Is It Time to Close Your Facebook Page?

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Alon Popilskis Reputation Management Consultant, Smart SEO Designs

Posted on July 26th 2013

Is It Time to Close Your Facebook Page?

Facebook pageUnless your organization watches its Facebook stats carefully, you may not have realized Facebook has become increasingly less accommodating to brands and companies over the course of the platform’s recent updates.  Some notable business owners, like billionaire Dallas Maverick’s owner Mark Cuban, have even spoken out against Facebook’s latest changes.

For example, in late 2012 TechCrunch noticed that posts made by brand pages were only being displayed to a tiny fraction of a page’s following, and were being hidden from the rest.  Facebook has been restricting how many of a page’s followers see a given post, a statistic known as “Reach,” for several years now.  However TechCrunch found that in late 2012 Facebook made changes to the newsfeed that caused the reach for brands to drop as much as 40% compared to what it was earlier in the year.

Posts for the average Facebook brand page are now being seen by less than 10% of their audience!  For example, if you spent time, money and effort to build your Facebook following to 4,000 people, that means now each post you make is going to be seen by less than 400 of them.

Facebook has a solution for this though…you can pay them money and then they will show your post to more people.  That doesn’t quite seem ethical though, does it?  First you spend money to build your following on Facebook, and then you spend even more money to reach the following you worked so hard to build?

It’s no wonder so many business owners, like Cuban, are upset and considering leaving the platform.  So, is it time for you to close your Facebook page?  Here are three important things to consider:

1. Does your business model allow for recurring purchases?  There is a rule in marketing and sales that says it’s always cheaper to sell more to an existing customer than it is to find a new customer.  If your business allows for customers to make repeat purchases, like an online store or clothing company with new items every season, then the chances are better that your company will get value from a Facebook page.  However, if your customers only need to buy your product once, like a video game or a book, then you will always have to be finding new customers because your product doesn’t lend itself to repeat purchases.  That will make it harder for you to come out with a positive return on your Facebook investment if you are continually having to find new customers instead of simply re-selling old ones.

2. Do you have other contact information for your Facebook followers?  Depending on your company’s approach to Facebook, you may know that most of the people on your Facebook page got there because they were already following your company on its website, email list, or elsewhere.  If that’s the case, there shouldn’t be much negative consequence to closing your Facebook page, because you can still reach those customers another way.  However this situation is probably rare, so what can you do if you don’t have other ways to contact your existing Facebook fans?

Start by going to your page and looking at the cost for promoted posts.  Figure out how much money you’d wind up spending to reach your desired number of fans each month.  This will let you know how much money you can potentially save by moving people to another platform like Twitter, Tumblr, or an email list.

From there, come up with a budget for a contest, and an ad campaign to promote it to your Facebook following, that encourages people to switch to your new platform of choice.  This will allow you to justify the expense of the contest and the promotional campaign because you can show that after a certain amount of time, say six months, you will have saved enough money in Facebook expenses to pay for the contest.  And every month after that those savings will be contributing to higher profits for your company.

3. How are you measuring the value of your Facebook fans?  This is the most important question to ask yourself about whether or not you should keep your Facebook page.  Do you know the average revenue generated per fan?  Or how many new fans you need to acquire in order for one to make a purchase?  Unless you have some way of proving that having a Facebook page is making your company money, you’re running the risk of wasting a substantial amount of time and resources.  It’s time for you to start making sure your Facebook page is creating a positive return on investment.

For example, if you know that for every 10 new fans you acquire on average one makes a $20 purchase, then you can look at how much it costs in advertising and administrative costs in order to get 10 new fans.  It’s important to factor in the labor and admin costs because those are resources that could be doing something else potentially more effective at generating money for your business if they weren’t tied up running the Facebook page.

So, if it costs you less than $20 to acquire 10 new fans on Facebook, then it’s worth it to keep your page and pay money to grow your following.  However, even if you’ve determined that your page is generating positive ROI now, that doesn’t mean that it will continue to do so.  Especially if your business doesn’t allow for repeat customers, like the first question pointed out, make sure that you check in on your Facebook ROI regularly.

