The Value of a Facebook Fan: What’s it Worth?
Just recently, I approached Bruce with an idea for incorporating a contest into a reveal tab on our Facebook page that I was sure would increase our “likes.” I had it all planned out and it was going to be FANtastic (pun intended).
But, Bruce and I got to talking about it … and he posed the question: “Why do we want more ‘likes’? I sat for a few seconds, and realized that the answer: “Because it’s the cool thing to do” really wasn’t going to cut it.
Why do we want more likes? What is that going to achieve? What really is the value of a like?”
I realized my affinity for unicorn and rainbow social media tactics simply wasn’t going to cut it this time. I was guilty of ignoring the nitty gritty metrics and simply jumping on the Like bandwagon with its popularity contest mentality.
I knew there had to be more to the value of a Facebook fan story, and I’m on a mission to uncover it. And that’s what we’re here to talk about today.
Exploring the Value of a Fan
In my quest to uncover the value of a Facebook fan, I remembered a report a friend of mine sent appropriately titled, “Value of a Facebook Fan.” The report, by social media management company Syncapse, shares findings based on survey data from more than 4,000 respondents in the summer of 2010.
I figured now was a great time to dive in, and I wanted to share what I learned with you.
Before we go into the details of the monetary value of a Facebook fan, let me first say that I personally think ALL people in our Facebook community are valuable, but that doesn’t pay the bills. So today, we’re talking numbers.
I’ll still fight for my unicorn and rainbow approach to social media whenever I can. So stay tuned for that.
The report was based solely on data for B2C-type companies, so it does leave some questions for B2B companies on how it can relate to them (which I’ll address later in this post), but the key findings of the report state:
- On average, fans spend an additional $71.84 on products for which they are fans compared to those who are not fans.
- Fans are 28% more likely than non-fans to continue using the brand.
- Fans are 41% more likely than non-fans to recommend a fanned product to their friends.
All Fans Are Not Equal
The report identifies the behavior and motivation between fans and non-fans of a brand on Facebook, showing how a fan can impact variables such as product spending, loyalty, propensity to recommend, brand affinity and more versus a non-fan.
According to the report, the value of a fan varies greatly from brand to brand. What’s more, some fans within a community are more “valuable” (in terms of bottom line) than others, based on certain factors like level of activity.
The factors affecting any given fan’s value include the price point of the product the brand is selling, the purchase cycle, purchase frequency and brand equity. With brand equity in particular, the report had this to say:
”The baseline brand equity has a very strong influence on the relative value
of a fan. A case in point is the fan value of BlackBerry ($83.98) versus Nokia ($180.87). BlackBerry manifests a lower loyalty premium for Facebook fans because the strength of their product among non-fans is much higher compared to Nokia. For Nokia, fans are intense stalwarts but less enthusiasm is evident with non-fans. In that light, fan value is not simply a question of ‘good’ or ‘bad’, but rather must be understood in terms of the overall profile of a brand’s loyalty inside and outside of the social channel.”
This implies that you can’t count your popularity by likes alone. If you have a strong brand outside of just your Facebook likes, this may actually decrease the value of the like. So, if non-fans are just as loyal, then the value of a fan is less.
The report also talked about the variation in fan value within a community.
For example, data shows an average fan may interact with a brand 10 times per year and make one recommendation for that brand, while an active fan may participate thirty times and make 10 recommendations.
Therefore the report states:
“This degree of variability in the value of a fan must be a major consideration in determining how brands address different types of fans in efforts to move them up the value ladder. In short, the goal must be to reduce fan variability while moving the average fan value to the active end of the range.”
The goal for a Facebook community, then, could be quality over quantity. To not simply garner new and more fans, but nurture the fans you already have to make the relationship even more valuable. This is an especially interesting idea when you consider the recent findings from Visibli that shows the more number of fans, the lesser the engagement level.
The idea of quality over quantity can make sense for brands that want to maintain that personal touch. See, if you have 100,000 or more fans, the question of how to maintain a community comes into play.
Facebook Fans and Spend
The report shows how much more likely a fan is to purchase a product from the brand. As I highlighted before, the findings show fans are likely to spend, on average, about $70 more on the brand versus non-fans.
But how does this data translate to B2B companies, where the price point is higher, the sales cycle is different and the fan base may not be the decision makers?
