Joely Righteous

A while ago I noticed that a particular piece of thinking that has been carried over from the tangible world of sales and product/service driven business into the less tangible, more abstract world of social and non-sales orientated online business.

In the world of tangibles if a particular action has a perceived value, then there is a push from the business to lower the barrier to action, this can vary from access to a brochure or information pack all the way through to a sale of an item. The reason this works is because a sale has a physical price there is a physical value, so by looking at conversion ratios we are able to attribute a value to the brochure.

The problem with lowering these barriers starts to come when the entire value proposition of the action is the effort that went into it.

Case in point; Facebook removed ‘Fan’ and replaced it with ‘Like’ as they noticed people “liked” things with a lot less thought, therefor brands would be able to grow their pages with more ease. The issue here is that by lowering this barrier they have diluted the value proposition. If we make some very generous assumptions and say that a customer that is also a Facebook ‘Fan’ spent on average $5 more per year than a customer who is not a Facebook ‘Fan’ then this number will inevitably go down when the brand starts to attract less interested ‘likes.’

In many ways we can draw a comparison to what has happened to online advertising, publishers inflated their impressions in an attempt to squeeze more money from advertisers, however by inflating volume the response rates dropped. Advertisers realised that this meant they needed to serve more of these impressions to get the same value, thus the per-impression value of the site was diminished and the incremental gain to the publisher was lost. Thus the downward spiral begins.

Of course, all of this is based on the assumption that there is any real incremental value to a Facebook fan to begin with. So far all attempts I have seen to report on dollar values for this kind of activity have been using methodology that ranges from questionable to retarded.

Moving beyond this some would argue that the value is the ability to deliver messages to this audience and engage with them on an ongoing basis, which is terrific, as long as they are spending more money than people who aren’t involved in that engagement, because every line you read, every word you type has a head hour against it and those cost the business money.

So if you’re attracting more ‘Likes’ than you were ‘Fans’ you might want to hold off on that self congratulatory back pat and avoid sending out that smug tweet to all your social media strategy expert guru pals, because it’s highly likely that you’re increasing quantity at the sacrifice of quality.