First, there’s no guarantee that Facebook won’t make changes in the future that will further reduce your ROI.  You may also find that as you sell more of your product it will become harder to sustain the same volume of sales.  You may reach a point where all of the people who are most likely to buy from you have already done so, and the only people left to target aren’t as interested.  This would cause your sales to drop and require you to look at a new strategy to address the changed marketplace.

The bottom line is if you’re going to have a Facebook page, make sure you’ve got a justification for it.  And “I’m doing it because all my competitors are doing it” doesn’t count.  Just because they like to waste money doesn’t mean you should.

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Alon Popilskis

Reputation Management Consultant, Smart SEO Designs

Alon Popilskis is a consultant with Smart SEO Designs, a NYC based agency that provides search engine optimization (SEO) and reputation management services. Alon works with businesses to help them build a solid brand presence that protects reputation and builds trust. During his free time, Alon enjoys honing his Japanese and frequenting his local yoga studio. You can follow Alon on Twitter and Google+.

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Comments

Very good point about the repeat customer.  Much more beneficial than the "one and done" business model as far as Facebook is concerned.

Here's the one reason you missed:  Customers expect you to be there.  When they have a problem, a question or perhaps even want the praise the brand, some consumers will use Facebook as their channel of choice. If you're not there, you will have disappointed or frustrated that customers and possibly weakened the relationship.

This article--like so many about social media--is written from the perspective of a marketer.  It's all about ME--what do I and my brand want?  What is the value to ME? How much am I selling on Facebook?  What's the value of a fan to ME?   

Focusing on social media from this perspective is like saying, "Should you close your customer call center?  I mean really, how much value are you getting from it? What's the value to your company of each call? Aren't there other ways to contact the company?"  Of course, it makes no sense to close a customer call center because the damage will be greater than the cost savings, and the same is true of Facebook, as well.

Yes, EdgeRank makes it damn near impossible for brands to break through the noise and get inclued on consumers' News Feeds, but isn't that really what Facebook users want?  No one signs on to Facebook see what brands are doing, so it is and SHOULD BE difficult for brands to get the same sort of attention in news feeds as one's family and friends. 

If a brand is smart, it will view Faebook less as a push channel and more of a pull channel, and will not overlook its value in customer service rather than only frame it as a marketing one.  

Very well said, Augie.

Augie article brings some relevant information and with which I agree. But is it really going to be frustrating for consumers if we do not find their mark there? Is it so essential? So for what reasons Apple is not on social networks? Simply because it delivers what it promises. And of course, it is the reference brand that any company would like to be. There are alternatives but, how to measure, for example, that of the 10 million fans you have on the page, 30%, 40% or even more left to consume the product of your competitor and began to consume their by their relationship with the consumer on Facebook?

Hi Augie,


Thank you for taking the time to leave a comment. I agree should explore using social media to provide quality care for their customers. At the same time, I don't necessarily believe that your point translates into a business needing to specifically be on Facebook. It may be the largest social network, and may also be a viable option for many businesses, however social media isn't a one size fits all model and Facebook may not be the best online network for every business.


While large companies can often afford hiring a person or small team dedicated to editing and managing their organization's media outlets, many small businesses cannot afford this same luxury.


Just creating a Facebook page is not an effective way of providing customers with quality service and having to maintain a Facebook presence requires a business to allocate resources to efficiently sustain an active existence on Facebook. Many customers will turn away from interacting with a brand that doesn't consistently update their social media sites, which includes leaving a complaint, making an inquiry or praising the organization. Additionally, it's possible that damage will be done to the business' online reputation if they aren't able to respond to a customer's problem or complaint in a timely manner.


Therefore, if a business cannot dedicate their time or resources to ensure that they're active across all social channels, they should decide on specific social networks that work best with their goals while being able to provide quality service by fostering reciprocal communications between themselves and their customers. Simply put, Facebook may not be the most effective outlet for all businesses.

Really informative.. Thanks for sharing.. I really had a great time reading it...

You've neglected some of the most important reasons to have a Facebook page.

Page Post Advertising. Not the same as Promoted Posts (a sucker's game) but a way to target customers who do not - and may never - follow your page. The most valuable thing Facebook offers you is a way to affordably advertise to a highly targeted set of customers on desktop and mobile. The talent for targeting lies with you, but Facebook makes it possible. Page Post ads also drive up your overall count and your reach numbers. If you have an advertising budget of any kind and you're not buying Facebook PP ads, you need to have a serious conversation with yourself - maybe even take yourself to the woodshed. 