In the recent SEMPO State of Search Marketing 2011 report, it showed that B2B companies are far less likely to engage in social media. I can understand the additional challenges that B2B companies face when looking to track ROI on Facebook.
I figure a good analysis of our fan base on Facebook is in order. Who are these people that follow us and why? Do we care if they’ll ever buy our products or services? Can they afford our products or services? Or, as a thought leader in the industry, is simply being a part of the conversation and forming relationships with our community all that matters?
Sure, a B2B brand’s Facebook network may not have the key decision makers needed to affect the bottom line – in fact, it may have direct competitors in its circle of friends. But there are other benefits to having those people in your community.
This is especially true in the online marketing industry, where it’s beneficial to nurture relationships with other marketers, even if you are competing in the same space.
In this case, the value may not be directly linked to a dollar amount, but ROI could be measured in other things, like an invitation to a speaking engagement or a referral for a client your competition is passing up – the scenarios are endless.
Plus, there are so many variables if we’re talking numbers; if you have fewer fans but a higher price point, and one of your fans converts as a result of or in part due to Facebook efforts, then it could potentially have more ROI than if you have a lot of fans and more conversions at a lower price point.
And if we scrap numbers entirely, we can focus on things like engagement and cross-promotion. In my experience, those fans who are most active on our Facebook community cross over into other communities of ours as well, such as the blog and Twitter.
At this point in my research, I was beginning to understand that building a case for Facebook Fan page success based on “likes” alone was not a valid argument.
Facebook Fans and Recommendations
Moving further away from numbers but into metrics that are just as important, let’s look at recommendations coming from fans of a brand. The data shows favorably that fans tend to recommend more than non-fans.
The report states that of those surveyed, Facebook fans are 41 percent more likely to recommend a product than their non-fan counterparts. Makes sense, right?
But let’s take this a step further outside of what the report highlights. The idea of recommendations directly correlates to social search, which ups the ante on the value of a fan with regards to recommendations.
In this case, the value of fan as it relates to word of mouth can be even greater than what these findings allow.
And in the report, the findings show that 38 percent of respondents would likely become a fan of a company page if they saw a family member or close friend do so. Thirty-four percent said they would do the same even if it were just a person they knew through Facebook.
How will this increase the chances for more fans when someone sees a recommendation from someone in their community either in the search engine results pages or through search features like Google +1?
Facebook Fans and Warm Fuzzies
Research shows that 81 percent of fans feel a connection with a brand they engage with on Facebook versus 39 percent of non-fans who said the same. Eighty-seven percent said they felt warmth, gratitude and happiness towards a brand versus 49 percent of non-fans.
And why not? When a brand takes the time to interact with its community, it humanizes that brand, it creates a relationship between the brand and person. Networking has always been at the root of successful business communities.
In the study, it also shows that Facebook fans are more loyal to brands they have fanned than others. (Click through to see a larger version of the image.)
So, this is where I once again defend the unicorn and rainbow approach to social media, and assert that taking the time to nurture relationship is one important metric that can’t be ignored and can impact the bottom line.
Lesson Learned: The Value of a Fan is Just One Metric
In the end, Bruce and I decided that while we value fans and likes, we didn’t want to have to force people to Like us in order to reap the benefits of offers we present to our Facebook community.
In fact, we have non-fans (those who have not officially clicked the Like button), that engage on our profile more than our fans do.
If using this report findings as an indicator of value, these non-fans could be just as, if not more valuable than a fan that has not engaged since they pressed the Like button.
So we decided to leave the idea of luring people to like us alone. If you want to join us in our Facebook community, great; if you want to endorse us by liking our page, even better – but the important thing is that you’re there.
If you’ve ever sat down to try and understand all the metrics you can track to measure social media efforts, your mind may have been blown a couple times over.
Not only are social media metrics aplenty, but also interconnected. One can impact the other, can impact the other and so on and so forth.
So, when sifting through all the ways one can measure their social media efforts, it’s important to understand each individually, and then how they’re connected as a whole for any given brand.
And that ain’t an easy task.
But, as the aimClear team reminded us earlier this week, you set the goals you want to reach and the metrics you want to track to measure the success of your social media marketing efforts.
That said, in exploration of the value of a fan, I realized it was just one tiny metric in a sea of important variables that measure success. And popularity through numbers does not always equal success.