The goal of Moneyball is to get the best results out of the least money spent. In other words, Billy Beane viewed his baseball team as a business, looking to get the best value or ROI. Beane’s Oakland teams made the playoffs four straight years in the early 2000s despite being in the bottom five teams in salary.
As a sports fan and a sportswriter, reading Moneyball changed the way I look at baseball like few other things have. Each week, I’ll try to do the same thing with SEO for you in this series, SEO MoneyBall, using some deeper statistics to give you a better look at how to improve your web presence. This week, I look at a study on the value of social media followers for businesses.
Beyond SEO efforts to rank on Google, another simple and efficient way to improve your business is to ramp up your social media presence. A few weeks ago, I detailed some powerful reasons to focus on social media, but today I’ll once again take a more numbers-based approach to the topic.
Social media is cheap. Like, dirt-cheap. Depending on how you handle your social media, it may even be free (other than the time it takes you to manage the accounts). In an effort to Moneyball your business efforts, there may not be a more powerful tool than a well-run social media campaign. Social media has now even been shown to impact your SEO efforts as well.
The message of Moneyball got lost a little bit in the Brad Pitt movie. The true success of Billy Beane’s Oakland teams was not that they won more games than before- they didn’t, by the way- but that they continued to win 95+ games a year despite having one of the five lowest payrolls in the league. Social media is your dirt-cheap way to win the metaphorical equivalent of 95+ games with minimal expenses.
Something we look at often in baseball statistics is Wins Above Replacement. Basically, it is a stat that compares a player to a readily available replacement player at the same position. In using some reverse mathematical maneuvering, that formula places the value of a 1.0 WAR player (a player worth 1 win more than a readily available replacement) at $5 million. So, when assembling a roster, the general consensus is that you pay about $5 million per WAR for a player.
Let’s pretend that Facebook likes are these replacement-level players. We want to find out how valuable each Like Over Replacement (There isn’t really a replacement we’re going against here, but let me have this one) is. This study by Syncapse tried to find that exact value.
You have to sign up to get the whole study, but I can summarize some of the findings for you. Basically, by studying motivations for becoming a fan on Facebook, Syncapse was able to assign a dollar value to each Like.
Perhaps most importantly, this study found that 78% of fans on a Facebook page are already customers.
“Since being a brand user is usually a prerequisite to becoming a Fan in consumer goods categories, marketers should prioritize their Fan acquisition investments on converting existing customers,” Syncapse said in its report. “Not only is acquisition cost and conversion friction lower, but the investment in a higher quality Fan base will reap rewards down the line, and this is true for both lower-cost and higher-cost consumer brands.”
Using this, as well as other statistics, Syncapse calculated the value of a Like to be $174.17, an increase from the $136.38 that the same study found in 2010. With a little bit of effort and focus on the part of your company (and the help of Facebook’s excellent promotion tools) it isn’t too difficult to boost your following.
How did Syncapse come to this conclusion? Well, as you can see in the chart below, they found that a Facebook fan will spend on average $255 as opposed to $139 spend by a non-fan. Facebook fans are also far more likely to recommend a brand to friends, purchase a product and be content with a brand than non-fans.
Return on Investment is our best way to look at effectiveness of social media. Think about ROI as our version of WAR. We’re trying to get those wins (dollar dollar bills, y’all) for the lowest cost possible. When you start thinking about Facebook Likes as an important part of those wins, it becomes clear that converting customers into Facebook followers and vice versa should be near the top of that strategy.
As the study shows us, there is a strong correlation between Facebook followers and dollars in your pocket. Syncapse reminds us that at a minimal cost, social media can still have powerful results.
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