Whether recommending or using a product themselves, Facebook fans of a brand provide significantly more value as customers than non-fans, according to a study from digital consulting firm Syncapse Corp.
The average value a Facebook fan provides a brand is $136.38, but it can swing to $270.77 on average for "best" fans or go down to $0 in the "worst." In the case of Coca-Cola, the "best" case for fan value reaches $316.78, the average was at $137.84, with some fans providing no value. This value is based on Syncapse analysis of five factors per fan: product spending, brand loyalty, propensity to recommend, brand affinity and earned media value.
"This degree of variability in the value of a fan must be a major consideration in determining how brands address different types of fans in efforts to move them up the value ladder. In short, the goal must be to reduce fan variability while moving the average fan value to the active end of the range," wrote Syncapse in its report.
The study analyzed the Facebook interactions of 20 brands: Nokia, BlackBerry, Motorola, Secret, Gillette, Axe, Dove, Victoria's Secret, Adidas, Nike, Coca-Cola, Oreo, Skittles, Nutella, Red Bull, Pringles, Playstation, Xbox, Starbucks and McDonald's.
Consumers on average spend an additional $71.84 across the twenty brands examined for which they are fans compared to those who are not fans. McDonald's saw the largest variability, with fans spending $310.98 versus $150.39 for non-fans -- a difference $159.79. Oreo saw the lowest value with a difference of $28.52 between the groups. Factors influencing these differences may include both product price and purchase lifecycle, Syncapse said.
Other findings in the study:
- On average, Facebook fans are 28 percent more likely to continue using a brand than are non-fan consumers. Adidas had the highest variance of loyalty between fans and non-fans with 42.5 percent of fans indicating a heightened likelihood of continued product usage. Secret saw the lowest difference in loyalty, only 15.8 percent between the two groups.
- Overall, 68 percent (on average) of Facebook fans indicated that they are very likely to recommend a product across the 20 brands. This is contrasted by 28 percent for non-fans. Gaming brand Playstation led overall Likelihood To Recommend with 81.4 percent followed by Victoria's Secret with 79.4 percent.
- Thirty-eight percent of respondents reported that they would likely become a fan of a brand if they saw a family member or close friend do so. This influence is slightly reduced to 34 percent if it is a person known through Facebook rather than a family member.
- Eighty one percent of fans said they feel "connection/empathy" with
the brand, compared to 39 percent of non-fans.
The quantitative research was conducted in conjunction with Hotspex Market Research and consisted of a 25-minute survey using their online panel. Data was collected from over 4,000 panelists across North America in June 2010.
Discussion Questions: Do you think marketers are underestimating or overestimating the value of Facebook 'fans' for a brand? What is the biggest benefit from a brand gaining Facebook 'fan' status? What are the challenges of calculating ROI for Facebook marketing?