What’s the Value of a Like?
FROM THE MARCH–APRIL 2017 ISSUE
Facebook is the preferred platform: 80% of Fortune 500 companies have active Facebook pages.
Marketers often justify these investments by arguing that attracting social media followers and increasing their exposure to a brand will ultimately increase sales.
To confuse cause and consequence
Many brands have discovered that customers who interact with them on social media do spend more money than other customers.
It’s possible that getting people to follow a brand on social media makes them buy more. But it’s also possible that those who already have positive feelings toward a brand are more likely to follow it in the first place, and that’s why they spend more than nonfollowers.
Given the millions of dollars in marketing budgets that flow to social media at many companies, the distinction is not trivial. It has enormous implications for marketers’ resource allocations and for how they manage their brands’ social media presence.
Supporting endorsements with branded content, however, can have significant results. And given that social media pages are gathering places for loyal customers, they can offer brands a unique source of customer intelligence and feedback from a crucial cohort. Armed with this knowledge, marketers can build new, more successful social media strategies.
Testing the Effects of Likes
In classic marketing, word-of-mouth endorsements by peers have been shown to increase sales. But the value of endorsements may be lower on social media, for a couple of reasons.
As social media swelled in popularity over the past 10 years, many predicted a revolution in marketing strategy. It wasn’t uncommon to hear about the end of “push marketing” (in which brands promote and advertise their goods and services) and the rise of “pull marketing” (efforts to draw customers in through social media and other channels). “More judo, less karate” became a popular aphorism. But our research suggests that marketing on social media will be ineffective if it uses only pull tactics. The modern social media marketing playbook should combine new and traditional approaches.
A study found that Facebook posts indicating that a Facebook friend is using a product—not just that he or she likes it—increase the chances that a member will use the product too.
Our research suggests that when it comes to highlighting customers’ engagement, brands will find it fruitful to choose online postings and other user-generated content that are more creative and meaningful than simple likes.
Use “pull” marketing to find your best customers, and listen to them.
Brands can use its social media channels to gain intelligence from its most loyal customers: They will enthusiastically provide feedback to improve product development, management, and delivery; defend the brand against unjustified complaints; and be early adopters of and evangelists for new offerings.
Knowing that their voices will be heard can make customers more willing to offer information and might even cause them to be more civil when they (inevitably) have complaints.
A version of this article appeared in the March–April 2017 issue (pp.108–115) of Harvard Business Review.
