How much is that Facebook follower worth?

SPECIAL TO BUSINESS INSIDEROctober 29, 2013 

Tomas Patek, owner of World Cycle & XC Ski, fussed over paperwork at one of the bike shop’s computer stations, his writing arm cocked in an athletic posture, the pen thin and toy-like in his hand. The self-assuredness he brought to that piece of paperwork came from years of running a business that caters to athletes and outdoor recreationalists.

Patek and his wife have owned and operated World Cycle since 1994. When they started the shop, their advertising budget — 2 percent to 3 percent of the business’ total income — went mostly toward ads in the phone book. Patek recalled when he first met the phone book ad salesman, who “looked like he was making about $200,000 a year.”

Today Patek asks the phone book company not to deliver to the store at 1407 W. State St. Social media have changed how potential customers notice him and other small-business owners. They have shifted the discussion of advertising from “how much money should I spend on advertising?” to “how many hours do I spend on Facebook and Twitter getting the word out?”

And the phone-book ad salesman?

“Last time I saw him, he looked like he was living out of the back of a van,” Patek says.

Using social media can challenge small-business owners with limited time for marketing. But social media have become more important to small businesses as more customers spend time on Facebook, Twitter and the ever-growing assortment of other media. These media have altered how Treasure Valley companies build brands and advertise.

Facebook, with more than a billion members, is the most powerful.

Facebook users can “like” or “unlike” a company, product or brand with a mouse click. A Facebook “like” from a customer has value to a business, though how much is open to debate. Estimates for the value of a “like” or other forms of Facebook appreciation range from as little as 20 cents to as much as $400, depending on the brand. Syncapse, a social intelligence company, estimates the average at $174.17.

World Cycle, like many small businesses in the Treasure Valley, relies on legacy customers who repeat their patronage of its goods and services. Getting customers to return is a matter of building relationships, and for World Cycle’s target customer, building relationships primarily means being active in the cycling and recreation communities — not online, but in person.

Patek says those relationships include the store’s alliances with the Boise Bicycle Project, the Southwest Idaho Mountain Biking Association and BYRDS, the Boise Young Rider Development Squad.

He rarely uses social media personally, preferring to talk to his customers in person. His resistance to automation is so ingrained that his phones don’t have answering machines.

“A big part of it is face-to-face interaction. It’s a customer-service strategy,” he says.

Nevertheless, Patek sees the value of social media when it comes to promoting events, goods and services. He and his employees spend four to five hours a week updating World Cycle’s Facebook page. “I have to budget time and staff towards that,” he says.

When someone extends appreciation to a business on Facebook, that business’ posts enter that person’s news feed.

Posting is always free, but because posts appear on fans’ news feeds in real time, a business’ posts can be buried beneath other Facebook posts before a potential customer can see them. So Facebook encourages businesses to promote posts. A promoted post, costing $5 or more, appears prominently in news feeds the next time the follower logs on to Facebook.

Promoted posts can be tailored to reach targeted demographics among a company’s followers. The business pays a flat fee to reach a certain number of its followers.

Facebook also sells:

• Sponsored stories, which are generated around user activity and are not controlled by advertisers.

• Page post ads, which appear as sponsored and promoted posts.

• Marketplace ads, which appear in the advertiser sidebar on the right-hand side of the Facebook news feed.

For these tools, advertisers pay Facebook per impression or by the click.

Drew Heilman, who does social media consulting for Eastside Tavern, uses social media as an extension of Eastside Tavern’s customer service. He incorporates Yelp, Google Review and Foursquare into his social media portfolio as well as Facebook.

“Social media is a two-way conversation, and you have to manage that conversation,” Heilman says.

Eastside Tavern’s customers are between 25 and 50 years old, meaning Heilman’s social media posts must appeal to college students out for a night on the town and middle-aged regulars looking to sip a few suds after work. The effect is a promotional style that, for the most part, is informative and concise to prevent the tavern’s followers from ignoring the posts altogether.

“The bigger the audience, the more people are in a buying position. That means I can’t be super hip or super cool,” he says.

But in promoted Facebook posts, Heilman is able to write “specific and targeted” copy, typically to promote everything from customer appreciation parties to karaoke and holiday cheer to the tavern’s younger customers.

He says the results have been dramatic. Heilman says events he advertises through promoted posts result in 10 percent to 15 percent more in sales than events he advertises through nonpromoted posts.

Heilman spends about an hour every day updating Eastside Tavern’s social media accounts. Though he has posted hundreds of times, he has used promoted posts only a handful of times, finding that sparing use helps him reach the maximum number of the tavern’s followers at key times.

“The idea is to reach [our customers] in a timely way,” he says.

Promoted posts aren’t for every small business. Some businesses balk at the idea of paying money for access to people who freely follow the business on social media. Others see promoting posts as disingenuous, detracting from the authenticity of the relationship between business and customer.

Richard Bishop, a caterer in Mountain Home, told The Wall Street Journal last fall that Facebook has “devalued the value of a fan” by restricting businesses’ access to their fans unless the businesses pay Facebook.

Jeff Jacobs, owner of Boise footwear company Foot Dynamics, describes himself as “an avid Facebook user personally.” But he doesn’t spend a lot of business time on the site.

Jacobs, a pedorthist (footwear specialist), performs shoe modifications, orthotics and gait analysis. Many of his customers require special consideration when it comes to buying footwear. With fewer than 150 Facebook followers, Facebook’s reach for Jacobs is limited. He uses social media to connect with other small business and with followers who are essentially his clients.

“People really don’t want to see businesses. They’re on Facebook for the social aspect,” he says.

For business, he says, social media can take on the aspect of a shiny object game, with users validating their use by the number of Facebook followers they’ve accrued rather than the quality of interaction.

Foot Dynamics’ marketing portfolio includes some newspaper advertising and “guerilla marketing” — sponsorships of events and word of mouth. Its Internet marketing is divided among a website, which provides basic information to customers; a LinkedIn account for professional connections; and Facebook, which Jacobs uses in a far more social manner.

“I’m not cultivating new business out there,” Jacobs says. “Facebook is for me to connect with my tribe.”

But because of the close-knit community Foot Dynamics has created around its products and services — a feat, considering Jacobs splits his time between clients in Boise and New York — he sees his followers as clients who either have or will buy footwear and/or orthotics services from him, raising the value of his social media followers.

“I would highly prize a valuable Facebook like,” he says.

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Harrison Berry: berryht@gmail.com

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