Many people often question whether investing in Facebook marketing is worth it or not.
Facebook is more of a community builder and positive word of mouth driver than it is a revenue builder. But it can be frustrating to find the value in Facebook when it is measured solely by fan count, engagement or referral revenue for your website. Many people look at these numbers and don’t see how the effort of managing their Facebook presence is monetarily worth what they are getting out of it.
Wait. Back up. Did I just say fan count and engagement aren’t important? Of course not! Having a large fan following and a highly engaging community are great as a marketer, but how do you justify those efforts to your boss?
Leverage Your Fan List
One strategy that I find overlooked by many marketers is to reach your Facebook fans with other efforts, like email marketing. How many Facebook fans do you have? Do you think all of those people are on your email list? Wouldn’t it be awesome if they were?
Fans aren’t going to give up their email address for anything. You need to give them a good reason, like the chance to win something, and not just a $10 credit to your store, but something of real value.
Value of a Facebook Fan
One of our clients hosts at least one Facebook giveaway a month with prizes like iPads and other tablets. Do you think that sounds like a lot of money to put into one instance on Facebook? Let’s take a look at the numbers from one of their recent giveaways in which they asked people to like their page and fill out an entry form (with email required) to be entered into a drawing for an iPad mini.
- Fans Gained: 2,500
- Email Addresses Gained (not already in client database): 2,000
- Cost of Giveaway: $500 ($350 for iPad mini plus time to manage)
- Cost to Acquire an Email: less than 30 cents
So that begs the question, how much is a Facebook fan worth?
- Let’s assume we send out an email campaign to our 2,000 new email addresses and that email has a 30% open rate.
- Those 600 people who opened the email convert at a rate of 10% – we gain 60 new customers.
- If the average order value is $50, this one email brings in $3,000 of revenue. Let’s not forget that these people are likely to convert again and those who don’t purchase (and don’t unsubscribe) may still convert in the future.
- (Immediate) Return on Campaign: 600%
Added Benefits to Facebook Marketing
- New Customers
Regardless of average order value on a customer’s first purchase, don’t overlook the lifetime value of converting a new customer. You’ve now pulled them in! Once you do this, you have the opportunity to engage with these customers further and they are more likely to convert again than someone who has never purchased from you.
- Valuable Email Addresses
Compare the cost of gaining 2,000 new emails from a Facebook contest to the cost of buying a list of 2,000 emails. When buying a list, you can expect to pay a lot more and convert a lot less (not to mention a much smaller open rate). The email addresses you collect on Facebook are of people who already know you and are much more likely to be interested in what you sell.
Amplification is the added reach you gain by engaging not only your fans but also friends of fans. When your fans engage with you on Facebook, you have the opportunity to also reach the friends of those fans. The more people you reach and add to your fan base, the greater the opportunity you have to gain new customers and new email addresses.
So let me answer the question… is it worth the investment to market via Facebook?
It depends on your ability to provide a compelling offer that will entice a community to engage with you in a beneficial way (for you and for them). If you can do that, than you bet it’s worth it!