Dashboard
A daily roundup of small-business developments.
As noted in Monday’s Dashboard summary of the week’s small-business news, a social media marketing firm, Syncapse, has published a report that says the average value of a Facebook fan is $174.17. Seeking further details about the calculation and its potential impact on a small-business owner’s social media investment, we reached out to the company’s chief executive, Michael Scissons, and had the following conversation, which has been edited and condensed.
How can small-business owners figure out what their fans are worth?
The value of a Facebook fan is determined by comparing actual fans versus nonfans across key criteria that determine enterprise value. In our study, the fan value calculation considers: One, product spending within the past 12 months. Two, loyalty and purchase intent in the future. Three, the propensity to recommend the brand to other potential customers. Four, the media and messaging value that is inherent with fan membership. Five, the propensity for fans to organically lure more fans. And Six, the emotional draw felt by brands or brand affinity.
You surveyed 2,000 panelists. Would you recommend that small-business owners looking to understand the value of their fans undertake a similar exercise?
The scale and precision in our research requires an investment that is likely out of range of most small businesses. However, a small business could execute a lightweight version that attempts to measure the key value factors across its fans and nonfans. A benchmark is always helpful in understanding where you stand and if Facebook is a worthwhile investment for customer growth and loyalty.
Your survey found that 11 percent of Facebook brand fans are more likely to continue using the brands than a non-Facebook fan. Do you think this seems low?
The 11 percent is an average, so that number will be higher or lower depending on the brand. Regardless, we view 11 percent as significant, especially considering that brand fans also spend 43 percent more in respective categories versus nonfans, despite not having a higher income. Those numbers can have compounding impact on the long-term performance of a brand.
Can a similar methodology be applied to sites like Pinterest, LinkedIn or Twitter?
Our methodology can be applied to any sort of membership within a larger customer group.
Do you think a Facebook fan is more valuable than a LinkedIn Connection or a Twitter follower?
Our public study did not compare the average value of Facebook fans versus Twitter or LinkedIn connections. However, our experience working with many of the world’s largest global marketers shows that fan value varies among brands as well as networks. Many mass-market global brands with low price points may see a higher value with Facebook fans versus connections on other social networks, because that’s where their customers are. Conversely, high-end or luxury brands may see a higher fan value on LinkedIn, because that’s where their customers frequent. The key is to experiment and find out the facts for your own individual brand.
Are there three things you would suggest small businesses do to leverage the value of their Facebook fans?
First, it’s important to observe your customers and see how they use Facebook. If they are on Facebook, then you have an amazing opportunity to connect with them in a new way — as do your competitors. Second, you should experiment and learn firsthand. This is new territory, so trial-and-error and learning from others is key. As you scale up, you’ll want to designate formal accountability for the social marketing efforts, and that often falls under the person responsible for marketing and customer acquisition. The biggest barrier to success is the time investment. Third, connect social marketing to business outcome. That may be awareness, lead generation, trials or even cold, hard sales. State your goal, define the success criteria, measure, and invest accordingly.
Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.