How do businesses generate sales? Answering that question helps to establish social media’s ROI. Rather than connecting social media directly to sales, try connecting social media to the factors that contribute to sales.

1.    Hire better sales people. If you want to generate revenue hire talented people who understand how to prospect, develop relationships with and service key accounts. Social media can help you identify these people. Use your own network of connections to promote sales jobs via LinkedIn. Use sites like Jobvite to create referral programs using social networks. Evaluate the social media presence of a prospect as a way to determine their relevant connections and experiences. Look for sales people who understand how to maintain relationships using social tools. Hiring better sales people = generating more revenue.

2.    Create compelling offers. Do you know how people are using your product? Or what they are looking for in a product? A listening program on social media can help. Notice what words are used to describe your product and your competitors. Use what you find to position the product, create compelling offers and identify keywords that spark attention. Better offers = higher conversion.

3.    Increase the trust in a company. Twitter has associated a human voice, and often a human face, with companies who use it well. I know if I have a problem with Comcast, I can @ComcastCares, or @ScottMonty if I have a question about Ford. I would argue that trust and connection with a brand facilitate purchasing behavior. Social media used poorly produces the opposite effect. As @RustyW states, “ Fake reviews web site http://consumerreviews.org/... was created by DirectBuy to showcase positive reviews. Just wrong.”  Trust –> Relationships –> Sales

4.    Increase the trust for a sales person. The best sales people I’ve worked with are resources to their clients. They provide effective solutions and immerse themselves in their client’s businesses. Social media provides an effective way to learn about your client’s businesses and to provide new solutions to constantly stay relevant. How? Use blogs and RSS to keep informed about trends in your clients’ business.  More relevance –> better ability to solve clients problems –> more sales

5.    Reach people at the moment of decision. Customers are asking their networks for advice directly impacting their purchasing decision. Try this test. Go to search.twitter.com and enter “Can you recommend?”. Companies who monitor social media and respond to opportunities pertaining to products and services they are selling have an opportunity to provide information to help consumers make decisions. Of course this should be done responsibly. Moment of decision = influence points

6.    Additional ways social media contributes to revenue: empowers evangelists to share their experiences; provides direct access to customers to collect feedback; enables direct sales like WOOT.

What’s a list without good evidence?

• Check out Peter Kim – the Dean of Social Design
• Chris Brogan on Social Media and the Sales Cycle
• Of course, we’ll add the Dell case study for good measure
• And some Fortune 500 stats cited on Cisco’s blog

Added bonus:

• The Godfather of Sales