Social media, Facebook, loyalty and the value of a fan

Where does brand loyalty come from? A social media platform? Or a brand's behavior?

Once again I enjoyed participating on an episode of The Beancast last night with some really smart people that included Mitch Joel, John Wall, Ian Schafer and, of course, Bob Knorpp.

We discussed the week’s marketing stories: everything from the plight of independent BP service stations to the likely winners at Cannes. But the topic that I found the most interesting was the question of loyalty. How do we measure it?  Can we assign a real dollar value to a Facebook fan? Are the recent findings from Syncapse and Vitrue dependable.

In the case of Syncapse this social media strategy company suggests that a Facebook fan is worth $136.00. The number comes from determining a typical fan’s behavior. Syncapse concluded he’s likely to spend $72.00 a year more on a brand than a non-fan; is 28 more likely to continue using that brand; has a high propensity to recommend products to friends and family; and has a real affinity to the brand he “likes.”

But the real question that no one seems to answer is this: If there were no Facebook or equivalent social network, would that “fan’s” behavior be any different?  Does he fan/like a brand on Facebook because he’s already loyal? Or does becoming a fan somehow induce that loyalty?

I’m willing to bet it’s the former.  We are loyal to a brand because of its products, service, quality and consistency; we then reflect that loyalty by fanning a brand, not vice versa.

This has real implications for marketers. Research like the above results in more of the idiocy we have seen in the last year or two: brands that have to be on Facebook; success that’s measured in terms of how many “fans” or “likes” that brand acquires; programs that are designed to drive up the numbers.

Granted Vitrue’s approach and valuation are quite different. Their number is less than $4.00 per fan, but they’re actually measuring impressions.

To me, both of these metrics represent a classic case of applying old media thinking to a new media environment.  They measure what exists after the fact — customer value and impressions — they don’t tell us whether or how we can actually increase loyalty.

A program that strives to pile up fans will at best simply identify people who are already loyal. At worst, it will convince someone to click a button because it’s effortless, but potentially also meaningless.

The only thing we should be measuring is whether or not we can create content, utility, service and value in the social media space that induces prospects to become customers and customers to become repeat customers, perhaps even willing to pay a premium. Accomplishing that calls for  ideas, creativity and experimentation, not another quantitative study.

Smart brands measure (and, for that matter, predict) everything. But before they put their money behind reaching and collecting fans, they invest in behaviors to prove they’re worthy of a customer’s loyalty.

What’s  your brand doing to earn loyalty?

8 comments
Rasmus
Rasmus

I agree with Heather and I think the term "loyal intent" is important.

Social media can get you exposure when you use it to promote your own stuff, but the loyal intent is only shown when someone else shares or retweets your work. Or leaves a comment.

The only way to harvest that intent is to acknowledge it and follow up. To communicate. And in that respect, I really don't think it matters much if you're using Facebook or e-mail.

As for the dollar value of a Facebook fan, that greatly depends on how you embrace him or her. For most, my guess is that the value is $0. For some it's $1000. Averages are useless for any other purpose than statistics themselves.
.-= Rasmus´s last blog ..KittenChops – Chocolate, Coffee and Design =-.

Heather snow
Heather snow

Reducing the value of a Facebook fan to dollars answers a question that a lot of people are asking, but it's the wrong question.

But to the point of loyalty... No, you can't buy it on Facebook (or elsewhere), but you can cultivate it. The fan on Facebook has demonstrated loyal intent; doesn't mean she will always be loyal, or that she is 100% loyal, but she has demonstrated willingness to engage with the brand.

From there it becomes a conversation, and if the brand is using the tool well, it may in fact be able to cultivate more deeply loyal customers out of those that have demonstrated a baseline of interest.

So then the question becomes, is it the right strategy to focus resources on those customers that are already at least minimally loyal? Or should you instead be investing on building a broader base?

I'd argue in favor of the first... cultivating loyal customers/Facebook fans into advocates who may extend their loyalty through word of mouth.

Vidar Brekke
Vidar Brekke

But we must quantify using metrics we understand, whether they are meaningful or not!!!! As such I believe I've found an answer we all can live with: The value of a Facebook fan is 42. http://www.definedlogic.com/2010/06/the-value-of-facebook-fa/
.-= Vidar Brekke´s last blog ..Pending further investigation, the value of a Facebook Fan is 42 =-.

Jeff Shattuck
Jeff Shattuck

Great post and I definitely agree with your notion that a brand's behavior matters more than anything else. But, I would also add that the real question is not whether a FB page creates loyalty, it's whether certain Facebook behaviors create more loyalty than others.

For example, just putting up a page where fans of your brand can fawn over it is not very smart. Instead, you want to engage and show that you are listening and responding. You also need to be willing to expose a few warts, because you just can't be out there in an honest way and not have some detractors!

Jeff

fairuse
fairuse

Yes, the brand must be involved with the customer. If not, all they have is hearsay. In a fit of opinion and writing about what my brands must do to keep me I posted before I listened to the show at http://beancast.us/profiles/blogs/topics-for-6202010-show#comments

Did not have much more to say on loyalty after listening because I 'see' the solution you made. I still think Twitter is a better tool because it is where the brand can have a one-on-one 'talk' with their customer - customer service is a big part of loyalty to a brand.

I do not have an iPhone; neither does T-mobile; customer service is top notch. And there are only 1 or 2 brands of phone I will use, even pay the extra price for - Nokia & HTC.

In that TheBeanCast comment I said a favorite brand has to mess up big before I leave. Product quality or customer service failure will doom the brand. With that in mind, I am not so locked in that I will not experiment with other brands. A new Keurig coffee maker introduced me to Green Mountain Coffee (@GreenMtnCoffee). They have excellent coffee and have had live tasting party via ustream; a two way conversation.

Notice I did not say Facebook? There may be a FB page but there is no reason for me to go there. Will I buy XYZ brand coffee because it cost less? No. Did I write off my previous favorite coffee bran? No, it is used in the other machine; both brands fit that machine.

That is how it works around here, right down to paper towels and chicken soup. OK, big stuff too - Ford is prime example of that.

Thanks for asking.

Howie G
Howie G

Edward. Perfectly said. But remember there are journalists, researchers, etc who need to do this social media mumbo jumbo because it makes them money. These are the same people who sold the people with no jobs the sub prime loans that blew up. And sadly lots of people working for the Brands bought those mortgages.

edward boches
edward boches

Jeff:
Agree, but I'd go a step further and suggest that loyalty starts long before we ever get to FB or social. I'm not sure there is anything about social media that makes someone loyal. It's all in a brand's behavior, treatment of customers, usefulness, etc.

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