Forrester Research created the "Facebook factor" to identify how much more likely Fans are to purchase a brand's products or services. The method, based on logistic regression modeling, requires brands to ask four questions around the following themes: being a Facebook fan of the brand, likelihood to purchase, amount of money spent in the past 12 months, and probability to recommend.
The most interesting piece of the puzzle probably resides in the logistic regression modeling that analyzes the impact that the drivers -- such as being a Facebook fan -- have on key brand engagement indicators. A logistic model predicts the probability of occurrence of an event, and shows the influence of one variable on another. It analyzes how engaging with a brand while being a Fan influences the likelihood of a purchase, consideration and recommendation of a brand.
About 96 of the top 100 advertisers use Facebook, according to the Forrester report. But how do customer interactions with brands influence engagement with a brand?
In the study -- The Facebook Factor -- Forrester analyzed four brands: Best Buy BlackBerry, Wal-Mart and Coca-Cola. For all four brands, Facebook "Fandom" appears to have the greatest impact on purchases. For example, the odds of a Best Buy Facebook Fan purchasing something from the brand are 5.3 times higher than a non-fan, while the odds of a Fan recommending and considering the brand for future purchase are 4.7 and 4.0 times higher, respectively.
While it signifies the strength of the relationship between the brand and Fan, the consumer purchase decision is not where marketers can make the greatest impact long-term. Similar to a viral campaign, the value in a brand's Fan base should focus on recommendations. The Forrester study found that Facebook Fans of each of the brands are more likely to recommend them than non-fans.
Facebook Fans who are BlackBerry smartphone owners have an 87% probability of recommending BlackBerry to a friend or relative, while a BlackBerry owner who does not engage with BlackBerry on Facebook has a 44% likelihood of doing so.
Having a Facebook fan base filled with brand advocates creates power for the brand and becomes a channel for influencers to spread the word -- not only across the social site, such as Facebook, Twitter, and Google+, but on search engines, as well.