Social Media

How to Increase Your Facebook ROI Without Wasting Time & Money

Brad Smith
July 15, 2013
Here's how you can increase your Facebook ROI without wasting any more time and money.
Abstract: Driving revenue from Facebook is possible… but “how” you do it depends on your business.

Advertising money continues to pour into social media, with a report from BIA/Kelsey projecting it will grow over 134% and top $11 billion in the next few years.

Unsurprisingly, the bulk of ad money spent in social media — 65% — is on Facebook.

Facebook is one of the brightest spots for companies to invest online because they provide access to almost all customer segments, continue to roll out new opportunities to reach your fans, and provide detailed analytics to get accurate results.

But here’s the problem: social tactics are not meaningful sales drivers.

Or at least, that’s what the experts say…


Why You Can’t Sell with Social Media

Forrester Research analyzed over 77,000 consumer purchases in 2012 to figure out which online marketing channels buyers — not just traffic — were coming from.

And they found that despite new tech trends and changes over the past few years, buyers tend to be influenced in largely the same ways:

  1. Search (SEO & Paid) matters most for new customers
  2. Email matters most for repeat customers

And what about social media?

Their research shows that social tactics were meaningless sales drivers.

There are a few reasons for this, which is beyond the scope of this article. (Basically it comes down to the inability or lack of tangible ways to properly attribute pre-conversion actions — aka it’s hard to measure appropriately. Kinda like offline advertising. But people still use that… right?!)

However they do have a point…

Selling directly with social media is difficult, and not always ideal. Here’s why…


Why Visitor Intent Dictates Sales

Let’s revisit that quote from Forrester Research for a second, because their findings are generally correct.

Search engine optimization (SEO) and paid search (PPC) will always outperform social media for driving sales. Always.

Because of visitor intent.

Before someone buys your product or service, they’re going to pass through several buying stages.

So before someone purchases, they have to become aware of their need, evaluate their alternatives, and then be committed to the solution they pick.

Users from search engines (both SEO and PPC) are typically much closer to making a purchase, because they’re seeking specific things and evaluating their alternatives. They type in exactly what they’re looking for, and don’t need as much work to convert them into paying customers.

Whereas social users typically haven’t even entered this buying stage yet. Most people on Facebook are there kill a few minutes, and see what their family or friends are up to. Not to purchase your widget, or mine. They aren’t even aware that they need our products and services. So they’re most likely not going to buy anything anytime soon.

However…

Social media does influence and drive revenue (just not directly). We’ve seen it time and time again.

How?

There are two specific strategies or paths you can take.


Strategy #1. Driving Direct Revenue Through Sales

You can drive revenue directly through Facebook… under certain circumstances.

I worked with a client in the past to create a custom Facebook application where customers could input their information and preferences, and then were automatically redirected to my client’s website with their results.

The beauty of this system was that we could track everything. We could see how many people used the service, how many people searched but didn’t buy, and then how many actually purchased. So for only a ~$2,000 investment, we were able to see over $20,000+ in new revenue generated over the first few months.

This strategy worked brilliantly and was easy to pull off. But… it won’t work for everyone.

Because like anything in marketing, we need to look at tactics in context.

And when you do that, there are certain “prerequisites” needed to give you a hint of how successful (or not) your campaign will be.

So if you want to sell directly from Facebook, then here are a few things to keep in mind.

Social Sales Tip #1. Brand Awareness: This is a two part equation…

  1. Do you have strong brand recognition and trust? While you don’t need national television advertising, you should be extremely well known in your industry or geographic area.
  2. Do you have big numbers? Marketing is always a numbers game, because only a small percentage are going to buy — like 1% or less in social media. So big numbers are important! Want to generate new sales from Facebook? Don’t bother trying until you have 20,000+ engaged fans. Go back to prioritizing growth and engagement.

Social Sales Tip #2. Commoditized Product & Sales Cycle: The thing you sell — your complete product or service — needs to be a commoditized product with a transactional sales process.

Why? Because it needs to be stupidly-simple to understand and purchase. If a consumer has to ask questions to clarify or do any mental math before purchase, then you’re not going to sell a single unit.

Social Sales Tip #3. Compelling Reason to Purchase Now: Why should someone buy right-here, right-now — instead of going back to the website or another sales channel they’re more comfortable with? This mostly comes back to the complete “package” and additional incentives you’re offering. (E.g. is there more convenience or a potential discount?)

