Now that you have a Facebook page for your business and are attracting fans, how do you know it is adding real value to your marketing efforts? What does gaining Facebook “likes” actually do for your business?
According to SocialCode, a full-service social agency owned by the Washington Post Company, which looked at 50 brands and more than 5 million Facebook ads over a five-month period earlier this year, Facebook page fans are much more likely to participate in “desirable actions” using Facebook, such as making a purchase, installing an app, entering a sweepstakes or voting online in a contest. (Source: Entrepreneur.com, “Understanding the Value of a Facebook Fan,” by Mikal E. Belicove, Nov. 30, 2011)
Facebook fans are three times more likely to convert than nonfans. The conversion rate for existing or new fans to enter a brand’s contest was found to be 6 percent as opposed to 1 percent for nonfans — a 545 percent differential, according to the survey. The SocialCode survey also reports that when it comes to making an actual purchase, fans do so at a 7 percent rate, while nonfans buy at a rate of just 2 percent.
So exactly how can you calculate the actual value of a Facebook fan? Well to answer this question, you need to first define what the value of a Facebook fan means to your business? For instance, is it building brand loyalty, referring the page to a friend, making an actual purchase as a result, etc.? Then, begin to actually measure the results based on these desired benchmarks.
Using a combination of Google Analytics and Facebook Insights (the reporting tool available for Facebook pages) is a good way to better understand Facebook user engagement and activities.
For instance, take a look at your website referral paths via Google Analytics to determine how many page visitors came from your Facebook page. You can also dig deeper by tracking the referral paths from Facebook to an actual online purchase or completion of a contact form.
Facebook Insights also allows you to track activities, such as the total number of new fans added to the page in any given period of time, the amount of time fans spent on your Facebook page, the level of engagement or interaction with the page, etc. You can also better determine the quality of your Facebook fans by seeing not just how often fans interact with the page, but the quality of their comments or posts generated on the page.
Understanding the value of a Facebook fan for your business requires you to first define what is truly valuable for your business. Then you can work to measure according to those benchmarks.
But regardless, the consensus is that having quality fans interacting with your page on Facebook clearly adds value.