For those marketing and promoting their businesses on social media, it came as a surprise when Eric Schmidt, senior manager of marketing strategy and insights at Coca-Cola, told AdAge magazine in March 2013 that there was no “statistically significant relationship between our [social media] buzz and short-term sales.” But is that accurate for every business — or even Coca-Cola?
Coca-Cola has been on the vanguard of using social media to drive sales; it created a Facebook Page in December of 2008 (almost a full month before rival brand Pepsi) and to date has 62 million fans and growing. It joined Twitter in March 2009, and has cultivated an active presence on Tumblr, Pintrest, MySpace, YouTube, and Instagram. But according to Mr. Schmidt, all that social media engagement has directly affected sales by only 0.01 percent.
Has the entire commercial mechanism been hoodwinked into believing in social media’s sales effectiveness? In our interviews with the following industry professionals, we discover that social media actually is an effective tool in the sales process, but there is a lot more to it than initially meets the eye.
Social Media and the Indirect, Soft Sell
In a response piece to Mr. Schmidt’s AdAge interview, Wendy Clark, senior vice-president of integrated marketing communications and capabilities at Coca-Cola, acknowledged that Mr. Schmidt’s data about social media directly leading to sales was, “when taken in isolation…true.”
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But she also shared that social media is an important part of Coca-Cola’s sales strategy, albeit indirectly. It’s effective within the context of creating engagement and impact, not direct, hard sales. According to Ms. Clark, social media, when combined with other sales strategies — like blogging, TV, and digital ads — plays a “crucial role at the heart of our activations that create marketplace impact, consumer engagement, brand love and brand value.”
The experience of other sales professionals, even those who don’t have Coca-Cola’s breadth and depth of resources, validates the research and the impact of the indirect sale. For example, a recent research study conducted by Aalto University, Texas A&M University, and the University at Buffalo, found that customers who are engaged on a company’s social media platform contribute 5.6 percent more revenue than customers who aren’t socially engaged with the company.
Change Tactics to Change Results
In an interview with Sunil Sajnani, an entrepreneur who writes The Extra Money Blog, Mr. Sajnani said that he started seriously using social media for sales in 2012. In that time, demand for his business and finance consulting services has grown significantly since he started focusing on engagement, not direct sales.
At first, Sajnani used his Facebook and Twitter outlets for pushing sales of his services. But after two months, he noticed his readers didn’t click or share his content. He wasn’t gaining followers, and his sales were coming in at a snail’s pace. Frustrated, Sajnani shifted his social media focus to a “more soft sell approach,” building relationships and engaging readers through talking indirectly about his products and services.
The shift worked. Sajnani notes that as a result, “the reverse [of stagnant sales] is happening. I find that showing examples and telling stories is what people relate to the most, and now sales occur automatically over time.” Today, Sajnani has also started to see sales results through cultivating Pinterest engagement.
Integrate Indirect Sales Into Customer Communities
Dana Case, the director of operations at document filing service MyCorporation, told Sprout Insights that she has found similar success through engagement on her company’s Facebook and LinkedIn platforms.
Like Sajnani, her ability to leverage her networks effectively came through trial and error. “When I first started using the social media tools in 2010, I just ran with it. I didn’t have a clear strategy around why, or what I wanted the outcome to be,” says Case.
An effective strategy organically emerged as she refocused her attention on her customers and their needs. The best way to do that, says Case, was to integrate with MyCorporation’s virtual social circles to understand what was relevant for her market. “Now, I engage in conversations and posts with my customers, family, and friends. I become a part of their community.” Case also weaves her promotional content indirectly into her updates to maintain and expand her place in the online conversation. The result has been an increase in brand awareness and an increase in her ability to meet her monthly sales goals.
The bottom line? Social media is an effective sales and marketing tool. What you might hear to the contrary is actually only one piece of the vast, interactive puzzle. The key to utilizing social media effectively for sales is to focus on what social media has always been about: engagement, content, and community.
What has your experience been using social media for sales? Let us know in the comments below.