What’s a Facebook fan worth?
By Mike Moran. Filed in Social Media Marketing |Tags: Business, Facebook, Facebook fan, Internet marketing, marketing, Marketing and Advertising, Online Communities, social media, Social network
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I’ve had a few clients ask me recently what a Facebook fan is worth. I hate seeing the crestfallen looks on their faces when I tell them, “Zero.” They are immediately puzzled, however, because they know that I am an advocate of using social media for marketing. So, I quickly explain that it doesn’t provide any value to your company to have a fan, but what you do with a fan can have great value if you take advantage of this new relationship with the company.
Let me explain myself. If you think about it, most Facebook fans are already your customers. Sure, there might be fans of the iPhone that have the “wrong” carrier. Perhaps many fans of BMWs can’t afford one. But these products are the exceptions. Most people who become Facebook fans of products or brands were real-life fans long before. And customers. So what is the value of these customers becoming fans? Probably nothing. They liked you before and they like you now. Now that they “like” you on Facebook, will they buy more?
The real answer to what a fan is worth is what you make of it. How do you market to these fans? Do you offer them insider deals? Do you give them sneak previews of new stuff? What do you do to make them feel special?
It’s those tactics, not the fact that they are fans, that have value. In a sense, a Facebook fan is no different than an e-mail address. That e-mail address is worth nothing if you don’t have some valuable e-mail marketing tactics that make it worth something.
There’s one firm I know that has an even bigger problem. By the time people become their fans, they are not just customers—they might be former customers! Graco Baby has a legion of loyal customers who are likely to become Facebook fans. Hey, I am one of them. Each of my four kids used our Graco stroller, among other Graco products. But what is it worth for me to become a fan of Graco? Not much. My youngest kid is 12. We bought our last stroller 18 years ago.
So how can a company like Graco make use of Facebook fans? That was a tough problem to think through. The real issue is that the people you want to market to (first-time parents) couldn’t possibly be fans of your products (yet) but by the time they are, they don’t need to buy any more.
So, Graco came up with an innovative solution. Last week, they launched a different kind of Facebook fan page, called “I Love My Baby Bump.” It reaches out to expectant parents as a place to connect and get information. The people who “like” that page are probably the precise target market that Graco is looking for, which helps get Graco’s brand and expertise in front of the right people. What Graco does with these fans will answer the question of what each one is worth. Special offers, mailing lists—Graco has a chance to treat these prospective customers in special ways.
I doubt that any of this costs all that much. The idea is what mattered. I can even imagine a success here being something that Graco can build on—could they create a similar Facebook page around adoptive parents? Perhaps there are even more ideas here, but you get the point. No matter what kind of business you have, merely setting up Facebook fan pages doesn’t get you anywhere. Any marketing approach starts with segmenting the right people and doing something that keeps them engaged and eventually buying from you. Facebook doesn’t change any of those rules, but sometimes it takes more creativity to know how to apply them.
Thursday, July 1st 2010 at 2:17 pm |
Excellent Post! I have been telling people how social media is a great platform for promotion. You have shared a great idea, how face book fan page can be used to target potential customers. I would like to add a point with this post. How about engaging the existing customers who are your face book fans?. well you can conduct a poll or ask them to share their experiences about your product and services,well,as they are your existing customers and fans of your products, they won’t post anything negative.Positive word of mouth is one of the most powerful tools. Don’t you think so?
Thursday, July 1st 2010 at 2:45 pm |
I do, Kavin. Engaging with existing customers certainly has value just by keeping the relationship warm, and can provide much-needed intelligence into what people really do with your products. Those soft benefits are really important, also, but my post was just trying to reign people in who are claiming that mere fandom is some kind of valuable thing. It’s not. Using the fan relationship as a marketing vehicle is great and your point about using it to collect market research and make your customers feel special has value, too. Thanks for the comment.
Friday, July 2nd 2010 at 3:30 pm |
Dead-on as always, Mike. There are companies falling over themselves to develop a metric to assign a dollar value to Facebook fans, but the answer is always, it depends. And beyond what a company can make of their fans by marketing to them and engaging them, there’s also the organic community that develops amongst fans, which, if fostered, can heighten the value even more. Thanks for another great post!
Friday, July 2nd 2010 at 6:41 pm |
Thanks, Stephanie. This is definitely a case where it makes sense to measure the cause rather than the effect. Marketing tactics cause sales (and Facebook fans), not vice versa.
Friday, July 9th 2010 at 2:58 pm |
You’re right. A social media is the perfect way to promote your blog/website and even business. In this way you have big chances to promote very fast to a large audience. Useful post. :)
Tuesday, July 13th 2010 at 7:50 pm |
I do totally agree that a fan FB can be worth nothing or depending on your strategy can be worth a great deal. It is like you said very similar to an email address but needs to be used in the right way. Thanks for the post, good info.