Social Sales Tip #4. Ease of use: Finally, the buying experience must be seamless and integrated. It’s not enough to put up a display ad on your Facebook page and hope or wish for results. Instead, you need to create a fully-integrated shopping experience that’s tightly integrated with your growth and engagement strategies to consistently drive new leads into your sales funnel.

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Strategy #2. Driving Indirect Revenue Through Leads

If you don’t meet all four of the tips above, then fear not — you can still use social media to influence sales. Your approach will just be a little different.

Instead of driving direct sales, we’re going to focus on driving new awareness and leads instead.

The goal here is to drive as much information about as many people as possible, so you can then qualify them and begin to tailor your more personal approach. Because consultative, complex sales processes need to get more personal — more one-to-one — more quickly.

So while getting new Likes are a great start, you also want to get their name, email address, business name, website URL, job title, and insight into their biggest obstacle (that you will eventually solve for them).

This is a seduction — because it may be difficult to get all of this information on the first pass. So you with small commitments, like their email address, and then elevate the relationship with new calls-to-action, offers, or incentives.

There are a variety of ways to do this. Again, the success of tactics depend largely on the context and your specific circumstances.

But here are two of my favorite ways…

Social Lead Generation Tip #1: Promotions Social media promotions are a great way to (a) increase growth, (b) improve engagement, and (c) generate leads — all at the same time. (Always use integrated tactics like this whenever you can to get multiple returns with one investment.)

But the promotion you run will depend largely on what you want to get out of it. If you want to increase reach and get more Facebook fans, then run a sweepstakes or basic entry so it’s easy and painless to enter.

Or if you’d like to increase engagement on your Facebook brand page (remember — you need both to sell!), then start using a more interactive contest where people can share, get involved, and talk with each other.

The next step is to look for partners who can join and add something you don’t have (like budget or reach), and can even contribute products or services to keep the cost down. You can cross-promote to each other’s audiences, and come up with several bundles or “packages” to increase the perceived value (even though this won’t cost you a lot out-of-pocket.)

Last but not least, see if you can build “viral hooks” into the promotion so your contestants are compelled do share and promote it for you. For example, the competition can be weighted to give these people improved odds depending on how many of their own friends they can involve or “Like” their entry.

Promotions are one of the best social media investments you can make. But the execution depends largely on your unique circumstances. So if you’d like more detail on how to run a promotion, then check out my Facebook Marketing Bootcamp.

Social Lead Generation Tip #2: “Lead Magnet” Premium Content Another great lead generation tactic is to use premium content that builds off your free content. (You are using free content to drive awareness — right?!)

HubSpot is brilliant at this. You can’t read a single blog article without receiving a targeted, relevant call-to-action to receive more valuable content. However this extra stuff comes at a price — usually in the form of providing additional information about yourself or business.

Why would someone willingly do this? Because it’s created specifically to address each customer’s pain points. Not to advertise or promote the company’s product. It’s focused on helping your customers find solutions to their common obstacles that are keeping them from reaching their goals.

Think of your social media marketing channels (or networks) like a funnel. People interact with these things on a daily basis, and your goal is to drive them back to your website, blog or landing page where you can get opt-ins. Then you can create custom links so you’re able track exactly where people are coming from (i.e. which social network) and get a rough idea of how each promotional channel is performing (relative to the others and the cost associated with each).

But here’s the key to making this work…


The Key to Social Media Marketing

It’s 1000 times easier to promote and receive interested parties if you use content that educates and informs, and doesn’t sell.

That’s because people aren’t on Facebook to interact with your brand. They don’t care about your brand. They care about seeing what their friends are up to, and how their family is doing.

So you need to catch their attention and interest by targeting their needs (based on your understanding from market research — you are researching your customers, right?!), and providing valuable things — content, video, discounts, etc. — that gets them to show intent and gets you permission to follow up through another means.

The sale comes later after building awareness and engagement, and then… value in what you offer.

Because the more demand and value you can build behind your product, service or brand, then the less you’ll have to compete on cost.

It’s not as easy as running a few ads, and the results don’t come as quickly.

But having the chance to speak directly with your prospects, customers and clients every single day is the biggest opportunity for your company’s future. There’s is literally nothing else that’s as important. Without happy, new people coming in and satisfied, old people sticking around, everything else in your company — from accounting to delivering your product or service — doesn’t matter.

And by using popular online tools like Facebook, you’re able to do this at scale and receive significant, cost-effective results over time that advertising will never come close to matching.