What's the value of a 'like'?

BRUCE WILDES

05-07-2017

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Social media is often a quagmire for both small and large companies to understand and effectively leverage.  Currently, 80% of Fortune 500 companies have active Facebook pages.  Their individual goals may be different.  Is it to increase sales, increase customers, attract followers, or to influence offline behavior?  87% of the Fortune 500 CMOs said they couldn’t document that social media creates new customers.  Research shows they are using social media the wrong way.

In a recent study by comSCORE and Facebook, with Starbucks customers, the people who like Starbucks’ Facebook page or who had a Facebook friend who liked the page spent 8% more and transacted 11% more frequently over the course of a month.  They confuse cause and consequence.

Does following a brand on social media cause them to buy more?  Maybe.  Maybe not.  It is also possible that those who already have positive feelings toward a brand are more likely to follow it in the first place, which is why they spend more money than non-followers in the first place.

Liking a Facebook page helps to further ensure top-of-mind brand awareness.  Companies must combine push and pull marketing.  They must support likes with branded content. 

Social media doesn’t work the way many marketers think it does.  Research was conducted to test whether liking a brand, or passively following it, makes people more likely to purchase it.  It also tested whether peoples likes affect their friends purchasing.  Does liking affect other behaviors?  Boosting likes by paying Facebook to display branded content to followers’ newsfeeds increases the chances of meaningful behavior change.

·      Endorsing a brand doesn’t affect a customer’s behavior or lead to increased purchasing.  It doesn’t increase purchasing by friends. 

·      Supporting endorsements with branded content does have some positive effect.

·      If you encourage your Facebook page to become a gathering place for your loyal customers, it can become a great source for customer intelligence and feedback from a crucial constituency.

·      In order to prove the ROI of a ‘like’ you must:
Define the metric

o   What is the goal?  Increase sales?, Change offline behavior?, Other?

o   Metric should be measurable

o   If not easily quantifiable such as increasing sales by 5%, it may involve a survey to help quantify the impact.

Based upon the research conducted, the most effective way to achieve a measurable return on your investment with your Facebook ‘likes’ is to run advertising to promote your posts and expose new recruits to your message.  To measure results on your own page, create a group from your customer base to like your Facebook page.  Invite half the group to ‘like’ your page.  This is the treatment group.  The other half is your control group.  Record which group each customer is in.  Confirm your assumptions.  Did liking inductions work?  Did the invited take you up on your offer?  Run advertising to promote posts and to expose new candidates to your message.  Measure the spend of each group.  The difference in the spend of each group is the value of the like on your page.  Use as large a sample size as possible.  Make sure the email address is current. 

As a follow-up experiment, pay Facebook to display 2 posts per week to the members of your ‘like’ group.  Measure the difference to the control group.  Vitality measured an 8% difference over the control group. 

Conclusion:  Social media, if used properly, can provide measurable results.  It can have a positive impact on acquiring, retaining, and growing the value of your customers.  The group of loyal customers is one of the most valuable assets of any business. Social media can provide you intelligence on your loyal customers while also creating greater engagement by amplifying your efforts through advertising.  According to research conducted by Fred Reichheld at Bain and Co., author of “The Loyalty Effect” and “The Ultimate Question 2.0”, a loyal customer is worth six times the business of a satisfied or passive customer.  Social media can be a very cost effective way to retain and grow this most valuable asset.

Please feel free to contact me today if you would like to have a complimentary one hour discovery meeting to further explore how to put together an effective and measurable social media strategy and management plan for your organization. 

Source:  Harvard Business Review Mar-Apr 2017   Leslie K. John, Daniel Mochon, Oliver Emrich, and Janet Schwartz