Remember the dot-com bubble when companies were looking at capturing eyeballs with no idea of how to monetize? It’s tough to ignore the similarities to today’s social web gold rush: companies going after fans and followers with no idea of what to do once they get them. At least this time it’s a marketing initiative, not a failure in the business model.
The fundamental question is: How can we leverage fans and followers to drive business results?
A recent study estimates the value of a Facebook fan (Facebook users that “like” companies) at $136, based on how much more the average fan spends compared with non-fans as well as estimating the value of the fan’s loyalty and recommendations.
We should be careful about the difference between correlation and causation: a fan is not worth $136 because they become a fan. Loyal customers are more likely to become fans; however, there is value in establishing Facebook as a channel to engage with more of your loyal customers. To facilitate this, clients are using the new SocialConnect “Like It!” functionality to make it easy for customers who write reviews – already engaged customers – to “like” a brand’s page, right after they submit a product review. Your best customers are those writing reviews, so offer them the “like opportunity” at this stage in the participation chain.
Let’s play it safe and say that for a particular retailer, getting a new fan is worth $68—half that of Syncapse’s estimate. Let’s assume this retailer gets about 10,000 customers to write a review every month. Now, let’s assume this retailer gets 10% if these reviewers to like the brand through the review thank-you page. That would mean the brand would be getting 1,000 new fans per month, which would be worth $68,000. How does a “like” turn into additional revenue? The brand now has a new channel to do permission-based marketing to these valuable customers. The key here is understanding what to place in this channel: the voice of your customer. A customer that has “liked” a brand is likely to be interested in products that have been rated highly by customers like him or her. The reviews shared on Facebook via SocialConnect will take this customer right to the product page, just pixels away from the Add to Cart button. Once they buy a product and write a review, he or she can now share that review back to Facebook.
So far we have seen that up to 26% of customers will share their reviews on Facebook, though, naturally, this number will vary depending on the nature of the brand and their customer demographics. Take this same hypothetical example of a retailer receiving 10,000 reviews per month and 26% of them sharing them on Facebook (best case scenario), they would get 2,600 “shares.” With the average person having 130 friends on Facebook, the retailer would be reaching 364,000 potential customers, many of whom may have never visited their website. The message from their friend is trusted (because it comes from a friend), authentic (it is written in their own words) and can take customers right into the product page to directly impact the decision-making process.
The “Like” button is a promising new step in the evolution of social commerce, and seemingly minor developments like this can translate into real business results.