Making Money From The Facebook “Buy It Now” Button Discussion At SocialBiz Atlanta Feb 3rd 2012

Ok Ok ! Before the Facebook and eBay lawyers descend on me a) there is no Facebook “Buy It Now” button or in fact any formal commerce transaction mechanism on Facebook (or Twitter or maybe Google+ although with Google’s Merchant Center and Google Checkout you have to believe they are poised to change this) ) YET !! and b) I am sure “Buy It Now” is a trademark of eBay so I hereby surrender my first grandchild to the courts.

It was my pleasure to be asked to close out a day of thought leadership at SocialBiz Atlanta (www.socialbizatlanta.com) along with Judy Mod, CEO of the Social Executive Council (one of the brightest people out there in the world of Social Media that I know .. far smarter than me .. I just focus on helping people make money .. Kerching !)

The Topic – Closing the Deal – The Impact of Social on Selling, the Sales Organization and Customer Relationships

All day 300+ of my closest friends and the core of Atlanta’s social media specialists heard from thought leaders about Social Media for Business. Almost everything we heard was dedicated to Marketing (market development and lead generation) and Service (staying in touch with customers after the sale to build long term value and relationships) but little information about Sales .. i.e. “Making The Cash Register Ring” (which is our humble objective here at Customer Results). Marketing and Service are great but to be brutal “As They Say In Business School Until Some One Buys Something It Doesn’t Mean Much” .. this is the USA after all.

So I shared some anecdotes about real world examples of people making money from Social Media and some concerns to see if this helped job some ideas:

Eight key things we discussed you might want to think about:

1. Selling to consumers and small businesses (B2C or B2SB) may share many similarities (not least the opportunity to “Buy It Now” per above comment) but larger complex transactions to larger businesses (B2LB) are a different story .. they very require different strategies

1. My favorite B2C / B2SB story is the investment management company who monitors LinkedIn job status so their Inside Sales professionals can reach out to job changers to have them roll their 401K to an IRA either protecting their relationship with the client or capturing other investment company’s assets. I forget the exact number but 400% increase in sales results is stuck in my head somewhere.

1. My favorite B2LB story is the company that made has built a private social network of customers and gives prospects a “sneak peak” access to that community when pursuing them. They sell $1m+ software contracts so this is VERY BRAVE BUT VERY POWERFUL. The prospect can interact freely on and offline but loses access to the community if they don’t become a customer. ARE YOU BRAVE ENOUGH TO DO THAT?

1. Moment of Sales Transactions (MOST) that are people enabled (retail stores, field sales people, contact center inbound or outbound) or that are largely people free (eCommerce, self serve IVR, Kiosk) have very different Social Media impacts.

1. People Free MOST – So what do you think the impact is of “Buy It Now” type functionality on Facebook (FB). Being really conservative let’s assume that of FB’s 1b accounts (they will be there soon so let’s keep it simple) that 2% of those have a company Page which sells something (when Mr. Zuckerberg lets us) and 2% of those sell $1000 a month in “stuff” and FB charges a 2% transaction fee (maybe Mr. Zuckerberg needs to buy a payment company like eBay did with PayPal). That is 1b x 2% x 2% x $1,000 x 12 x 2% or a year in $96m in revenues which is probably 50% net income or $48m in extra profits. I am willing to bet that FB can multiply that by 10 once you count “pay per play” online gaming and other options which is equivalent to close to 50% of the net income they declared in their IPO docs.

1. People Enabled MOST – The big question is what is the impact of social media on people enabled transactions. Not the marketing or service parts but the transaction. The most powerful impact is when the transaction cycle is longer and more complex.

1. The Buyer Economy Vs The Seller Economy – Judy Mod at Social Gastronomy (http://www.socialgastronomy.com/) has lots of information on this but it is basically a direct parallel of the Customer Economy concept that has evolved over the past 10 years .. companies and sales forces need to think about what is the customer trying to get from social media and adapt their strategy accordingly
   1. The customer wants to talk to other customers “People Like Us”
   2. The customer wants to be educated and is likely to be much more educated when they come to the moment of engagement with the sales person (so the sales person had better know the competitive landscape because social customers will dismiss ignorant sales people)
   3. The customer rarely wants to be “spun”
   4. The customer still wants a personal relationship .. not just a Tweet and an IM
   5. The customer will buy most often from the fastest and most sincere respondent to their concerns

1. Channels and Agents And The World Of Social Media In Insurance – Lauren Vargas, alumni of earth shattering Community Development and Management at Radian6 and now leading light of Community for Aetna talked about some of her challenges in Social Media Community Development in such a large company which brought to mind a few other thoughts from some work I was involved in recently with an insurance broker.

