The most accessible measures of progress in your social media program are the raw numbers of fans: Facebook “likes,” Twitter followers, YouTube subscribers and so on. But that begs the question: what is the actual value of these fans? A number of mostly small and unscientific studies have sought to quantify the value of a Facebook fan, and they’ve been all over the map in their methodologies and results.
Vitrue arrived at the underwhelming number of $3.60, by equating the value of brand mentions in the social graph with the cost of having to buy impressions via PR or advertising. SocialCode compared the cost of advertising and conversion rates of nonfans and fans and came up with a value of $9.56 per fan.
Syncapse observed that fans of a brand on Facebook buy more from a company than nonfans and are 28% more likely to continue as loyal customers. Based on this data, Syncapse concluded that a Facebook fan was worth $161.
One weakness of these studies is the chicken-and-egg question. Which came first, the Facebook fandom or the customer’s brand advocacy? People “like” the brands that they actually like. It’s not surprising that higher response rates and order values are correlated with being a fan of a brand on Facebook. But correlation does not equal causation.