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Transforming the Way We Do Business: Learning How to Leverage Facebook
March 30, 2009
Excerpted from "The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences, and Sell More Stuff" (Prentice Hall Professional) by Clara Shih
By Clara Shih
As anyone who has ever bought or sold something knows, sales is an intrinsically social activity based on mutual trust. Even in the case of commodity products and services, relationships can sometimes even trump price as the deciding factor in purchase decisions. Ultimately, people like doing business with people they like, and refuse to do business with people they don’t trust.
One major result of the democratization of business described in earlier chapters has been unprecedented market competition. In today's business landscape, companies are faced with a greater number of competitors and savvier buyers empowered with information. More than ever, sales reps must strive to maximize the lifetime value of their customer relationships versus maximizing the value of a single transaction.
With fewer unfair structural advantages for reps to count on, timely insights into customer needs and interpersonal communications in the sales process have become requirements for closing the deal. Online social networks are emerging as critical business tools to help facilitate these insights and communications.
Although many of the best salespeople are just natural instinctive relationship builders, certain sales methodologies have been proven in recent years to help the rest of us learn to emulate their success. Customer relationship management, or CRM, attempts to capture the science of sales with software and processes to handle all of a company's interactions with its customers. Sales force automation, in particular, builds in processes like forecasting, territory management, e-mail templates, dashboards, activity management, and deal alerts so that managers have visibility and sales teams can be more productive (see figure below).
Online social networking adds another dimension of possibility to CRM by enriching critical sales practices with contextual information and relationship-building tools.
CRM systems like this one from salesforce.com offer business visibility for managers, improved rep productivity, and effective selling processes.
This chapter is divided into three parts. First, it walks through a typical sales cycle and suggests ways in which the online social graph might be leveraged to increase sales effectiveness. Next, this chapter resumes discussion on network structures, first introduced in the previous chapter, and how they apply in sales. It concludes with a short discussion on the implications for CRM, and how the future of information contained in CRM will likely be bidirectional between companies and their customers. Many of the techniques in this chapter are exploratory as social sales tools are still very nascent. Chapter 10, "Build and Manage Your Relationships," provides concrete instructions on how individuals can build and manage relationships on Facebook for sales or otherwise.
Transforming the Sales Cycle
Sales reps can use online social networking to become more productive in two ways: to glean insights about customers and to engage in casual communications with customers. From the customer's perspective, the sales call has the potential to become more personalized and relevant. It's no longer acceptable for reps to generically push every product and service.
Today's reps are expected to have "done their homework” based on the information available on the Internet and on social networking sites. Customers, for their part, are responsible for managing and maintaining what information they choose to share with whom. Chapter 10 explains how to use Facebook privacy controls to manage online identities, and Chapter 11, "Corporate Governance and Strategy," speaks to more general issues and concerns around privacy and security.
Based on the sales deals I've participated in as well as interviews with my colleagues in sales, I have identified eight aspects of the sales cycle that stand to benefit from the online social graph: establishing credibility, sales prospecting, getting your foot in the door, navigating customer organizations, collaborating across sales teams, providing customer references, building ongoing rapport, and ensuring ongoing customer success with postsales support. These are also very much in line with the general techniques advocated by popular sales methodologies such as Miller Heiman and CustomerCentric Selling.
Before we delve into the sales cycle, I would first like to call out some differences between B2B (business to business) and B2C (business to consumer) sales, and discuss how these might affect social sales strategy.
B2B Versus B2C Sales
Selling to consumers, or business to consumer (B2C), tends to be more straightforward, transactional, and driven by product and marketing. Because of a lower price point and fewer people involved in making the purchase decision, B2C typically has a shorter sales cycle. For many items, especially those below $100, it is usually more about marketing than about sales. Often there is no salesperson involved. As far as online social networking, these goods and services stand to benefit more from social merchandising, targeted advertising, and viral marketing tactics, which we discuss in Chapter 5, "Social Network Marketing."
As we go up in price and complexity, B2C begins to resemble business to business (B2B). Especially when "intangibles" like warranties, customer support, authenticity, and service quality factor into a sale, trust and relationships become critical differentiators (see Fig-ure 4.2). B2B selling into organizations is often a multistep process involving multiple stakeholders and levels of decision making, resulting in a longer sales cycle. The upcoming sections on sales team collaboration and navigating customer organizations are directed especially at B2B sales. Finally, B2B deals tend to be custom transactions. These typically involve negotiation, as there is a higher markup to begin with and imprecise information about the value of the good or service being offered.
Relationships and trust play a bigger role in purchase decisions of higher-priced items that are more difficult to value and require greater expertise to understand. (Credit: Timothy Chou, cofounder of Openwater)
Networks and lecturer at Stanford. He whiteboarded a similar concept for me in his office in June 2008.
But why use a person-to-person tool like Facebook for selling to an organization? The important thing to keep in mind is that individuals are at the heart of any organization. Purchase decisions are made by individual people, not entire companies. Transactions succeed or fail because of a few key such individuals—your customer champion, executive decision maker, customer reference, sales rep, product expert. By strengthening the bond and improving information flow among your internal deal team as well as with key customer stakeholders, social networking sites can help your company create a more productive selling machine.
Establishing Credibility
First, sales reps need to establish credibility that they are competent and committed to delivering customer success. Traditionally, reps had to rely on the brand reputation of their company and products, and their Rolodex of customer relationships slowly built up over many years.
Today, sales reps and others can accelerate the process of building trust by using social networking sites to convey qualifications. A typical LinkedIn profile, for example, contains four types of information that would have been awkward or more difficult to provide in the past: public testimonials, list of connections, professional experience, and education pedigree. Just like Amazon.com has customer reviews on books and Zagat has customer reviews on restaurants, social networking sites are becoming the de facto place for reviews on business professionals. If you have satisfied customers, it might not be a bad idea to ask them for public testimonials on LinkedIn or the Testimonials application on Facebook. Chapter 7, "Social Recruiting," goes into greater detail about LinkedIn recommendations in the context of job candidate references.
Bidirectional visibility helps foster mutual trust. With this information on hand (which you have chosen to share), prospective customers are empowered to "check you out" as a sales rep and hopefully gain confidence in your knowledge and competence in helping them find the right solution for their needs.
© 2009 Pearson Education, Inc. Excerpted with permission from "The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences, and Sell More Stuff" (Prentice Hall Professional).
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