A few months ago, I shared with you the 5 basic rules of calculating the value of a Facebook fan (or like, tweet, share, follower, etc.). If you missed it, check it out here. This week, I bring you a little more on that topic.
Above (click on the image) is a short video that touches on many of the same topics:
– The $ value of a fan (or follower, subscriber, etc.) is based on transactions, either from that individual or from someone whose transaction behavior they can be shown to have influenced.
– These transactions are usually reflected in one of three ways: Net new transactions (new/recently acquired customer), increased buy-rate/frequency (existing customer starts buying more often), and increased yield (existing customer starts spending more, on average, per transaction).
– The $ value of a fan is therefore variable.
– The value of a fan changes from fan to fan.
– The value of a fan changes from company to company (or brand to brand).
– The value of a fan often changes over time. (Insight: This change is what your social media activities are supposed to be influencing.)
– Social media activity that is expressly intended to be connected to actual ROI should, as a principal aim, focus on increasing the $ value of the brand’s fans, followers and subscribers – either by converting them into new transacting customers, increasing their yield and/or buy rate, and/or having the same effect on peers within their circle of influence.
The video also brings up the danger of cookie-cutter equations or “values” for fans and followers, and the danger of mistaking costs for value (media equivalency equations).
If the video doesn’t play for you, go watch it here.
Production notes: The video was shot in London in July of 2011. I dug it out of the vault just for you guys. The background noise is a little high. Sorry.
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As always, if you want to dive a little deeper into this and other social media program / social business topics, pick up a copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization (Que/Pearson) at your local boostore (or just order it online through Amazon, B&N, etc.)
The book is a must-have for any manager or executive involved, directly or not with the development, integration, management and measurement of social media activities in their organizations.
Brand Building and Online Marketing Blog 
Right on Olivier, thank you for telling the truth = transaction behaviour.
More, I like your blazer. 🙂
😀 Thanks!
You know, I think the blazer was screwing up the contrast on my camera. Did you notice how it kept getting bright and dark every time I moved? 😀
True, may be it is telling that value of fan is different in different scenarios. 😀
You really need to stop making sense about making cents. It may burst the bubble…
The bubble’s job is to burst. It is its bubble nature.
I am about to break into “Social Media ROI” right after I post this comment. I am excited to learn how to align social communications and learn to integrate social media into long-term and short-term marketing and brand campaigns! I am off to a great start so lets see what else I can learn to improve my personal brand. Thanks, and Great post!
Great post Olivier! I think that it is really important that people understand the difference between quantity and quality of followers. Simply having a lot of friends on Facebook or followers on twitter does not always mean that you are being successful in your social media campaign.
Spot on, Olivier. You need to be able to track your fans from your Facebook Page to the register. That’s exactly what we tell our customers here at CoupSmart, and that’s exactly what we do – we track and measure each fan by redemption.
Another salient point: every fan is unique and their value will vary. That’s why you need to be able to track based on the individual, not the demographic.
Thanks so much for posting this.
Great video Olivier! Is that really you on that checkered blazer?! 🙂 Yes, nowadays, bot accounts are everywhere. Quantity will never beat Quality.
Thanks for the share!