No doubt you’ve heard all the numbers – more than 800 million active users, 200 million “power users,” an estimated IPO value of $5 billion – the question is whether this translates into sales for Facebook marketers and their clients. Following the almost weekly developments (as of this writing, Facebook has filed two amendments to the IPO and Yahoo is suing for patent infringement) won’t help. The user experience is too far removed from these news items.
The winning strategy isn’t based on any new, sparkly offerings designed to tempt retailers and make money for Facebook (who had a billion in profit last year on $3.7 billion in revenue). We’ll look at those ideas, but we’ll end up somewhere else.
What Facebook says
Facebook offers a series of marketing seminars designed to boost presence and sales.
These seminars revolve around gaining links to other users and running advertisements. They are worth listening to, if only to understand how Facebook makes money and where they think the value of the platform comes in.
With the IPO, marketers are being asked to bump their investments in the platform (and pay for the privilege) in exchange for the promise of reaching an already captive fan base. This comes in response to Wall Street worries about profitability and the root business model of Facebook, and the message to marketers is that scale won’t be free.
Part of this package is a tool called “Reach Generator.” The purpose is to repurpose a business’s content as ads that are sent to that business’s fan base. Facebook claims that currently only 16% of fans actually see content from a linked to Facebook page. The paid tool is supposed to up this to 75%. Pricing will be based on how large a fan base you already have.
Here’s where the problem comes in and why a different paradigm is better. The problem is that companies spend, in some cases, millions of dollars to gain more Facebook fans. Now they are being told that these fans aren’t really getting their content?
A different way to look at Facebook
The strategy mentioned above mirrors Google to some extent. However, unlike Google, which can customize impressions based on a host of different factors – location, browsing history and other personalized info – this is already doing what Facebook intends. And Google isn’t limited by membership or existing links.
Instead of trying to use Facebook for primary advertising, the right strategy is to use it for market tracking, development, and what it was intended to be: a social site.
How this plays out in practice is to accumulate a core customer group. These are folks who are already fans of your product or business. If it sounds strange to say that you have real fans, you don’t have to look far to see this in action. “I love Krispy Kreme” generates almost 200,000 results on Google. And yes, there’s a Facebook page with that title as well.
Everything from umbrellas to tires to clown supplies has a core following. These fans care about the details and the nuances; they want to know everything and they want to express their opinions. Importantly, the companies that recognize them also recognize the value of these ambassadors. And this is where the social gets social.
First, they know that their fans won’t be fooled by bogus pandering or contrivance. This core fan base only responds to the authentic. However, engaging these existing fans can be used to reach their friends and influence a much larger segment of the marketplace.
The way social is done with a core fan base in mind is through targeted promotions and feedback. Feedback works extremely well on Facebook. Polls are one way, contests another. But one of the most important factors continues to be recognition. Recognizing what core fans are saying and responding meaningfully are the keys to strengthening relationships.
The payoffs come not directly through sales to the core fans, but through building buzz for new product releases, promotions, and repair issues. Coupon codes that can be shared by fans with others work well, as does “inside” information about upcoming features or product changes. On the repair side, when things go wrong (and they will), the same core fan base gets the apology and the plan to move forward. Without an existing social network in place, reputation repair would be impossible.
On the downside, none of this comes for free. While giveaways don’t have to be the rule, engagement does. For a business of any size, it means a dedicated effort, continued interest and the willingness to commit long term. This can be hard to justify without the usual advertising metrics to draw upon. Rethinking Facebook means rethinking the value of the constituencies and treating them like real people. The expressed values of your brand have to align with what your customers observe, and this takes work. The relationship cannot be abused.
The payoffs come with customer and brand loyalty. Your emails get read, and your market doesn’t evaporate the first time you have a real hiccup. It’s marketing for depth over breadth, but the solid foundation is one that couldn’t have happened without Facebook. Emails and newsletters just don’t have the same interactive touch. Use the new system well and it will pay benefits. Use it poorly and it will do nothing other than what “old school” advertising does, and not even that as well as other platforms.