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April 09, 2012

Proof that Facebook fans are worth more to brands

by Josh Bernoff

The debate about the value of Facebook fans continues to rage on. I hate raging arguments in the absence of solid evidence. So I was delighted to see that analyst Gina Sverdlov of Forrester Research had applied actual statistical modeling to address the question, in a new report called "The Facebook Factor."

Gina's technique is simple to understand. Using a statistical technique called logistical regression, she examined a large number of factors that potentially contribute to whether a consumer will purchase, consider, or recommend a brand. The technique could work for any brand; the report specifically analyzes Best Buy, Walmart, Coca-Cola, and Blackberry.

The results are very suggestive.

Best buy facebook fan

Here are some facts from the report.

  • For all four brands, being a Facebook fan of the brand boosts purchase, consideration, and recommendation. For example, 79% of Best Buy Facebook fans bought there in the last 12 months vs. 41% of non-fans. And 74% of them recommend Best Buy vs. 38% of non-fans.
  • Of all the questions we asked (and there were many), being a Facebook fan had more influence over these behaviors than any other factor. Being a Facebook fan of Best Buy increases the odds that a customer will purchase by 5.3 times; the next closest influence factor is having researched consumer electronics, which only increases the odds of purchase by 1.4 times. The pattern is repeated for every single behavior and every single brand. For example, having a Walmart nearby doubles the odds that you'll consider buying there, but being a Facebook fan of Walmart increases those odds by more than a factor of four.

Does this mean you should pour your budget into building fans for your brand? No! While there is a strong correlation between these positive behaviors for your brand and being a fan, there's no proof that being a fan causes people to buy, consider, or recommend your brand. If you boost your fan base artificially, those fans will be less avid on average.

What this analysis does show is that fandom is worth something. Your Facebook fans are more likely to buy from you, consider you, and of course, recommend you. 

This means that cultivating them with content and interaction on your Facebook brand page is well worth it, because this is where your most enthusiastic customers are. You have the opportunity to supercharge them, not just to buy, but to spread your message. For companies that don't provide these fans what they want -- interaction, content, things to share -- this is a wakeup call. And if your brand doesn't have a Facebook page, this report is proof you're stuck in marketing thinking from the previous century. Use this analysis to justify putting your marketing budget and effort into a Facebook page and the staff to keep it lively.



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Annie Pettit

Thank you for pointing out that the data is correlational, not causational. Now, if only there was some way to randomly cause people to friend a brand and then visit and read the brand site with the same regularity as someone who did it by choice. :)

Allison Fine

Hi, Josh, thanks for this info. Question: are Facebook fans customers first then fans or the other way around?


Great post! One thought that came to my mind about the fans value is not necessarily about their own consumer behavior, but the behavior of others that they are able to influence. For instance, what is the value of person A "liking" a product, which then results in a conversion of 6 of their friends? Person A has previously established rapport and trust with friends, which gives them arguably greater influential power than the company.

Doug Schumacher

I don't see it specified, but I'm assuming this survey was posed to consumers in general, including those who don't currently purchase the brand.

I'd be curious how being a fan of a brand's Facebook page positively alters their sentiment on those issues above other brand customers who aren't on Facebook.

Steve F

I did poorly in stats during business school, but even I can see the importance of cultivating Facebook fans for your brand.

They key, as with most online marketing initiaves, is true engagement. Form real and valued relationships with existing a prospective customers.

Interact regularily and give them value, always. That holds true for both the products and services you sell as your primary business, and your social media presence.

They'll reward you for doing so, as indicated by the statistics above. Remember, people buy from people they like. It's your mission to become one of the people they like.

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