Facebook Stats for Retailers: How Do You Compare?
If it wasn’t already clear, reports last week that Facebook is on pace to generate over $3 Billion in revenue this year highlighted the growing importance of the social media giant to advertisers and online commerce in general. While retailers’ Facebook strategies have become more sophisticated and data-driven along the way, the most visible and potentially envy-inducing metric remains one’s total number of Likes. Though not all Likes are equally valuable, comparing our own count to those of our competitors is a common proclivity and it can offer guidance as a high level benchmark, particularly if we consider some context.
With that in mind, we reviewed data from 100 of Internet Retailer’s Top 500 list to help answer the question: “What is the typical range of Facebook Likes for a company of similar size to my own?”
Comparing Like Counts to Online Sales
Below we’ve plotted Facebook Like counts as of this week against 2010 web sales, derived from IR500 data. Note that because of the wide range in results for these two metrics, both are plotted in logarithmic scale:
As we would expect, Like counts increase as revenue increases and there is quite a bit of variance from the dashed trend line, suggesting other factors have significant impacts as well.
Viewed from another perspective, we can also see that the revenue per Like trends higher for larger and larger online retailers, suggesting that smaller retailers are generating Likes at greater rates per customer. And just to be clear, revenue per Like is simply the ratio of those two metrics (2010 total web sales and current Facebook Likes) and not meant to imply each Like generated the revenue itself.
Customer Demographics – While about half of Americans use Facebook to some degree these days, some sites just have a more natural fit with the type of user who is most inclined to Like and engage with brand pages. Some research has suggested different propensities to Like a page on Facebook given the user’s age. A retailer appealing to a younger demographic may simply find it easier to generate Likes than one appealing more to an older demographic.
User Psychology – What we Like on Facebook is an expression of who we are. Inclinations towards expressing individuality likely give niche retailers an edge in generating Likes. A user may love Amazon.com, but so do a lot of other people, so Liking them isn’t as telling a statement about oneself.
Growth Rates – The smaller retailers in this sample showed relatively high revenue growth in past years and if those trends continued into 2011, it would skew their revenue per Like figures lower here.
Offline Presence – There definitely isn’t a perfect correlation between a retailer’s offline revenue/general brand awareness and their online sales. For example, Best Buy and Newegg had similar online sales in 2010, but Best Buy’s Like count is 7 times Newegg’s, no doubt largely due to their heavy offline presence.
Facebook Outreach Efforts - Last but not least, although the importance of Facebook to online retail is widely recognized, efforts to generate Likes and keep fans engaged vary extensively from site to site. For those finding their counts aren’t stacking up well, there’s likely a big opportunity to not only improve on their high level stats, but also the less glamorous ones that may ultimately be more important to the bottom line.
Engagement Rates by Sales
Speaking of finer level stats, we were also able to assess typical Facebook post engagement rates across our sample of retailers by pulling combined comment and Like counts from the 5 most recent posts of each retailer, taking the average and dividing by the total page Like count:
Once again the results are noisy, but we do see a trend of higher engagement rates for pages with fewer Likes. This may seem a bit counterintuitive if we expect to see bandwagon effects accelerate user engagement, but smaller sites likely have more passionate fan bases and they may just be a bit more nimble than the bigger players.
Engagements rates were fairly low on average though with just under 1 comment or Like for each 1000 fans. The best rate we saw was 5 engagements per 1000 fans, while a few of these retailers struggled to encourage much interaction at all.
Summing up the stats above, here are typical results for retailers of various sizes using the trend line estimates:
OK, I Have a Better Idea of Where I Stand. What Next?
As we’ve tried to drive home, no two retailers are identical and there isn’t a magic number of Facebook Likes you should have in order to consider your social efforts successful. Even the savviest of businesses on Facebook are not yet reaching thousands of users who would be willing to Like them and maybe even engage with posts from time to time. In other words, everyone could have higher Like counts and we should continue to work on driving up them up, but that isn’t the end game in and of itself.
Retailers should be working to improve engagement rates and the quality of those engagements. Test messaging content and frequency and assess the impact on your branding goals as well as your direct response needs. Consider a Facebook advertising effort that leverages your current fan base and engagement to spread your message to a new, but well-targeted audience. Facebook offers much more data about your own page than the publicly viewed numbers presented here. Collect that data and use it to inform your decisions. Focusing on and getting the details of your Facebook efforts right will ultimately boost your high level stats and it’s not too late to catch up with or lap the competition on either front.