpoint, it is not efficient and it does not work. You’ve just spread yourself too thin.
Still, “Serendipity Social Selling” is what most people do: Engaging almost randomly with 1000’s of people on Twitter, with no strategy, no process and being happy with an ever increasing number of friends/ followers.
On the other end of the spectrum, If you don’t follow enough people, you run the risk of either “stalking” your target or being too slow growing your network
The magic formula that we have empirically uncovered is:
15-20mn per day, 100-150 targets, 5 engagement opportunities per day, 50 new professional relations per year and 5 sales.
If a sales rep does a reasonably good job at targeting and engaging such a quality group of people, he/she should end up building 50 new relations per year i.e 50 people you could ask for a meeting and engage in a sales conversations.
Then it’s all on him/her and depends on the product/service sold but reasonably one could make 5 sales.
This result brings us back to learning #1.
Social Selling does not work for business where the Customer Lifetime Value is too low.
In the optimal situation, Sales Rep will close ~5 sales in year one (could go higher with referrals but one should start with the estimate of 5 sales per year ).
Beside listening and engaging with prospects, he/she will have to manage the clients and create/curate some content so the 1h per day becomes more a 25% of his/her time.
This gives the boundary of the social selling process: 1/4th sales rep, 5 sales per year.
So the factors you should take into account before deciding whether Social Selling is good for you are:
- Presence of the prospective clients in Social
- Customer Lifetime value versus Cost of the Sales Rep assuming the performance will be 5-10 sales per year
- Are trust and knowledge key success factors for closing?
- Is the sale transactional or relational ?
- Do you have the right sales rep to engage in social?
If all of these are yes, they you definitely should give it a GO !