I was recently asked by a client to help justify the cost for acquiring Facebook Fans. ROI is what CXOs like to focus on and it presents a daunting challenge for marketers engaging in social media.
Typically, my response to this common question is to ask what you think the value of someone sharing stories, videos and photos of their awesome vacation at your resort to room filled with friends, family and colleagues. Facebook's last stat on average numeber of Friends is 130, but this statistic is over a year old... who do you know that has only 130 Friends? Regardless of what the multiplier exactly is, its alot, and the value of that Word-of-Mouth endorsement is high.
How high? I wish I knew… I can only point out some of the benefits, and below a few articles that claim to quantify value of a fan.
- Implied Endorsement : This is very much the core of the value of a Fan. The Word-of-Mouth value of a one person Liking your brand and broadcasting that to all their friends, is strong. Countless studies reinforce that nothing influences purchase decisions more than endorsements from people we know.
- Advertising on Two Levels :
- Targeted Display Ads: The level of pin-point targeted advertising is phenonemal. Design visuals and message for each segment: women riders, women skiers, male riders, male skier and then combine with unique offers for different geographic regions... is all very easy and cheap!
- Sponsored Stories Ads: One of the most effective ad types that Facebook offers is the “Sponsored Story”, which reaches out to Fan’s Friends with the very simple message of “Jane Doe Likes Brand X”. I've seen this simple type of ad tends to outperform the display ads and at a lower cost per click.
- Customer Retention : Keeping the love alive is not easy. Email can be difficult to penetrate spam filters, and people change their emails from time to time. The Like creates a connection for on-going engagement.
- Maximizing Revenue : With this communication channel open and alive, a resort then has the opportunity to inform and influence customers to buy more from your ancillary revenue centers such as food & beverage, retail, rental, ski school, hotel, spa, performances, etc.
Here is what some others think:
My buddy Joe Mescher (aka Social Media Commando) posted his thoughts on this (compelling photography as well... from a certain point of view).
A study came out in November 2011 which put the number at about $10, but there is much more to the story.
Ultimately in business, there are some things that you need hard numbers for. Others, you just don't. There are two companies that are truely killing it. Google and Facebook. These are the two properties where users engage more heavily with than any other. Bottom line, be there or be square.