1. The issue revolves around who owns the customer, the customer conversation and the community development activity because the broker agent (in this case not an Aetna agent I note to avoid more lawyers’ fees!) was an independent or semi independent business.
2. is the customers’ allegiance to the product provider (Aetna,, State Farm, Hartford, Liberty .. insert your favorite here) or is it to the broker agent and who gets to build the community. To make this even more fun often the model is an issue of a SB2Lb (Insurance Broker small business to Insurance Provider Large Business) vs. a LB2SB (Large insurance provider to small business customer) or LB2C (Large Insurance Provider Business to Consumer Customer) or SB2C (Small Insurance Broker to Consumer Business), these all have different models and not enough time to talk about them at the conference (or here .. nicely 4 people said they wished we had had the conversation early in the day so we could have explored these further).
3. We briefly discussed how a friend of mine is launching a Concierge healthcare product to allow independent physicians and urgent care centers to help patients manage basic healthcare at a low monthly fee allowing them to more carefully manage copays and deductibles and how Facebook plays into the customer acquisition strategy (where is that “Buy It Now” button when you need it !. Oh and as Ernie Megazzini from CoreMatrix prompted and we discussed a little if someone says “yeah .. great product .. I like this and recommend it” for a P&C or Healthcare insurance product in a public social media setting is that considered to be selling the product which means they have to be licensed .. maybe 50 times for every state where someone might read the comment and act on it.
4. Just like the internet 15 years ago sorting this out over the next few years will be one of the key success criteria of social media as a real tool of commerce .. déjà view 2001 for me personally.

1. How does this social media thing affect sales compensation and performance plans ..

1. The biggest impact is to make sure you include social community development and maintenance in your performance metrics and expectations

1. A major issue is how to deal with repercussions in territory based sales models (or even in national industry focused but maybe not so much) .. the issue is if Bert in Atlanta sells to or chats with Angie in Chattanooga about a product and Angie in Chattanooga brings eight of her friends on LinkedIn into the conversation including her friend Yonda in San Francisco who as part of the LinkedIn community discussion says “I’d like to buy some of that” does the sale belong to Angie or to Hoy who is Bert’s peer in San Francisco.

1. And my favorite experience in the past few months is …. Ownership of the community

1. i. there are statistics that say that 40% of sales people are highly receptive to a in a job change right now
2. ii. that includes more than 80% of the top performing 20% of sales people
   1. iii. and guess what .. most sales people move to another company in the same industry (aka .. a competitor

1. Are you your customers your BFF’s .. There is a well known retail brand out there where the store associates are a cultural fit with the customers, in fact it is a condition of employment that you fit their cultural profile …

1. the experiment they are discussing is that a customer makes a purchase of a high value item (new line of boots for example) they will create a social media relationship with a specific store associate (the customer picks who that is from a list of the store associates)
2. the customer then gets special offers (e.g. An inside promotional party when the promotional star is in town for the boots if they get 10 of their friends along to the event which includes a beer with the store associate (associates also attend this and other customer events to build relationships
3. Store associates hand out their personal Twitter and Facebook account information to build relationships with customers.
4. So if you let your sales person build a community around their personal Twitter and Facebook account and they move they take that with them (to a competitor) .. but if you build it around an anonymous account (“Customer Results Service” for example then it far less effective than for a Service relationship ..
5. We need to figure this one out especially in an At Will / Right To Work economy where competitive protection is so difficult to enforce.

1. Influencers In Social Sales …
   1. It is well known among the Behavioral scientists (and my mother) that “birds of a feather flock together” .. in the social sales world this means that if you buy something there is a likelihood your social network is interested also. While that might be mildly useful in selling Taco dinners it is transformational in high ticket items .. .for example a luxury car company is exploring mining social networks where when a consumer buys a luxury SUV there is greater than a 70% chance that the “Social Customer” will post a picture of the new car to their Facebook page or Google+ account to show off to their friends (not to mention Tweet as they leave the showroom). It is said there is a 30% chance that one of the close “Circle” of friends is either in the market or will be persuaded to be in the market for that car because you their friend bought one … if you recommend them to the dealer with some kind of special deal the chances of closing that sale are X% (well that would be telling) … If BMW is listening having just seen Mission Impossible I would like a promotional I8 please !
   2. And Paul Greenberg (http://the56group.typepad.com/) gave some great stats on buying likelihood based on recommendations of “People Like Us” (I was certainly not typing on my Blackberry answering an email and failing to write those stats down at that point but I am sure they are on his blog somewhere)

1. And finally .. If Marketing is doing a better job of creating high value leads and service is doing a better job of sustaining customer relationships for onsell and upsell then should sales budgets be cut and that money handed to Marketing and Service

1. Whoa cowboy .. I hear the sales world cry .. while the obvious answer is “Yes” it isn’t that simple.
2. First we haven’t figured all this out yet so we wouldn’t want to be moving the money around
3. Second it is a big deal .. especially in larger companies “budgets talk” so we had better figure it out
4. Third this is just like the internet and ecommerce world (flashbacks to 1998) .. while eCommerce took care of a lot of basic interactions and even large quantities of simplistic ordering and reordering functions the reality is that this new world will accelerate the need for as much of basic relationship maintaining sales person ((I still have a neighbor who used to work in a bookstore who is not fond of Amazon)
5. As one of my favorite author / thinker duos Joe Pine and James Gilmore (Experience Economy, Authenticity, Markets Of One) have been saying for 15 years, sales and service personnel who contribute to an enhanced, differentiated and memorable customer experience and can understand and relate complex customer needs to customer centric solutions will always be incredibly valuable
6. So I say give some of the budget to marketing and service but also increase their accountability for the results they need to deliver to sales (because Customer Results Matter .. shameless plug #322) and then you use the money freed up by a reduction in sales activity to increase the budget for your most talented sales people (i.e. pay them more incentives or awards for overachieving) .. maybe the sales profession of 2015 will have 25% fewer people than yesterday.

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