Now, there are plenty of convincing reasons why social media networks would be a powerful tool in any company’s marketing arsenal, and yet so few businesses that actually stick their necks out into the cyber realms of Facebook, Digg, and Twitter. It is free press, after all. Why not get out there and play?
Estimating a Social Media Fan’s Worth
Many small businesses are convinced that opening up a social media account would not be worthwhile because they believe that fans do not do business. It is likely that this point of view comes from a research study, conducted about a year ago by Vitrue[1]. The study concluded that each Facebook fan was worth approximately $3.60 per year. Naturally, entrepreneurs were disappointed, especially small businesses who had spent hours of time on a 50-friend network.
Suffice it to say that Vitrue did not spend more than five minutes on its method. The study took the number of impressions each fan would have of the company (via wall post). Then, it applied the typical value for each impression to deduce the result. Wham, bam, done, right?
Wrong. More recently, a thorough study was released by Syncapse and Hotspex[2], which recognizes the value of social media followers in each of the following areas:
1) Product Spending
2) Brand Loyalty
3) Propensity to Recommend
4) Brand affinity
5) Earned Media Value
The big idea is that Facebook fans are more likely to be active agents of the brands they are affiliated with than non-fans. Some fans will buy products, while others will mention the company to friends. Some will invite others to become fans, while others will spread brand loyalty, either online or off. A social media fan is not just a consumer, he/she is a marketing agent.
PS The study concludes that each fan on Facebook is worth $136.38. How many fans does your company have again?
[1] http://vitrue.com/blog/2010/04/14/360-facebook-fan-valuation-is-just-the-tip-of-the-iceberg/
[2] http://www.syncapse.com/media/syncapse-value-of-a-facebook-fan.pdf
Tags: facebook, SEO, small business