Researchers at Rice University have published a report that examines the dollar value of Facebook fans on the sales of Dessert Gallery (DG), a Houston-based bakery and cafe chain. The study found that Facebook fans became more loyal customers.
Facebook now has more than 400 million users, 200 million of which login to the site on a daily basis. In addition to this the social networking powerhouse has more than 3 million active pages, out of which 1.5 million are of local businesses. These 3 million active pages have more than 5.3 billion fans. In short, Facebook Pages have become the center of the Facebook marketing ecosystem. Despite the popularity of Pages, few reports have been produced which measure the effectiveness of the product. So what did this latest report find?
As part of the study, an email was sent out to 13,270 customers on DG’s mailing list to gather feedback about the store. Out of these 13,270 list members only 689 responded. After collecting initial feedback, the researchers created a Facebook fanpage for DG, which was updated regularly with pictures of goodies, news about contests and promotions, links to favorable reviews, and introductions to DG employees. The initial respondents were also asked to become a fan of DG on Facebook.
Three months into the study, feedback was gathered once again both from mailing list members and DG’s fans on Facebook. The results of the research showed that:
- Customers who became a fan of DG on Facebook ended up being more loyal. Although they spent the same amount of money per visit, the frequency of their visits to DG increased. On an empirical scale, fans visited DG 20% more often then non-fans.
- Fans were more likely to recommend DG to friends and had an average Net Promoter Score of 75, as compared to 53% for Facebook users who were not fans, and 66% for customers not on Facebook.
- Fans had a higher emotional attachment to DG, 3.4 on a scale of 4, as compared to 3.0 for other customers.
However, there are some points of caution as well. According to the researchers, only 5% of the 13,000+ customers became a fan of DG on Facebook. This indicates that it’s harder to convert existing customers into Facebook fans. We would suggest that the company use their mailing list and other promotional channels to help increase the overall percentage of existing customers who become fans.
We also foresee future products that will enable customers to become fans of companies on the spot, which means the opportunity for instant engagement will be much greater in the near future. The message is clear: brands need to reach out to their customers who are already on Facebook and engage them via the site.
This reiterates what we see anecdotally for clients with well-maintained Facebook pages. The click-thru and conversions rates for fans are significantly higher than non-fans, and the activism among the most loyal followers really helps the brands.
These are powerful statistics and it provides proof on how important it is to know how to target your audience using Facebook pages. Want to get started? Here’s how:
http://idaconcpts.com/2009/04/15/how-to-target-your-audience-using-facebook-pages/
According to my belief, people might not be loyal if they are following a Brand Fan Page on Facebook. But i’m sure that it has higher recall value. A brand could try to make those users loyal through its page with meaningful interactions and getting the audience involved in some way or the other. Otherwise, its just an ‘information overload’ situation where the brands are communicating just one way and the user never bothers to read the usual marketing gimmicks. Unless innovative, a social media strategy won’t make your users loyal with just having fans on your fan page and just telling them about the upcoming sale.
As much as I agree that Facebook Pages are powerful for marketing and that involving the customer increase loyalty and likelyhood of recommendation to others I feel obligated to disagree with the way you came to this result. I would say that the 689 respondants probably are already the most loyal customers since they actually respond and do not ignore the e-mail. In order for you to conclude on an increase in loyalty you need to analyze the behavior and loyalty Of those 689 respondants BEFORE and AFTER they have become influenced by the Facebook Page because they already score higher than the average customer.
nice job!
I know of a restaurant that had a computer with their Facebook Page up. You could sign up to be a fan right there (not sure if they incentivized it). I agree though – there needs to be products that make it easier.
The real power though is if the restaurant or brand engages with you in real life too. For example, I once had a bad experience with a restaurant and told them on their fan page. They responded and I said I’d be back that week. We had the CEO with us and a large group. They could’ve made the connection and greeted me by name. They didn’t and the food wasn’t any better the 2nd time. Haven’t been back.
There are opportunities to deepen the relationship that starts on Facebook even further.
Love this data.
Janet
http://www.OnlinePRBook.com
@Newspapergrl
i want to report facebook for my account and disabled my account i have not dan nothing wrong for this to hapen and will not give it back to me and i have lost all my friend’s and family please help me get my account back.