Researchers at Rice University have published a report that examines the dollar value of Facebook fans on the sales of Dessert Gallery (DG), a Houston-based bakery and cafe chain. The study found that Facebook fans became more loyal customers.
Facebook now has more than 400 million users, 200 million of which login to the site on a daily basis. In addition to this the social networking powerhouse has more than 3 million active pages, out of which 1.5 million are of local businesses. These 3 million active pages have more than 5.3 billion fans. In short, Facebook Pages have become the center of the Facebook marketing ecosystem. Despite the popularity of Pages, few reports have been produced which measure the effectiveness of the product. So what did this latest report find?
As part of the study, an email was sent out to 13,270 customers on DG’s mailing list to gather feedback about the store. Out of these 13,270 list members only 689 responded. After collecting initial feedback, the researchers created a Facebook fanpage for DG, which was updated regularly with pictures of goodies, news about contests and promotions, links to favorable reviews, and introductions to DG employees. The initial respondents were also asked to become a fan of DG on Facebook.
Three months into the study, feedback was gathered once again both from mailing list members and DG’s fans on Facebook. The results of the research showed that:
- Customers who became a fan of DG on Facebook ended up being more loyal. Although they spent the same amount of money per visit, the frequency of their visits to DG increased. On an empirical scale, fans visited DG 20% more often then non-fans.
- Fans were more likely to recommend DG to friends and had an average Net Promoter Score of 75, as compared to 53% for Facebook users who were not fans, and 66% for customers not on Facebook.
- Fans had a higher emotional attachment to DG, 3.4 on a scale of 4, as compared to 3.0 for other customers.
However, there are some points of caution as well. According to the researchers, only 5% of the 13,000+ customers became a fan of DG on Facebook. This indicates that it’s harder to convert existing customers into Facebook fans. We would suggest that the company use their mailing list and other promotional channels to help increase the overall percentage of existing customers who become fans.
We also foresee future products that will enable customers to become fans of companies on the spot, which means the opportunity for instant engagement will be much greater in the near future. The message is clear: brands need to reach out to their customers who are already on Facebook and engage them via the site.