Joey
http://josephbushnell.com
Saturday, July 24th 2010 at 10:53 pm |
wow, brilliant post, brilliant strategy. cuts to the core of what can make social media a brand and business building tool (done well), or just so much noise and wasted effort.
Tuesday, October 5th 2010 at 3:35 am |
Mike, thanks for the great posting. Your blog is an excellent resource of thinking outside the box and using a different marketing approach as you stated with Graco. Most people don’t realize that selling to existing customers reduces the sales timeline cycle compared to selling to a new customer.
Tuesday, October 12th 2010 at 11:59 pm |
Sorry but I must disagree with you basic position in this post. First, you assume that brands set up fan pages with no strategy or objectives whatsoever. Secondly, you assume that a brand (e.g., Graco) has absolutely nothing to upsell. I mean, Seriously? (yes, notice the SNL reference).
Of course a Like button has a value. But it is with this as with anything. If you chose to flush $100 down the toilet, it has no value either but would you do that?
Wednesday, October 13th 2010 at 3:18 am |
Gee, Rikard, you seem a bit upset. Sorry if I hit a nerve.
I actually am not assuming anything. I am speaking from my experience working with many brands that waste marketing money every day. Facebook fan pages are just the latest trend that can be executed well, as Graco has, or executed haphazardly with no strategy whatsoever (which I have seen all too many times).
And Graco makes baby products, so I really don’t think I am still in the market for them, and that’s why I am impressed that they are targeting their emerging market (expectant families) rather than trying to recruit fans among customers who are aging out of their market segment.
I appreciate your feedback, but I still think that brands need to think clearly about what their goals are before Facebook (or any marketing) will return their investment.
Wednesday, October 13th 2010 at 2:44 pm |
The backdrop to my comment is that a question was posed on Quora “What is a Like button worth”. Someone recommended your post while suggesting that the answer is “zero”. I realize that you believe the answer is “depends” (which I agree with). BUT, isn’t that the case with everything we do? I am just struggling to understand the point, that’s all. Of course, my thoughts about my customers may just be too high and this is really a big deal? I will take that as my personal takeaway from this. Thanks!
Wednesday, October 13th 2010 at 2:50 pm |
Thank for clarifying, Rikard. Of course you are right that the value of anything depends on other factors, but my point is what it depends on. To me, Facebook fans aren’t different than brand awareness. There might be some kind of monetary value in there somewhere that you can correlate with something, but it’s very difficult to measure.
But the value of a new customer or of a new sale is not hard to measure at all. To the extent that we refocus the discussion on how to correlate fans (or brand awareness for that matter) to sales or to customer acquisition, then we are able to answer with something better than “It depends.”
Wednesday, October 13th 2010 at 5:37 pm |
Agree. There should be some formula for this. Since referrals from social networking sites has doubled in the last 10 months, normal formulas for SEM are eroding. We know that a fan, or someone who clicks on Like buttons, are more inclined to share and comment within Facebook. Ultimately that too results in revisits to the web site just like SEM efforts to. If I know the conversion ratio and the revenue per customer, I should be able to assign a value to a fan… I would think?
Wednesday, October 13th 2010 at 6:22 pm |
There are ways to do it, Rikard, which is why I am beating to death the idea that we need to use direct marketing principles to measure this. My point is that most marketers do not do this. I am glad that your experience is different.
Thursday, February 24th 2011 at 5:08 pm |
zero?
that’s a funny way to talk economics.. is the cost to acquire a fan zero? i don’t think so.. go back to school and try learning something about costs and prices then publish opinions..
Thursday, February 24th 2011 at 7:50 pm |
Hello there, ZERObust.
I think you might need to go back to school. Since when is the cost of something equal to its value? Lots of people buy things for less than they are worth and lots more buy things for more than they are worth. In any transaction, each side believes it is getting something more valuable than what it is giving up. The grocery store values your money more and you value their food more. That is what economics is all about.
The point of the post is that there is no value in having a fan any more than there is value in having a phone number or an e-mail address. The value comes from what you do with it.
I didn’t think it was rocket science, but perhaps I was harder to understand than I expected.
Thursday, May 31st 2012 at 12:11 pm |
Sorry but I must disagree with you basic position in this post. First, you assume that brands set up fan pages with no strategy or objectives whatsoever. Secondly, you assume that a brand (e.g., Graco) has absolutely nothing to upsell. I mean, Seriously? (yes, notice the SNL reference).
Of course a Like button has a value. But it is with this as with anything. If you chose to flush $100 down the toilet, it has no value either but would you do that?
Thursday, May 31st 2012 at 7:40 pm |
I’d like to gently suggest that you read the post again. Not only wasn’t I criticizing Graco–I was praising them. My point is that you need to do the kinds of things that Graco did in order to make fans valuable. I appreciate you reading the post and commenting, but I think we are closer on this than you make it sound. My point is that by itself, a fan has no value–it is what you do with the fans.