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

Let us go then, you and I, to the Twitter accounts of the top brands. Before we do, I’m going to make a prediction: the majority of their tweets will be @ replies. That’s interesting for several reasons. First, it signifies that they are using Twitter to engage with their customer base by responding to their questions, suggestions and comments. Second, it indicates a neglect of what their followers find compelling.

It’s uninteresting to follow a company I care about and only read their replies to their customers. I’m going to generalize and say that we follow companies because we like their products and services, we want discounts, special access to promotions, to get closer to a world view we share as well as a response to our questions.

If the majority of a company’s responses are @ replies, it signifies a company is listening. However, listening alone is not compelling, especially if a company’s responses are not directed at you.

Check it out for yourself. Go to these Twitter accounts and see:

@Starbucks
@JetBlue
@Wholefoods

There is another side to this discussion. If we think of the brand as a person and Twitter its voice, the account consisting of a majority of @ replies is approachable. Customers feel that can ask a question and receive a response, evidenced by the account’s activity. It communicates something real about the brand.

I am in favor of a balanced approachability strategy that signifies you are listening, while also providing engaging content. We track the ratio of @ replies in our tweet stream for clients as a metric that helps us navigate this.

Join the conversation on our Page

I’m teaching a course at Emerson College called “Social Media and Marketing.” Unofficially, I’ve titled it “Why Social Media Matters.” I’ve asked 20 industry experts to share with me the most challenging questions they are asked on a regular basis about social media. Their answers shaped our curriculum. Each week the class explores one of the question. Five companies are involved with the class: Cisco, Doink, 8Minute Dating, Zappos and Nokia. Students are working on their real business challenges involving social media.

In the first class, we discussed the meaning of social media, based on its application and various definitions. There is considerable debate on what social media is.
Prior to the class, I asked several prominent bloggers for their definition, many of whom referred me to the Wikipedia definition.
While that’s a good place to start, we shared many other insightful resources:

1. Video: Social Media Revolution
Statistics are persuasive; I wish the sources were cited more fully in this video.

2. Presentation: IAB social media metrics definitions
The Interactive Advertising Bureau offers many concentrated key performance indicators helpful in planning and measuring a social media campaign.

3. TED Talk video: Howard Rheingold
An early and important contribution to defining social media, before the phrase even existed.

4. TED Talk video: Seth Godin on Tribes
An essential framework for brands using social media.

5. Video: Chris Brogan “Don’t be that Guy”
An important reminder of how not to market in social networks.

6. Blog post: Jeremiah Owyang – 50 ways to use social media

7. Blog post: What is Social Media? 23 Definitions

How do you define social media? Why does it matter to you? Share your story on our Facebook Page.

I just completed an integrated social media plan for a client. The plan will engage and activate their customers on social networks.

Customers that are engaged with the brand are more likely to buy products and services.

And they are more likely to refer.

This helps to establish the business case for social media.

A non-social media example underscoring this point is the way universities interact with their alumni. Check out your latest alumni magazine.

In mine I found 7 examples you can use right now to build a customer community:

1. User generated content. Alumni wrote 75% of the content in the magazine. In what ways can you incorporate customer content into your blog?

2. Icons. Images of new buildings, professors and innovations fill the pages of the magazine making me proud to associate with the community. What images are you sharing with customers in your coorespondence with them: clip art or photos that evoke a sense of identification with your company?

3. Context. On every page the alumni magazine reminds us of the history of the university, which is greater than any individual member. Reading through the magazine I feel a sense of being apart of something greater than me. What values does your company promote, which are bigger than it? Are you sharing those values with your customers?

4. Ceremony. Birth, death, marriage and accomplishments are ceremonies celebrated within the pages of the alumni magazine. What are the ceremonies you celebrate with your customers? (i.e., 1-800-Flowers is celebrating their customer’s birthdays on Facebook).

5. Featured members. The alumni magazine spotlights new alumni each month by honoring them with an interview. How do you honor your customers?

6. Togetherness. The alumni magazine invites fellow alumni to travel together. It encourages those who do to send pictures and features them in the magazine. This creates a sense of belonging that is real. How are you creating a sense of “togetherness” with your customers?

7. The Ask. A purpose of the alumni magazine is to raise money for the university. It does this in direct and indirect ways. Directly, it asks for contribution only once. Indirectly, the more you read the magazine, the more you identify with the community increasing the likeihood of donation. How are you asking customers for their business? And what value are you delivering before they do?

Join the conversation on our Fan Page

This semester I’m teaching a course at Emerson College in Boston entitled Social Media and Marketing. If this topic interests you, there are many ways you can participate. The easiest is joining our Facebook fan page, “Why Social Media Matters.” My goal is to contribute to meaningful discourse about the role of social media in our lives and our businesses. Feel free to drop on by and stay for a while. I’m going to blog quite frequently about it as well.

One of the things I love about social media is how simple it can be. Sure, you can make social media complex. You can measure metrics, use social marketing models and chart the growth of communities over time. However, you can also create one powerful idea. An idea that doesn’t require anything but others willing to play along.

Take the idea of Follow Friday for example. Hundreds of thousands participate weekly in nominating their friends to be followed on Twitter. The concept is simple, and the participation is contagious. To play, you just need a Twitter account. What if we applied the concept of Follow Friday to our lives? Maybe we’d call it “Have you met” Tuesdays. And we would share the great people we know with others we cared about.

Why does social media matter to you?