Tp]he potential impact of Social Selling varies greatly by industry
Social Selling will be highly disruptive to some industries. Not so much to others.
If you are in an industry where social selling has high applicability, peddle faster. If you don’t modify your core sales model, your competitors will beat you. It is unwise to play it safe in this situation. Social selling is a zero sum game. Win with it and you are likely to win big.
If you are in an industry where social selling has low applicability, ignore it. You do not need to modify your sales model. Let your competitors get distracted. Keep your eye on the ball and you will beat them.
How do you know which one you are?
We track 19 industries. A post reviewing all 19 would not be a post, but a book. Therefore, I have developed three industry “clusters”. Use them to quickly determine if social selling is applicable to your industry.
Legacy Buyer Industries
For these industries, there is unlikely to be a wholesale shift to social selling. Examples include medical devices and pharmaceuticals. We project a gain of 5 percent in medical devices. We project a gain of 3 percent in pharma. It will be 2019 before these gains are realized.
The reason for modest growth is medical devices, and pharmaceuticals, have persistent buyer behaviors. Social selling capabilities can only go so far in simulating the experience of selling. Reps need to be in doctor’s offices and operating rooms.
Innovative Buyer Industries
These industries are likely to see a more transformative effect from social selling. Buyers in these industries are rapidly changing how they buy. For example, Software and IT Infrastructure offer virtual rather than physical products. Buyers can make a purchase decision with little help from a sales rep. This makes these industries highly susceptible to social selling transformation.
We project social selling revenue gains to average 40 percent here. Companies in these sectors have their work cut out for them. They need to absorb sales-model changes while fending off competitors. The onus will be on the companies to act decisively and quickly. This means streamlining and repurposing their legacy sales models. They need to redirect the freed-up resources to build out their social selling capabilities. Such change may come with a stiff price tag. But these industries may have little choice but to step up in a sustained way. The current trajectory suggests they are headed toward greater disruption from social selling.
SOP Buyer Industries
These are the industries that have completed several rounds of social selling disruption. This is how the buyers buy. Social selling is standard operating procedure at this point. Sectors like publishing, electronics, and travel have seen their sales models permanently changed. For instance, publishing and travel is expected to originate over half of their revenue from social channels in five years. This will continue to reshape the sales model for companies in this cluster.
These industries will need to implement social selling in new areas. For instance, companies can leverage big-data social analytics to boost sales coverage efficiency. Sales teams in this cluster that succeed will be those that make bold bets to reshape themselves. Failure to do so is swimming upstream. It is no longer if, or when, to implement social selling, but how big to bet? Typically there are small organic growth rates in these industries. Growing revenue by a few percent will translate into significant top-line impact.
The message from our research is that sales teams need to embrace social selling. But they should do so in line with their own unique opportunity. Why invest in social selling if improvements to the current sales force will suffice? Conversely, why mess with small experiments when the revenue is large?
To assess and act on the social selling opportunity, we recommend four steps.
- Estimate the revenue at stake. Sales teams need to get a handle on the revenue opportunities available to them. Social selling originated revenue should be assessed at the product level. It should be checked against competitor performance. The aggregate impact should be computed. The numbers should be turned into social selling targets to monitor progress.
- Rank the opportunity. Most sales organizations don’t have the resources to execute on multiple big opportunities at once. Be selective. Figure out what areas are likely to deliver the greatest amount of revenue and start there. Social selling requires some experimentation. However, too many ad hoc projects lead to scattershot investments that fail to deliver growth. One SaaS company, for instance, ended up with 20 different prospecting methods. Social selling is in replacement of old prospecting methods. It is not in addition to.
- Take a complete view. One business services firm increased sales appointments by 35% but did not see a revenue increase. The reps could not perform once they were on the sales appointments. Think through the impact social selling has end to end.
- Align the sales teams accordingly. In the long run, some sales models will simply be destroyed by social. Tweaking them is futile. Sales leaders need to act purposefully and divest where it makes sense. Identify which sales teams are likely to be cannibalized and shut them down. Conversely, some sales teams will clearly need new capabilities. Companies often do not have the luxury to build up skills organically over time. One client hired SBI to rapidly build out its social selling capabilities. If speed is important, get help.
In summary, capturing the value of social selling will be important in most industries. It will be critical for survival in some. But not all.
If you are new to social selling, and need help, go here. One of our experts can help you through the 4 steps above.