You're the Boss Blog: Putting a Dollar Value on a Facebook Fan

A weekly roundup of small-business developments.

Courtesy of Syncapse Michael Scissons

As noted in Monday’s Dashboard summary of the week’s small-business news, a social media marketing firm, Syncapse, has published a report that says the average value of a Facebook fan is $174.17. Seeking further details about the calculation and its potential impact on a small-business owner’s social media investment, we reached out to the company’s chief executive, Michael Scissons, and had the following conversation, which has been edited and condensed.

How can small-business owners figure out what their fans are worth?

The value of a Facebook fan is determined by comparing actual fans versus nonfans across key criteria that determine enterprise value. In our study, the fan value calculation considers: One, product spending within the past 12 months. Two, loyalty and purchase intent in the future. Three, the propensity to recommend the brand to other potential customers. Four, the media and messaging value that is inherent with fan membership. Five, the propensity for fans to organically lure more fans. And Six, the emotional draw felt by brands or brand affinity.

You surveyed 2,000 panelists. Would you recommend that small-business owners looking to understand the value of their fans undertake a similar exercise?

The scale and precision in our research requires an investment that is likely out of range of most small businesses. However, a small business could execute a lightweight version that attempts to measure the key value factors across its fans and nonfans. A benchmark is always helpful in understanding where you stand and if Facebook is a worthwhile investment for customer growth and loyalty.

Your survey found that 11 percent of Facebook brand fans are more likely to continue using the brands than a non-Facebook fan. Do you think this seems low?

The 11 percent is an average, so that number will be higher or lower depending on the brand. Regardless, we view 11 percent as significant, especially considering that brand fans also spend 43 percent more in respective categories versus nonfans, despite not having a higher income. Those numbers can have compounding impact on the long-term performance of a brand.

Can a similar methodology be applied to sites like Pinterest, LinkedIn or Twitter?

Our methodology can be applied to any sort of membership within a larger customer group.

Do you think a Facebook fan is more valuable than a LinkedIn Connection or a Twitter follower?

Our public study did not compare the average value of Facebook fans versus Twitter or LinkedIn connections. However, our experience working with many of the world’s largest global marketers shows that fan value varies among brands as well as networks. Many mass-market global brands with low price points may see a higher value with Facebook fans versus connections on other social networks, because that’s where their customers are. Conversely, high-end or luxury brands may see a higher fan value on LinkedIn, because that’s where their customers frequent. The key is to experiment and find out the facts for your own individual brand.

Are there three things you would suggest small businesses do to leverage the value of their Facebook fans?

First, it’s important to observe your customers and see how they use Facebook. If they are on Facebook, then you have an amazing opportunity to connect with them in a new way — as do your competitors. Second, you should experiment and learn firsthand. This is new territory, so trial-and-error and learning from others is key. As you scale up, you’ll want to designate formal accountability for the social marketing efforts, and that often falls under the person responsible for marketing and customer acquisition. The biggest barrier to success is the time investment. Third, connect social marketing to business outcome. That may be awareness, lead generation, trials or even cold, hard sales. State your goal, define the success criteria, measure, and invest accordingly.

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

State of the Art: Placing a Dollar Value on Apple’s Mountain Lion Software - State of the Art

Apple takes a different approach with its OS X software for the Mac. It intends to offer a modest new version every year. Installation is a 15-minute, one-click operation, and the price is piddling. For OS X 10.8, Mountain Lion, which came out Wednesday, Apple wants $20 — and you can install one copy on as many Macs as you have, without having to type in serial numbers or deal with copy protection hurdles.

If you’re a Mac owner, then, here’s the question: Is Mountain Lion worth $20? (A note: I have written a how-to manual to Mountain Lion for an independent publisher; it was neither commissioned by nor written in cooperation with Apple.)

There’s only one precise way to answer that, of course: assign a dollar value to each new feature.

Now, Apple claims “over 200 new features.” But some of them are tiny tweaks (Safari checks for software updates every day! Ooh!) or techie-only treats (“Xsan, the high-performance cluster file system”). Fifteen are improvements for Chinese customers, which is great for Apple’s world-domination plans but irrelevant to non-Chinese speakers.

So how many are real steps forward?

Mountain Lion continues to put velvet handcuffs on people who own iPhones, iPads and other Macs. For example, three iPhone/iPad apps are now on the Mac, too: Notes (a yellow pad, now with formatting and graphics), Reminders (a to-do list); and Game Center (lets you play against people on their Macs, iPhones and iPads, although few compatible games exist yet).

All of these sync with other Apple machines wirelessly, courtesy of Apple’s free, increasingly sophisticated iCloud service. The new apps join Mail, Calendar (formerly called iCal) and Contacts (formerly Address Book), which already sync with your iGadgets. Change a phone number on your phone, and it’s instantly updated on your tablet and computer; set up a reminder on your Mac, and your phone will chirp at the appointed time or even place.

It’s all useful and a bit magical — if you own more than one Apple device. Clearly, the company wants to keep you a happy prisoner inside its beautiful walled garden.

