Marketing Profs, May 5, 2009
How can businesses use social media to shorten the sales cycle?
How can businesses use social media to shorten the sales cycle? And, how can marketers measure the ROI of their social media investments? These are questions that every business needs to ask and answer.
Large companies are already asking them—and some are actively trying to figure it out. This area is fast evolving; so, definitive answers aren’t available yet. Nevertheless, it’s clear to me that marketers can deploy social media to shorten the sales cycle—and that measuring success will be no harder than it is for comparable conventional marketing programs.
Shortening the sales cycle—and accelerating revenue—begins with shrinking the buying process. This diagram depicts the 9 steps prospects typically traverse before they make a buying decision.
Step one is finding out who needs your capabilities most--because those with the greatest need tend to buy more quickly and pay top dollar. Today, marketers use conventional marketing research tactics to accomplish this task. Examples include mining internal sales and service data, buying reports from industry analysts, and interviewing prospects and customers.
In the near future, marketers will visit prospects where they congregate—virtually—at peer-based social networking sites to lurk and listen. Only then, will they return to conventional research techniques to sharpen their insights or validate their conclusions. Examples of peer-networking groups include Sermo (www.sermo.com) for physicians and Wikibon (www.wikibon.org) for CIOs.
Those that can’t find an online water cooler where their prospects meet to exchange ideas may want to create their own social communities. Already, sites like Joomla (www.joomla.com) are providing platforms that have social features built in, to make this task easier and less expensive to accomplish.
Depending on the cost of lurking and learning, market data acquisition costs may decrease significantly, thanks to social media. As for measuring ROI, marketers will do it the same way they measure the activities they use today to pinpoint their most promising prospects.
After identifying the target audience, and pinpointing the most promising prospects, the next challenge is helping these individuals recognize that your solution will address their needs. This often requires a drip campaign as it takes repeated attempts—and multiple communications—to change perceptions. In the conventional world, this task falls to either public relations because it has broad reach—or to more cost-effective direct marketing techniques--when marketers know exactly whom they need to reach.
Now, add social media to the mix. Reporters are already trolling the Internet when hunting down news or a source to comment on trends. The Wall Street Journal reporter that quoted my company on health care online marketing found me through a search engine. One of my clients gets frequent requests to speak from those who find her blog. Both of us have high search engine rankings because we publish a lot of content.
Marketers will measure effectiveness using the same calculations they use to measure conventional PR—except thanks to the tools that come with search engine and blog software--this task will be easier, quicker, and less expensive to accomplish.
As for direct marketing, most conventional mail has shifted online, largely to reduce costs associated with production and distribution. In the future, expect microblogging technologies--such as those provided by Twitter and Linked In—to supplement email marketing drip campaigns. These technologies may provide more bang for the buck.
It’s quicker and easier to create messages than whole communications. The key to success will be including both the message and a call to action in these very short communications. But marketers are doing that today when they create paid search campaigns.
Marketers may also come to prefer microblogging because it offers the opportunity to “pull” prospects in, as well as “push” messages out to them. Some microblogging platforms already support search capabilities that prospects can use to sift through past messages as information needs arise.
Marketers that wish to measure effectiveness can see who opts to receive their communications. As they do today, they can set up unique landing pages for each call to action and capture information about those that indicate higher levels of interest.
Ready to buy:
When it comes time to create urgency, marketers may use microblog communications. Or, they may leverage the social community. The goal now, is to create buzz about a solution that prospective users just can’t live without.
Today, marketers often use testimonials and case studies to raise awareness of the benefits prospects are missing. It’s likely that prospects will find unsolicited customer reviews, and spontaneous comments in chat rooms, far more compelling.
Know you exist:
As we’ve discussed, social media will supplement conventional PR channels when it comes to helping prospective buyers find your company. In one scenario, a prospect will search for articles—or buyers’ guides—in conventional media that publishers distribute online as well as in print. Through these channels, they will identify search terms, or better yet, links that will help them build their knowledge about options.
In another, they’ll hear about your company at a social network where your target audience congregates. Savvy marketers may take steps to seed the conversation by identifying key influencers and communicating with them in advance.
Know you meet needs:
As always, the challenge will be ensuring that prospects eventually come to associate your company with all the solutions they may need—rather than just the one they became aware of first. That just means that your company needs to participate in multiple conversations on multiple topics. Each can reference a different solution you offer—and the unique benefits to the audience you are addressing.
Think of you when needs arise:
In the old days, companies that wanted to stay high on prospects’ radar could get away with communicating monthly or even quarterly. Today, prospects—and those that influence them--are going online for information every day.
Marketers, therefore, will need to communicate much more frequently to elevate their messages above the clutter. Moreover, since broadcast media is giving way to narrowcasting, they may need to publish in multiple venues to get the same impact.
You have what they want:
When marketers develop requirements for new solutions, they will likely add social networking to the qualitative and quantitative research they do today. After listening online to get ideas, they will turn to secondary research to size markets and perhaps qualitative research to rank requirements. Then, they’ll probably use a mix of qualitative research and social networking to deepen their insights.
Chances are the new technologies will provide greater efficiencies—since marketers will be able to gather more data, and acquire it more quickly. Many more people participate in a peer-to-peer forum than in a focus group. Moreover, when conversation is asynchronous individual participants can often “speak” for longer periods of time. Also, because data persists online, researchers may be able to mine archives for the information they see.
It’s not clear how much new technologies will impact the costs associated with identifying and ranking product requirements. As mentioned above, researchers will likely need to supplement social technologies with conventional research to ensure they have all the data they require. Even so, unless the cost of lurking and listening is very high, expect research expenditures to decrease.
The price is right
Prospects dally when prices are too high—but all that means is that marketers need to set prices commensurate with value. One of the things that marketers will listen for when they lurk at social networking sites is how badly prospects need their solutions. They’ll do this by paying attention to what prospects say about the limitations of current solutions—and what benefits they could derive if they could find an alternative that addressed shortcomings. Then, they’ll use this information to set prices and to formulate the value propositions for their marketing messages.
Easy to buy:
While, the plethora of online information will speed up prospects’ buying processes, marketers will need to take steps to make it easy to buy from them. One component is uncovering obstacles.
In the conventional world, marketers may have interviewed customers, service personnel or sales people to find out what enchanted—or irked—prospects or customers. Today, for better or worse, much of this information may pop up online in the form of customer reviews or in conversations among social networkers.
This means that marketers will need to ensure that they have a representative at all forums where relevant conversations are—or are not—taking place so that they can take corrective action. This is one area where expenses may rise dramatically for two reasons. First, there are more channels to monitor. Second, it will take better and more frequent communications to rise above the clutter.
Social media will accelerate the buying process
Marketers are fond of noting that it takes multiple impressions to make an impact and even more to build the credibility required to win a prospect’s business. So, it seems safe to conclude that, other things being equal, social media will accelerate the buying process.
Nevertheless, individual companies will need to work much harder to gain share of mind, stay high on the radar, and remain in the running. The winners will be those who learn when and how to successfully integrate social media with conventional marketing at every stage of the buying process.
As for measurement, the more things change the more they will remain the same. Marketing ROI is never easy to measure—and some tactics are easier to measure than others.
In most cases, marketers will use many of the same metrics to they do today. Examples include the cost of moving prospects to the next level at every stage of the buying process—and the speed at which prospects do so. What will change most are the processes and tools that marketers use to capture, analyze, and report data. As with email marketing and search, expect social media developers to bundle in platform-specific features to accomplish these important tasks.