I have been thinking about the value of Facebook fans lately, and how they stack up against other types of online and digital marketing payoffs. The problem with getting to an answer to the value of a fan, and what many small business owners face when trying to sort out what square to place their marketing dollars on, is the array of mismatched direction.

Small businesses aren’t very good at increasing their Facebook fan base. So even though they may be following all of the “rules of the Facebook road,” they aren’t seeing much if any return on their effort.

A Bigger Fan Base is Better

Ultralinx posted an article titled The Importance of Having a Fan Base, which included a cool infograph illustrating their point.

With the explosion of Social Media, businesses and brands have found a new way to advertise. Advertising through Social Media has a lot better ROI than most other types of advertising and can help build relationships between businesses and their customers. Building relationships with people fosters loyalty, as a result, loyalty has the potential to increase profit.

According to Ultralinx, the benefits of having a fan base include:

  • 50% of small business owners reported that they gained new customers through social media.
  • Ning, a social network platform, found that it only takes 20 people to create an online community.
  • 64% of Twitter users say they are more likely to buy from a brand if they already follow it. 51% said the same on Facebook.

So, one would think that investing time and money building such a digital platform is the proper direction. And, as with your checkbook balance, bigger is better right?

Wait, Only 1% of Facebook Fans Engage with Brands

Just as we were  convinced to start ramping up our digital assault, we read a contradicting article, this from AdAge, that Not Many Fans Are Engaging; What are we to believe?

 For a few years now, brands have been touting frothy Facebook “like” numbers as evidence of their social-media acumen. But how many of those fans are actually bothering to take part in conversation with brands?

Not too many, as it turns out.

Slightly more than 1% of fans of the biggest brands on Facebook are actually engaging with the brands, according to a study from the Ehrenberg-Bass Institute, an Australia-based marketing think tank that counts Procter & Gamble, Coca-Cola and other major advertisers as its supporters

Is Facebook for Business Overrated  

The point here is that  you can find a blog, an article, a video and multiple consultants to support either side of the equation. What is best for your business? It wasn’t long ago that I too was a bit skeptical and thought that Facebook for Business is Overrated. I have changed my mind, but with a qualification, only after you have built a Fan Base large enough to matter. If you aren’t willing to do what it takes to create a space for a “community” to gather around your brand, and grow that to a size large enough to matter then leave your Facebook chips at home. Size really does matter.

We have since placed a disproportionate amount of our marketing resources on that bet and Doubled Down on our Facebook Fan Page for our boutique apartment business. I am glad we did, as it is producing a steady stream of rental leads for us. However, not much of anything happened until we got close to 10,000 Fans. Prior to that, we were mostly talking to ourselves.

That raises another question, What is the Optimal Facebook Fan Base size to see a return?

It has taken some time to build a hearty, Hyper Local Fan Base, and a lot of work, trial and error. Patience was required. And, we didn’t know what the right size was either, until finally we started to experience a sharing of “Likes” and engagement. It has sort of been an obsession around our office for the last 24 months or so, but it looks like it is beginning to create a nice return.

What are your experiences — Especially those of you in small businesses? How many fans did you have before you began to see responses, leads and even sales or conversions? Where was your double down point? Let us know in the comments.

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About Eric Brown

Eric Brown

Eric Brown's background is rooted in the rental and real estate industries. He founded metro Detroit’s Urbane Apartments in 2003, after serving as senior vice president for a major Midwest apartment developer. He established a proven track record of effectively repositioning existing rental properties in a way that added value for investors while enhancing the resident experience. He also established The Urbane Way, a social media marketing and PR laboratory, where innovative marketing ideas are tested.

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Comments & Reactions

Comments Policy

Comments on Social Media Explorer are open to anyone. However, I will remove any comment that is disrespectful and not in the spirit of intelligent discourse. You are welcome to leave links to content relevant to the conversation, but I reserve the right to remove it if I don't see the relevancy. Be nice, have fun. Fair?

  • Anonymous

    Hi Eric,  Most of the updates that businesses push out to fans is just nonsense.  The content is not interesting to fans and Facebook knows this.  That’s why not a lot of the content gets onto the Fans newsfeeds.  When the timeline for Facebook pages comes out what’s going to happen to these updates?  The will be in the timeline and in the ticker and will seldom get into the newsfeed.  You get into the newsfeed through sponsored stories and open graph applications.   What do you think? 
    Ian

    • http://urbanemedia.co/ Urbane Media

      @lancleary, It all starts with an integrated marketing strategy consistent with the business. That said, we do see s significant difference in actual engagement, depending on who in our office is working our Facebook Page, which I find interesting. 

