Yesterday I chatted with my friend Jeff who has a company that raises money for charities. He was making the decision on whether he should spend budget money on social media or a new high-end sales person. Granted, the cost of social media is significantly less than a high-end sales person, but there was only room in the budget for one of the two.

“What is social media for?”, he asked. He had been told that social media has a very high ROI, but he was concerned that the ROI was high simply because the cost was so low. In other words – would you rather get $10,000,000 from a sales person you pay $130,000 to or $1,00,000 from an intern you pay $10,000 to (assuming you could even get that)?

Jeff is selling an expensive product business to business that has a long term sales cycle. Social media will raise his client loyalty – but it will not raise his sales. And the few leads that might come from social media take time and energy to develop – and need the high-end sales person to start the relationship (a phrase I prefer over “closing the deal”.) In other words – for his companies specific needs social media didn’t fit.

So why was I the only person to tell him?

That’s a question I don’t have the answer to. It could be because right now I’m reading Major Account Sales Strategy (and yes, these are affiliate links) and listening to cds of SPIN Selling, which explain the differences in the techniques needed for high cost versus low cost items and as such realizing the difference sales tools needed (which is what marketing is) for selling different priced items.

Social media tools work to sell small goods that have a low risk on the buyer. No one ever lost their job because they decided to buy a Gap t-shirt for $12.99 instead of a J. Crew one for $15.99 or whatever. However, if the fundraising company you choose to hire doesn’t bring in the $50,000,000 your company needs – then your tush really could be on the line. No company is going to trust a risk like that on a company just because they happen to use Twitter. The risk is different, the sale technique needed is different.

This isn’t to say that the company shouldn’t use social media. As I mentioned earlier, social media helps raise customer loyalty. People like to know they can reach you through multiple channels whenever they need – so having a presence on Facebook, Twitter and such will be appreciated by current clients – even if they never contact you there. Having a blog will raise your SEO, which won’t do you much good if you’re clients don’t find you through Googling, but it will also make the site sticky and if you give information with value then your clients will appreciate it. And more than anything else, social media is expected today. So your company will look like it’s back in the dark ages if it’s not using these tools – but that doesn’t mean you should hire someone for social media over the high-end sales person. At the end of the day, it’s about what type of sales your company does and your goals.