What is a fan worth?
What is a fan of a brand worth?
This isn’t a social media question, this is a marketing question. A fan is a good customer. There’s a widely held notion that 80% of business comes from 20% of the people.
I’m not sure if the 80-20 thing is a law, or just a theory that stems from treating the best customers well.
Even before social media, we understood that the best customers are people who are worth offering something special too. The regulars at a restaurant get the best table. The regulars at a bar get invited to a day where the drinks are on the house. Loyalty coffee cards reward frequent purchases with a free coffee – but 9 get one free.
I’m telling you this because the reality is, we don’t know what a fan is worth in social media. That said, we don’t really know what a best customer is worth in the real world. We make assumptions about the word of mouth of a fan – they will tell their friends. Fans should be treated well.
There’s also enough data to suggest keeping a customer is cheaper than getting a brand new one.
So there’s value. All that context is for this image:
This is a slide from this presentation call “The Value of a Fan“. This brings up an obvious cause and effect: is social media an effect of fans, or the cause of fans. Meaning, do people become fans on Facebook of brands they love, and would these people fall into the category of the 20% best customers? Would these fans still buy 4x as much even without social media?
The answer is probably yes.
So where does that leave Facebook? There is value in having the 20% best customers informing the brand. As a mass, I’ve seen them turn skeptics into advocates. Get a group of your best customers into a room, and they can be a potent source of PR.
But knowing that it will be just 20% of your best fans (at best), it should temper expectations with what it can and can’t do. It can be an excellent place to poll your best customers. It can also be an excellent place to reward your best customers (think best table, free drinks). isn’t a bad thing. It’s not
- Under 1 Percent of Web Visits Comes from Social Media (marketingpilgrim.com)
- 7 tips for selling executives on social media (holykaw.alltop.com)
- 9 Ways Social Media is Like Sex (worob.com)