Depending on what methodology you believe, a Facebook fan could be worth upwards of $100 or as little as $1.00. Some have speculated that fans are worth $10, based on brands advertising on Facebook and the number of impressions they get with actions taken.
The good news is, there are ways to measure the impact any business has on Facebook. Yes engagement numbers are important - you have to make sure that what you're sharing is being seen by your fans - but in reality a small business will have to advertise on Facebook and measure the actual conversions of those ads into sales. Or, business owners can proactively determine the amount of offline sales Facebook is driving to a business. This will take the extra step of asking "how did you hear about us," but in measuring any marketing efforts small businesses should be doing that anyway. If "Facebook" consistently pops up as an answer, one can measure the impact.
Unless you're actively taking one of these two steps, it will be impossible to tie back to actual sales, which would inform the value of your fan base. All you'll be able to do is engage your audience, build a following and hope that the referrals will drive revenue. What none of the studies to date have done is quantify the amount of offline sales that Facebook drives, which will ultimately determine the success or failure for the majority of small business owners.
What small businesses need to realize is that Facebook is like any other marketing channel, only the direct tie to money is oftentimes less direct. Because Facebook rewards engagement, rich content and fan bases that share and comment, oftentimes the monetary aspect gets lost in the shuffle. It also adds an extra step in that fans expect more from this channel than say an email with an offer. There's more "wining and dining" on Facebook prior to a purchase, so to speak. While email is typically a few steps to purchase, Facebook could be several, depending on what avenue a small business takes. In looking at Facebook's own advertising success stories, engagement is almost always a precursor to sales.
On the other hand, there might be no referral engine more powerful than Facebook. Real customers can very quickly endorse a business and spur others into action by using it. Several studies have shown that consumers are influenced by social media, including friends recommending products or services. Many ask outright what they should buy, relying solely on their own friends to make the decision. Since Facebook is the biggest of all the social communities, you can imagine the yet to be measured impact on consumer behavior.
Facebook, just like any other marketing method, needs to be done thoughtfully and carefully cultivated over time. While an email list of customers could take years to develop and monetize, so could a Facebook fan base. There are multiple levers small businesses can pull in order to drive sales and test to see what is more effective. Trends change and Facebook continues to roll out new ways to reach fans. Staying on top of them is important.
But the sooner small business owners start treating the social network like a marketing channel, the closer they will be to figuring out just how much each fan is worth to them.
The author is solely responsible for the content.
Jason Keith has been working for and with small businesses in the New England area for more than 10 years, specifically small, micro businesses. Born and raised in Massachusetts and a former journalist, he provides a unique perspective on the issues facing small businesses locally and nationally.To reach him directly email firstname.lastname@example.org.
This is a personal blog. The opinions expressed here are the author's alone.