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Andrea Hill: Busting the Myths of Sales Made Through Social Media

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Despite constant study of and reporting about social media sales, there continues to be misunderstanding about how social media really works and what expectations we should have of it.

Social Media Sales are Secondary. Prospecting and Awareness Building are Primary

Sure, in the beginning there was tremendous excitement about how social media would level the playing field for small businesses. It was free, and it was the answer to small business sales.

Only it wasn’t. And it isn’t.

So when I see quotes that speak to analyzing the success of your social media efforts based on the number of sales, I cringe. Because that direct relationship doesn’t exist and can’t be readily measured.

Social Media Should be Analyzed like Display Advertising

What is exciting about social media is that if you throw a lot of elbow grease at it, you can create a very large social media following. On Twitter, this means at least 10,000 followers and on Facebook this means at least 5,000 followers. Those aren’t goals – those are minimum standards necessary to compete (to learn more about how to think about social media, click here).

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Before social media, only large companies could afford to run display advertising in consumer magazines and commercials on television with sufficient coverage to create genuine consumer awareness. But no company ever claimed that it knew how many sales were driven directly by its Super Bowl commercial. Why? Because advertising isn’t measured in that manner (see this article in AdAge about the way Super Bowl ads are measured and thought about).

Then Why Advertise?

It is fairly common for companies to complain that they can never tell if their advertising is working. As a result, many small business owners refuse to advertise. This is unfortunate, because the failure to advertise equates to a failure to go fishing for new customers – which is called prospecting. One way or the other, all businesses must look for new customers.

We do know that companies and products with higher visibility and industry/consumer awareness have higher sales. This is one of the longest studied and benchmarked aspects of the advertising/marketing industries over many decades. Social media appears to have a similar effect as display advertising in magazines and on TV – it makes a brand or a product more familiar, so people are more likely to buy when an offer occurs. But just as when an advertiser runs an ad on TV the phones don’t automatically start ringing, when you add a buy link on Facebook the clicks don’t necessarily happen either. So what do we measure?

We monitor relative increase in consumer awareness to the relative increases in sales.

We measure the effectiveness of sales efforts to those prospects by measuring:

  • Percentage of quality prospects
  • Average number of contacts required to convert prospects to customers
  • Time lapse between acquiring prospects and converting them

If your prospecting efforts improve when using Social Media, then Social Media is working for you. These are just the metrics for monitoring prospecting success on Social Media. There are many other metrics for analyzing Social Media success, but that’s a different article.

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Creating Emotional Connection

Social Media has a secondary benefit which has a cousin in the display advertising world. First, think about how feel-good commercials make you feel about a brand. When Coca-Cola sings about inclusiveness, when the Ford spokesman acts like your next-door neighbor, when Flo at Progressive Insurance makes us laugh, we develop warm feelings for the brand. This is a very specific advertising method designed to improve consumer brand engagement through an emotional connection.

Social media has an even more tangible engagement effect, because you can improve brand engagement with an emotional connection built on actual, authentic engagement. It requires commitment, but it works.

It’s About the Sales Cycle, not the Sale

Remember how the Sales Cycle works?

Prospecting: Get prospects’ attention, capture leads, establish your credibility as a brand.

Cultivating: Bond with your prospects, sort the more interested and likely from the less interested and likely, and create desire for your products.

Servicing: Close the sale, service customers, and deepen customer relationships.

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Rinse, Repeat: You will likely lose 14% of your customers each year, so this process never ends.

Just as it can take many months or even years for a display advertising campaign to pay off in actual awareness, so does it take many months and even years for a Social Media strategy to pay off in actual awareness. Luckily for small business owners, the economics of social media are easier on the budget.

So remember: You don’t have to do Social Media. But you must market and promote and seek new prospects on a constant basis, and the economics of prospecting on Social Media are extremely advantageous for small business. But if you decide to use Social Media as part of your advertising and marketing strategy, don’t think you can measure its effectiveness with a direct relationship to sales. That will only lead to disappointment and discontinuation of a medium that – if you’re using it correctly – is providing a different set of important – and measurable – benefits.


Andrea Hill is a business owner and writer. She owns Hill Management Group, LLC, with the brands StrategyWerx and SupportWerx. StrategyWerx is Andrea’s platform for serving small business owners. Learn more at werxblog.com.

This article is an online extra for INSTORE Online.

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Commentary: The Business

Hear Those Jingle Bells? They’re Also Wedding Bells

Hiding among the holiday crowds is a key customer who doesn’t want to be rushed.

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This story was originally published in the December 2011 edition of INSTORE.

THAT RINGING in your ears is jingle bells! Jewelers around the country are in the midst of the most important selling season of the year. According to J. Walter Thompson, the holiday selling season accounts for nearly 22 percent of annual diamond sales in the United States, meaning it’s still crucial to a successful year for retail jewelers.

