Monday, August 13, 2012

The Real Value of a Facebook Like

Trying to qualify the value of a Facebook Like for a given brand has been shown to be an incredibly elusive and often frustrating exercise. An exercise many brand managers and marketing managers would say ends more often than not, in futility.
Sure, having that large number of Facebook Likes is always great for the ego while standing around the water cooler with the brand managers and marketers – but what is the inherent value?
What good are all these Likes if it doesn’t correlate to increased revenue?
Two recent studies have shed some light on what the value of a Facebook Like truly is:
“The Facebook Factor” via Forrester and the “Power of a Like 2” the sequel to comScore’s “Power of a Like” released last year.

Each study examines the use of Facebook across several large, retail brands.
Released earlier this year, “The Facebook Factor” takes a hard look at the impact of a Facebook fan on brand interactions for four very large, well-known brands: Best Buy, Coca-Cola, Walmart and Blackberry.
Using the Best Buy results as one example, take a look at the startling difference between someone who Likes a given brand on Facebook vs. someone who does not:
The Real Value of a Facebook Like
The dollar amounts above reflect the average amount someone who Likes Best Buy on Facebook will spend over the course of 12 months vs. how much who does NOT Like them over the same timeframe.
So think about this… someone who Likes Best Buy on Facebook is going to spend, on average, over $200 more per year PLUS are nearly 100% more likely to recommend Best Buy to a friend or relative.
I would say these are very telling statistics wouldn’t you? Similar results were also seen across the other three brands in the Forrester research.
As for the “Power of a Like 2” it’s important to take a quick look back the original, the “Power of a Like” which revealed that Facebook Fans or Likes of a given brand, along with their friends, tend to be that given brand’s best customers.
The original study also pointed out that compared to the average Internet user, Facebook Fans are also heavy users of a brand’s products.
Ironically, the “Power of Like 2” also used Best Buy as one of their “test subjects” and their results were very similar to what Forrester uncovered, showing Best Buy Fans spend on average 131% more in Best Buy stores and online than those who are not Fans of Best Buy.
Ok, So Now What?
The quick-trigger reaction of some reading this will be to go out and try and accumulate as many Facebook Fans or Likes they can with the thought being ‘the more the merrier’ or more precisely ‘the more the merrier we will be for we will sell more products!’
But before you run out and instruct your social media managers to go forth and find any and all people to Like your brand on Facebook regardless of who they are –stop and remember what you learned in marketing class re: demographics.
From the Forrester findings…
“Profile and target your Facebook fans. Use demographics, marketing preferences, and online and retail behaviors to tailor your marketing strategy to them. Your fans are among your highest value customers — they spend more, and they are advocates of your brand. Target your customer retention marketing strategy to appeal to these valuable customers.”

No comments: