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New York, NY (Profitable.com) The value of a Facebook Fan to major consumer brands has increased an average of 28% to $174 since 2010, according to a new empirical study from Syncapse in partnership with Hotspex. The study, which examined 20 top global consumer brands in terms of their Facebook Fan performance, replicates and enhances the seminal research Syncapse conducted in late 2010 that first measured Facebook Fans value as drivers of shareholder value. Back then the average value of a Fan across all brands under the study was $136.
In addition to a 28% increase in value, Fan counts have doubled or even tripled since the first study so even a slight increase in the value of an average Fan is magnified. In 2010, these brand pages typically had a few million Fans each. Top brands in the 2013 study have well over 15 million Fans, with some like McDonalds and Coca-Cola with 25 million and 60 million, respectively.
“Recent years have been characterized by hype and a competitive race to acquire the most Facebook Fan connections, but brand marketers are sobering up and beginning to ask hard questions around the ROI of social marketing,” said Michael Scissons , founder and CEO, Syncapse. “Perhaps no question is asked more than ‘What is the value of a Facebook brand fan?’ With this study, we applied stringent research methods to benchmark and measure the differences between users who have ‘liked’ or “Fanned” a brand on Facebook and those who have not, to determine their business value.”
The study compared Facebook Fans and non-Fans based on their product spending, brand loyalty, propensity to recommend, media value, cost of acquisition and brand affinity. For example, 20% of a brand’s customers represent 80% of revenues, and that 20% segment often indexes highly within a brand’s Fan membership. Data were collected from over 2,000 panelists residing in the U.S. in late January and early February 2013.
The Value of a Facebook Fan 2013 public report is available for free download at [http://www.syncapse.com/value-of-a-facebook-fan-2013].
Facebook Brand Fans Are Super Consumers
It is important to understand fundamental behavioral differences between Fans and non-Fans. For example, Fans are much more active in social media, with two-thirds of brand Fans also being a Fan of more than 10 brand pages at any given time. Conversely, almost two-thirds of brand users that are non-Fans have Fanned 10 or less brand pages. On average, three quarters of Fans are likely to share good brand experiences and share promotions and discounts with their Facebook friends. On the other hand, almost two-thirds of Fans are likely to share a bad brand experience.
Finally, the study offers strategies to help brands cultivate new and existing Fans who tend to be consumers of and evangelists for their products. Syncapse suggests using existing customer touch points – i.e., microsites, product packaging, time of purchase, and customer service interactions – to convert brand users into Fans. Then brands should segment, communicate and engage Fans based on their needs and wants.
For many brands, 20% of customers represent 80% of revenues, and that 20% segment often indexes highly within a brand’s Fan membership. Therefore, brands must identify who are their customers among Fans and score them. The better the brand marketer can isolate key customer segments, the more relevant his or her messaging can be to drive loyalty and introduce the best offers to spend more.
Syncapse has isolated factors that drive shareholder value and applied them to determine the values of Fans versus non-Fans. These factors are widely identified as fundamental to both short-term and long-term sales performance and have been tested across multiple organizations to confirm their importance. They include:
- Product Spending: The difference in spending habits on each brand within the category.
- Loyalty: The consumer intention to keep purchasing the brand in the future.
- Propensity to Recommend: Probability and propensity for word-of-mouth recommendations to lead to future sales.
- Media Value: Efficiencies of earned reach and frequency via the Facebook platform.
- Acquisition Cost: Efficiency of Fans in enticing others to participate and drive organic membership.
- Brand Affinity: The perceived personality or the emotional draw felt by Fans towards their brands.
Based on the valuation model developed by Syncapse, the survey research for this study was conducted by Hotspex and consisted of a 25-minute survey using its online panel. Data were collected from over 2,000 panelists residing in the U.S. in late January and early February 2013. Respondents self-identified as Fans by indicating which brands they have ‘liked’ on Facebook. Next, information on past and projected future behavior was collected both at the category level and at the individual brand level. Data for Brand Affinity were collected using Hotspex’s PersonaSphere™, a proprietary tool to measure the emotional drivers of marketing stimuli.
In addition to the public study, Syncapse conducts a private, ongoing syndicated study for brand marketers seeking to benchmark Fan value and track ongoing performance of their social marketing and overall brand health.
Founded in 2007, Syncapse is a technology-enabled services company that uses social media data to achieve smarter marketing for the world’s most valuable brands. Anheuser-Busch InBev, Coca-Cola, Diageo, JP Morgan Chase, L’Oreal, Reckitt Benckiser and others turn to Syncapse to understand their customer needs and improve performance. Headquartered in New York City, the company has offices in London, Toronto and Gurgaon. Visit http://www.syncapse.com.