Is Social Networking an Overhyped Fad or a Useful Tool?
CSO Insights is in the process of completing its 11th annual sales effectiveness study of more than 1,000 companies worldwide, so I am again reviewing what impact CRM is having (or not having) on the performance of sales and marketing professionals. Looking at this year's numbers I continue to be underwhelmed, as only 27.8 percent (up slightly from 25.7 percent a year ago) of the firms we surveyed stated that they are seeing significant improvements in effectiveness as a result of their CRM technology investments.
But a deeper dive into the data yields an interesting trend: Not all CRM tools are created equal. Some technologies are actually generating much higher results than others. So which applications are worth serious consideration and which are not? To find out, I am test-driving some of these technologies.
This month I focused on social networking. There are a number of players in this space, including Spoke, Leverage Software, Zero Degrees, LinkedIn, and SelectMinds. These systems claim to increase the productivity of sales and marketing professionals by leveraging the theory of six degrees of separation, allowing users to tap into the existing affiliations of other professionals. Good theory, but does it work?
Having already subscribed to, but never really used, LinkedIn, I chose to delve into its application. Within LinkedIn I had 54 direct contacts that were part of my network. Since I was looking to interview existing vice presidents of sales, I typed that title into the search engine and found that my network could connect me with more than 500 current vice presidents of sales within three degrees of separation from me. On the surface this struck me as an impressive potential number, but would my contacts actually do an introduction for me?
For the test I selected 30 sales executives I wanted to interview, and using LinkedIn I asked my network members to facilitate an introduction to these people I had never met. To my surprise 29 of these individuals accepted my request and passed it on to their contacts with a personal note of introduction. What then shocked me was that 23 of those targeted executives (including people in Europe and the Far East) accepted my request, and offered to consider helping with my research effort.
At this point I now had information on how to directly contact these sales execs. In following up with these individuals I was able to convince 18 of them to help me with my project. It equates to a 60 percent hit rate--compared with results from cold calling, this is very impressive.
As I spoke to other sales and marketing professionals about their experiences using tools like these, they gave the tools very high marks for such tasks as recruiting sales and marketing professionals, conducting market research, and helping with lead generation efforts. So, social networking as a CRM tool does appear to represent real value.
I have a new tablet PC coming this week. Several of my colleagues have been calling this the "killer box" for mobile sales professionals, so in my next Reality Check column I'll give you the lowdown on this system. In the meantime, if you see any great CRM successes or failures, please send me an email.
Jim Dickie is a Partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. Contact him at email@example.com
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