      • Anonymous

        Yes and the integrated marketing strategy generally comes up with content that is not interesting to people.   Brands are competing with friends and I’d also favor updates from people I hang out with than any brand so brands are loosing this battle.  The way brands can start winning this battle again is come up with open graph applications that  are so compelling and interesting that people install them and enable friction less sharing. 

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  • http://lindsay-hunt.com/ Lindsay

    Eric, I agree with your assessment. It’s really hard for small businesses to see value out of Facebook Pages when they don’t have a fan base that’s big enough. Many of my clients are pulling their hair out trying to increase engagement, but aren’t doing anything to create a community around their brands. 

    I’ve seen many who get frustrated with their results and give up on Facebook before they give their communities time to develop. Many have a false assumption that they’ll create a Facebook page and have overnight success. It takes more effort and work and some businesses aren’t willing to put the effort in to get results. 

    • http://urbanemedia.co/ Urbane Media

      @137ea2771f9ed250c09b90b7ac8651bd:disqus , Good EveningWhat strategies have you seen work best to drive “likes” I am not a big fan of contests, although we have administered many. 

    • http://twitter.com/NewCustomersNow Joe

      Great point Lindsay. Businesses need to nurture their communities. It’s a really tough sell though especially for small business owners who are already over taxed.

  • http://www.anandmpatel.com/ Anand Patel

    Spot on. The talking to yourself phase is awesome…not. It makes you wonder if your Facebook efforts are even worth it but it really is about not giving up and finding the right content to create engagements with your audience! 

  • http://jonloomer.com/ Jon Loomer

    Good post, Eric! My page is a few months old, and I’m actively building my audience. I’m up over 1,800 likes, and that’s produced a relatively engaged base. That said, I do have the occasional “talk to myself” post, and the page itself hasn’t produced much in terms of leads. But I realize it’s still early.

    Sounds like I need to shoot for 10,000!

  • Cory Sweetin

    I agree with Eric.  Most small businesses get close to zero engagement because they are just posting their daily specials or deal of the day.  They quickly fall off their followers’ feeds.  Small businesses need to do a better job of joining the conversations that are already going on and posting content that is interesting; in other words stuff that’s not all business.  I’ve seen small businesses with 1000 followers do well with social media.  It’s not about the numbers it’s about the quality of the relationships.

    Best regards,

    Cory

    • Anonymous

      Do you really want a relationship with your local shoe shop down the road that convinced you to become a fan?  Yes there are some people that are mad into fashion and would like to hear about the latest fashion and there are some people that will find some of their content mildy entertaining but generally they will struggle to come up with good content because they don’t have a lot of interesting stuff to say.  

      • Cory Sweetin

        You make some good points but it depends on the shoe shop, right?   If you’re a high end fashionable shoe shop or sports shoe shop you should be able to come up with interesting content that people would want to interact with.  If your a boring run of the mill shoe shop with nothing interesting to say then social media marketing may not be the best thing for you.   However, it doesn’t always have to be about shoes.  Join in on the conversations that are going on; local happenings, charitable causes, sports, pop culture, etc.  Post that picture of the crazy stadium replica meat tray around Super Bowl time.  In other words be interesting first and be a business second. 

      • Cory Sweetin

        You make some good points but it depends on the shoe shop, right?   If you’re a high end fashionable shoe shop or sports shoe shop you should be able to come up with interesting content that people would want to interact with.  If your a boring run of the mill shoe shop with nothing interesting to say then social media marketing may not be the best thing for you.   However, it doesn’t always have to be about shoes.  Join in on the conversations that are going on; local happenings, charitable causes, sports, pop culture, etc.  Post that picture of the crazy stadium replica meat tray around Super Bowl time.  In other words be interesting first and be a business second. 

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  • http://www.geoffreyamoore.com/ rstrad1

    Thanks for the interesting read.   I just finished Geoffrey Moore’s Book, Escape Velocity http://www.escapevelocitybymoore.com it solidified my belief that no matter how big or small your company is you need to embrace change and continue to innovate.  Facebook ties right in with how it is helping to drive a whole new set of customers onto the map.  The only problem is figuring out how to crack that nut, especially when you are a B2B.  Thanks for the information, I think I really need to start getting those followers : )

  • http://twitter.com/jwongjk Jan Wong

    Interesting thoughts. It is very true that it takes a larger fan base for things to really happen on a Facebook page but I’ve also seen pages with less than a thousand fans doing a fairly good job. This made me think that the lesser amount of fans you have, the higher level of engagement you require – which may be true.

    Pages with higher amount of fans can post a simple greeting e.g. “Happy Christmas to our fans!” and may get 100 likes and shares (or at least a higher probability of achieving so), but a page with lower fan count may require something more engaging to reap similar responses. 

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  • http://pimpmyfans.com/ get fans on facebook

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