So what’s the value for these new syncing apps? Well, if phone apps cost $1 or $2, and computer shareware $20 or $30, then these new apps are probably worth about $7.

The new Notification Center is also modeled on an iPhone/iPad feature. It’s a dark gray panel that slides onto the screen when you drag two fingers onto your trackpad (or click a menu-bar button). Here are all the nags, messages and alerts that your programs have issued, consolidated into one tidy, customizable list: today’s appointments, incoming messages, software updates, Twitter updates and so on.

They tie into Mountain Lion’s new alert system, in which each incoming alert bubble slides quietly into the corner of your screen. It’s like a butler who tiptoes into your room with lunch, sees that you’re busy, and sets the tray down on the side table before quietly withdrawing.

But being bombarded with bubbles would be a big bummer. So the Mail app’s new V.I.P. feature lets you designate certain people whose messages you never want to miss — your spouse, your boss, the cable guy. You can set it up so that alert bubbles appear only when those people write. That’s so smart. Notification Center: easily worth $3.50.

Dictation has come to the Mac, too. When you double-tap the Fn button on your keyboard, you can speak to type.

It’s exactly the same recognition technology as the iPhone’s. So it requires no voice training and no special microphone, but it requires an Internet connection. And the accuracy is not quite what you see in the Martin Scorsese Apple commercials for Siri. Still, dictation fast and useful, to the tune of $5.75.

The new Share button is a keeper, too. It pops up everywhere — in shortcut menus, window edges, programs like Safari and Preview, and so on.

State of the Art: Placing a Dollar Value on Apple’s Mountain Lion Software — State of the Art

Apple takes a different approach with its OS X software for the Mac. It intends to offer a modest new version every year. Installation is a 15-minute, one-click operation, and the price is piddling. For OS X 10.8, Mountain Lion, which comes out Wednesday, Apple wants $20 — and you can install one copy on as many Macs as you have, without having to type in serial numbers or deal with copy protection hurdles.

If you’re a Mac owner, then, here’s the question: Is Mountain Lion worth $20? (A note: I have written a how-to manual to Mountain Lion for an independent publisher; it was neither commissioned by nor written in cooperation with Apple.)

There’s only one precise way to answer that, of course: assign a dollar value to each new feature.

Now, Apple claims “over 200 new features.” But some of them are tiny tweaks (Safari checks for software updates every day! Ooh!) or techie-only treats (“Xsan, the high-performance cluster file system”). Fifteen are improvements for Chinese customers, which is great for Apple’s world-domination plans but irrelevant to non-Chinese speakers.

So how many are real steps forward?

Mountain Lion continues to put velvet handcuffs on people who own iPhones, iPads and other Macs. For example, three iPhone/iPad apps are now on the Mac, too: Notes (a yellow pad, now with formatting and graphics), Reminders (a to-do list); and Game Center (lets you play against people on their Macs, iPhones and iPads, although few compatible games exist yet).

All of these sync with other Apple machines wirelessly, courtesy of Apple’s free, increasingly sophisticated iCloud service. The new apps join Mail, Calendar (formerly called iCal) and Contacts (formerly Address Book), which already sync with your iGadgets. Change a phone number on your phone, and it’s instantly updated on your tablet and computer; set up a reminder on your Mac, and your phone will chirp at the appointed time or even place.

It’s all useful and a bit magical — if you own more than one Apple device. Clearly, the company wants to keep you a happy prisoner inside its beautiful walled garden.

So what’s the value for these new syncing apps? Well, if phone apps cost $1 or $2, and computer shareware $20 or $30, then these new apps are probably worth about $7.

The new Notification Center is also modeled on an iPhone/iPad feature. It’s a dark gray panel that slides onto the screen when you drag two fingers onto your trackpad (or click a menu-bar button). Here are all the nags, messages and alerts that your programs have issued, consolidated into one tidy, customizable list: today’s appointments, incoming messages, software updates, Twitter updates and so on.

They tie into Mountain Lion’s new alert system, in which each incoming alert bubble slides quietly into the corner of your screen. It’s like a butler who tiptoes into your room with lunch, sees that you’re busy, and sets the tray down on the side table before quietly withdrawing.

But being bombarded with bubbles would be a big bummer. So the Mail app’s new V.I.P. feature lets you designate certain people whose messages you never want to miss — your spouse, your boss, the cable guy. You can set it up so that alert bubbles appear only when those people write. That’s so smart. Notification Center: easily worth $3.50.

Dictation has come to the Mac, too. When you double-tap the Fn button on your keyboard, you can speak to type.

It’s exactly the same recognition technology as the iPhone’s. So it requires no voice training and no special microphone, but it requires an Internet connection. And the accuracy is not quite what you see in the Martin Scorsese Apple commercials for Siri. Still, dictation fast and useful, to the tune of $5.75.

The new Share button is a keeper, too. It pops up everywhere — in shortcut menus, window edges, programs like Safari and Preview, and so on.