I recently came across a piece of work by Gina Sverdlov of Forrester Research in a report called “The Facebook Factor”. In the report she shows how she applied statistical modeling to add real facts to this controversial marketing dilemma – is there value in having facebook fans?
At some point, we have all been caught up in the argument…do you recommend a facebook page or not? And depending on the brand, customer-base and demographic of the brand owner (age, outlook and skills with new technologies), we may have followed the wait and see cautious approach, hoping to prove with a real ROI to back our decision.
Gina appears to have provided us with an answer. She has examined a large number of factors that potentially contribute to whether a consumer will purchase, consider, or recommend a brand. She specifically analyzes Best Buy, Walmart, Coca-Cola, and Blackberry. The results are very interesting…
With all the four brands, being a Facebook fan of the brand definitely boosts purchase, consideration, and recommendation. Quote..79% of Best Buy Facebook fans bought there in the last 12 months vs. 41% of non-fans. And 74% of them recommend Best Buy vs. 38% of non-fans.
Of all the questions asked, being a Facebook fan had more influence over these behaviors than any other factor. Quote…Being a Facebook fan of Best Buy increases the odds that a customer will purchase by 5.3 times; the next closest influence factor is having researched consumer electronics, which only increases the odds of purchase by 1.4 times.
The pattern appears to repeat itself for every single behavior, with every single brand. For example, having a Walmart nearby doubles the odds that you’ll consider buying there, but being a Facebook fan of Walmart increases those odds by more than a factor of four.
So where does that leave us? Should we be setting aside large budgets to build a massive fanbase on facebook? I think not. Correlation may be an answer for the positive behaviours exhibited by the fans (ie to buy, consider or recommend) but there is not yet proof that being a fan means that person will buy, consider or recommend. Many fans fail to engage even if they like the brand. And if the fan base is created artificially, then is no basis for any purchase as there is little, if any, customer need.
What I have taken away from this is that there is value in having fans and using facebook or other social media to engage with. Fans who feel they are “known” by a brand will be more likely to to buy, consider or recommend that brand. What it does imply is that the brand facebook page will serve as a platform where fans can find engaging content and can interact with other customers and with the brand itself. In turn, they become brand ambassadors, each other happily spreading your messages. So if you are not there, another brand will be, building relationships and interacting with your customers. I think this is a wake-up call.