Sramana Mitra: That is a huge problem on Facebook: Likes vs. leads.
Jai Rawat: Exactly. Likes don’t equal to fans. We say that people are visiting a site already, so they are obviously interested in the types of products you sell and they are somewhat familiar with your brand. They are much better candidates to become fans. So what the Get-a-Fan module does is when people visit your website there is a little slider that comes out and says, “Hey, if you become a fan and click on the Like button, you will get 10% off.” Of course, they are running these promotions on their websites all the time anyway, so instead of just giving it away, ask them to become a fan. They never have to leave the website. They become a fan right away and they get a coupon, which they can redeem within the same session.
SM: So you integrate with their Facebook?
JR: Yes, we do the whole thing at the back end. The slider comes out, they can see the call to action to become a fan, then they click on the button, we take care of attaching that to the fan base of that retailer and then the coupon gets presented, which can be a generic coupon. Either everyone gets the same coupon or a single use coupon or everyone gets a different one. There are lots of different options. Users can also become e-mail subscribers. There are other things we added as well. What we found was that we are not only converting a lot of visitors into fans, but these fans would then go on and convert to sales at a four to five times conversion rate. This is very interesting, because it is not something we expected in the first place when we created that module.
SM: What do you think is the psychology behind that?
JR: I am glad you asked that. I went looking for that answer as well. There is something called the Theory of Consistency. People want to stay consistent with their behavior. There is a little experiment some researchers did, which will probably explain this behavior. In a Palo Alto neighborhood they looked at two different neighborhoods and they asked residents to put a “Drive Safe” sign on their front yard. In one neighborhood almost everyone said, “I am not going to spoil my front yard with some sign. No way.” In the second neighborhood was very similar, though most people agreed to do it. The difference was that in the neighborhood, where most people agreed to do it, a couple of weeks ago they had gone to that neighborhood and asked people to put a “Drive Safe” bumper sticker on their cars, which most people were OK with. That is a much smaller commitment. But now that they had made that smaller commitment, they were willing to do that bigger commitment as well. If you can get users to make a small commitment, they want to stay consistent with their behavior and are much more likely to make a bigger commitment as well. This plays a very similar role here, when the users say that they like this brand or site and they make that commitment and announce it to the world – your likes get broadcasted to everyone. Chances are that you will go ahead and give your business to that increase as well.
SM: That is not necessarily true. On Facebook people are liking things.
JR: The difference is that there is no purchase intent on Facebook. Here the person is looking to buy something. The question is whether they are going to buy it from you or somebody else. But the purchase intent is already there. That is the big difference. When people are visiting an e-commerce site they are looking to buy something. Combining those two things is where the magic is happening.
SM: So there is a prequalification of who likes and from that base you are getting better conversion.
JR: Exactly. We are only after going after the users who already have existing purchase intent. We are converting them into fans. Going back to the original example: They added this module and they are generating almost $2 million in incremental revenue per year, which is almost 10% of their annual revenue.