New research shows Facebook fan pages may work best as niche marketing programs targeted to customers who regularly use Facebook. “Social-media marketing must be employed judiciously with other types of marketing programs,” says Utpal Dholakia. Facebook marketing programs may be especially effective for iconic brands, he adds, which appear to attract a higher percentage of their customer base as Facebook fans. (Credit: Jeff Fitlow/Rice)

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RICE (US)—Companies that use Facebook and its fan page module to market themselves can increase sales, word-of-mouth marketing, and customer loyalty significantly among a subset of their customers, new research shows.

The study appears in the March issue of the Harvard Business Review.

Utpal Dholakia, associate professor of management at Rice University’s Jones Graduate School of Business, surveyed customers of Dessert Gallery (DG), a popular Houston-based café chain.

DG did not have a Facebook presence prior to the study, which was based on surveys of more than 1,700 respondents over a three-month period. The study found that compared with typical Dessert Gallery customers, the company’s Facebook fans:

• Made 36 percent more visits to DG’s stores each month.
• Spent 45 percent more of their eating-out dollars at DG.
• Spent 33 percent more at DG’s stores.
• Had 14 percent higher emotional attachment to the DG brand.
• Had 41 percent greater psychological loyalty toward DG.

While the results indicate that Facebook fan pages offer an effective and low-cost way of social-media marketing, Dholakia says, the results should be interpret the results cautiously.

“The fact that only about 5 percent of the firm’s 13,000 customers became Facebook fans within three months indicates that Facebook fan pages may work best as niche marketing programs targeted to customers who regularly use Facebook.

“Social-media marketing must be employed judiciously with other types of marketing programs,” he adds.

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

Rice University news: www.media.rice.edu/media/