Washington: Facebook and its fan page module can be a very useful tool for increasing sales of a company, a new study claims.
The new research from Rice University's Jones Graduate School of Business suggests that the social networking site holds the potential of an effective social marketing tool that can improve word-of-mouth marketing and customer loyalty significantly.
Utpal Dholakia, associate professor of management at the institute, and Emily Durham, a Jones School alumna and founder of Restaurant Connections, in their article, "How Effective is Facebook Marketing?" highlight the advantages of the new form of marketing.
They did a survey of more than 1,700 respondents over a three-month period, to learn that compared with typical Dessert Gallery customers, the company's Facebook fans were more active.
The company's Facebook fans had made 36 percent more visits to DG's stores each month and spent 45 percent more of their eating-out dollars at DG.
Also, 14 percent had higher emotional attachment to the DG brand.
Dholakia said: "We must be cautious in interpreting the study's results. 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."
The study has been published in the March issue of the Harvard Business Review.
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