There’s no shortage of opinions as to the connection between a company’s social media presence and its financial performance.
More than a few authors have written about the ways in which a corporate Facebook page, or a sales associate’s LinkedIn profile, can lead to ROI. Others have developed complex formulas to help companies determine the monetary value of a “Like” on Facebook or a “Follow” on Twitter.
Complicating things further, however, are the number of skeptics who see few links between a company’s social media profile and its balance sheets, pointing out that “Likes” on Facebook don’t necessarily translate to customer engagement or the sale of a product.
Clara Shih, CEO of Silicon Valley start-up Hearsay Social, says the real value of social media lies somewhere in the middle. A presence on “social,” as Shih calls it, can result in ROI— but you have to know how to make it personal, and how to use it to your advantage.
Shih recently stopped by Canadian Business to discuss her social media philosophy during a whirlwind visit to Toronto. Hearsay just opened a new office in the city–the company’s first in Canada, and one of a number of satellite locations in an ongoing effort to expand globally (they expect to be in Asia by next year). The start-up, which focuses on attracting firms from industries employing a high number of sales agents (financial services, insurance, and real estate chief among them), has been busy adding Canadian clientele to its roster, including two of Canada’s chartered banks.
“Canada is the highest growth market for us right now, so we’re really excited to be here,” said Shih.
A Stanford computer science grad, Shih, 31, has become something of a social media guru in recent years, having developed Facebook’s first business app (called FaceForce) in 2007. In 2009 she released her first book, The Facebook Era, which went on to become required reading in the marketing program at Harvard Business School, all while founding Hearsay with the help of her Stanford classmate Steve Garrity. Financial backing for Hearsay has primarily come from California’s Sequoia Capital (which led a C Series round of funding in September to the tune of $30 million). If that weren’t enough, Shih also sits on the board for Starbucks.
Hearsay Social primarily exists to help companies with their social media strategy, and currently offers its services to about 50,000 sales representatives from various firms worldwide. The Hearsay business model calls to mind Canadian success story HootSuite, though Shih is quick to point out that Hearsay sees itself as more of a complement than a competitor to the Vancouver-based tech darling’s “social marketing” business model. Instead, Shih describes Hearsay as a “social sales” company–a term describing the use of social media by sales representatives to find and engage with clients.
Hearsay offers what might be considered a modern update to classic sales techniques. Instead of just checking court records, sending emails, and making cold calls, many sales representatives now use social media to their advantage in order to forge personal relationships with clients. If an insurance broker knows that a client is expecting a baby due to a Facebook post, for example, it might be an ideal time to advise them on updating their life insurance policy. It’s the right move to make from a sales perspective, but raises a number of concerns for companies at large.
“Within many organizations, there will be a set of salespeople who have gone rogue,” says Shih, noting that sales associates will often set up their own professional Facebook or LinkedIn profiles without any company oversight.
For large organizations such as insurance agencies or banks that have to comply with the rules of oversight bodies such as IIROC or the OSC, it’s important to ensure that employees are sending out a consistent message online.
To tackle the problem, Hearsay offers two key products. The first is a general social media platform run by a company’s communications department–Hearsay wrangles in all the “rogue” social profiles to make oversight possible, and trains employees in the art of being engaging on social media while also complying with industry regulations. Media relations departments are also given the ability to curate a library of content that employees can post to their profiles.
To give employees the chance to make their profiles more personal, however, Hearsay also offers a unique product known as “Social Signals.” An algorithmic program using natural language analysis scans a sales associate’s entire network of social media connections (on Facebook, LinkedIn, and Twitter, for example) and lets them know when a client might be experiencing a major life event possibly requiring their services. For example, the messages “Meet Jack: 7lbs., 4oz.,” or “Just had my final fitting!”, would prompt Social Signals to send the notification that a client “might have” had a baby or be planning a wedding.
In a round of internal product testing (the results of which were released in August), Hearsay found that a group of its clients delivered sales that were between 11 and 22% better when social media was actively used in the selling process.
Another internal study showed that 64% of Hearsay’s clients said they had used the company’s social media products to find new sales leads, which acts as an indicator to Shih that corporate social media presence can lead to ROI.
Still, Shih does acknowledge that connecting social media to ROI is an “imperfect science,” primarily because it’s difficult to attribute which action on the part of a sales representative leads to the closing of a deal with a client.
“It’s not a single phone call or social media or a lunch,” says Shih. “It’s all of those things together.”
The key to social selling is that it still requires extra steps on the part of the sales representative to pursue the information that social media provides.
Using scripts and templates to get a foot in the door with a client “is what salespeople have done as long as there have been salespeople,” says Shih–it’s the good salespeople that use the script (or in this case, the Hearsay “Social Signals”) as a stepping stone to forming relationships with clients, and making sales, she argues.
Perhaps the most poignant question presented by Hearsay’s business model is whether a sales representative can afford not to pay attention to what their clients are putting on social media. A simple connection on LinkedIn might not lead directly to ROI, but engaging with the information in a client’s status might just lead to that first sale.