From a granular point of view, how does social selling help actually lower customer acquisition cost? This is something I think a lot of VPs are wondering about.
There's six different ways that we acquire customers. We’ve got inbound demand generation, outbound or direct sales, channel sales, customer referral, and account-based marketing/ account-based sales development (ABM/ABSD).
What social allows you to do is to amplify messages. So there are two ways of prospecting: fishing with a net or hunting with a spear. One, fishing with a net, is crucial for starting off the ground, the other, hunting with a spear, for strategic growth.
Stage One: Creating An Inbound Machine
Especially when you're first starting and growing a business, you're less concerned about the exact customers that you get. You're more concerned just about getting customers and growth.
As you first start acquiring customers, no one knows you. You have to work extremely hard to get somebody’s attention and win that very first customer.
What social allows you to do is to amplify customer stories and amplify best practices, so you scale success faster.
Once you turn on an inbound machine, customers will start coming to your business who are much more educated. The velocity it takes to close them will be a lot less.
You may not get to choose who those people are, but that’s okay, because you’re just starting out. And you enable other departments by attracting business at scale.
A senior salesperson or account executive costs $100,000, for example. You can build an inbound marketing department for that same cost, but what happens is the account executive can only touch so many people.
All they can do is make a phone call, an email, a phone call, an email. But the more that inbound marketing starts to scale up, that account executive starts talking to first dozens, then hundreds of potential customers.
As the marketing team scales up, the communication volume at the same cost becomes massive. And social is at the heart of their inbound communication.
Basically, you start scaling up your inbound, and all of the sudden, you don’t need as many expensive sales professionals to generate leads, as long as they can close the deals coming in.
Stage Two: Inbound & Social Enables Referrals
As you start scaling, the customers you've now acquired allow you to gain customer referrals.
Again, social selling allows an amplified message to customer A. It's easy for customer A to tell stories about customer B because you're much more visible and you're much more public. They can share a piece of your content, or suggest they sign up for a webinar or online event.
Essentially, it's easier for those referred to do more due diligence on your team, because there's more information on you.
Customer referral as well is a form of inbound that costs you less. You’re 4.2X more likely to get an appointment if there is a personal connection with a buyer, and Implicit found referrals provide the best ratio of closed-won vs. closed-lost opportunities, at 68.7%.
At Sales for Life you can see customer referrals have the highest conversion rates as well:
Customer Referral: 53%
* Our account-based efforts are still in the trial phase.
It's the SQL to close conversions that are important thing. If you want the KPI to measure any of the above efforts, measure that.
If you can scale your customer referral process, you’ll really start seeing big wins for less, as we have. But you need to start with inbound for that customer referral machine to work.
Stage Three: Strategic Growth with Account-Based Selling
Then, all of the sudden, what happens is you've hit an inflection point where you need to start pinpointing who you want to sell to, because you're not growing strategically anymore.
You might be growing, but it's less reliable. It might be a small minnow that comes in, then a whale. Your deal size is all over the place!
What you need to do now is start shifting gears to fish with a spear, rather than a wide-casting net. That's account-based marketing/ account-based sales development (ABM/ABSD). But these tactics don’t mean reverting back to one sales rep pounding the phone and email.
Rather than picking up accounts as they come in, account-based selling allows your sales team to actively chase named accounts. But they’re still using social to customize messaging, surround them on social, prospect, etc.
At the end of the day, social helps enable these processes at scale, allowing you to:
- Penetrate accounts faster than traditional methods
- Collaboration or networking to happen faster than the phone or email
- Unearth information for ABSD/ABM
By starting with social, scaling wins to referrals, and starting to strategically grow with account-based efforts, you can ensure a steady and constant growth for your team in a digitally-dominated sales environment.