I recently interviewed 54 top salespeople about how they use LinkedIn to research accounts, prospect for leads, and generate sales. All of the study participants sell technology-based products to the IT departments of mid to large size companies.
The study included three types of salespeople: 33% were inside salespeople who sell exclusively over the phone, 41% were outside field reps responsible for acquiring new accounts, and 26% were outside field reps who managed existing client account.
The results suggest there are three types of LinkedIn users:
Enthusiasts: Twenty-five percent of the study participants would be classified as "Enthusiast" LinkedIn users. Enthusiasts have fully developed LinkedIn accounts and use LinkedIn continuously during the day. They believe it is an important tool for generating product interest and promoting their company to potential customers. Enthusiasts were more likely to be outside salespeople responsible for acquiring new accounts. The average Enthusiast has around 700 contacts, and one had over 1200. Half of Enthusiasts have paid for an upgraded LinkedIn subscription at their own expense.
Casual: Forty percent of participants would be classified as "Casual" LinkedIn users who access their account on a regular basis. They consider LinkedIn a useful tool to research and learn more about prospective clients. Casual users have about 250 contacts on average, and all use a free LinkedIn subscription.
Personal: Fifteen percent of participants would be classified as "Personal" LinkedIn users. Their LinkedIn accounts have ample information about their job history and past accomplishments. Their main purpose for having a LinkedIn account is for job-related networking and they rarely, if ever, use LinkedIn for work-related purposes. Personal users averaged around 300 contacts.
Non-Participants: Twenty percent of the salespeople were "Non-Participants." Non-Participants don't have a LinkedIn account or their profile contains very little personal information and fewer than 20 contacts. They don't consider LinkedIn a priority and seldom log-in to their account. These people were more likely to be older than Enthusiasts, and the majority worked in the same position or at the same company for many years.
Here's how data from the first two groups breaks down:
The composition of contacts varied greatly between Enthusiasts and Casuals. About 30% of Enthusiasts' contacts were with existing clients, compared to only 5% for Casuals. Over 85% of Enthusiasts indicated they use their LinkedIn account to engage prospective customers during the sales process, while only 20% of Casuals did. Twenty percent of Enthusiasts contacts were prospective customers, on average, whereas it was less than 4% for Casuals. Partners (resellers, consultants, industry influencers, etc.) who affect customer purchasing decisions account for about 28% of contacts for Enthusiasts and roughly 17% of Casuals.
Every Enthusiast and nearly half of Casuals use LinkedIn to find out who they should contact in order to secure customer meetings. Over 90% of Enthusiasts and 65% of Casuals use LinkedIn prior to customer meetings to find out more about the people they will meet. Specifically, they are interested in where they have worked in the past and who they might know in common. Both groups also use LinkedIn extensively to verify a person's title. About 55% of Enthusiasts and 10% of Casuals use LinkedIn to research their competition. In addition, Enthusiasts mentioned they will monitor a prospective customer's connections to find out which competitors and salespeople are working on the account. Overall, LinkedIn was rated as a research tool (on a scale of one to five with five being highest) by Enthusiasts at 4.1 and 2.5 by Casuals.
Less than 15% of Enthusiasts and none of the Casuals ever reported making an unsolicited initial customer contact directly through a LinkedIn invitation. Nearly all salespeople commented they were fearful this would be perceived negatively by the prospective client. Instead, over 85% of Enthusiasts and 50% of Casuals indicated they would use LinkedIn to ensure they were contacting the right person but make first contact via email. The majority of both Enthusiasts and Casuals indicated their companies supplied better prospecting tools than LinkedIn. Overall, LinkedIn was rated as a prospecting tool by Enthusiasts at 3.8 and 2.1 by Casuals.
Use of Groups
On average, Enthusiasts belong to 12 groups and Casuals to four. Both Enthusiasts and Casuals indicated their main purposes for joining groups was to keep in touch with colleagues they worked with in the past, follow companies of interest, and to improve industry related knowledge or sales-skills. About 40% of Enthusiasts and less than 20% of Casuals responded that they belonged to groups that their prospective customers were part of. No one indicated they had generated an initial customer meeting based upon a group membership.
Existing Client Communication
Seventy percent of Enthusiasts and 18% of Casuals reported they had used LinkedIn to keep existing customers informed about their company's offerings. Those who did used LinkedIn to send short messages that contained links to press releases, white papers, analyst reports, product announcements, and company produced videos. However, both groups overwhelmingly preferred to use e-mail to stay in touch with existing clients. LinkedIn was rated as an existing client communication by Enthusiasts at 2.1 and 1.5 by Casuals.
LinkedIn Generated Revenue
Over 40 percent of Enthusiasts indicated they have successfully generated revenue based upon LinkedIn-related efforts. Conversely, less than 20 percent of Casuals successfully generated revenue directly attribute to LinkedIn.
Overall, 18% of all survey respondents indicated they have generated additional sales as a direct result of their LinkedIn activities. However, this number is deceiving. In order to truly measure LinkedIn's effectiveness you must take into account how many salespeople are Enthusiasts, Casuals, Personals, or Non-Participants.