As your brand starts to build a social audience, you’ll start collecting more and more fans of your business’s Facebook page. But that’s just a number on a screen – how much is each fan worth in terms of increased revenue? How do you go about monetizing your fans?
Fans have two key value-drivers for brands. First is brand loyalty. By engaging with your fans on a regular basis, they’ll think of your company, rather than your competitors, when it comes time to buy. Second is by marketing and selling products directly through coupons and promotions offered to your Facebook fans.
According to a recent report by Vitrue, a fan is valued at about $3.60 for the average brand. They used a formula based on what they would pay to have the same number of eyeballs look at marketing promotions through other mediums, like cost-per-thousand-views banners.
According to this formula, they came up with the following values for Facebook fans by brand:
Coca Cola: $0.96
Red Bull: $1.14
Truly, this fails to take into account the real value of a fan. How can YouTube, who sells nothing, earn 90x more per fan than Pringles? How can the NBA, which makes most of their money through ticket sales, earn so much off their fans, when Facebook marketing likely has little sway over how many games a fan goes to see? It all boils down to brand engagement, which is something that matters a lot more to a company like Coca Cola than it does to a small business.
Instead, for small and medium businesses with brick and mortar stores, the value of the fan is going to be measured in purchases and leads. You can determine your own fan value by promoting products or providing coupons to fans and seeing how many extra sales were made possible by the promotion.
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