New data has answered the number one question in the minds of business leaders: Can social media drives sales? The new question is how.

The guessing game regarding social media and sales is coming to an end. Studies released in the past month have the data we’ve all

New data has answered the number one question in the minds of business leaders: Can social media drives sales? The new question is how.

The guessing game regarding social media and sales is coming to an end. Studies released in the past month have the data we’ve all been waiting for – proof that social media is linked to sales.

Adventurous first movers in social media – those who set a social media strategy and invested resources in delivering it – create an impressive data trail.

Sarah Timmerman founded her online fashion site, Beginning Boutique in 2008, and started the company’s first social media marketing campaign in 2009. Timmerman says her company – which focuses most of its effort on Facebook – achieved a 70 per cent return on investment from its social media effort in the past year, and an 11 per cent uplift in sales from social media campaigns.

Four in 10 social media users will buy an item after sharing or favouriting it on Twitter, Pinterest or Facebook, according to new research by American company, VisionCritical. The survey involved 5,657 responses to online surveys over the 17 months to June 2013.

The survey – From Social to Sale – found that social media drives roughly equal amounts of online and in-store purchasing, and that Pinterest is the network most likely to drive spontaneous purchasing (even though 73 per cent of respondents use Facebook compared to 15 per cent who use Pinterest).

Hubspot’s State of Inbound Marketing 2013 found that the sales conversion from social media is 13 per cent above average (US) conversion rates, and that 52 per cent of the 14,2103 survey respondents (Jan-Feb 2013) sourced one or more leads from Facebook this year, while 43 per cent of respondents gained a customer from their own company blogs or from LinkedIn.

The Zero Moment of Truth

Before your customer comes through your door or to your website, they already know about you. They have checked out reviews of your service and products, compared your prices, and made judgements about your values and purpose. Google has dubbed that critical first moment when customers meet your brand online, the Zero Moment of Truth. To shape the perception of your brand, you have to be in the conversation (or someone else will be shaping it).

Timmerman says social media today is the like the fashion high street of yesteryear. Her fashion range of party dresses and street wear targets 10-35-year-old women who want their clothes tomorrow. “We chose Facebook because it is where the major part of our market is socialising,” Timmerman says.

But Timmerman is now following her market to Instagram. “We think Instagram is the new Facebook,” Timmerman says. The company also has a presence on Tumblr, Twitter and Pinterest.

So, if social media drives sales, the next question is how are these conversion being achieved?

Here are five answers:

1. Engage, then sell

Social media is about engagement and selling second. Providing free, valuable, regular and relevant information for customers comes first. Timmerman then offers redeemable coupons, sneak peeks at new ranges, and other benefits to her Facebook fans, measures that she says lift sales about 11 per cent.

2.Different sales strategies for different levels of engagement

Not all social media fans share the same level of engagement, however, and a smart sales strategy takes that into account, writes Jen Houston, author and co-founder of content marketing company, Papershare. After getting a huge lift in readers of Papershare’s first e-book, Houston sat down with her sales team to analyse her readers (according to what content they had read) and devise sales strategies that were tailored to their various levels of engagement.

3. Real-time local marketing

Just last month, Twitter bought Spindle, an application that reveals “what is happening nearby right now” by pulling social content from networks like Twitter and Facebook.

It doesn’t get this information from the web, only from social media. This move by Twitter, combined with Google’s shift last month to display “local search” results, offers a big clue for marketers who want their efforts to return results: local search, driven by tuning into social media networks, is where the “big boys” see the future. Do you want to argue with Google?

4. Engage social intelligence

The real value of social media is that it boosts our social intelligence – which psychologists define as our ability to put ourselves in someone else’s shoes and get along with them, writes US market researcher, Paul Marsden.

Why does social intelligence matter to your sales effort? Because companies that help customers use their social intelligence, drive sales.

Marsden uses the example of a Finnish insurance company, If, which allows prospective customers to contact its existing customers to find out information. Customer reviews and stars are another way of doing this.

5. The secret of retention

Any sales or marketing professional will tell you that it is far easier to sell to an existing customer than to acquire a new one.

Social media provides companies with an unprecedented opportunity to keep customers happy after a purchase by staying in touch, and offering them ongoing relevant, valuable content for free. It is the customer loyalty scheme that your customers actually want (rather than another annoying card to carry in their wallets), and it works for prospects too.

The secret to retention through social media is to listen, to stay close to customers and ask them what they want, says Timmerman. “We share new stock and ask our fans what they think of it, if they want it. We ask them what kind of content they want from us. We show them behind-the-scene office shoots. We don’t focus on driving sales – you would quickly become obsolete – we find out what they want and offer it to them.”

First published in BRW July 17, 2013