What Is The Value Of A Fan?Thursday February 7th, 2013
While companies like Seamless are willing to invest $7 per Facebook fan, many small businesses are still hesitant to invest in social media marketing at all.
I was recently asked by a potential client, “What is the magic here with social media? How do you turn fans into sales?” The question was an honest one, and it had a slight air of cynicism. He truly wanted to believe that increasing his company’s social fan base would help sell his product but was hesitant to invest money in a plan to do so.
I was confident that we could generate some buzz and explained how strong content would make the difference between loyal fans and sheer numbers. The man continued to ask tough questions about how these fans turn into sales, how long it would take, how much he could expect sales to increase, etc. I imagined him sitting on the other end of the phone, jotting down mathematical equations to calculate a projected ROI to warrant the investment.
I appreciated his sticktoitiveness, and wished I could have given him a precise formula for how we help our clients build a following and increase website traffic, or more importantly, how it would turn into sales. While digital tools are becoming more powerful and analytics more thorough, some level of old-fashioned faith is still required to make the jump. You have to believe that in the long term, social media fans will grow your company’s revenue even before it’s proven.
Soon after the call, I read an article about how NY-based Seamless is willing to offer $7 per Facebook fan, crushing the $1-4 price per fan acquisition that had been commonplace. Why is Seamless willing to invest $7 for the opportunity to add a Facebook fan, and potentially, collect an email address? They used analytics to prove that each fan acquired generates an ROI that far exceeds the $7 they would be investing. It pays to have data, and it takes a very small leap to start collecting that data.
When it comes to digital strategy, no matter the channel, your customer needs to believe in the opportunity, whether there is proof or not. Proof comes with experimentation.