Your potential customers are going to look you up on Facebook regardless, in the same way we look up individuals. You should look pretty there - smart, stylish, in the know, and ready to respond. 

If you're running targeted ad campaigns every month and you're posting relevant content daily - content that is not sales pitchy - you won't have fret to about your reach numbers, they'll be worth your while. 

Okay I'm sorry, but if you don't know how to work around the algos then you have no business running a FB page. The page I'm running has around 196K followers and over a 1 mill saw my posts last week, which is up for promotion typically I get around 200K or so, which means I'm doing better than average. I do this by finding the right way to post and offering sharable content. If your content sucks no one is going to share it anyway so yes you probably do see less of an audience, but the fact is check the analytics chances are you're still getting a good slice of traffic from FB.

As well you need to be there and present you can't just not answer people back, don't be like WalMart have a voice and personality that can relate to fans, but sadly many companies lose that focus. This article talks about return and losses which is important in marketing, but the other factor is the human factor, which too many marketers seem to ignore. 

"Customers expect you to be there." is not at all true re B2B and B2C readers or users on facebook.

When's the last time you went to facebook to find a product, service or solution? Its not a business page. Frankly, how do you know your customers expect you to be there?  

When discussing using facebook as a valuable business building tool, "Customers expect you to be there"  seems to be a big reason given to be on Facebook. Actually, that's not at all true re B2B, B2C and developing a business opportunity or sales.

When's the last time you went to facebook to find a product, service or solution? Its not a business page. Where's the sales conversion evidence that says your customers expect you to be there? 

Facebook readers and participants expect to see if cousin Mike updated the info on his trip. They expect to see their Grandkid and the parents at Disney or the recent storm. Its not a business to business page and frankly, not a B2C page.

Oh, but what about those "likes" and getting tons of them. Isn't that proof of Facebooks marketing and sales development value you may ask. Lets take a look at that with a focus on what a Like does for your business re acquiring paying customers

So you are there and you get a ton of Likes - that's not a sale is it? I'll bet the ratio between a ton of Likes and actual customers acquired is very tiny. Why? Because Folks don't contact you and ask to learn more, they simply like you and now they get bombarded with info, updates but they are still in facebook to see whats going on with friends as the main reason. They are not there to buy something.

Yes, there are a gazillion subscribers on Facebook but they are not even close to where your natural audiences, natural prospects hang out online so time you spend as a business on Facebook and its upkeep isn't really worth your time re actually connecting with folks who would even care about your business and what it offers.   Instead, If you want to use Social Media to be in front of your natural target audience where you can connect with probable prospects, find and go where your target audience "hangs out" online to talk shop, discuss issues, problems, solutions, join in there and become the "go to Guru" with ideas and solutions for what the readers are discussing. That's surely not facebook.

Please See http://bit.ly/Xfmo8g for some ideas on how to use your time and resources to leverage natural audience, natural prospect social media pages, groups and discussions so it acquires paying customers for you. 

 

Woah!

People keep asking whether they should have a page, whether to keep it, and complain about Facebook policies that have little or nothing to do with running a business.

Before you make wild assumptions and try to find a plan that others think is best, how about getting the basics of business. Does the total cost diveded into income look better or worse than what you would do if you weren't on Facebook?

The myth that Facebook is cheating us out of page views is almost as old as the myth that LIKES have some seperate value. The trend to posts not getting seen in newstreams is ongoing, because there are so many other things bumping them down. 

The Mark Cuban myth is the worse of all. Who builds a building and doesn't assume there will be cost of running the building and the business inside? 

I've seen numerous cases of a business paying to advertise a page, paying to post and reaping a huge ROI. Less ROI than if it were free, naturally.. we know there's no free lunch. So why so much surprise here?

I like how this post talks about the Lifetime-Value of customers.  To calculate any ROI, you need to know this. You also need to compare investments to what YOU would be doing with the money if you didn't use Facebook, NOT what some other company is doing or not doing. 

As we move to more contextually placed marketing, answering customer needs instead of pushing a message, tracking a relationship beyond one transaction, we may just learn that we make more by spending money on a Facebook page rather than alternatives. 

