Contacting leads on LinkedIn or not?

Social selling is on the rise. You can use social media to identify, qualify, and connect directly with leads. Websites such as LinkedIn are now giving you the option to send individualized messages to the leads and start the conversation.

Does it bring good ROI? Do leads contacted via personalized texts on social media convert into clients?

Some evidence seems to suggest that social selling in the B2B world is effective for insight generation, connecting, and engagement.

However, stats might not be enough to convince you. They could somehow be difficult to interpret in this case. There is a solid argument, though, that suggests the ROI for LinkedIn or similar social media platforms could be good. The argument builds on the fact that those platforms have the conditions for optimal pricing that maximizes their profit while allowing good returns for clients.

Let’s understand together why.

First, sending messages has no marginal costs for the social media companies. When you ask a supplier to print flyers for you, there are marginal costs associated with printing. Your supplier charges its margin on top of the marginal costs. It does not cost LinkedIn more if you send one message or one hundred messages. All they get is a clean margin, which allows them the flexibility to adjust their prices as needed. The margin must cover their fixed costs, which tend to be considerable. The larger the fixed costs and the lower the marginal costs, the higher the risk, which means the social media company has an incentive to optimize pricing.

Second, LinkedIn and other platforms have access to real-time and abundant feedback data on the effectiveness of their sources of monetization. If a strategy does not monetize, it takes them very little to realize it and use optimization tools to correct the mistake.

What does this all mean?

These two conditions lead to one principle: LinkedIn would price its services in a way that maximizes its own profit. If there was no ROI in contacting your prospects via LinkedIn, none would use the service, so they would get no revenue. They would then lessen their margins, lowering the price until the ROI becomes good for you. It is in LinkedIn’s interest that you convert your leads into clients so that more companies would use their service and they can monetize better on one of their most important sources of revenue.

Now, be careful! Even if the average ROI might be good, there will be very high ROI dispersion. Some sellers will see higher ROI, and some sellers will see insufficient ROI. For some companies, it will be a great deal, and for others, it will be bad. It’s up to you to figure out if social selling works for your leads. See if you can use LinkedIn to effectively qualify leads. The information on the platform could be very effective in identifying and then targeting high-quality leads. Gauge whether your prospects are digital-friendly and will respond positively to solicitation from social media. In general, you can expect younger prospects to respond more positively. If your leads are using social media to reach out to their own clients (something you can verify by their own activity), they might be more likely to respond positively to solicitation via social media messages. Last, ensure the message is personalized. If you have to copy and paste the same message to everyone, then why not use social media advertising, which gives more flexibility and better use of visuals?

Conclusion. Is social selling on platforms like LinkedIn worth your budget and time? On average, yes, but make sure your specific case is not below average.