Facebook can be a great way to get your business in front of people: Create a Facebook Page for your business, get people to like it (to become a fan), and then engage them.
You can interact with them and you can send out messages to them. You can have them share pictures, stories, and experiences with others on your page. (Read more about using Facebook at each stage of your sales funnel).
But there’s a challenge: How do you get people to Like your business’ Facebook page in the first place? You can send out message after message to your personal network (that can get spammy after a while), or you can just cross your fingers and hope someone sees your “Like us on Facebook” button that you’ve posted on your website (that’s the luck option).
In short, the ad says that CARSTAR will donate $1 for every “Like” on their Facebook Page.
This is a great idea: People love to “contribute” to good causes without giving any of their own money (check out the Pepsi Refresh Project for another great example). It costs nothing, takes only a moment, and a great cause wins in the end.
CARSTAR wins, too, because most of the people will not “unLike” the page (some will, but most won’t). As a result, CARSTAR now has many thousands of people who will hear the CARSTAR message regularly and potentially think of CARSTAR when they wreck their car. (As I write this, CARSTAR has over 8,700 fans).
CRUNCHING THE NUMBERS
Why is CARSTAR “paying” for these Likes? It’s probably because they’ve done the math and realized that each Like is worth a certain amount of money to them: I’ve just made up some really quick back-of-the-envelope numbers below to show you what kind of number-crunching CARSTAR would have done. Their Facebook fans are leads and CARSTAR has determined that they are willing to “pay” (a charity) $1 per Lead. Here is the rest of the math…
If the campaign ended today and no one else became a CARSTAR fan, they’d have just over 8,700 fans and have spent $8,700 to get them. If 1% of those 8,700 fans brought their car in to CARSTAR for a repair at some point in the future, and if there was an average profit margin of $100 per repair, CARSTAR would break even: They’d repair 87 cars, earn a potential profit of $8700, which is exactly what they spent on the campaign. If they could get 2% of their fans to bring in their car for a repair, they’d repair 174 cars, and earn $8,700 profit ($17,400 profit less the $8,700 it cost to get these Likes).
BUT, their goal is likely not to break even. Their goal is likely not to fix only 1% of their fan’s cars. They would work at getting more than 1% of fans into their shops; they would work at getting a higher per-repair profit margin, they’d work at getting those people to come back again and again, and they’d work at getting those people to tell their friends.
WHAT THIS MEANS FOR YOUR SALES FUNNEL
If you want to generate fans for your sales funnel, this is a great way to do it. Make sure you find a good cause, and make sure that you can afford to pay for the influx of people. (What happens if you suddenly get 50,000 Likes?!?)
To start, sit down and crunch your own numbers: Figure out what an average sale earns you for revenue and profit. Figure out how many leads it takes to make a sale, and what each lead is worth. Assuming the same ratio of Leads-to-Customers, figure out what the impact in your business will be with 10, 100, 1000, and 10000 more leads. Then, offer an incentive for people to sign up (but make sure that it is less than the amount that a lead is worth).
It all starts with fans and CARSTAR has found a great way to get them.