 

Hi Warren,


Thank you for your insightful response. I agree that there's no such thing as a free lunch. As you indicated, one should expect to pay when using Facebook as a marketing tool, especially when it can result in a huge ROI. With that being said, some of the prior Facebook updates appear to yield less of a ROI, particularly for small businesses.


While it's important for businesses to track 'soft' metrics like brand awareness and loyalty, Facebook itself may not be the most effective social media site for all businesses.  Businesses should decide on specific social networks that work best with their goals while being able to provide quality service by fostering reciprocal communications between themselves and their customers.

I mainly use Facebook for keeping in touch with a few family members and some other local friends, not as a marketing device. I usually use Twitter @Peta_de_Aztlan

So I do not see any need to Close my Facebook in a kind of resentful way. It is a #CIA data-mining operation after all. So let us not be naive.

Great article.

For the tiny proportion of our target demographic that are on Facebook it is becoming increasingly difficult to reach them because i believe that ultimately Facebook's core values do not align with businesses wanting to reach its users.  Case in point, the recent removal of polls.

Businesses and their advertising are just a necessary evil to keep the stock mkt happy!

While the article is excellent, most of the comments make valid points, too. Something no one acknowledged yet is the influence that an active FB page has on the organic search rankings and incoming traffic. I have done several hands-on tests with different sites and industris - I cannot explain the why, but I devi itely see a correlation between an active FB page and improved organic search results and traffic.

End of the day, the decision to be or not to be on FB is very specific for each business but when making it, remember that today everything is related. You might have some benefits off of your FB page that you don't even know about (incl. brand waraness). 

Hi Diana,


Thank you for your response and a great point at that. I wonder if the correlation would apply to other social networks assuming that a business is active on their network(s) of choosing. As you expressed, the decision on whether to be on Facebook or not is an individual one for each business.

Hey, Alon! Thanks for your reply. To address the question asked - I have tested with FB and Twitter - both, when used in conjunctjion, have powerful influence on organic search traffic; FB alone has influence and Twitter - lower than FB but still, it does have some influence...

Thanks Mr. Popilskis

I see many knee jerk reactions in the comments. Looks like many of these people have been left in the dust. I check my accounts daily and have one particular customer who we have been building a solid base for, (people who actually buy the product and interact about it) not SEO fluff numbers, really stands out.

All of a sudden, the report shows drop offs in "reach" and I know from likes, interaction and responses it is growing. I have been in the web business since dial ups. Google became rich by offering search and then selling top listings on the pages. Shady but hey its "free". You can choose to buy those top listings.

What Facebook is doing is throttling back your information outreach and trying to strong arm you into spending money with them to advertise. Did they put Vladmir Putin in charge?  Its a scam (floating untrue numbers)....But hey its "free".


Thanks for articulating what I have actually seen.

Great article! He's right, get away from Facebook, I already did long time ago and joined Nerofix. Have a look at http://nerofix.com, it's a great and solid social network from Europe. Would be nice to read some news about Nerofix too here in the future. Best, Caroline

I would never advise every single business entity to create a facebook page in the first place. I think that it is a good idea to be easily found on the internet if people are looking for you. But facebook is primarily a personal interface in my opinion. It is as others have stated, a place where you checkin with friends and family.

Not to say that there are not ways to caplitalize on facebook's capabilities. But maintaining a Page is going to take time and effort. Using that page to commercial affect is going to require skills and persistence. Not every business can do this effectively due to budgetary or time contstraints. So I wonder what other readers of this article think of this question.

What is better for a business with very limited resources and time to do? Not bother with Facebook or create a page and then ignore it? I tend to think that creating listings on yellowpages.com or on google maps may be a better investment of time to raise visibility on the internet.

It is all about engaging your fans and creating compelling content. My average post reaches over 50% of my like count and it is not uncomment to reach 10 times the number of likes through the posts being shared. No third party profile should ever replace your core website, that is the mistake most people make. They get distracted on social media and ignore their main site which is fully under your control.

Hi Aaron,

50% is a pretty good number.  I am guilty sometimes of getting distracted by social media and ignoring my blog but I have made some pretty good contacts as well.  I think that Facebook is kind of loosing its power for brands.