Using Facebook for Marketing

Facebook Marketing Research

According to new research from Rice University's Jones Graduate School of Business , small businesses that market themselves to customers by using the popular social-media site Facebook can increase sales, word-of-mouth marketing and customer loyalty significantly among a subset of their customers.

A study conducted by Rice University suggests that Facebook fan pages offer an effective and low-cost way for small businesses to grow their businesses through social-media marketing.

Facebook Marketing Research

University researchers surveyed customers of Dessert Gallery, a popular Houston-based café chain. Prior to the study, Dessert Gallery did not have a Facebook presence.

The study, based on surveys of more than 1,700 respondents over a three-month period, found that compared with typical Dessert Gallery customers, the company's Facebook fans were more loyal to Dessert Gallery.

Here are some of the Facebook marketing statistics garnered by the study:

  • Facebook fans made 36 percent more visits to Dessert Gallery's stores each month.
  • Facebook fans spent 45 percent more of their eating-out dollars at Dessert Gallery.
  • Facebook fans spent 33 percent more at Dessert Gallery's stores.
  • Facebook fans had 14 percent higher emotional attachment to the Dessert Gallery brand.
  • Facebook fans had 41 percent greater psychological loyalty toward Dessert Gallery.

Sounds like a great Facebook marketing success story to us, wouldn't you agree? By leveraging the power of Facebook, Dessert Gallery became a bigger and more profitable business. Not bad!

The research was conducted by Utpal Dholakia, associate professor of management at Rice University's Jones Graduate School of Business, and Emily Durham, a Jones School alumna and founder of Restaurant Connections, a Houston‐based restaurant consultancy.

Dholakia acknowledges that only about 5 percent of the firm's 13,000 customers became Facebook fans during the three month period that the study took place. As such, he suggests that Facebook fan pages may work best as niche marketing programs targeted to customers who regularly use Facebook.

In other words, marketing via Facebook isn't a cure all for small businesses, but it can be a great way to grow your business with people who are already actively using Facebook.

Dholakia said Facebook marketing programs may be especially effective for iconic brands, which appear to attract a higher percentage of their customer base as Facebook fans.

Offering further proof on the effectiveness of Facebook marketing, Empathica's Facebook Marketing App (called GoRecommend) has generated more than 1 million news feed posts on Facebook. The Facebook app allows restaurants and retailers to easily let their customers share positive, viral brand recommendations with their friends on Facebook.

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