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The Sales Review

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2 ROI Calculators to Explain Social Selling to Your CEO

Posted by Jamie Shanks on Jul 26, 2014 2:04:26 AM


Social Selling ROIIf your organization is new to using social media for sales, you may have to explain Social Selling ROI to your management or executive leadership team.

There are 2 ways to determine the ROI of a Social Selling program.

1. Cumulative Revenue Creation or Cumulative Pipeline Growth

For companies that are looking for a "sum is greater than the whole of its parts" result, look at the total revenue or pipeline growth with have on your company, knowing you'll have Superstars, Core Performers and Laggards. You care about the total effect on your business.

If your sales cycle is on average is much longer than the training program, use Pipeline Growth as your main KPI (as long as you know the Probability to Close ratio), so that you have a true representation of the program AS IT'S HAPPENING IN REAL-TIME. I would recommend that you extend your analysis months later to capture revenue, knowing it takes that long to close a deal.

The formula is:

Breakeven = Cost / AVG Deal Value OR Cost / Opportunity Value @ a discount rate of % Closing Ratio

2. Revenue per Sales Rep

For companies that want to measure individual contributors to determine the demographics and bio of a "successful sales rep”, look at the cost of training per student and then reverse engineer the # of Opportunities or Deals required to Breakeven. You will need to factor in the average deal size, volumes, velocity, and so on.

See the figure below for a sample calculation.

Revenue per Sales Rep

My video below explains these two ROI calculation methods in more detail.

Do you need help building a business case for social selling or social selling training? Contact me using the button below!

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Jamie Shanks

Jamie Shanks

About the Author

Jamie Shanks is a world-leading Social Selling expert and author of the book, "Social Selling Mastery - Scaling Up Your Sales And Marketing Machine For The Digital Buyer". A true pioneer in the space of digital sales transformation, Jamie Shanks has trained over 10,000's of sales professionals and leaders all around the world.

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