How Social Media Can Reinvent Your Staid, Old Sales Tactics

Twitter and Facebook are disrupting your brand's traditional marketing efforts. Here's how to adapt.

"Half the money I spend on advertising is wasted; the trouble is, I don't know which half." --John Wanamaker, late 1800s.

More than a century ago, the founder of Wanamaker's department store uttered those words (or so the legend goes). A pioneer of merchandising and sales, John Wanamaker knew advertising helped drive purchases, but the why and how remained a mystery.

Fast-forward to 2014, and we like to think we've turned marketing and sales into a fine-tuned science. Generations of salespeople have been schooled in the concept of the sales funnel, the more-or-less linear journey customers take as they progress along the path to a purchase. At the top of the funnel, marketing efforts build awareness and interest. Deeper down, things such as opt-in email campaigns and white papers drive leads. At some point, the sales team kicks into high gear, courting hot leads and converting opportunities to sales. Finally, the customer is spit back out the bottom of the funnel to, theoretically, begin the journey anew.

The idea of the sales and marketing funnel is so entrenched that it has given rise to an industry of customer relationship management, or CRM, software offerings, which help companies acquire and identify leads and usher them neatly through the distinct stages of the funnel.

The problem is that nothing about the funnel is neat. It has always represented an idealized journey and, in the era of social media, it increasingly represents a fictional one. Customers are navigating their own paths to purchase. They're learning about products in new ways and from new sources. They're entering the funnel--then exiting, distracted by other offers. There is no predetermined path to purchase, no series of predictable steps to a sale--and these days, a sale hardly represents the end of a customer's journey. Ideally, it's just the beginning.

Channels such as Twitter and Facebook represent a different, decentralized, and nonlinear way for customers to learn about, interact wit,h and compare companies and their products. In one respect, this represents a huge challenge. Simply tracking--not to mention influencing--the dialogue on fast-multiplying numbers of social channels can be a daunting proposition for brands. On the other hand, social media is remarkably effective at driving more prospects into the top of the funnel. And, used correctly, it can also compress and cut out entire stages (as when a salesperson reaches out to a hot lead directly on Twitter), and it can give consumers countless new entry and exit points (as when prospects turn to Facebook for social proof points before purchasing).

Consider the relatively simple example of a customer searching for a new car. Awareness is built not just through TV and print ads but through word of mouth on Facebook and Twitter. In many cases, online friends and followers help narrow down options, steering the buyer toward a particular model. Then comes the research phase of online reviews, blogs, and other resources. By the time the buyer makes contact with the brand itself, visiting its website or actually going to a dealership, she’s already deep into the funnel. But sales staff may be completely oblivious to her history. And our theoretical buyer is by no means hooked at this stage. Strategic social ads on her Facebook account or new input on Twitter, for example, might send her careening in a new direction. Finally, if she does purchase, the cycle is far from over. Ideally, she shares photos on Instagram; she raves about her new car on Twitter. Social media has twisted the familiar sales funnel into something almost unrecognizable.

The result is a happy paradox. The rise of social media and new digital channels has hopelessly complicated the traditional marketing and sales process. At the same time, social media offers a way to look past these complexities and introduce a new level of efficiency and personalization to sales.

We're starting to see this (finally) with the emergence of purpose-built social CRM tools, which are finding ways to catalogue diverse customer touch points and make use of the huge trove of public, social information out there. Each additional interaction with Twitter or Facebook or YouTube or Yelp becomes, rather than an obstacle, a way to better understand the consumer, her needs, and the particular phase of the sales funnel (or cycle) that she's in.

The data collected is infinitely richer than what could be gleaned from a click on a website or an opt-in email campaign. And the benefits flow both ways. When social CRM and marketing automation work right, consumers end up with exactly the information they need to evaluate the product they're looking for. In turn, companies are able to dispense with archaic marketing strategies--email blitzes, costly paid ads that reach the wrong audience, high-priced creative content that fails to hit its mark--and connect directly with people who actually want to learn about their products.

In other words, social CRM holds the promise of answering, at least in part, Wanamaker's century-old riddle, more poignant in the social-media era than ever: how to turn the elusive art of advertising and marketing into something resembling a science.

RYAN HOLMES is the CEO of HootSuite, a social media management system with eight million users, including 79 of the Fortune 100 companies. In the trenches everyday with Facebook, Twitter, Google+ and the world's largest social networks, Holmes has a unique view on the intersection of social media and business. Follow him on LinkedIn.

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