Retailers invest months preparing for the season, not to mention dollars! Marketing, merchandising, packaging, special events, and sales training must all be in place.

The other ringing you hear is wedding bells! There is a vital statistic lurking inside that 22 percent number of which you should be aware: various studies show that about 25 percent of engagements occur during the fourth quarter in the U.S., making your diamond bridal business a key part of holiday sales.

Here’s the critical point: amid all the busy-ness of the season, don’t overlook this essential category. Make a list and check it twice. Focus on two important areas: Diamond inventory and the particular temperament of the engagement-ring shopper.

From an inventory/merchandise perspective, jewelers should be over-prepared and ready to present a wealth of options and styles to the engagementring customer. The adage that one can’t sell from an empty wagon applies! Savvy consumers will have scoured the Internet and other retail stores and seen hundreds of ring styles. Their jeweler of choice will have to provide options!

Engagement-ring customers are not the typical Christmas shopper. They are often walking into your store for the first time after, on average, three months of shopping (according to The Knot 2011 Engagement and Jewelry Study). This consumer is not preoccupied with getting a package under the tree, but rather with making one of the most important purchases of their lifetime. They require your full attention and will not respond well to being rushed just because it’s Christmas and you’re busy. Sales associates must be prepared to give the engagement-ring shopper the time and attention they require.

When making your “list,” be sure to include a training session or two to ready your sales staff to effectively engage the wedding-ring customer during the holiday season. Train them to change gears for this consumer so they don’t feel rushed or under-served. Use all the resources at your disposal to ensure an impressive engagement-ring inventory that will excite your customer. Make sure your collection of loose diamonds includes a good number of 1-carat diamonds, and if possible, have a 2 to 3 carat on hand. Overnight and “in time” inventory is great, but sometimes you can’t make the sale if you don’t have the goods!

That ringing in your ears is jingle bells and wedding bells playing two distinctly different but profitable tunes during this Christmas selling season!

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Dave Richardson

Why Attitude Is More Important Than Experience When Hiring

Hire for attitude rather than just experience.

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WHY IT IS TRUE: The key question in hiring a new sales associate is, can this person sell? The second question is, does this person have any jewelry sales experience?

PLAN OF ACTION: Be careful hiring someone with jewelry experience, particularly if that experience comes from different stores over a number of years.

My philosophy has always been this: it is easier to train a good salesperson to sell jewelry than to train someone who knows jewelry how to sell.

Most importantly though, look at the person’s attitude toward selling, enthusiasm for working with customers, and results during their sales career. Chances are you will score a real winner.

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The Digital Doc: Answers to Your Questions About Digital Marketing

Smart Age Solutions takes reader questions about a topic that many jewelers find intimidating.

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IN THIS NEW COLUMN, Smart Age Solutions answers jewelers’ questions about how to use digital marketing on the local level to bring in more customers and make more sales. As the company notes, many jewelers do not yet understand just how much power they have to create a dynamic brand in the digital space.

Do you have a question for the Digital Doc? Send it to digitaldoc@smartagesolutions.com.

Q: I’m really hesitant about putting money into digital ads. I don’t know too much about it and I’m worried I’ll just be wasting money.

A: You are certainly not alone! First, it’s best to do some general research to educate yourself on the basics of digital marketing at the local level. You do not need to become an expert, but it’s important do some preliminary information-gathering before you make a decision. There are many resources online that can give you a basic overview of what you can achieve with different marketing channels (Google, Facebook, Instagram, etc.). Once you’ve done this, start a few conversations with reputable marketing agencies in the industry. These companies can provide you with different packages based on your budget. They can also give you an idea of what activity your marketing dollars will create.

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Q: How do I know if digital marketing is working? When should I expect a sale?

A: The first step in a digital marketing campaign is to declare your goals. The next step is to get as many qualified online shoppers in your community to visit your website so they can explore your products and services. The easiest things to measure are website traffic and telephone calls. If both increase, great! The sales will follow.

Q: I try to get my team to ask our customers for a review or feedback. I know they make us feel all warm and fuzzy, but how do online reviews help my marketing strategy?

A: There are many advantages a great online review provides. Besides the obvious notion that people trust other people’s opinions of products and services,your online reviews can have a significant impact on how you are treated as an advertiser by platforms like Google and Facebook. Google’s logic is simple: The more that consumers interact with a business online, the more legitimate and relevant they are to their community. The rewards that jewelers can expect for great online reviews are better ad placement, more consistent impressions, and lower costs per click to their website. What this means is that Jeweler A with 200 online reviews spending $1,000 can achieve better results for a lower budget than Jeweler B down the street with 10 reviews spending $10,000.

Pro tip: The big advantage to digital marketing is the ability to change your advertisements on the fly. If something about the advertisement isn’t working, you change the message, branding or event details. If you have ever had to pay to re-skin a billboard, print new catalogs or re-record a radio spot, you will know just how valuable it is to have the power to edit advertisements for little to no cost.

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