On his Brand Builder blog, Olivier Blanchard is using an essay of complex formulas to ask how to calculate the value of an individual Facebook, Twitter and Pinterest follower.
Branding expert Rob Frankel has a succinct and simple – albeit unpopular – answer: not much.
“I’m still waiting for the study where anybody can connect the dots from a social media strategy to real bottom line revenue,” said Frankel, the author of The Revenge Of Brand X: How To Build A Big Time Brand On The Web Or Anywhere Else. “It may be out there, but I haven’t seen it.”
Frankel’s views do not sit well with the cottage industry of social media consultants. Those are the people who need to convince companies that developing a social media strategy is crucial for their future success. But when a client asks Frankel about a brand stratgey and tells him that social media is a crucial component, he asks them “Why?”
“A lot of times when I ask why, they say ‘Well, we see our competitors doing it.’ It never occurs to them that their competitors could be wrong,” he said. “There’s an awful lot of that kind of thinking out there.”
Frankel says he is most concerned by the recent push to put a value on each individual Facebook like and Twitter follower. To him, it’s reminiscent of the late 1990’s when dot-coms starting assigning “lifetime value” numbers to individual customers.
“The Internet was an unknown, so people thought they could get away with establishing a new valuation method. They said it costs us $10 to gain a customer, but over the lifetime of that customer’s relationship with our company, he’ll spend $1,000,” Frankel said. “It was bogus. You ended up seeing company after company disintegrate.”
Frankel doesn’t oppose using social media as a strategy. He says Twitter, for example, is a great way to alert customers of product news and updates. He also sees value in using social media defensively and for customer service. For example, a company could monitor Twitter for negative comments about its brand by customers and try to alleviate the problem.
“It’s got to be the right tool for the right job. If your car doesn’t run and you realize it’s a mechanical problem, you’re going to need a tool set. But that tool set is probably not going to include a hammer and saw,” he said. “Every company out there is saying ‘Like us on Facebook.’ But why? Why would I like a gasket company.”
