Why Most Companies Underinvest in Social Media (And How You Can Fix It)
Oct 01, 2012 4:00 AM - Posted by Brad Smith
“Social tactics are not meaningful sales drivers”, according to a new report by market research firm Forrester.
They looked at purchase paths of online buyers, and measured how many sales were coming directly from each traffic source.
And social media sales were almost negligible.
But it does help drive revenue significantly. Except in an indirect, hard-to-measure way. So it usually doesn’t get the credit it deserves.
Here’s what you should do about it, and two simple ways you can start measuring your own performance.
The Best Marketing Channels for Driving Sales
Marketing channels have their own unique pros and cons.
But of course, we all have limited resources. We only have so much time, money, or energy to invest into something at one time.
So if you’re primary goal is to increase sales, then you should obviously invest in marketing tactics that give you the best returns.
According to Forrester’s report, summarized by Marketing Pilgrim, the channels that drove the most sales were:
- Paid search for new visitors
- Email marketing for repeat visitors.
Paid advertising and SEO drive high-quality traffic, because people are showing intent by typing in exactly what they’re looking for.
And email marketing is surprising still underutilized. It may not be the trendy new thing like social media, but it’s still way more efficient because you can automate almost everything.
But that doesn’t mean you can’t sell at all with social media.
You can. It’s just hard to track.
So here are a few easy ways to track how social media is impacting sales and revenue.
Strategy #1: Use Coupons or Tracking Codes to Measure Direct Sales
The easiest way to monitor sales from a social media source is to use a unique coupon code. You give each network a different code, so you can see how many sales are coming from Twitter vs. Facebook vs. YouTube, etc.
There are a lot of software companies trying to create easy solutions for this right now. One that I’m aware of is called SpringMetrics Smart Offers (not an affiliate link).
If you have a more complex sales system (and a larger budget), then you could also use a custom tracking code that will pass visitor information for each purchase.
For example, I helped a past client create a custom booking application for their Facebook page. We found a local developer, and they built it in a few days (they’re pretty simple) for around $1,500.
Someone could then enter the information they were looking for, and then they were automatically taken to my client’s website for their results.
This passed a tracking code as well, so each visitor coming from Facebook could be tracked accurately. And we could see who actually completed a purchase. In the first few months, they generated over $20,000 in revenue through Facebook alone.
Strategy #2: Use Promotions to Acquire Leads
It’s easy to see how many people use social media to find your website, but it gets much harder to accurately track when that visitor goes through your sales process and purchases something.
That’s especially true if you have different internal people following up with leads. So another easy strategy is to isolate your social media leads into different lists or databases.
You can easily do this with different landing pages, and even combine them with unique email lists.
Then use regular updates to drive visitors from your social networking channels, or promotions to capture their information so you can nurture and follow-up with them on a regular basis.
For example, run a social media promotion (because it gives you more potential viral reach) with Wildfire (not an affiliate link), and get their contact information as the method of entry (like a sweepstakes).
Obviously, any sales made would be indirect because you’re still going to have to follow up or nurture them before they buy.
But it keeps things simple, so you can get back to work and at least have some information to base your marketing decisions.