By Luanne Teoh on 07-06-2011

According to Consumer Pulse, 51% of Facebook fans are more likely to buy from a brand they like and 79% of Twitter followers who follow a brand are more likely to recommend a brand they follow.

What does this mean? Rush out and get a whole ton of followers and “Likes”? Ideally, yes.

However, getting a whole ton of random followers will do you no good in the conversion aspect of the business. The conversion rate for your social media will be incredibly low and the whole subject and issue of  ”what’s the value of a social media fan” and “the ROI of your social media strategy” will undoubtedly come up as a topic of internal discussion.

Brands that receive the highest conversion rate are those that are marketing to customers who already want to hear from them. For instance Prada, a luxury brand from Italy recently went public in Hong Kong and is expected to command a higher price in Hong Kong than it would have at home in Europe. This is due to Asian demand for luxury goods as China is forecasted to be the second biggest market for luxury goods after the US.

The premise is simple – market to the people who are already your customers and who want to hear from you.

If 51% of Facebook fans will buy, then Prada can expect to bring in at least 391,000 sales from a “Facebook Fan Sale” (if they decide to do one) – the beauty of social media is its viral nature. Should Prada have a sale with pre-sale announcements, their fans will be their best marketing team that will announce it to all their friends.

This proves the report according to Exact Target that the #1 reason a Facebook fan “Likes” a page is to receive discounts and promotion (see graph below)

Now that the reasons behind a fan’s “Like” is clear, this presents small businesses with the opportunity to market to their current fans and reach the networks of those fans.

Reason #2 for people liking a brand is to show support for the company to others – who is now your potential marketing team doing the work for you. Because 90% of consumers trust recommendation from friends, your marketing team will not only be credible, it will also be incredibly effective.

Top graph courtesy of Consumer Pulse and bottom graph courtesy of Exact Target.

About Luanne Teoh

Luanne is a senior correspondent for BizTechDay focused on Small Business Tech, Mobile and China based in San Francisco. Apart from a keen interest in technology, Luanne is also and avid explorer of the globe, cultures and people.

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